MINNEAPOLIS, March 3, 2010 – The Minnesota Department of Human Services (DHS) released a report that includes the reimbursement amounts that certified health care homes will likely receive for delivering care coordination services to patients on public health care programs.

As part of Minnesota’s 2008 Health Care Reform Act, the state has had the goal of establishing health care homes for patients enrolled in Medical Assistance.

As part of that, the state has been working out a payment system for reimbursing health care homes for care coordination services, such as care coordination. Rates announced this week call for payments of about $10 to $60 a month per health care home enrollee depending on the complexity of a patient’s care coordination needs. The average payment works out to $31.39 a month, according to a DHS report. These payment rates still have to be formalized.

Under the system, payment rates are based on a complexity tiering structure. Providers will identify the number of major conditions their patients have that are chronic, severe and are likely to require a care team. Clinics will then divide their patients into five tiers based on the number of major health conditions that affect them. Patients without major health conditions (Tier 0) are not eligible for health care home payments.

This chart describes the tiers and their matching payments.

Chronic Conditions Tier PMPM Rate*
1-3 1 $10.14
4-6 2 $20.27
7-9 3 $40.54
10+ 4 $60.81

*per member per month rate

In recognition of the increased time and resources involved, health care homes will receive a 15 percent pay boost for patients who have a serious mental illness or a primary language other than English. The MMA views this recognition of non-clinical factors as a positive development.

DHS estimates that about half of the Medical Assistance’s fee-for-service population will have at least one chronic condition and qualify for a health care home payment.

The department came up with the payment rates by basing them on the current state $66 reimbursement rate for a 40 to 60 minute evaluation and management visit with a physician. The department then discounted that rate, since it assumed that care coordination services are delivered by teams including physicians, care coordinators, and office or clerical staff.

The MMA is currently assessing whether the payments will be enough to prompt clinics to start offering health care home services in Minnesota.

“The MMA is hopeful that the rates – which are higher than medical home rates paid by some other state Medicaid programs – will generate additional interest in health care homes,” said Janet Silversmith, MMA director of policy, “but each clinic will need to assess for themselves whether to participate based on the relative proportion of patients they have with severe chronic conditions.”