The Affordable Care Act (ACA) gives Medicaid programs the option to create health homes to coordinate and better integrate primary, acute, behavioral health and long-term services and supports for beneficiaries with complex and chronic conditions. Growing evidence suggests that care management services – particularly those provided at the point of care – not only improve quality but reduce costly and avoidable hospital and skilled nursing facility admissions and emergency room visits.

The demonstrated effectiveness of care management models coupled with the availability of enhanced federal matching dollars makes the health home option particularly attractive to state Medicaid programs. And with some 50 percent of Medicaid beneficiaries enrolled in risk-based managed care today and states enrolling more clinically complex patients into those delivery systems, the health home option may provide an important and cost-effective tool for managed care organizations (MCOs) responsible for the physical, behavioral and/or long term care services required by Medicaid beneficiaries with chronic illnesses.

This brief explores how states might advance their health home strategy in whole or in part through their existing Medicaid risk-based managed care infrastructure. It details some of the implicit advantages of MCO environments for the development of health homes, as well as some challenges that states may encounter.

For more information, see also the November 16, 2010 letter from CMCS to State Medicaid Directors on Health Homes for Enrollees with Chronic Conditions.