Title 42, The Public Health and WelfareRelease 119-110
§1396w–4 State Option to Provide Coordinated Care Through a Health Home for Individuals with Chronic Conditions
Title 42 › CHAPTER 7 — SOCIAL SECURITY › SUBCHAPTER XIX — GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS › § 1396w–4
Summary
Starting January 1, 2011, a State can choose to let certain people on Medicaid get a “health home.” A health home is a designated provider, a team of health professionals, or a health team that coordinates care for people with chronic conditions. The federal government will set rules for which providers qualify. States must pay those providers for health home services. For the first 8 fiscal year quarters after a State’s plan change takes effect, the federal share of those payments is 90 percent. States must describe how they will set payments; payments can be tiered by need or provider ability and do not have to be only a per-member-per-month rate. The federal government may give planning grants starting January 1, 2011, but total grants cannot exceed $25,000,000. A State that gets a planning grant must pay its normal Medicaid share each year (the State percentage under section 1396d(b)). For State plans focused on substance use disorder (SUD) approved on or after October 1, 2018, the State can ask to extend the 90 percent federal share for 2 more fiscal quarters. Those SUD plans must report on quality, access, and total spending when the period ends. By October 1, 2020, CMS must post best practices for SUD-focused plans. States must require hospitals to have procedures to refer people with chronic conditions from emergency departments to designated providers. States should work with the Substance Abuse and Mental Health Services Administration. States must track avoidable readmissions and plan to use health information technology. Providers must report quality measures to the State. Key terms: eligible individual with chronic conditions (Medicaid-eligible and has at least two chronic conditions, or one chronic condition and risk for another, or a serious persistent mental health condition); chronic conditions (examples: mental health, substance use disorder, asthma, diabetes, heart disease, BMI over 25); health home (the chosen provider or team); health home services (care management, care coordination and health promotion, transitional care, patient and family support, community referrals, and use of health IT); designated provider (types of approved medical providers with the needed systems); team of health care professionals (a group that may include nurses, social workers, and others); health team (as defined elsewhere by law).
Full Legal Text
Title 42, §1396w–4
The Public Health and Welfare, Source: USLM XML via OLRC
(a)In general
Notwithstanding section 1396a(a)(1) of this title (relating to statewideness), section 1396a(a)(10)(B) of this title (relating to comparability), and any other provision of this subchapter for which the Secretary determines it is necessary to waive in order to implement this section, beginning January 1, 2011, a State, at its option as a State plan amendment, may provide for medical assistance under this subchapter to eligible individuals with chronic conditions who select a designated provider (as described under subsection (h)(5)), a team of health care professionals (as described under subsection (h)(6)) operating with such a provider, or a health team (as described under subsection (h)(7)) as the individual’s health home for purposes of providing the individual with health home services.
(b)Health home qualification standards
The Secretary shall establish standards for qualification as a designated provider for the purpose of being eligible to be a health home for purposes of this section.
(c)Payments
(1)In general
A State shall provide a designated provider, a team of health care professionals operating with such a provider, or a health team with payments for the provision of health home services to each eligible individual with chronic conditions that selects such provider, team of health care professionals, or health team as the individual’s health home. Payments made to a designated provider, a team of health care professionals operating with such a provider, or a health team for such services shall be treated as medical assistance for purposes of section 1396b(a) of this title, except that, subject to paragraph (4), during the first 8 fiscal year quarters that the State plan amendment is in effect, the Federal medical assistance percentage applicable to such payments shall be equal to 90 percent.
(2)Methodology
(A)In general
The State shall specify in the State plan amendment the methodology the State will use for determining payment for the provision of health home services. Such methodology for determining payment—
(i)may be tiered to reflect, with respect to each eligible individual with chronic conditions provided such services by a designated provider, a team of health care professionals operating with such a provider, or a health team, as well as the severity or number of each such individual’s chronic conditions or the specific capabilities of the provider, team of health care professionals, or health team; and
(ii)shall be established consistent with section 1396a(a)(30)(A) of this title.
