Principles of Financing the Medical Home for Children

A well-implemented and adequately funded medical home not only is the best approach to optimize the health of the individual patient but also can function as an effective instrument for improving population health. Key financing elements to providing quality, effective, comprehensive care in the pediatric medical home include the following: (1) first dollar coverage without deductibles, copays, or other cost-sharing for necessary preventive care services as recommended by Bright Futures: Guidelines for Health Supervision of Infants, Children, and Adolescents; (2) adoption of a uniform definition of medical necessity across payers that embraces services that promote optimal growth and development and prevent, diagnose, and treat the full range of pediatric physical, mental, behavioral, and developmental conditions, in accord with evidence-based science or evidence-informed expert opinion; (3) payment models that promote appropriate use of pediatric primary care and pediatric specialty services and discourage inappropriate, inefficient, or excessive use of medical services; and (4) payment models that strengthen the patient- and family-physician relationship and do not impose additional administrative burdens that will only erode the effectiveness of the medical home. These goals can be met by designing payment models that provide adequate funding of the cost of medical encounters, care coordination, population health services, and quality improvement activities; provide incentives for quality and effectiveness of care; and ease administrative burdens.