M.Div, Psy.D, D. Min

Health Homes:

A Next Step Toward Integrative Healthcare in the United States

Kenneth L. Miller, PhD, LPCC-S, NCC, BCPC, AMBPP

A.L. Stanley, MS Ed, NCC

Youngstown State University


Authors discuss Section 2703 the Affordable Care Act of 2010, which created an optional Medicaid State Plan benefit for states to institute Health Homes1 to serve the healthcare needs of Medicaid-eligible individuals suffering from chronic health conditions. Centers for Medicare and Medicaid Services (CMS) promulgated the expectation for state Health Home providers to adopt a whole-person philosophy by integrating and coordinating “acute, primary, behavioral health and long-term services”2 and supports. Authors clarify health home requirements, structures, functions, benefits, and limitations. They argue that Health Homes address deficiencies in the current system of health service delivery by providing integrative, efficient, and fiscally responsible services that result in improved outcomes for patients.

Keywords: Affordable Care Act, Health Homes, Integrative Healthcare, Medicaid

Learning Objectives:

  1. Understand objectives of the Health Home model

  2. Understand eligibility requirements to receive Health Home services

  3. Understand the structure, functions, and limitations of Health Homes

  4. Understand Health Home reporting requirements; and,

  5. Understand the potential for Health Homes to serve as models of effective and efficient healthcare delivery.

Statement of the Problem

Medical service delivery practices in the United States have been characterized as uncoordinated, inefficient, wasteful, overly complex, fraudulent, and consequently too expensive. These characteristics are particularly salient for poor Americans, who are affected by cumbersome paperwork requirements and uncoordinated service delivery that places excessive demands on time, money, and energy to access needed medical services. Authors provide an overview of recent Health Home legislation and argue that it includes safeguards against wasteful practices and requires an integrated approach to service delivery. Authors suggest that Health Homes may serve as a model for medical practice in the twenty-first century.

The Affordable Care Act of 2010 and Health Homes

The Affordable Care Act of 2010 established a minimum Medicaid eligibility level of 133% of the federal poverty level for almost all U.S. citizens under the age of 65.3 Before implementation on January 1, 2014, states had the option to expand Medicaid coverage with Federal support using the revised criteria. Section 2703 of the Affordable Care Act of 2010 “created an optional Medicaid State Plan benefit”1 that enabled states to establish Health Homes to coordinate the delivery of healthcare services to Medicaid-eligible persons with chronic health conditions.1

The Health Home model was conceptualized much like the medical home model. The American Academy of Pediatrics has described the medical home model as medical care that is “accessible, family-centered, continuous, comprehensive, coordinated, compassionate, and culturally effective.”4 Medical home model characteristics, as defined in the Joint Principles of the Patient-Centered Medical Home and outlined by The American Academy of Family Physicians (AAFP), the American Osteopathic Association (AOA), and the American College of Physicians (ACP) include: quality, safety, enhanced access, whole-person orientation, coordinated care, a personal physician, physician-directed medical practices, and adequate payment. These principles have been combined with added emphasis on policy, training, service, research and finance to create a health home model with objectives that include: “lowering health care costs, increasing quality, reducing health disparities, achieving better outcomes, lowering utilization rates, improving compliance with recommended care, and coordinating a spectrum of medical and social services required by the individual across the lifespan.”5

This model was conceptualized, in part, to redress widespread waste in the current U.S. health care system. Categories of waste include “poor execution or lack of widespread adoption of best practices, failures of care coordination, overtreatment, administrative complexity, pricing failures, and fraud/abuse.”6 The Centers for Medicare and Medicaid Services (CMS) included an explicit expectation that Health Home providers operate under a whole-person philosophy in which all “primary, acute, behavioral health, and long-term services and supports” be integrated and coordinated to “treat the whole person.”3

