There's no question that the healthcare community has embraced the patient-centered medical home (PCMH) model of care. To date, there are 22 multi-stakeholder pilots in 16 states, with eight state Medicare pilots scheduled for 2009. The joint principles of the PCMH have been endorsed by the AMA, AAFP, AAP, ACP and the AOA.

However, with the cost of transforming a physician practice into a medical home estimated at 30 percent over current fee-for-service reimbursement levels, acceptable funding formulas are still needed to cover construction and maintenance of medical homes.

Medical Home Reimbursement Models: Funding Patient-Centered Care with Multi-Stakeholder Collaborations presents three ongoing medical home pilots built on a variety of reimbursement models. This 39-page special report provides an opportunity to evaluate three PCMH financial models and benefit from the experiences of multi-stakeholder collaborations. These case studies reflect early collaborations by Colorado, Ohio and New Hampshire providers, employers and public and private payors to build reimbursement structures that reward providers for care coordination and preventive efforts without adversely impacting healthcare costs.

Colorado is deeply involved in medical home initiatives at the state and national levels. In the first case study, Lesley Reeder, R.N., B.S.N., quality improvement specialist for the Colorado Department of Health Care Policy and Financing, shares details on the Colorado Children’s Healthcare Access Program (CCHAP), which provides medical homes for Medicaid and SCHIP beneficiaries. CCHAP offers enhanced reimbursement for preventive care for 59 providers who care for 10,000 children. A physician champion and a supportive governor figure largely in the success of this small pilot, which is a stepping stone to larger medical home pilots in the state.

Colorado also participates in the Multi-Stakeholder Patient-Centered Medical Home Pilot, described in this book by Julie Schilz, co-chair of the Center for Multi-stakeholder Demonstrations and IPIP manager for the Colorado Clinical Guidelines Collaborative. In this multi-state pilot, Colorado is partnering with Ohio and a mix of employers and public and private payors to fund medical homes. Schilz provides details on its three-tiered reimbursement model (an approach recommended by the Patient-Centered Primary Care Collaborative) and describes other considerations, including sensitivity toward antitrust regulations.

Thirdly, from New Hampshire comes details on a payor-provider medical home pilot from Barbara Walters, M.D., senior medical director of Dartmouth-Hitchcock Medical Center. Seasoned from its participation in the CMS Group Physician Practice demonstration project for Medicare beneficiaries, Dartmouth-Hitchcock partnered with Cigna to create a medical home pilot whose reimbursement structure starts with quality, not cost. This collaboration with a commercial payor allowed Dartmouth-Hitchcock to apply lessons learned from the CMS demo as well as the clinical model it had developed.

Dr. Walters also shares details on the separate New Hampshire Citizens Health Initiative, which is readying a multi-site multi-stakeholder medical home pilot similar to Colorado's. Colorado even advised New Hampshire during pilot development. The New Hampshire initiative will launch in 2009 and will provide infrastructure and practice support for participating practices who have not yet clinically designed themselves in a medical home model.

This report also provides details on the following:

• Building community and legislative support for medical home initiatives;
• What public and private payors can learn by participating in multi-stakeholder collaborations;
• Avoiding the unintended consequences of pay-for-performance models;
• Benefits of process changes and staff satisfaction that result from medical home implementation;
• Identifying early "gets" and long-term gains;
• Value-added services that a public payor/collaborator can provide;
• The importance of reviewing antitrust regulations;
• Why it helps to have physicians at the negotiating table;
• Building a pilot that stands up to evaluation;
• Importance of ICD-9 coding in risk-adjusted models;