New Medicaid Funding Could Help States Better Integrate Care for Children with Medical Complexity

Earlier this month, the Senate passed the Medicaid Services Investment and Accountability Act of 2019 (H.R. 1839), which contains funding mechanisms and reforms that allow states to improve care coordination for children enrolled in Medicaid. As of early this week, the bill was on the President’s desk awaiting his signature.

This legislation significantly gives states the option to establish health homes for children with medical complexity (CMC) to promote better care coordination. The concept of giving states this option was originally proposed in the Advancing Care for Exceptional (ACE) Kids Act and was debated in Congress for several years before it was passed as part of H.R. 1839.

Medicaid health homes (originally established under Section 2703 of the Affordable Care Act – ACA) provide targeted and coordinated care for patients with chronic conditions who are enrolled in Medicaid. The goal of health homes providers is to “integrate and coordinate all primary, acute, behavioral health, and long-term services and supports to treat the whole person.”

Medicaid health homes do not allow states to specifically limit enrollment in health homes by age, but through health home provider requirements states may limit who can provide the health home services (e.g., pediatric providers).  Since this option has been available, state Medicaid agencies have used health homes to target and provide coordinated care to specific populations, such as children with behavioral health needs. In a departure from the previous health home requirements, this new health home option would allow states to specifically target children under age 21 with complex health care needs.

The new legislation contains provisions that will be important for states to consider:

  • Start date: States may submit Medicaid state plan amendments related to health homes for children with medical complexity beginning Oct. 1, 2022.  
  • Enhanced federal match: To encourage uptake of this state option and to help with start-up costs, during the first two fiscal year quarters that a  Medicaid state plan amendment is in effect, the Federal Medical Assistance Percentages (FMAP) for payments made to designated health homes will be increased by 15 percent, but cannot exceed 90 percent. This is a more limited federal match than health homes established by the ACA, which receive a 90 percent FMAP for the first eight quarters.
  • Target population: The legislation stipulates that enrollment in a health home program must be provided as an optional basis for children with medical complexity. It clearly defines eligibility for children younger than 21 with medical complexity as having:
    • One or more chronic conditions that cumulatively affect three or more organ systems and severely reduces cognitive or physical functioning – such as the ability to eat, drink, or breathe independently – and that also requires the use of medication, durable medical equipment, therapy, surgery, or other treatments; or
    • One life-limiting illness or rare pediatric disease, as defined in section 529(a)(3) of the Federal Food, Drug, and Cosmetic Act.
  • Types of services:
    • Services provided by health homes will include the six core health home services required under Section 2703 of the ACA: comprehensive care management, care coordination, health promotion, comprehensive transitional care, patient and family support, and referrals to community and social support services.
    • Further, this new health home option for children with medical complexity must provide access to the full range of pediatric specialty and subspecialty medical services, including services from out-of-state providers if medically necessary.
  • Health home qualifications:  
    • Health home providers have traditionally included designated providers, teams of health professionals, and health teams.  
    • The legislation stipulates that the Secretary of Health and Human Services (HHS) will establish standards for qualifying as a health home. The standards will include requirements related to: coordinating prompt and coordinated care among various types of providers, establishing a family-centered care plan, working in a culturally- and linguistically-appropriate manner, and coordinating care with out-of-state providers.  
  • State reporting requirements: States must report to HHS information including: the number of children participating in the program, the nature and prevalence of the chronic conditions of enrollees, the type of delivery systems and payment models used in the program, quality measures used in the program, and health home provider characteristics.
  • State planning grants: Beginning on Oct. 1, 2022, HHS can award up to $5 million in planning grants to interested states.   

The legislation also requires the HHS Secretary to issue guidance to state Medicaid agencies by October 2020 on best practices for using and coordinating care from out-of-state providers for children with medical complexity. States will be required to report on implementation of this guidance within their health home programs.

The National Academy for State Health Policy (NASHP) will continue to monitor progress on this legislation and if signed into law, NASHP will follow its implementation and highlight potential issues for states as they pursue this new Medicaid option. For more information about state strategies to improve care to children with special health care needs, visit NASHP’s Children and Youth with Special Health Care Needs Resource Page.