ACA Section 2703 Health Homes


The Medicaid Health Home State Plan Option, authorized under the Affordable Care Act (Section 2703), allows states to design health homes to provide comprehensive care coordination for Medicaid beneficiaries with chronic conditions. States will receive enhanced federal funding during the first eight quarters of implementation to support the rollout of this new integrated model of care.

CMS expects states health home providers to operate under a “whole-person” philosophy. Health Homes providers will integrate and coordinate all primary, acute, behavioral health, and long-term services and supports to treat the whole person. 

Health Homes are for people with Medicaid who:

  • Have 2 or more chronic conditions; Have one chronic condition and are at risk for a second; Have one serious and persistent mental health condition; Chronic conditions listed in the statute including mental health or substance abuse issues, asthma, diabetes, heart disease and being overweight.
  • Additional chronic conditions, such as HIV/AIDS, may be considered by CMS for approval.

The six core health home services designed to improve care quality and reduce inappropriate emergency department use and hospital admissions are comprehensive care management; care coordination and health promotion; comprehensive transitional care; individual and family support services; linkage and referral to community and social support services; and use of HIT as feasible and appropriate. The health home model’s patient-centered approach requires many providers to take on new roles or expand services they have been providing into new domains of care.  It also requires an enhanced level of communication and interaction with other providers than is typical in the current delivery system.  How well providers perform as health homes depends largely on their prior experience, ability to adapt to new routines, available infrastructure, and external support.

Health home providers can be:  a physician, clinical/group practice, rural health clinic, community health center, community mental health center, home health agency, pediatrician, OB/GYN, or other provider.

A team of health professionals may include: physicians, nurse care coordinators, nutritionists, social workers, behavioral health professionals, and can be free-standing, virtual, hospital-based, or a community mental health center. A health team must include: medical specialists, nurses, pharmacists, nutritionists, dieticians, social workers, behavioral health providers, chiropractics, licensed complementary and alternative practitioners.

Click here for a comprehensive list of approved State Plan Amendments. 

Payment Model: 

States will receive a 90% enhanced FMAP (Federal Medical Assistance Percentage) for the specific health home services in Section 2703. The enhanced match does not apply to the underlying Medicaid services also provided to individuals enrolled in a health home. 
The 90% enhanced match is good for the first eight quarters in which the program is effective. A state may receive more than one period of enhanced match, understanding that they will only be allowed to claim the enhanced match for a total of 8 quarters for one beneficiary. 

Fewer ED / Hospital Visits: 

A preliminary evaluation of the Missouri primary care health home program showed a 5.9 percent reduction in hospital admissions per 1,000 enrollees and a 9.7 percent reduction in emergency department use per 1,000 enrollees. 

Improved Health: 

 The evaluation also found significant improvements in blood sugar, cholesterol, and blood pressure levels among individuals receiving health home services, relative to the baseline period25

Cost Savings: 

One state estimated cost savings for hospitalizations totaled over $5.7 million, and the total savings to the Medicaid program were over $2 million, or an average of $148 per member per month (PMPM).

Last updated December 2019
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