Health Home Eligibility Requirements

As of March, 2014, the following states had enacted Health Home State Plan Amendments (SPAs): Alabama, Idaho, Iowa, Maryland, Maine, Missouri, New York, North Carolina, Ohio, Oregon, Rhode Island, South Dakota, Vermont, Washington, and Wisconsin. Of these 15 states, Alabama, New York, Ohio, Vermont, Washington, and Wisconsin opted for regional rather than statewide SPA implementation.7 Other states (Iowa, Kansas, Maine, Ohio, West Virginia, Wisconsin) have officially submitted SPAs to CMS. In addition, approved Health Home planning requests have been introduced by Alabama, Arizona, Arkansas, California, District of Columbia, Idaho, Kansas, Kentucky, Maine, Maryland, Minnesota, Mississippi, Nevada, New Jersey, New Mexico, North Carolina, Puerto Rico, Washington, West Virginia, and Wisconsin. Remaining states have not proposed SPAs. Figure 1 provides an illustration of SPA proposal status by state.8

Figure 1. State Health Home CMS Proposal Status

Figure 1

Health Home SPA program designs must be submitted to CMS for approval. A State Plan Amendment must include detailed descriptions of: target populations, geographical area, delivery systems, enrollment, building blocks, designated providers, provider standards/qualifications, payment methodology, comprehensive care management, care-coordination, comprehensive transitional care health promotion, individual and family support services, referral to community and social support services, and quality measures.9 After meeting these minimum federal eligibility requirements, Health Home administrators enjoy considerable latitude in program implementation.

Target Populations

Medical requirements for individuals to receive health home services include those with chronic conditions as delineated in section 1945(h)(2) of the Social Security Act (the Act) and include: asthma, diabetes, obesity (i.e., body mass index over 25), mental health issues, and substance abuse disorders. However, one chronic condition will not automatically qualify individuals for health home services. As of November of 2010, the federal government required that individuals meet one or more of the following three minimum medical eligibility requirements: having at least two chronic medical conditions; having one chronic condition and be at risk for a second; or having a severe and persistent mental health condition. Although the federal legislation set forth these guidelines for chronic conditions, the Act allows individual states to modify eligibility requirements for their target populations. For example, a state may expand the definition of chronic to include conditions not outlined in section 1945(h)(2) of the Act. They may also restrict medical eligibility to include only one or two of the requirements listed above.

Medical eligibility requirements are not universal. Idaho, Iowa, and North Carolina (see specific state plan amendments at Centers for Medicare and Medicaid Services)7 have added unique definitions of at-risk factors. Idaho’s include dyslipidemia, tobacco use, hypertension, and disease of the respiratory system. Iowa has expanded its eligibility requirements to include:

… [a] documented family history of a verifiable heritable condition included as eligible chronic conditions; a diagnosed medical condition with and established co-morbidity to an eligible chronic condition; or a verifiable environmental exposure to an agent or condition known to be causative of an eligible chronic condition.10

In North Carolina, a woman can be considered at-risk for a chronic condition upon developing gestational diabetes during pregnancy. Although these and other states have expanded their eligibility requirements, others like Ohio have narrowly defined their target populations to include only children and adults with serious and persistent mental illnesses.10

Provider Eligibility Requirements

States have the flexibility to determine eligible health home providers within federal guidelines. States must select one or more of the following provider infrastructures: (a) a designated provider that may be a community health center, home health agency, physician or group practice; (b) a team of health professionals that may include physicians, nutritionists, behavioral health professionals, and social workers who may be based in hospitals or community mental health centers that are either free-standing or virtual; or, (c) a health team that must include social workers, behavioral health providers, nutritionists, dieticians, nurses, specialists, and licensed complementary and alternative practitioners.1 Table 1 provides Health Home enrollee and provider estimates by state.11

Table 1

To date, all approved SPAs have included the following elements: adoption of a whole-person treatment model, use of electronic records, provider accountability for patient outcomes, and strategies for reducing healthcare costs. In some cases, individual states have been granted rights to modify their provider requirement standards. In an effort to limit face-to-face visits, Missouri and Iowa are encouraging providers to employ technology to improve standards of patient communication via email, text message and patient portals. New York requires that providers establish procedures to refer individuals with chronic conditions from hospital emergency rooms to designated Health Homes.10

Payment Methodology

As of January 1, 2011 and contingent upon federal approval of State Plan Amendments, states were automatically qualified to receive federal grants equal to “90 percent enhanced Federal Medical Assistance Percentage (FMAP)”12 for the specific health home services under Section 2703. These grants are available for the first eight quarters of expenses per qualified Health Home enrollee.13

