States in Action Archive
CMS Offers Advice to States on Creating Health Homes

In this Ask the Expert column, senior officials from CMS provide information and advice that may help states plan and implement health homes under the Patient Protection and Affordable Care Act (ACA).

 

According to the ACA provision and CMS guidelines, states will have flexibility in designing health homes. In what areas or ways would you encourage states to innovate?

CMS encourages states to determine how health homes could address the greatest need. An analysis of existing programs operating within a state should indicate if particular populations, or individuals with particular conditions, are being underserved through a fragmented system. State flexibility in determining the chronic conditions to include, [as well as the] providers and reimbursement methodologies, provides a great opportunity for effecting real change in the areas where it's needed most.

According to a letter from CMS to states, health home providers must "coordinate and provide access to long-term care supports and services." Can a nursing home or a multi-level long-term care provider—such as a Continuing Care Retirement Community or a Program All-inclusive Care for the Elderly (PACE) be a health home? Would dementia be considered a chronic condition?

CMS would be supportive of a state adding dementia as a chronic condition to be served through a health home. States have a great deal of flexibility in determining appropriate providers of health home services, which could include a PACE program. The provider pool will be largely driven by the chronic conditions the state is incorporating into their program. A long-term relationship is envisioned between the health home and the beneficiary, along with a focus on community integration, so we would question an institutional provider's role as a health home provider.

What is the most important concern you're hearing from states regarding implementing health homes under the ACA, and how should states best address that concern?

CMS is aware that states need to make difficult decisions in this economic environment that may influence their ability to implement this provision. States need to assess their ability to devote sufficient resources to implementing a new program. Provider infrastructure, the ability to collect data required by the Affordable Care Act, and other state-specific issues need to be evaluated.

While these are concerns that every state must weigh, the enhanced FMAP for health home services in the first eight quarters of program effectiveness, along with the potential of cost savings through reduced hospitalizations and nursing facility admissions, would certainly balance many of those issues. The evaluation component of this provision, which will be informed by the quality measures each state utilizes to address the elements required in statute, will demonstrate the experience of the early programs, and will provide additional evidence to other states debating whether to implement this provision.

CMS is available to provide technical assistance to states as they make these decisions, and we're actively working to align health home requirements (such as quality measurements) with other Medicaid and Medicare provisions to minimize burden on states and providers. Additionally, CMS is encouraging states and other interested parties to submit questions to the health home mailbox as described in the November 16 SMD letter. The questions submitted will help shape future guidance and policy direction.

How does CMS envision state integration of health homes with Medicaid managed care? For example, can states draw down enhanced match for programs implemented by Medicaid managed care organizations? Is the requirement to have health home payment go directly to providers or teams an obstacle here?

CMS sees no reason why a health home program would not work—and work effectively—in a managed care environment. If health home services were being reimbursed as an increase to the existing PMPM [per member/per month] rate, the state would need to describe how the portion of the rate eligible for the 90 percent FMAP is segregated from the remainder of the rate matched at the regular FMAP percentage. We don't envision any conflict between this arrangement, and the requirement to directly reimburse providers/teams, but we'll be working through those details in our negotiations with states.

Any final words of advice to states as they consider planning and implementing health homes under the ACA?

CMS is very excited about the potential inherent in this provision, and we encourage states to engage their provider communities in discussions about health home implementation. CMS is also available for technical assistance to any state interested in submitting a health home State Plan amendment. We see this provision as an example of CMS's Three-Part Aim of providing better care for individuals, providing better care for populations, and lowering costs through system improvements.


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