Practice Innovation,Health Care Utilization and Costs in a Network of Federally Qualified Health Centers and Hospitals for Medicaid Enrollees

Abstract

State Medicaid programs need cost-effective strategies to provide high-quality care that is accessible to individuals with low incomes and limited resources. Integrated delivery systems have been formed to provide care across the continuum, but creating a shared vision for improving community health can be challenging. Medical Home Network was created as a network of primary care providers and hospital systems providing care to Medicaid enrollees, guided by the principles of egalitarian governance, practice-level care coordination, real-time electronic alerts, and pay-for-performance incentives. This analysis of health care utilization and costs included 1,189,195 Medicaid enrollees. After implementation of Medical Home Network, a risk-adjusted increase of $9.07 or 4.3% per member per month was found over the 2 years of implementation compared with an increase of $17.25 or 9.3% per member per month, before accounting for the cost of care management fees and other financial incentives, for Medicaid enrollees within the same geographic area with a primary care provider outside of Medical Home Network. After accounting for care coordination fees paid to providers, the net risk-adjusted cost reduction was $11.0 million.