Primary Care: Health Homes
Introduction | Evidence of Quality Improvements | Evidence of Savings | Key Considerations | Further Resources | State-by-State Ratings
The Policy
The state implements the State Option to Provide Health Homes for Enrollees with Chronic Conditions (Section 2703 of the Affordable Care Act).
Introduction
The sickest and most vulnerable Medicaid beneficiaries, representing only 5 percent of Medicaid enrollees, account for 54 percent of Medicaid spending. Of this small group, 80 percent have three or more chronic health conditions. These very complex health needs combined with a very complicated and difficult to navigate U.S. health care system leads to fragmented, costly, uncoordinated care. This often results in unnecessary hospitalizations and institutionalizations. It is this especially vulnerable population that offers the greatest potential for improvements in care and reductions in cost through new methods of service delivery.
Uncoordinated health care in such a vulnerable population makes it even more likely that they will not receive needed medical treatment, will have higher numbers of emergency room visits, will have greater numbers of preventable hospital admissions/readmissions, and/or receive duplicate medical services. A 2009 study of more than 9 million Medicaid patients in five states found that patients with uncoordinated care had average annual health care costs of $15,100 vs. $3,116 for those with better coordinated care.
The Health Home option in the Affordable Care Act provides states with a tool to help improve care coordination among Medicaid's sickest - and most expensive - beneficiaries. By offering enhanced federal dollars to states who take up this option, Health Homes could not only bring in immediate federal resources, but it could help states save money in Medicaid in the medium-run by lowering health care costs of those with multiple conditions.
Specifically, section 2703 of the ACA provides for a 90 percent federal medical assistance percentage (FMAP) rate for eight quarters to reimburse states for implementing the six Health Home services delineated below. To be eligible for these services, Medicaid enrollees must have at least two chronic conditions, one chronic condition and be at risk for another, or one serious and persistent mental health condition. While the structure of Health Homes is not specifically defined by the ACA, they must provide individuals with all of the following:
- comprehensive care management
- care coordination and health promotion
- comprehensive transitional care from inpatient to other settings, including appropriate follow-up
- support for patients, their families and their authorized representatives
- referral to community and social support service, when needed
- use of health information technology to link services, as feasible and appropriate
The ACA requires that Health Homes operate under a "whole-person" philosophy, meaning that they care not just for an individual's physical condition, but also provide linkages to long-term community care services and supports, and family services. States are allowed a great deal of flexibility in designing how services are provided, as long as the above noted six guidelines are met. This allows for states to tailor the Health Home not only to the needs of the larger Medicaid population, but allows for further tailoring to provide greater health benefit at an individual level as well.
Evidence of Quality Improvement
The implementation of the Health Home as defined by the Affordable Care Act is just now beginning, but quality and cost comparisons can be made by looking at medical homes programs that have been implemented in recent years.
Community Care of North Carolina (CCNC), a state-wide medical home program for North Carolina Medicaid recipients, has been in existence since 2001 and its medical home services surpass those defined by the Agency for Healthcare Research and Quality (AHRQ). By creating a strong medical home system for its beneficiaries, it has achieved significant improvement in the quality of health. For example, between 2003 and 2006 CCNC saw a 40 percent reduction in hospitalizations for patients with asthma. CCNC is also in the top 10 percent in the US, compared to commercially managed Medicaid programs, for health care quality measures relating to testing for and control of cholesterol, blood pressure and diabetes Further, potential preventable hospital admissions and readmissions have decreased despite the significant increase in the enrollment of persons with severe chronic illnesses.
A study of 30 distinct medical home programs for children with special health care needs found that a majority, but not all, of the medical home programs showed improvements in care. The programs were found to improve:
- Health status/functioning: reduction in life-threatening illnesses, reduction in ICU admissions, improvement in asthma control, improved mental health, reduced asthma symptom days, fewer missed school days for the children and fewer missed work days for their parents.
- Timeliness of care: better access to mental health services and same day primary care appointments, and a reduction in the likelihood of delaying or foregoing needed care.
- Family functioning and family centeredness: reduction in family strain and increased levels of parent satisfaction with the child's health care provider.
Further, the Commonwealth Fund's 2006 Health Care Quality Survey showed that access to a medical home along with insurance can help reduce racial and ethnic disparities and increase preventative screenings.
Evidence of Savings
Thus far, medical home programs have proved difficult to evaluate for various reasons including: formal patient centered medical home (PCMH) evaluation criteria are relatively new and not yet widely implemented, decisions to implement only certain components of a PCMH rather than the full model, a lack of rigorous studies, and in some cases poorly defined evaluation criteria. Not all medical homes have been shown to reduce costs and the cost savings created by the medical home program must be large enough to offset cost increases due to the necessary medical home infrastructure and for those patients who are not high-risk. However, there are a number of significant reductions in cost that have been achieved by medical homes thus far. By 2006 CCNC had achieved an estimated savings of $161 million annually and the largest areas of savings were through decreases in emergency room utilization (23 percent less than projected) and outpatient care (25 percent less than projected). External assessment of CCNC estimated a savings of $984 million in health care costs between fiscal years 2007 and 2010 despite the rising enrollment of populations with complex chronic health conditions.
