Evaluation of the Medicaid Health Home Option for Beneficiaries with Chronic Conditions: Final Annual Report - Base Year


Evaluation of the Medicaid Health Home Option for Beneficiaries with Chronic Conditions: Final Annual Report - Base Year

Executive Summary

Brenda C. Spillman, Barbara A. Ormond and Elizabeth Richardson

Urban Institute

December 6, 2012

This report was prepared under contracts #HHSP23320100025WI and #HHSP23337001T between the U.S. Department of Health and Human Services (HHS), Office of Disability, Aging and Long-Term Care Policy (DALTCP) and the Urban Institute. For additional information about the study, you may visit the DALTCP home page at http://aspe.hhs.gov/office_specific/daltcp.cfm or contact the ASPE Project Officer, David de Voursney, at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 20201. His e-mail address is: David.DeVoursney@hhs.gov.

The opinions and views expressed in this report are those of the authors. They do not necessarily reflect the views of the Department of Health and Human Services, the contractor or any other funding organization.

This report presents first-year findings of the long-term evaluation of Medicaid health homes, a new model of care authorized in Section 2703 of the Affordable Care Act for high-need, high-cost beneficiaries with chronic physical conditions or serious mental illness (SMI). The Urban Institute is conducting the long-term evaluation for the U.S. Department of Health and Human Services, Office of the Assistant Secretary of Planning and Evaluation to assess the care models and processes states are using, the extent to which health homes result in increased monitoring and care coordination, and whether these models result in better care quality, reduced hospital, skilled nursing facility, and emergency department use, and lower costs. Findings will inform a 2017 Report to Congress.

Distinct features of Section 2703 health home model include the elevated importance placed on integrating physical health care with behavioral/mental health care and on linking enrollees to social services and other community supports. States with health home State Plan Amendments (SPAs) approved by the Centers for Medicare and Medicaid Services (CMS) receive eight quarters of 90% federal match for seven defined services: comprehensive care management, care coordination, health promotion, comprehensive transitional care, individual and family support services, linkage and referral to community and social support services, and use of health information technology (HIT). States have flexibility with respect to chronic conditions selected, geographic coverage, providers designated, and the payment system for health home services. The minimum eligibility criteria are having two chronic conditions, one chronic condition and being at risk of a second, or one serious and persistent mental health condition.

Evaluation Structure, Timeline, and Methods

The long-term evaluation began October 1, 2011, and will continue for five years. This report examines the first four states with approved SPAs--Missouri, Rhode Island, New York, and Oregon. Additional states will be selected for evaluation as their SPAs are approved. For each SPA, initial evaluation activities are developing background materials on program design and implementation context and conducting site visits. These activities provide a qualitative foundation for tracking and interpreting program progress over the eight-quarter intervention period during which the enhanced federal match is available. Follow-up telephone interviews will be conducted roughly annually after in-person site visits. Quantitative analysis of key outcomes will occur largely in the final two years of the evaluation and will examine utilization and costs for health home participants and comparison groups of beneficiaries.

Profile of First-Year State Health Home Initiatives

Health homes in the first four states focus on beneficiaries with SMI, substance abuse, and chronic physical conditions. New York and Oregon have chosen to combine all three populations in single broadly focused SPAs. Health home providers in New York are lead agencies that have assembled comprehensive service networks, while in Oregon they are the patient-centered primary care homes (PCPCHs) that form the foundation of a statewide health system reform. Missouri and Rhode Island each have one SPA focused on people with mental/behavioral health issues and community mental health centers as health home service providers, and a second SPA targeting a different population. Missouri's second SPA focuses on beneficiaries with multiple chronic physical conditions served by federally qualified health centers, rural health clinics, and hospital-operated primary care centers. Rhode Island's second program focuses on younger beneficiaries with special health care needs receiving care from specialized providers known as Comprehensive Evaluation, Diagnosis, Assessment, Referral, Re-evaluation (CEDARR) Family Centers.

With one exception, all four states are relying on per member per month (PMPM) payment for health home services. Missouri bases its PMPM on staffing needs assumptions. Rhode Island uses a similar methodology for its community mental health organizations, based on personnel costs and staffing ratios. New York uses regional and case-mix adjusted PMPM payments for health home enrollees and pays providers 80% of the PMPM during the period when they are attempting to enroll eligible beneficiaries. Oregon's PMPM payments are set at three levels based on the extent to which providers meet established criteria for PCPCHs. The exception to PMPM payments is Rhode Island's CEDARR Family Center-based health homes, which are paid through a mix of fixed service fees and established rates per quarter hour of effort.