The payment methodologies outlined in the approved SPAs are varied. They include but are not limited to: fee-for-service (FFS); tiered payments based on risk of individual (as determined by the state); per member per month (PMPM); PMPM plus add-ons for specialized care; and managed care organization (MCO) payments. Iowa and New York have added performance payment incentives based on health home quality measures. Two states, New York and North Carolina, base PMPM rate adjustments on region and individuals’ functional status.10

Reporting Requirements and Quality Measures

CMS requires states to report expenditures and quality measures in an interim survey and an independent evaluation, both to be submitted as Reports to Congress. The purpose of expenditure reporting is to demonstrate states’ efforts to improve continuously upon their Health Home models by increasing cost savings and decreasing avoidable hospitalizations. In reporting expenditures, CMS encourages states to demonstrate cost savings in one of two ways: creating a non-Health Home group of beneficiaries with similar characteristics and chronic conditions and compare non-Health Home group expenditures to Health Home expenditures, or; by calculating and comparing beneficiaries’ pre- and post-health home expenditures. CMS suggests a methodology for tracking avoidable hospitalizations by:

…constructing a denominator that counts the total number of hospitalizations for common conditions within the Medicaid population, and a numerator that counts the total number of hospitalizations within the denominator that were followed by another hospitalization within 30 days of the previous hospital stay discharge.5

Quality measure reports are the responsibility of designated state providers and a necessary condition for provider reimbursement. Reports must include assessments of clinical outcomes of individuals, quality care outcomes, and outcomes of patients’ experiences of care. States have flexibility in their SPAs to propose additional quality outcomes and procedures for measuring them. However, such amendments must be approved by CMS.5

Issues in Health Home Implementation

Townley and Takach14 suggested that states are likely to encounter significant problems implementing their State Plan Amendments. They include: coordination with existing programs; financing and payment; integrating behavioral and physical health; sharing health data; and evaluating Health Home programs. They also provided suggestions to aid states in managing these problems.

To address coordination issues, Townley and Takach recommended that states leverage existing healthcare programs in developing health home implementation plans. They urged SPA administrators to remember that CMS will not reimburse for duplicate services, which is a critical issue for Medicaid-managed care enrollees who may benefit from coordination services through a managed care plan.

In order to address financing and payment issues, Townley and Takach14 noted that states enjoy considerable latitude in developing Health Home payment methods. They indicated that states may receive a time-limited, enhanced funding match by either financing or arranging to finance “practice education or training.”14 The authors suggested that the enhanced match reflects the importance of early and continuing training to ensure provider readiness to deliver requisite services as states implement their SPAs. They reported that some states are providing such training through learning collaboratives jointly funded by both private and state sources.

Townley and Takach14 supported the need to integrate behavioral and physical healthcare services due to the facts that individuals who suffer severe mental illness experience more physical health problems than those in the general population, but are less frequently diagnosed and treated for physical illnesses. To address this problem, Health Home administrators are implementing a continuum of models that include co-locating medical and behavioral healthcare professionals in the same setting or are relying on primary care physicians to collaborate with psychiatrists and other medical professionals to achieve the requisite levels of integration.

Sharing patient health information is a critical aspect of integrated healthcare service delivery. Townley and Takach14 pointed out that existing laws (i.e., the Federal Health Insurance Portability and Accountability Act of 1996) and regulations (i.e., Federal Confidentiality of Alcohol and Drug Abuse Patient Records), which are designed to protect personal health information, may create substantial roadblocks for health home providers to achieve this goal. Although sharing of behavioral health information, including electronic transmissions of data, may be possible with the patient's consent, adoption rates of health information technologies have been low, particularly among small providers.

As previously noted, administrators are required by law to submit two reports to Congress that attest to their Health Home's capacity to lower health costs, improve patient health outcomes, and ensure patient satisfaction. Although federal evaluation criteria are based primarily on outcome measures, states have argued for the use of both process and outcomes measures. Townley and Takach14 pointed out that in states without established electronic medical records systems, the costs associated with manual chart reviews may be prohibitive. They also reported that evaluations of patient satisfaction with the quality of care may vary considerably due to the administrators' unique experiences with care surveys.


