The Medical Home Model of Care
Updated September 2012
As Medicaid spending continues to overwhelm state budgets, the medical home model of care offers one method of transforming the health care delivery system. Medical homes can reduce costs while improving quality and efficiency through an innovative approach to delivering comprehensive patient-centered preventive and primary care.
Also known as the patient-centered medical home (PCMH), this model is designed around patient needs and aims to improve access to care (e.g. through extended office hours and increased communication between providers and patients via email and telephone), increase care coordination and enhance overall quality, while simultaneously reducing costs.
The medical home relies on a team of providers—such as physicians, nurses, nutritionists, pharmacists, and social workers—to meet a patient’s health care needs. Studies have shown that the medical home model’s attention to the whole-person and integration of all aspects of health care offer potential to improve physical health, behavioral health, access to community-based social services and management of chronic conditions.
Although general agreement exists about the basic tenets of the medical home, the model is still evolving. Not all medical homes look alike or use the same strategies to reduce costs, improve quality and coordinate care. Accreditation offers formal recognition and a stamp of approval to those that successfully meet specific standards and requirements, facilitating payment from both public and private payers. Medical home accreditation is available from national accreditation organizations, as well as a few states that have developed their own standards. Although certain health care providers (such as community health centers) already embody many elements of the PCMH, many are seeking formal recognition as patient-centered medical homes. This is due in part to the fact that medical practices that participate in medical home pilot programs often qualify for enhanced reimbursement rates, or receive other financial incentives for coordinating care.
Key to medical home success are health information technology (HIT) and payment reform. Because the medical home can be a physical or a virtual network of providers and services, HIT facilitates communication and information sharing among providers. For example, medical homes use electronic health records, which give providers instant access to patient information regardless of location. Payment reform is another important element. The medical home model offers financial incentives for providers to focus on the quality of patient outcomes rather than the volume of services they provide. Medical homes assume a wide variety of forms. A couple of examples outlined below include community health centers and medical homes to manage chronic disease and behavioral health.
Legislators play a key role in creating and supporting this health care delivery model. As of April 2013, 43 states had policies promoting the medical home model for certain Medicaid or CHIP beneficiaries. States have created pilot projects, reformed payment structures, invested in health information technology, restructured Medicaid provider systems, and included the medical home model in service delivery.
The 2010 Patient Protection and Affordable Care Act (PPACA) contains various provisions that support implementation of the medical home model including new payment policies, Medicaid demonstrations, and the creation of Accountable Care Organizations – which are similar to medical homes, on a larger scale.
LegisBrief: The Medical Home Model of Care: Reducing Cost and Improving Quality (September 2012)
NCSL Brief: Medical Homes | Recent Resources on Cost Containment and Efficiencies, at http://www.ncsl.org/default.aspx?tabid=19936 (Updated February 2016)
Providing Quality Care through Medical Homes, NCSL conference presentation by V. Fan Tait, American Academy of Pediatrics
Joint Principles of the Patient-Centered Medical Home, Patient Centered Primary Care Collaborative
Patient Centered Medical Home Resource Center, Agency for Healthcare Research and Quality
The National Center for Medical Home Implementation
Building Medical Homes: Lessons From Eight States with Emerging Programs, National Academy for State Health Policy (December 2011)
Building Medical Homes in State Medicaid and CHIP Programs, National Academy for State Health Policy (June 2009)
Numerous assessment instruments are available to measure and accredit medical homes if they meet specific criteria. While some states are looking to national accreditation organizations for formal recognition, others are developing their own standards to formally recognize medical homes.
National accreditation organizations have created their own tools to evaluate the extent to which a practice complies with medical home standards. For example, the National Committee for Quality Assurance (NCQA) has developed the widely-used NCQA Physician Practice Connections—Patient-Centered Medical Home standard to recognize medical homes. This instrument relies on medical practices to self-report data on nine standards including access and communication, patient tracking and registry functions, care management, patient self-management and support, electronic prescribing, test tracking, referral tracking, performance reporting and improvement and advanced electronic communication. Other national medical home accreditation organizations include the Joint Commission, the Accreditation Association for Ambulatory Health Care (AAAHC) and the Utilization Review Accreditation Committee (URAC). For a comparison of patient-centered medical home recognition tools, see the 2012 Urban Institute report linked below.