Implementation and Emerging Issues

Our first year activities have yielded a number of insights regarding key program features and early implementation lessons we will continue to track over the intervention period.

Health home models: The six program models vary in terms of how much flexibility is afforded to participating providers, which is evident across four general areas: provider designation and qualifications (i.e., who can be a health home); structure (i.e., how services are provided, and by what staff); specification of service requirements; and accountability or reporting requirements.

  • More prescriptive models (Missouri, Rhode Island) may entail greater up-front provider investments to meet required staffing and make under-enrollment or enrollment discontinuities more of a problem.

  • A centralized approach to identifying and assigning potential enrollees to providers (Missouri, New York) may identify eligible beneficiaries more comprehensively but may entail greater costs for locating and recruiting enrollees; provider-based enrollment (Oregon, Rhode Island) may run a greater risk of cherry-picking or missing beneficiaries with low connectivity to the health system.

  • Integration of physical health, mental health, and nonclinical support services is crucial to the success of health homes, but is a challenge even in states with more experience with integration. In all four states, mental health and primary care providers report that paying attention to both physical and mental health issues represents a culture change in the approach to patient care.

  • All four states are struggling with incorporating children into the health home model, which is viewed as more applicable to adults and their providers because of its focus on beneficiaries with chronic conditions, although the extent to which this presents a challenge varies.

Communication: Modes and patterns of communication are still being developed within and across sites of care, and particularly between health home providers and hospitals and managed care organizations. The extent to which new patterns of communication and new protocols are needed depends in part on how much of a change from the existing care system the health home program represents. In all programs the lack of widespread and interoperable information technology systems, and regulatory restrictions on sharing patient information created barriers to communication at all levels.

Provider issues and challenges: Depending on the program, providers are either taking on new roles or becoming a part of a more integrated system. Common themes we heard related to who would incur costs and who would benefit from the return on investments, the inadequacy of data systems to meet provider needs, and the pace and effects of practice transformation.

HIT infrastructure and issues: Providers in all states noted the inadequacy of current electronic health records (EHRs) in supporting care integration, the documentation of nonclinical services, or cross-site communication. The lack of federal funding to support EHR adoption by behavioral health providers was seen as a significant barrier.

Role of complementary programs: All four states are building on structures and programs that already exist, are attempting to align their health home programs with other reforms, and have been able to draw on resources and technical assistance made available at both the state and federal level in the last several years to support practice transformation, care coordination, and mental health integration more generally.

The enhanced match: In all four states, the availability of the enhanced match was cited as an important part of the motivation for implementing health homes.

Overview of Evaluation Design and Challenges

Our research design uses a mixed-methods approach employing both qualitative and quantitative data collection and analysis. We have identified several challenges to the quantitative aspects of the evaluation and potential strategies for addressing them.

  • Primary challenges are the two-year implementation window, which is a short time over which to realize measurable improvements, and implementation of health homes statewide and alongside a range of other reforms, which makes it difficult to isolate a health home effect and to identify "uncontaminated" comparison groups.

  • The variety in state approaches to health home design and enrollment practices may present opportunities to identify state-specific or program-specific design adaptations.

Second Year Activities

In the next year, we will continue to monitor the first four states and begin work with new states, which to date include North Carolina, Iowa, and Ohio. We also will be receiving administrative data from CMS that will allow us to begin developing profiles of the health home eligible populations in each state. We will continue to work with states to identify suitable comparison groups, obtain identifiers for health home enrollees, and obtain information on quality monitoring measures the states are collecting from health home providers.


All states studied in this first year have used the Medicaid Health Homes option to augment existing programs, to accelerate movement down an established pathway, as one part of larger system reform efforts, or all of the above. Even so, implementation appears to be a slow process, at least with respect to the eight-quarter intervention period. Particular issues revealed through the site visits are those relating to the need to improve communication between provider types and settings, as well as the special challenges associated with integrating care. In the second evaluation year, the four states examined in this report and North Carolina will complete their first intervention year and move well into their second years. This will allow us to observe how progress toward full implementation and system reform may differ across these maturing programs and to document these and other implementation issues for new programs in their first intervention year.

The Full Report is also available from the DALTCP website (http://aspe.hhs.gov/office_specific/daltcp.cfm) or directly at http://aspe.hhs.gov/daltcp/reports/2012/HHOption.shtml.