(B)Alternate models of payment
The methodology for determining payment for provision of health home services under this section shall not be limited to a per-member per-month basis and may provide (as proposed by the State and subject to approval by the Secretary) for alternate models of payment.
(3)Planning grants
(A)In general
Beginning January 1, 2011, the Secretary may award planning grants to States for purposes of developing a State plan amendment under this section. A planning grant awarded to a State under this paragraph shall remain available until expended.
(B)State contribution
A State awarded a planning grant shall contribute an amount equal to the State percentage determined under section 1396d(b) of this title (without regard to section 5001 of Public Law 111–5) for each fiscal year for which the grant is awarded.
(C)Limitation
The total amount of payments made to States under this paragraph shall not exceed $25,000,000.
(4)Special rule relating to substance use disorder health homes
(A)In general
In the case of a State with an SUD-focused State plan amendment approved by the Secretary on or after October 1, 2018, the Secretary may, at the request of the State, extend the application of the Federal medical assistance percentage described in paragraph (1) to payments for the provision of health home services to SUD-eligible individuals under such State plan amendment, in addition to the first 8 fiscal year quarters the State plan amendment is in effect, for the subsequent 2 fiscal year quarters that the State plan amendment is in effect. Nothing in this section shall be construed as prohibiting a State with a State plan amendment that is approved under this section and that is not an SUD-focused State plan amendment from additionally having approved on or after such date an SUD-focused State plan amendment under this section, including for purposes of application of this paragraph.
(B)Report requirements
In the case of a State with an SUD-focused State plan amendment for which the application of the Federal medical assistance percentage has been extended under subparagraph (A), such State shall, at the end of the period of such State plan amendment, submit to the Secretary a report on the following, with respect to SUD-eligible individuals provided health home services under such State plan amendment:
(i)The quality of health care provided to such individuals, with a focus on outcomes relevant to the recovery of each such individual.
(ii)The access of such individuals to health care.
(iii)The total expenditures of such individuals for health care.
For purposes of this subparagraph, the Secretary shall specify all applicable measures for determining quality, access, and expenditures.
(C)Best practices
Not later than October 1, 2020, the Secretary shall make publicly available on the internet website of the Centers for Medicare & Medicaid Services best practices for designing and implementing an SUD-focused State plan amendment, based on the experiences of States that have State plan amendments approved under this section that include SUD-eligible individuals.
(D)Definitions
For purposes of this paragraph: (i) SUD-eligible individuals
(ii)SUD-focused State plan amendment
The term “SUD-focused State plan amendment” means a State plan amendment under this section that is designed to provide health home services primarily to SUD-eligible individuals.
(d)Hospital referrals
A State shall include in the State plan amendment a requirement for hospitals that are participating providers under the State plan or a waiver of such plan to establish procedures for referring any eligible individuals with chronic conditions who seek or need treatment in a hospital emergency department to designated providers.
(e)Coordination
A State shall consult and coordinate, as appropriate, with the Substance Abuse and Mental Health Services Administration in addressing issues regarding the prevention and treatment of mental illness and substance abuse among eligible individuals with chronic conditions.
(f)Monitoring
A State shall include in the State plan amendment—
(1)a methodology for tracking avoidable hospital readmissions and calculating savings that result from improved chronic care coordination and management under this section; and
(2)a proposal for use of health information technology in providing health home services under this section and improving service delivery and coordination across the care continuum (including the use of wireless patient technology to improve coordination and management of care and patient adherence to recommendations made by their provider).
(g)Report on quality measures
As a condition for receiving payment for health home services provided to an eligible individual with chronic conditions, a designated provider shall report to the State, in accordance with such requirements as the Secretary shall specify, on all applicable measures for determining the quality of such services. When appropriate and feasible, a designated provider shall use health information technology in providing the State with such information.
