The Department of Health and Human Services (HHS) announced that CMS will start soliciting state applications later this year for medical home demonstrations that will include Medicare funding. The demonstrations are expected to begin in early 2010 and last approximately three years. Among other things, the Medicare demonstrations would test whether these projects: 1) reduce unjustified variations in utilization and expenditure across delivery systems; 2) improve the safety, effectiveness, timeliness and efficiency of health care; and 3) reduce overall utilization and expenditures under the Medicare program.

Under the Advanced Primary Care Model (APC), physicians receive supplemental payments for achieving nationally recognized quality standards, coordinating care across a multidisciplinary team and monitoring patients' care outside the physician's office or hospital using health information technology, regardless of whether the patient is insured by Medicare, Medicaid or a private insurer.

The APC model was developed by the four leading primary care physician specialty societies - the American Academy of Pediatrics, the American Academy of Family Physicians, the American College of Physicians and the American Osteopathic Association. It has been endorsed by other health care provider groups, private health care purchasers, labor unions and consumer organizations.

It is being tested in practice demonstrations by public and private insurers, including at least 30 state Medicaid programs, Blue Cross and Blue Shield, United Healthcare, CIGNA and Aetna, along with systems such as Geisinger, Kaiser and Group Health.

States wishing to participate in the new demonstration must:  

  • Certify they have already established similar cooperative agreements between private payers and their Medicaid program;  
  • Demonstrate a commitment by a majority of their primary care doctors to join the program;  
  • Meet a stringent set of qualifications for doctors who participate; and  
  • Integrate public health services to emphasize wellness and prevention strategies.  

The demonstration's design will include mechanisms to assure it generates savings for the Medicare trust funds and the federal government overall.  

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