Cost Analyses of the Iowa Medicaid Health Home Program

The Medicaid Health Home program began on July 1, 2012 with an initial enrollment of 308.This program is designed to enhance services to Medicaid members with chronic conditions through providers implementing Patient-Centered Medical Home best practices. Providers are paid to provide these enhanced services through per member per month payment based on the enrolled member’s number of chronic conditions. Currently, there are 31 counties with MHH providers.

Though enrollment did not rise rapidly due to difficulty in recruiting MHH providers, it did rise to 4,296 by December, 2013. The MHH population is primarily female, white, adult and living in an urban county. In addition, most of the study population qualified for Tier 1 or Tier 2 indicating they had 6 or fewer chronic problems.

The unit of analysis for this study was a per member month, with the dependent variable being per member per month (PMPM) Medicaid total costs and PMPM emergency department (ED) costs. We used Medicaid claims and enrollment files from calendar years 2011-2013 for individuals in the study and comparison populations. This yielded 1,870,608 months of data for 66,449 members: 5,778 members in the intervention group and 60,671 members in the comparison group.

Analytic method
We used a fixed effects regression modeling technique that included monthly information for each member for the months they were in the study. The dependent variables for the analyses were total PMPM cost and PMPM cost for ED visits not resulting in an inpatient stay, PMPM costs for inpatient care and PMPM costs for nursing home services. The independent variables included month in the MHH program, month in the study, percent poverty, county of residence, Medicaid program of enrollment, presence of specific chronic conditions, and age.

Regression analyses indicate that $132.10 were saved in the first month of a person’s enrollment in the program. This estimate increases by $10.70 for each additional month they are enrolled in the program. Final total savings from the program as of December 2013 are over $9 million.

Momany, E., Nguyen-Hoang, P., Damiano, P., Bentler, S. E., & Shane, D. Cost Analyses of the Iowa Medicaid Health Home Program. : University of Iowa Public Policy Center.