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Building Medical Homes: Lessons From Eight States with Emerging Programs

There have been numerous efforts by payers and providers to improve patient access to high-functioning medical homes—an enhanced model of primary care that offers whole-person, comprehensive, ongoing, and coordinated patient- and family-centered care. Public payers, especially Medicaid, have been leaders in these efforts, with the hopes of preventing illness, reducing wasteful fragmentation, and averting the need for costly emergency department visits, hospitalizations, and institutionalizations. With the support of The Commonwealth Fund, the National Academy for State Health Policy (NASHP) has fostered these efforts through the Consortia to Advance Medical Homes for Medicaid and CHIP Participants. In 2007–09, NASHP provided its first round of assistance to eight states—Colorado, Idaho, Louisiana, Minnesota, New Hampshire, Oklahoma, Oregon, and Washington—that were seeking to build medical homes in their Medicaid and CHIP programs. This assistance consisted of an in-person kick-off meeting, a series of regular group technical assistance webinars, and ongoing individualized consultation with experts.

Drawing on the combined experiences of these states and a small group of states that already had programs, NASHP developed a framework that other states could follow to implement medical home programs. The framework consists of five broad steps:

  1. Strategically engage partners.
  2. Set performance expectations and implement a process to identify practices that meet expectations.
  3. Compensate and motivate practices through enhanced payment.
  4. Help practices meet expectations and improve performance.
  5. Evaluate program performance.

In 2009–10, NASHP supported the efforts of a second group of states—Alabama, Iowa, Kansas, Maryland, Montana, Nebraska, Texas, and Virginia—as they sought to develop new medical home programs. The work of these states reinforced the importance of following the five key steps. From this work a number of common themes emerged, which are of relevance to states that are considering or are already promoting medical homes.

  • Tailoring the definition of "medical home" to reflect state needs, priorities, and circumstances. As they craft their definitions, state policymakers are frequently looking to national definitions and other states' existing definitions to conceptualize their priorities. For example, Montana's definition emphasizes the importance of culturally effective, community-based care.
  • Using payment policy to foster collaboration among primary care and specialty care physicians, as well as other service providers. As an example, Iowa is paying primary care providers for remote consultations with hospital based specialists, while Alabama is paying more to practices that collaborate with their local community networks. The Alabama networks will help practices function as medical homes. Among other responsibilities, network staff will help primary care providers coordinate care for high-need and high-risk patients and teach self-management skills.
  • Using payment policy to reward more capable and better-performing medical homes. State medical home programs are rewarding practices that meet more demanding standards—such as effectively using a registry—with higher medical home payments. They are also distributing savings based on practice performance, with greater shares going to those that perform better on preselected performance measures.
  • Helping practices improve performance. In addition to offering enhanced payment, states are supporting practices by providing electronic health record systems, registries, and data as well as support in implementing these new tools. They are also offering learning collaboratives to bring teams from practices together to work toward common improvement goals and deploying coaches to help practices become high-performing medical homes.
  • Providing support for care coordination. States use various strategies to help primary care providers improve care coordination. Some states are explicitly directing participating practices to use a portion of their medical home payments to hire staff who coordinate care. Other states are developing community resources that link practices and patients to other services in the community and augment the primary care providers' care coordination activities.
  • Easing the evaluation burden for medical home providers. Although there is evidence that medical homes improve quality and contain costs in Medicaid, each state needs to assess whether the medical home—as implemented in their state—succeeds. States are looking to assess improvements within primary care practices by monitoring changes in acute care utilization, cost containment, and patient and provider experience. When possible, medical home programs are relying heavily on data collected as a function of providing and paying for services (e.g., claims
    data) in their evaluation designs. This minimizes the extra reporting work that practices must do. Initiatives are also drawing measures from national data sets and incorporating information that practices must already report to other programs.
  • Basing medical home qualification criteria on models established by a national organization. State medical home programs need ways to translate their medical home principles into concrete, measureable expectations. To that end, many states are convinced that there is value in leveraging national medical home qualification processes, such as those administered by the National Committee for Quality Assurance (NCQA) or the Joint Commission. Some states are adopting national qualification standards outright, while others are modifying them. Using national standards leverages investments made by widely known, respected, neutral organizations and eliminates the need to devote limited resources to developing and administering a new recognition process.
  • Balancing the desire for improved performance with the cost of the improvements. The start-up and ongoing costs associated with transforming a standard primary care practice into a high-performing medical home can be significant for both practices and payers. Accordingly, some program leaders focus their resources on a limited number of practices at the start of a program and/or allow practices to receive medical home payments for a limited period before they achieve formal medical home recognition.
  • Addressing antitrust concerns that arise when multiple payers come together to create a medical home program. States that are seeking to build multipayer programs have critical roles to play in providing antitrust protection for interested private payers, and they have multiple options for providing this protection. In many cases, neutral state agencies are supervising sensitive meetings. Additionally, states are enacting legislation that explicitly provides antitrust protection.

The state profiles contained in this report demonstrate that states can move forward with plans to improve primary care systems, even in the face of unprecedented budget constraints. The design of their projects has been greatly informed by the work of states that have already implemented medical homes. At the same time, states are innovating and learning lessons that can serve to advance the broader field.

Publication Details



N. Kaye, J. Buxbaum, and M. Takach, Building Medical Homes: Lessons From Eight States With Emerging Programs, The Commonwealth Fund and the National Academy for State Health Policy, December 2011.