Design of the CMS Medical Home Demonstration
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This report presents the design of the Centers for Medicare & Medicaid Services’ (CMS) Medical Home Demonstration. In December 2006, Section 204 of the Tax Relief and Health Care Act of 2006 (TRHCA) mandated that CMS establish a medical home demonstration project to provide―targeted, accessible, continuous and coordinated, family-centered care to high-need populations. In addition, Section 133(a)(2) of the Medicare Improvements for Patients and Providers Act of 2008, which went into effect on July 15, 2008, makes available an additional $100 million from the Federal Supplementary Medical Insurance Trust Fund to carry out the demonstration. The primary purpose of the Medical Home Demonstration is to determine whether Medicare medical homes reduce costs to Medicare by avoiding unnecessary care, coordinating and rationalizing care, and avoiding preventable hospitalizations and readmissions. The demonstration also will determine whether medical homes improve the quality of health care by avoiding inconsistent treatments and medications, increasing the amount of preventive care, and improving patient adherence.
The medical home model, whose principles have recently been refined by the American Association of Family Physicians (AAFP), American Academy of Pediatricians (AAP), American College of Physicians (ACP), and American Osteopathic Association (AOA) (2007), are expected to achieve these goals largely through integration and coordination of health care by primary care physicians. Integrated health care is expected to enhance patient adherence to recommended treatment and avoid (1) hospitalizations, unnecessary office visits, tests, and procedures; (2) use of expensive technology or biologicals when less expensive tests or treatments are equally effective; and (3) patient safety risks inherent in inconsistent treatment decisions. Eighty-six percent of beneficiaries of fee-for-service (FFS) Medicare have one or more chronic conditions (Peikes et al. 2008), and many of these individuals suffer from five or more chronic conditions (Anderson 2005). Most FFS Medicare beneficiaries with chronic conditions receive care from several physicians—often 10 or more in a given year. The fragmentation of care for Medicare beneficiaries (MedPAC 2006; Pham et al. 2007; Starfield et al. 1976) and its relationship to rapidly rising health care costs (Parchman et al. 2005; Kripalani et al. 2007) are well documented.
This report summarizes the design of the CMS Medical Home Demonstration, hereafter referred to as the demonstration. Chapter II covers the basics of the demonstration design—how medical homes are defined, which physicians and patients are eligible to participate in the demonstration, and how practices will be paid for providing medical home services. Chapter III covers the operational procedures of the demonstration—the demonstration timeline, site selection, recruitment and enrollment procedures, assignment of beneficiaries to practices, how transitions such as patients who move out of the demonstration site or practices who drop out of the demonstration during the demonstration will be handled, and finally how the demonstration will be evaluated.
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