(h)Definitions
In this section: (1) Eligible individual with chronic conditions
(2)Chronic condition
The term “chronic condition” has the meaning given that term by the Secretary and shall include, but is not limited to, the following:
(A)A mental health condition.
(B)Substance use disorder.
(C)Asthma.
(D)Diabetes.
(E)Heart disease.
(F)Being overweight, as evidenced by having a Body Mass Index (BMI) over 25.
(3)Health home
The term “health home” means a designated provider (including a provider that operates in coordination with a team of health care professionals) or a health team selected by an eligible individual with chronic conditions to provide health home services.
(4)Health home services
(A)In general
The term “health home services” means comprehensive and timely high-quality services described in subparagraph (B) that are provided by a designated provider, a team of health care professionals operating with such a provider, or a health team.
(B)Services described
The services described in this subparagraph are—
(i)comprehensive care management;
(ii)care coordination and health promotion;
(iii)comprehensive transitional care, including appropriate follow-up, from inpatient to other settings;
(iv)patient and family support (including authorized representatives);
(v)referral to community and social support services, if relevant; and
(vi)use of health information technology to link services, as feasible and appropriate.
(5)Designated provider
The term “designated provider” means a physician, clinical practice or clinical group practice, rural clinic, community health center, community mental health center, home health agency, or any other entity or provider (including pediatricians, gynecologists, and obstetricians) that is determined by the State and approved by the Secretary to be qualified to be a health home for eligible individuals with chronic conditions on the basis of documentation evidencing that the physician, practice, or clinic—
(A)has the systems and infrastructure in place to provide health home services; and
(B)satisfies the qualification standards established by the Secretary under subsection (b).
(6)Team of health care professionals
The term “team of health care professionals” means a team of health professionals (as described in the State plan amendment) that may—
(A)include physicians and other professionals, such as a nurse care coordinator, nutritionist, social worker, behavioral health professional, or any professionals deemed appropriate by the State; and
(B)be free standing, virtual, or based at a hospital, community health center, community mental health center, rural clinic, clinical practice or clinical group practice, academic health center, or any entity deemed appropriate by the State and approved by the Secretary.
(7)Health team
The term “health team” has the meaning given such term for purposes of section 256a–1 of this title.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
section 5001 of Public Law 111–5, referred to in subsec. (c)(3)(B), is section 5001 of Pub. L. 111–5, div. B, title V, Feb. 17, 2009, 123 Stat. 496, which was formerly set out as a note under section 1396d of this title.
Amendments
2018—Subsec. (c)(1). Pub. L. 115–271, § 1006(a)(1), inserted “subject to paragraph (4),” after “except that,”. Subsec. (c)(4). Pub. L. 115–271, § 1006(a)(2), added par. (4).
Statutory Notes and Related Subsidiaries
Survey and Interim Report Pub. L. 111–148, title II, § 2703(b)(2), Mar. 23, 2010, 124 Stat. 322, provided that: “(A) In general.—Not later than January 1, 2014, the Secretary of Health and Human Services shall survey States that have elected the option under section 1945 of the Social Security Act [42 U.S.C. 1396w–4] (as added by subsection (a)) and report to Congress on the nature, extent, and use of such option, particularly as it pertains to—“(i) hospital admission rates; “(ii) chronic disease management; “(iii) coordination of care for individuals with chronic conditions; “(iv) assessment of program implementation; “(v) processes and lessons learned (as described in subparagraph (B)); “(vi) assessment of quality improvements and clinical outcomes under such option; and “(vii) estimates of cost savings. “(B) Implementation reporting.—A State that has elected the option under section 1945 of the Social Security Act (as added by subsection (a)) shall report to the Secretary, as necessary, on processes that have been developed and lessons learned regarding provision of coordinated care through a health home for Medicaid beneficiaries with chronic conditions under such option.”
Reference
Citations & Metadata
Citation
42 U.S.C. § 1396w–4
Title 42, The Public Health and Welfare
Last Updated
Sep 22, 2026
Release point: 119-110