In addition to potential cost-savings from improved care coordination, the Health Home option offers states the opportunity to draw down enhanced federal funding for services they may already be offering at regular matching rates. Many states already have significant medical home programs in place for their Medicaid enrollees, but do not qualify as Health Homes unless they meet the six specific criteria set forth in the ACA and have a State Plan Amendment (SPA) approved by the Centers for Medicare and Medicaid Services (CMS). By making adjustments to existing medical home programs in order to comply with the requirements set forth in the ACA, existing Medicaid medical home programs can qualify as Health Homes and receive the 90 percent FMAP rate for the Health Home services delineated by the ACA.
Key Considerations
State Investment:
- Creating a Health Home is a significant commitment and states must be certain that they are able to develop the capacity to provide the required services. States should involve providers in the process of planning Health Homes, including the determination of what gaps exist between current health management activities and the Health Home requirements.
- States may choose to implement their Health Home program geographically and/or by specific population. States may find that it is only fiscally viable to implement a very limited Health Home program, but can expand the program at a later date to encompass a new region/population. A state may receive more than one period of enhanced matching funds, but can only receive the enhanced matched for a total of eight quarters for each beneficiary.
- When providers change processes of care for their Medicaid patients, they often implement those same changes with other patients as well. In such cases, health benefits and cost savings will accrue more broadly and aligning messages, incentives, and supports across payers will provide greater benefit. However, if providers receive conflicting messages from multiple payers the positive impacts will be lessened. States should be encouraged to collaborate with private payers on this and other payment/delivery system reforms.
Special Populations: Mental health issues are two to three times more common in patients with chronic health conditions and require special considerations around the cultural competency of mental health providers. Health Homes must successfully integrate the wider community of mental health providers in order to increase the diversity of the mental health workforce involved in the treatment of Health Home enrollees and collaborate with organizations in minority communities to provide further support.
Models of Care:
- Health Homes should ensure easy access to the care team, not just through telephone access, but also through same-day appointments when needed.
- Small practices may find that they are unable to qualify on their own as Health Homes due to a lack of resources to build capacity. However, small practices that wish to be involved in the provision of Health Home services should consider contacting other providers their area to become part of a Health Home network. Practices within a network can share resources, such as care coordinators, to help keep costs manageable.
- Health Homes should treat the patient and their family as members of the care team involving them in the treatment decision making process.
Reimbursement and Financial Incentives:
- States may wish to offer incentives to providers for achieving specific quality outcomes. However, in the initial stages of the Health Home providers should first build the capacity to achieve desired outcomes. States can initially consider performance-based incentives focusing on process measures and gradually phase in outcome-based payments.
- Providers must be paid in a manner that is reflective of the financial and staffing resources required to provide the services associated with a Health Home.
Medicaid Managed Care: Currently, more than 50 percent of Medicaid beneficiaries are enrolled in risk-based managed care. While the widely varying structures of Medicaid Managed Care Organizations (MCOs) add further complexity to the implementation of health homes, the health home is an important opportunity for MCOs to redefine their role and confirm their value in an evolving health system. With careful consideration of the advantages and challenges, states with Medicaid managed care can take advantage of the ACA Health Homes option. States must consider which existing elements of the MCO offer building blocks for the health home and also the challenges posed by contracting and reimbursement. The Further Resources section contains specific information on implementing health homes in a risk-based Medicaid managed care system.
Outreach and Enrollment: To increase patient engagement, eligible beneficiaries must be aware of the Health Home services available to them and how to access those services, know which providers are participating, and understand how a Health Home will benefit them. This will require that the state's Medicaid program, providers, and community organizations successfully reach out to and communicate with eligible beneficiaries about Health Homes. Further, providing information to patients about how they can make the most of their medical visits will improve the physician-patient interaction and engagement.
Consumer Engagement in Quality Improvement: Health Homes should make every effort to include patients and families in quality improvement efforts. Ways that this can be accomplished include surveys, focus groups, involvement in governance and/or on patient/family advisory councils or quality improvement teams, as well as participating in the development of educational materials.
Further Resources
Centers for Medicare and Medicaid Services, Letter to State Medicaid Director and State Health Official, SMDL#10-024, ACA#12, November 16, 2010
Community Catalyst, Medicaid Health Homes: A new state option can improve patient care, save money, and capture additional federal dollars
The Commonwealth Fund, States in Action Newsletter - Health Homes for the Chronically Ill: An Opportunity for States
Center for Health Care Strategies, Inc., Implementing Health Homes in a Risk-Based Medicaid Managed Care Delivery System
Community Care of North Carolina Toolkit
State-by-State Ratings
 Made the Grade
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 Room to Improve (?)
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 Miss the Mark
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