Enhance Care Coordination through the Patient Centered Medical Home (PCMH)
Provide $500 Million in Dedicated Funding to the PCMH Demonstration Project
What is a PCMH?
The patient centered medical home would provide the opportunity for individuals to have a permanent
relationship with a physician trained to provide first contact, continuous, and comprehensive care. The
medical home is responsible for providing for all of a patient’s health care needs or appropriately arranging
care with other qualified professionals. It is a model of practice in which a team of health professionals
working collaboratively to provide coordinated care that includes the use of health information technology,
disease management, and diagnosis and treatment of acute and chronic illnesses.
Why are Changes Needed to Improve the Medicare Demo?
The PCMH Demonstration Project was authorized in the Medicare Improvement and Extension Act of 2006
(P.L. 109-432). There was no dedicated funding specifically for the demo in that legislation, which now
leaves the project in jeopardy of failing to fully evaluate the promise of the medical home. The Centers for
Medicare & Medicaid Services (CMS) is in the process of designing the demo and hopes to launch it early in
2009. CMS believes that its spending to execute the demo is limited to the savings the agency projects the
demo to generate. The lack of dedicated funding can severely hamper physician participation in the demo-
both in the number of geographic locations included in the project and the number of participating practices.
The CMS projection of the amount of savings and the timing of when the agency expects them to materialize
could result in payments that are inadequate to generate physician interest in participation. Physician
practices must make significant investments in infrastructure in the effort to be recognized as a medical
home. CMS must offer sufficient financial incentives to help practices transform to a readiness-state in being
able to provide the case envisioned by the PCMH. Providing $500 million in dedicated funding to the demo,
as was included in the House-passed Children’s Health & Medicare Act of 2007, would ensure that CMS has
adequate funding to carry out the demo.
The law specifies that the medical home demo will be conducted in up to eight states and in a variety of
practice settings, including practices with two or fewer physicians. Physician practices are to provide PCMH
care. Physicians in medical home practices will be paid a care management fee for each Medicare
beneficiary included in the project and medical home practices will be eligible to share in any savings that
materialize beyond what CMS makes in care management payments. CMS is in the process of designing the
demo, including: the criteria that qualifies a practice as a medical home; the amount of care management
payments; identifying the geographic locations; and process for recruiting practices.
ACP urges Congress to provide $500 million in dedicated funding to the medical home project and change it
from a demo to a pilot project that will allow for more rapid expansion of the program if it is successful on
measures of quality, beneficiary satisfaction, and cost efficiency. Members of Congress are urged to
cosponsor S. 1340 and H.R. 2244, the Geriatric Assessment and Chronic Care Coordination Act of 2007,
introduced by Senator Blanche Lincoln (D-AR) and Representative Gene Green (D-TX) respectively. Both
bills would create a Medicare benefit for a comprehensive geriatric assessment for beneficiaries with chronic
diseases or dementia.
For more information on ACP’s positions, please visit the Advocacy section on ACP Online,