Health Law Consulting Blog

Tuesday, January 21, 2014

Patient-Centered Medical Homes

The Patient-Centered Primary Care Collaborative (PCPCC) states that the “medical home” (also referred to as the “patient-centered medical home”) is best described as a model or philosophy of primary care that is patient-centered, comprehensive, team-based, coordinated, accessible, and focused on quality and safety. It is now a widely accepted model for how primary care should be organized and delivered throughout the health care system, and is a philosophy of health care delivery that encourages providers and care teams to meet patients where they are, from the simplest to the most complex conditions. It is a place where patients are treated with respect, dignity, and compassion, and enable strong and trusting relationships with providers and staff. Above all, the medical home is not a final destination, instead it is a model for achieving primary care excellence so that care is received in the right place, at the right time, and in the manner that best suits a patient's needs.

In 2007, the major primary care physician associations developed and endorsed the Joint Principles of the Patient-Centered Medical Home. The model has since evolved, and today the PCPCC actively promotes the medical home as defined by the Agency for Healthcare Research and Quality (AHRQ).

Features of the Medical Home

Adapted from the AHRQ definition, the PCPCC describes the medical home as an approach to the delivery of primary care that is:

  • Patient-centered: A partnership among practitioners, patients, and their families ensures that decisions respect patients’ wants, needs, and preferences, and that patients have the education and support they need to make decisions and participate in their own care.
  • Comprehensive: A team of care providers is wholly accountable for a patient’s physical and mental health care needs, including prevention and wellness, acute care, and chronic care.
  • Coordinated: Care is organized across all elements of the broader health care system, including specialty care, hospitals, home health care, community services and supports.
  • Accessible: Patients are able to access services with shorter waiting times, "after hours" care, 24/7 electronic or telephone access and strong communication through health IT innovations.
  • Committed to quality and safety: Clinicians and staff enhance quality improvement through the use of health IT and other tools to ensure that patients and families make informed decisions about their health.

In 2008, the Centers for Medicare and Medicaid Services (CMS) released detailed information about the Medicare Medical Home Demonstration, a three-year demonstration authorized by the Tax Relief and Health Care Act of 2006.  Under the demonstration project, physician practices that qualified as medical homes were paid a monthly care management fee to “provide targeted, accessible, continuous and coordinated, family centered high need populations,” which included patients with prolonged or chronic medical conditions.

In September 2009, the Department of Health and Human Services (HHS) announced the establishment of the Multi-Payer Advanced Primary Care Practice (MAPCP) Demonstration, under which Medicare joined the Medicaid and private insurers as a payer participant in state-sponsored initiatives to promote the principles that characterize advanced primary care often referred to as the “patient-centered medical home” (PCMH).

Historically, “the PCMH referred to a care model advanced many years ago by the American Academy of Pediatrics (AAP) to describe a single source of medical information about the pediatric patient.  The concept expanded to denote the delivery of primary health services that are provided and/or coordinated by a consistent, responsible and accessible physician or medical practice.”  The current alignment of the medical home model with specific financial incentives to enhance care coordination (with the goal of achieving cost savings in Medicare) has shifted attention away from the benefits of the medical home as a care delivery model and resulted heighten concern among some about the potential limitations of structuring a physician payment system based on the medical home structure.

The AMA/Specialty Society RVS Update Committee (RUC) provided CMS with its recommendations for Relative Value Units (RVUs) for the care management fee. Care management fees were paid to participating practices on a per member (i.e., eligible patient) per month basis, at a blended rate of approximately $40 for Tier I practices and $52 for Tier II practices.  The National Quality Assurance (NCQA) medical home recognition started with two Tiers and now has Three Tiers.

Advances were then risk-adjusted according to patient severity based on the Hierarchical Conditions Code Categories, which reflects disease burden and predicted future costs to Medicare.

Under the demonstration design, participating practices were eligible to receive 80% of the savings above the first 2% of savings, less care management fees.  Payment of the monthly medical home fee to qualified practices begin in January 2010, and continued through December 2012. 

Support for innovative payment models that can sustain medical homes is growing.  Medical homes that lower the cost of care, offer incentives, rewards quality over quantity, enable practices to invest in infrastructure and increase patient satisfaction are lofty goals, but attainable.  However, the rapid proliferation of medical home initiatives in the United States in the past few years is more seems to have a regional trajectory, is marked by experimentation and evolution in both practice transformation strategies and in payment models.  The central challenge continues to be how best to structure payment arrangements.

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