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How can a medical home be financed?

The website for the National Center for Medical Home Implementation go to exit disclaimer provides guidance to understand and to manage costs linked to the medical home.  While this site is directed towards families with children with special health care needs, many of these financing principles can apply to the care of all children. This site advises stakeholders that there are additional costs associated with the medical home - costs that are not usually covered by health insurance.  These additional costs arise from services integral to the medical home, such as coordinating care, planning transitions in health care, and providing support systems for families.
To deliver these additional services, providers need to determine how their medical homes will be financed.  Providers can make certain changes to their billing practices to ensure that they are properly reimbursed.  This can be addressed by providers conscientiously selecting the most appropriate current procedural terminology (CPT) codes go to exit disclaimer and reducing the occurrence of down-coding. Down-coding refers to the practice of coding for a less complicated procedure, which results in easier coding and less paperwork but also reduces the amount a physician can be reimbursed.  For providers, including those reimbursed under a capitated system, this Institute for Community Inclusion manual (PDF - 907KB) go to exit disclaimer can serve as a guide to receiving payment that is reflective of services provided.   Chapel Hill Pediatrics and Adolescents (CHPA), a pediatric practice in Chapel Hill, NC, provides a concise account go to exit disclaimer of how it implemented new financing practices to support their medical home.  In addition to ensuring proper coding, CPHA also finances its medical home by obtaining outside funding from a Blue Cross Blue Shield foundation, State Title V grants and by pursuing contract negotiations with insurers when necessary.  In addition to State funding, many providers utilizing or planning to utilize health IT within the medical home may be eligible for funding under the American Recovery and Reinvestment Act (ARRA).  ARRA financial incentives have been established for the adoption of EHRs, which can help providers implement the characteristics of the medical home into their practices.

Financing a medical home is an issue that is relevant not only to patients, their families, and providers, but also to both public and private payers in the system.  Those financing the medical home will want to know how the medical home can offset related costs.  A 2008 study by the Deloitte Center for Health Solutions (PDF - 528KB) assesses risks, costs, and the return on investment associated with medical homes.  In its original model for analyzing medical homes, this study calculates an ROI that differs according to medical condition.  The report also acknowledges the existing initial costs of implementation and the need for incentives for providers to build medical homes. The National Academy for State Health Policy notes in an analysis supported by the Commonwealth Fund that payers, both private and public, may also be interested in offering incentives to providers, such as providing monthly coordination fees, enhanced visit rates, and other payment strategies that support medical homes.

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