Although national accreditation standards are widely recognized, compliance can be expensive and burdensome for states. A few states—such as Maine, Montana and Vermont—are nevertheless using NCQA accreditation. Many others, however, are developing their own formal medical home standards and recognition tools. Medicaid officials interviewed by the Urban Institute indicate that Medicaid and CHIP medical-home pilot programs are less likely to use national accrediting agencies because they are often costly, require a significant amount of time to complete, focus heavily on HIT and have been used primarily for adult populations, rather than pediatric medical homes. State-administered standards, in contrast, allow individual states to develop qualifications and standards that are pertinent to their specific populations, as well as incorporate criteria that fit community needs.
Patient-Centered Medical Home Recognition Tools: A Comparison of Ten Surveys’ Content and Operational Details, the Urban Institute, Health Policy Center (March 2012)
Will the Patient-Centered Medical Home Transform the Delivery of Health Care? Timely Analysis of Immediate Health Policy Issues, the Urban Institute (August 2011)
Defining and Measuring the Patient-Centered Medical Home, Journal of General Internal Medicine (June 2010)
Health Information Technology
Health information technology, such as electronic health records (EHRs), disease registries, personal health record systems and clinical decision support, is key to improving access to and sharing of patient information within a care coordination team. HIT significantly enhances the capability of the patient-centered medical home to achieve its quality and efficiency goals. By enabling providers to collect, manage, and share important patient information, health information technology facilitates communication between providers, health care teams and patients. This increased coordination, which gives network providers instant access to patient records regardless of where they seek services, improves care delivery and management. Increased use of technology also enhances communication between providers and patients and promotes patient engagement.
HIT: Turning the Patient-Centered Medical Home From Concept to Reality, Agency for Healthcare Research and Quality, U.S. Department of Health and Human Services
Fee-for-service, the traditional method of paying health care providers, incentivizes quantity of health care services over quality and volume over value. As an integral part of the medical home model, payment reform restructures provider compensation to align financial incentives with health outcomes. Providers are rewarded for promoting and coordinating overall patient health and improving health outcomes while simultaneously reducing health care costs. The theory is that better coordinated care leads to healthier patients who require fewer services, saving money in the long run.
Reimbursing medical practices that strive to improve care delivery through medical homes contributes to cost containment. Payment reform can also provide support for services that are not currently reimbursable – such as care coordination activities, adoption and use of health information technology, patient education, training to improve patient self-management of disease and enhanced provider-patient interaction.
Medical home payment systems assume various forms and may rely on a combination of payment models. For example, one financing system pays medical home providers a per-member, per-month fee in addition to traditional fee-for-service payments. This extra compensation covers medical home activities such as care coordination. Additional financial compensation may also be available if specific quality targets are achieved.
Medical Home Payment, Safety Net Medical Home Initiative (2011)
Medical Home Models
Medicaid homes can assume various forms. A few of the most common are described below.
Community Health Centers
Community health centers (CHCs) are community-based nonprofit organizations that provide comprehensive health services to people who lack access to other medical care—including the uninsured, residents of rural or underserved areas and some Medicaid patients—regardless of their ability to pay. In addition to primary care, CHCs often provide dental, vision and behavioral health services, community-centered services and care integration - including health education and case management. Although CHCs essentially function as community-centered medical homes, they are increasingly applying for formal recognition as patient-centered medical homes.
As of 2010, 1,124 community health centers operated more than 8,000 health care delivery sites and served nearly 20 million patients. Nearly three quarters of the populations served by CHCs had income at or below 100 percent of the federal poverty level ($22,050 for a family of four). About 40 percent received health insurance through Medicaid, 36 percent were uninsured and about half of CHC patients lived in rural areas. Studies from both the private and public sectors have identified health centers as providers of high quality, continuous care for the nation’s most vulnerable populations. For more on CHCs, click here.
Management of Chronic Disease and Behavioral Health
The medical home model offers an opportunity for states to reduce costs and improve care for the chronically ill. These Medicaid beneficiaries tend to have complex needs and are a major driver of health care costs. Many of the 43 states planning or implementing the medical home model focus on a subset of the chronically ill or other high cost beneficiaries.
Section 2703 of the Patient Protection and Affordable Care Act also includes an option for states to provide health homes (similar to medical homes) for enrollees with multiple chronic conditions. This provision offers federal support for improving the integration and coordination of comprehensive health care services for Medicaid beneficiaries with conditions such as mental health issues, substance use disorders, asthma, diabetes, heart disease and obesity. A 90 percent federal match is available to states for two years for programs that use the medical home model to serve Medicaid beneficiaries with chronic conditions.
Patient Centered Medical Home: Improving Chronic Illness Care, Safety Net Medical Home Initiative
Long Term Services and Supports and Chronic Care Coordination: Policy Advances Enacted by the Patient Protection and Affordable Care Act, National Academy of State Health Policy (April 2010)
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