New Jersey – Medical Homes

New Jersey Medicaid Medical Home Demonstration Project
New Jersey’s governor signed P.L. 2010, c.74 into law in September 2010 to establish a three-year medical home demonstration. The legislation, unanimously passed by the legislature, directed the Division of Medical Assistance and Health Service (DMAHS) to develop the demonstration in partnership with the state’s Medicaid managed care organizations (MCOs).

In accordance with that legislative requirement, New Jersey’s contracts with each of the state’s four Medicaid managed care organizations (MCOs) now include several requirements related to building medical homes. These requirements took effect on July 1, 2011 and are to last until June 30, 2014. According to the contract, medical home services include:

  1. “Care-coordination through multi-disciplinary teams;
  2. Care of enrollees with chronic diseases and the elderly;
  3. Patient or family education for enrollees with chronic diseases;
  4. Home-based services;
  5. Telephonic communication;
  6. Group care;
  7. Oral health examinations; and
  8. Culturally and linguistically appropriate care.”

New Jersey’s Medicaid MCOs are required to develop medical home payment models and then seek approval from DMAHS. They are also required to use National Committee for Quality Assurance (NCQA) medical home recognition criteria to qualify practices and to regularly evaluate their programs. The medical home projects are to be guided by the Joint Principles of the Patient Centered Medical Home. New Jersey anticipates that approximately 25,000 Medicaid beneficiaries will receive medical home services under the pilots from a diverse array of provider types. The state is encouraging MCOs to focus on practices that care for frail elderly beneficiaries and others with chronic health conditions, behavioral health conditions, and/or developmental disabilities. A November 2012 report to the legislature provides an update on MCO efforts to implement medical homes as of that date.

Other activity of note in New Jersey, as detailed in this report, includes:

  • The establishment of behavioral health home pilot sites for Medicaid beneficiaries (pages 74-75); and
  • Legislation and planning related to the establishment of accountable care organizations for Medicaid beneficiaries (pages 76-83). For more information on Medicaid ACOs in New Jersey, visit the New Jersey page of NASHP’s State Accountable Care Activity Map.
Federal Support: 
  • New Jersey has received a planning grant from the Centers for Medicare & Medicaid Services (CMS) to develop a state plan amendment to implement Section 2703 of the Affordable Care Act (ACA), establishing health homes for Medicaid enrollees with chronic conditions. To learn more about Section 2703 Health Homes, visit the CMS Health Homes webpage.
  • New Jersey is one of seven markets participating in CMS’s Comprehensive Primary Care Initiative (CPCi). In this multi-payer initiative, Medicare is collaborating with public and private insurers in the selected states or regions with the goal of strengthening primary care. In New Jersey, CPCi launched in November 2012, bringing together five payers, as well as 71 participating primary care practices with 272 providers across the state.

Last updated: April 2014

Forming Partnerships
New Jersey Medicaid Medical Home Demonstration Project: P.L. 2010, c.74 directed Medicaid to consult with Medicaid managed care organizations (MCOs) in establishing a medical home demonstration.
Defining & Recoginizng a Medical Home
New Jersey Medicaid Medical Home Demonstration Project: P.L. 2010, c.74 defined the medical home model as, at a minimum, including, “a multi-disciplinary team that provides patient-centered care coordination through the use of health information technology and chronic disease registries across the patient’s life-span and across all domains of the health care system and the patient’s community.”  The legislation further specified that health centers may be considered primary care providers.
New Jersey’s contract with Medicaid managed care organizations (MCOs) specifies that the MCO demonstration projects are to be executed in accordance with the Joint Principles of the Patient Centered Medical Home.
New Jersey Medicaid Medical Home Demonstration Project: The Medicaid MCO medical home pilots must use the National Committee for Quality Assurance (NCQA) standards for practice recognition. All practices must achieve NCQA Level 1 recognition by the end of year 1 and NCQA Level 2 recognition by the end of year 2. See page 440 of the MCO contract for further details.
Comprehensive Primary Care Initiative (CPCi): Practices were selected for participation in CMS’s Comprehensive Primary Care Initiative through a competitive application process. Under CPCi, practices are not required to attain formal PCMH recognition; however, formal PCMH recognition through NCQA, AAHCC, the Joint Commissioner, URAC, or a state-based recognition program was viewed favorably in practice selection. Additional criteria included:
  • Health information technology, including attestation to Stage 1 Meaningful Use and engagement with local Regional Extension Center (REC);
  • Percentage of practice revenue earned from participating payers; and
  • Participation in practice transformation programs through organizations like quality improvement organizations, RECs, or learning collaboratives.
Aligning Reimbursement & Purchasing
New Jersey Medicaid Medical Home Demonstration Project: Each of the four New Jersey Medicaid managed care organizations (MCOs) is administering its own medical home pilot, and information is not available on the specific payment methodologies that each MCO will use to pay medical home-recognized practices. The MCO contract states that each MCO must submit its proposed reimbursement methodology to the state for approval. It also requires the methodologies to “support care coordination and reward quality and improved patient outcomes.”
Comprehensive Primary Care Initiative (CPCi): This four-year multi-payer initiative, launched in November 2012, includes six payers in the New Jersey market: Medicare, Amerigroup, AmeriHealth New Jersey, Horizon Blue Cross Blue Shield of New Jersey, and UnitedHealthcare.
Medicare pays selected practices a per-beneficiary per-month (PBPM) risk-adjusted care management fee, which ranges from $8 to $40. CMS has indicated that it expects care management fees to average $20 PBPM during the first two years of the initiative. In Years 3 and 4, care management fees will average $15 PBPM. Medicare will also introduce a shared savings component beginning in Year 2, calculated at the market level.
The CPCi solicitation for payers indicates that participating payers (non-Medicare) are expected to follow a similar framework, paying per-member per-month (PMPM) care management fees to participating practices on top of fee-for-service and incorporating a shared savings component. Payment amounts will be negotiated individually with participating practices to comply with anti-trust laws.
Measuring Results
New Jersey Medicaid Medical Home Demonstration Project: According to New Jersey’s Medicaid managed care contract, Medicaid managed care organizations (MCOs) are to evaluate their medical home demonstrations using the following criteria:
  1. “Whether cost savings are achieved and supporting documentation;
  2. Types and rates of health screening;
  3. Health outcome measures including but not limited to:
    • emergency room visit rates;
    • hospitalization rates; and
    • avoidable hospital readmission rates, comparing medical home cohorts;
  4. At a minimum, two clinical measures; and
  5. Satisfaction measures, e.g., CAHPS [Consumer Assessment of Healthcare Providers and Systems] measures.”
Reports are to be made to the Division of Medical Assistance and Health Service (DMAHS) annually.