The Centers for Medicare and Medicaid Services (CMS) released a letter on November 16 to state Medicaid directors on payments to "health homes", for individuals with chronic conditions, per section 2703 of the Affordable Care Act (ACA). "Health homes" (physician-led teams coordinating primary, acute, behavioral health, and long term care services and supports), pioneered by many states and commercial payers, are among several strategies under the ACA to try to contain the costs of unnecessary hospital admissions, re-admissions to hospitals soon after discharge, and inappropriate hospital outpatient department/emergency room use, while improving quality of care and treatment outcomes. A new state Medicaid plan option will be available on January 1, 2011 under which states can claim 90 percent Federal financial participation (FFP) on payments to health homes for eight quarters (after which FFP will remain available at the state's regular Federal medical assistance percentage). The ACA also offers planning grants that are available now. The November 16 letter provides guidance on applying for the planning grants, on developing state plan amendments, and on designing strategies within the flexibility that is available to states under this option. It outlines the range of allowable methods for targeting the optional service to one or more groups with qualifying chronic conditions, such as diabetes, heart disease, and mental health conditions; the range of allowable reimbursement methods for states to consider, such as tiered capitation rates, case rates, and other types of bundled rates; and allowable provider entities that may serve as health homes, such as physician group practices, community health centers, and community mental health clinics. It also encourages state Medicaid agencies to collaborate with key stakeholders such as state mental health agencies and with the Substance Abuse and Mental Health Services Administration (SAMHSA), which has awarded grants to 56 health home sites to improve integration of primary and behavioral health services.
CMS also announced on November 16 that eight states (Maine, Vermont, Rhode Island, New York, Pennsylvania, North Carolina, Michigan and Minnesota) have been selected to participate in demonstration projects to evaluate the effectiveness of up to 1,200 health homes serving one million Medicare and Medicaid recipients. A separate demonstration will be conducted for 500 federally qualified health centers (FQHCs) serving as health homes for 195,000 recipients. Additional demonstration opportunities for up to 15 states on coordinating care for Medicare/Medicaid dual eligible individuals will be announced next month.
About Tom Entrikin
A former policy specialist with the U.S. Health Care Financing Administration (now Centers for Medicare & Medicaid Services (CMS)), Tom Entrikin has vast experience providing technical assistance to states on Medicaid eligibility, coverage, and reimbursement; provider certification and enrollment; program integrity; recovery of third party liabilities; Medicaid Management Information System (MMIS) performance specifications and operations; interagency agreements; contracts with managed care organizations; and Medicaid waiver programs.
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