The Affordable Care Act of 2010 introduced sweeping changes in the nation’s healthcare system that have far-reaching implications for patients, employers, and taxpayers. For the first time in legislative history, a federal healthcare initiative has conceded the existence of a link between physical and mental health and created a vehicle for delivering integrated and holistic healthcare services to our nation’s poorest and sickest citizens. The establishment of Health Homes addresses limitations and waste in the current healthcare service delivery system by requiring that patients receive comprehensive treatment in ways designed to reduce disparities in access, service utilization, and costs, while improving access, quality care, and longevity.

Although hotly contested by political leaders, business owners, and citizens alike, the Affordable Care Act and the establishment of Health Homes have the potential to serve as a tool of political divisiveness that may ultimately perpetuate health/wealth disparities they were designed to redress. However, implemented with fidelity to both the letter and spirit of the law, Health Homes hold the promise of delivering high-quality medical services to poor Americans in a safe, efficient, and effective manner. Not incidentally, conscientious implementation of Health Home legislation may ultimately result in tax savings and will provide greater equality in access for marginalized Americans to a critical national resource.


  1. 1: Centers for Medicare and Medicaid Services. Health Homes. Accessed May 3, 2013.
  2. 2: Barth, S. Center for Health Strategies, Inc. Integrated Care for Dual Eligible Beneficiaries. Published December 13, 2013. Accessed March 19, 2014.
  3. 3: Centers for Medicare and Medicaid Services. Eligibility. Accessed May 3, 2013.
  4. 4: U.S. Department of Health and Human Services, Health Resources and Services Administration. What is a medical home? Why is it important? Accessed April 3, 2014.
  5. 5: Mann C. Letter to State Medical Director or State Health Official Baltimore, MD: Centers for Medicare and Medicaid Services (SMDL# 10-024; ACA# 12), Baltimore, MD. /downloads/SMD10024.pdf. Published November 16, 2010. Accessed March 20, 2014.
  6. 6: Health Affairs/Robert Wood Johnson Foundation. Health policy briefs: Reducing waste in health care. Health Affairs. Published December 13, 2012. Accessed February 28, 2014.
  7. 6: Centers for Medicare and Medicaid Services State by state health home state plan amendment matrix: Summary overview. Updated March 19, 2014. Accessed April 1, 2014
  8. 7: Centers for Medicare and Medicaid Services. State health home CMS proposal status (effective November 2013). Accessed September 10, 2014.
  9. 8: Patient Protection and Affordable Care Act, 42 USC § 2703.
  10. 9: Centers for Medicare and Medicaid Services. Approved health home state plan amendments. Accessed June 1, 2014.
  11. 10: Centers for Medicare and Medicaid Services. Health home enrollee/provider estimates. Accessed September 10, 2014.Townley C, Takach M. National Academy for State Health Policy. Developing and implementing the section 2703 Health Home State Option: State strategies to address key issues March 20, 2014.
  12. 11: The Henry J. Kaiser Family Foundation. Kaiser Commission on Medicaid and the Uninsured. How is The Affordable Care Act Leading to Changes in Long-Term Services and Supports (LTSS) Today? State Adoption of Six LTSS Options. Published April 2013. Accessed March 22, 2014.
  13. 12: Primary care: Health homes. Community Catalyst. Accessed June 1, 2014Centers for Medicare and Medicaid Services. State Health Home Proposal Status Accessed September 10, 2014.
  14. 13: Townley C, Takach M. National Academy for State Health Policy. Developing and implementing the section 2703 Health Home State Option: State strategies to address key March 20, 2014.

About the Author

Kenneth L. Miller, PhD, LPCC-S, NCC, BCPC, ABMPP is a professor in the Department of Counseling, Special Education, and School Psychology at Youngstown State University in Youngstown, Ohio. He has been a counselor educator for over 20 years and has served in a variety of administrative and clinical leadership roles in addition to his teaching responsibilities. His research interests include integrative medicine as a vehicle for social justice, assessment of cultural bias and discrimination, the role of resiliency on psychological well-being, and measurement of dispositional competence in mental health training programs. Miller serves as Co-Chair of the Governing Board of the AAIM Accreditation Commission and on the Executive Board of the American Psychotherapy Association. Email:

Published by Dr. Robert O' Block in The Annals of Psychotherapy fall 2014.