The Need for Case Mix Adjusted Payments: Lessons from Louisiana’s PCMH Program

The title says a lot: “Patient-Centered Medical Homes In Louisiana Had Minimal Impact On Medicaid Population’s Use Of Acute Care And Costs.”¹

Health plans and other payers want to improve total cost of care and quality by aligning payment and measurement models with better health care delivery. They ask “How will we know better care delivery when we see it?” The National Committee for Quality Assurance’s PCMH (patient-centered medical home) recognition program is one way.

A number of studies demonstrate some improvement in patient outcomes following NCQA PCMH recognition, but many of these gains are in process measures and might not translate to more meaningful outcomes (e.g. risk-adjusted total cost of care, hospitalizations).

The conclusions:

“Our findings suggest that [NCQA’s PCMH] certification had a minimal effect, which was restricted to those patient-centered medical homes with many chronically ill patients.”

The study matched practices in a PCMH program with others not in the program, made reasonable adjustments to account for baseline differences, and looked at important outcomes after the PCMH practices achieved their NCQA PCMH certification.

The authors postulate that while some practices may transform care delivery, other practices may meet the NCQA requirements without implementing substantive change. The study suggests that the impact of the work may be most beneficial or evident in practices serving people with a greater illness burden.

“The findings support a case mix adjusted payment policy for medical homes going forward.”

L. Gordon Moore, MD, is senior medical director for populations and payment solutions at 3M Health Information Systems.


1. Cole, Evan S., Claudia Campbell, Mark L. Diana, Larry Webber, and Richard Culbertson. “Patient-Centered Medical Homes In Louisiana Had Minimal Impact On Medicaid Population’s Use Of Acute Care And Costs.” Health Affairs 34, no. 1 (January 1, 2015): 87–94. doi:10.1377/hlthaff.2014.0582.

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