Does it pay to be a health home?

03/16/2015

The Affordable Care Act (ACA) established Medicaid Health Homes to help better coordinate care for seriously ill patients. There are now 16 states operating 20 different health home models and serving more than 1 million patients.

Designated health homes in these states have had to make a significant investment in staff, training and infrastructure, aided by generous federal matching funds. States receive 90 percent enhanced Federal Medical Assistance Percentages (FMAPs) for the health home services for the first eight quarters of the program.

Preliminary results from early adopter states indicate that health homes can both improve clinical outcomes and save money, but there are still challenges ahead in maintaining these programs, even as more states submit their plan amendments.

Early results are positive

Health homes are similar to medical homes in that they were designed to improve coordination between the behavioral and physical health providers. They also include health promotion and links to community support and other resources. The key difference is that health homes serve a very specific population. To be eligible for services, individuals must have two chronic conditions; have one chronic condition and be at risk of developing a second; or have a serious, persistent mental health condition.

Early adopters of health homes were Missouri, Rhode Island, New York and Oregon. The way states have structured their initiatives varies considerably from state to state, however.

“In some states the center of gravity is in behavioral health reaching to primary care, and in others, the center of gravity is in the primary care space,” says Melinda Abrams, vice president of the Commonwealth Fund’s healthcare delivery system reform initiative. “While there are requirements for care management, coordination, family support and links to community services, exactly how that is done is left up to the states.”

Missouri established two Medicaid plan amendments targeted at populations with chronic mental health conditions, as well as those with designated chronic physical health conditions, and its health homes are roughly split evenly between primary-care based and behavioral based. At the community mental health centers (CMHCs) that serve as health homes, staff were educated to help monitor client health status and put practices into place to help ensure those patients had access to primary care services.

Missouri had the advantage of building on an existing integration program that already fostered interaction among physical and mental health providers. As part of its earlier DMH Net program, Missouri established a metabolic screening process to help identify client issues with diabetes, hypertension and related illnesses. That program also created a part-time nursing liaison at each CMHC. The state’s Disease Management 3700 program for high-cost Medicaid clients also helped identify high utilizers, and resulted in outreach to CMHC clients with primary care problems.

“For us this has been sustainable,” says Andrew Greening, vice president of treatment services at Preferred Family Healthcare, one of the state’s designated health homes. “The big cost is the physician consultant cost, and we’ve been fortunate to be able to have a consultant that has provided the direction we need, and been a sustainable resource for our operations.”

Preferred Health is reimbursed on a per member, per month basis, which meets the cost of the nurse care managers, health home director and primary care physician consultant positions required by the state.

“Those are positions that are not able to bill for services under Medicaid,” Greening says.

The state has released data that reflects both the clinical and financial effectiveness of the program. According to early reports, in the first year, hospitalizations among CMHC health home clients decreased by 9.1percent. There were also significant improvements in cholesterol, blood pressure, blood sugar levels for patients with diabetes and hypertension, and even successes in weight loss for obese patients.

On the cost front, of the 20,000 enrollees in CMHC healthcare homes in the first 18 months of the program, Missouri reported savings an average of $32.98 per member, per month in Medicaid expenditures, totaling $2.4 million.

The health homes are estimated to have saved more than $23 million overall since their inception. Savings have been enough to help sustain the program now that the enhanced federal match dollars are gone.

Other states have also had promising results. For example, in New York, primary care visits increased by 14 percent, while expensive inpatient admissions and emergency room visits decreased by 23 percent.

Investment in staffing

Health homes require an investment in additional staff and training, as well as a significant operational adjustment to ensure providers are sharing information.

“One of the big challenges for the behavioral health organizations is learning how to operate within that larger structure of the medical system,” says George Braunstein, senior associate at market intelligence and consulting firm Open Minds, and former executive director of the Fairfax-Falls Church Community services Board (CSB) in Fairfax, Va. “They have to learn how to work with chronic health problems, understand what they are and what the key indicators are that have to be measured, and how to work with medical providers in an effective way.”

Reimbursement also works slightly differently, and some actions require a significant amount of documentation.

Most state plans rely on a per member, per month payment model, known as capitation. In Missouri and Rhode Island, payments are flat rates based on personnel costs and caseload assumptions. In Rhode Island, CMHCs have to submit detailed data supporting service provision to receive payments. Other payment strategies are possible under the CMS guidelines. For example, payment can be tiered—known as risk adjustment—by the acuity or severity of chronic conditions, or by the provider’s ability to handle different levels of complexity or severity.

Staffing requirements also vary by state. In Missouri, health home center teams must include a health home director, nurse care managers, a primary care physician consultant and administrative support staff, as well as some optional positions. Staffing levels are based on the number of enrollees. Providers also have to establish relationships with each other and with community support services.

“You have to think about this as building a team,” Braunstein says. “You have to find partner agencies who have the same level of dedication to these outcome as you do. You are also going to need additional staff as part of the health home team. There is upfront intensive personnel investment for planning, and then there’s the question of managing it on an ongoing basis.”

Is it sustainable?

Early adopter states like Missouri have already reached the end of their enhanced match period. According to a report on the program by the Urban Institute, some states have also tapped resources from local foundations and from state initiatives outside of Medicaid. There is also additional federal match available for states that are expanding health homes to new geographic regions or to cover new populations.

“States have to think about sustainability of the health home model while they are planning for the establishment of the program,” Abrams says. “Missouri is a great example. After the federal funding ran out, they opted to continue support several of its health homes because the evidence indicated it was working.”

“Most of the preliminary work done shows that the agencies are saving a significant amount of money,” Braunstein says. “The systems still have to do a lot of blending and braiding of different funding streams to sustain these programs. And if some of the individuals in these programs are more self-directed and self-sustaining in their care, they become less expensive to support.”

How this savings is distributed may pose a challenge moving forward. In some cases, the savings is generated by the health home activities, but accrued to the state Medicaid program or to local hospitals rather than to the CMHCs or primary care providers.

Health homes face other challenges aside from financing. Integrating care for children in these programs has proven challenging, although one of Rhode Island’s programs is specifically child-focused. Developing consent forms and getting clients to sign them was another logistics obstacle that some states encountered, according to the Urban Institute report.

Top challenges

In Missouri, Greening says his organization found that developing relationships with primary care providers was one of the most challenging elements of the health home program.

“We’ve reached out to the physicians the consumers already have, and had to find physicians for those who didn’t have one,” Greening says. “We are supporting the consumers in following their doctors’ orders and medication regimens. HIPAA has been a hurdle, and we’ve had to work hard to remind providers that HIPAA doesn’t interfere with continuity of care.”

In other states, providers have struggled to integrate their information technology systems to make it easier to share patient information. Dually eligible individuals have also posed a challenge, both in terms of reimbursement and in making sure that all providers are kept up-to-date on both Medicaid and Medicare-reimbursed procedures.

Even with those challenges, more states are filing plan amendments and those with existing programs have seen positive outcomes.

“Establishing a health home looks like a monumental task to take on, but the outcomes are so much better,” Greening says. “We’ve had individuals who are sick and struggling just to get up in the morning and function, who are now working toward recovery.”