DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid 
Services 7500 Security Boulevard, Mail 
Stop S2-26-12  
Baltimore, Maryland 21244-1850 
 
 
              SMD # 22-004 
 
Re: Health Homes for Children with 
Medically Complex Conditions  
 
August 1, 2022 
 
Dear State Medicaid Director: 
 
This letter provides guidance on the implementation of section 1945A of the Social Security Act 
(the Act), enacted as part of the Medicaid Services Investment and Accountability Act of 2019 
(P. L. 116-16), which authorizes states to cover an optional health home state plan benefit for 
Medicaid-eligible children with medically complex conditions.  Under this provision, beginning 
October 1, 2022, states have the option to cover health home services for Medicaid-eligible 
children with medically complex conditions as defined in section 1945A(i) of the Act.   
 
Background on Health Homes 
 
In 2010, the Affordable Care Act (ACA)1 added section 1945 to the Act, establishing an option 
for states to cover health home services for Medicaid-eligible individuals with two or more 
chronic conditions, with at least one chronic condition and who are at risk for a second, or with 
at least one serious and persistent mental health condition.  Section 1945 health home services 
are generally care management, care coordination, and patient and family support services.  
Thus, states implementation of health homes under section 1945 of the Act has helped to ensure 
that certain Medicaid beneficiaries care is better integrated and coordinated, thereby helping to 
ensure these beneficiaries can receive whole-person care that addresses their needs.  Since 
January 2011, 27 states and the District of Columbia have successfully implemented health home 
programs for Medicaid beneficiaries with chronic conditions, such as asthma, diabetes, substance 
use disorder (SUD), and mental health conditions, in accordance with section 1945 of the Act.  
As of March 2022, there are 34 active health home programs under section 1945 of the Act.2  
 
Section 1945A of the Act provides an opportunity for states to cover care coordination, care 
management, patient and family support, and similar services that are expected to support a 
family-centered system of care for children with medically complex conditions, and that could 
help to improve health outcomes for these children.  Often, children with medically complex 
conditions require specialized diagnostic or treatment services that may not always be readily 
                                                            
1 The Patient Protection and Affordable Care Act (Pub. L. 111148) was enacted on March 23, 2010. The 
Healthcare and Education Reconciliation Act of 2010 (Pub. L. 111152), which amended and revised several 
provisions of the Patient Protection and Affordable Care Act, was enacted on March 30, 2010. In this State Medicaid 
Director letter, the two statutes are referred to collectively as the Affordable Care Act. 
2 See Other Resources section at https://www.medicaid.gov/resources-for-states/medicaid-state-technical-
assistance/health-home-information-resource-center/index.html.   Page 2 - State Medicaid Director 
available from providers within their state of permanent residence.  By implementing the section 
1945A health home option, states can cover coordination of care for children with medically 
complex conditions, including coordination of the full range of pediatric specialty and 
subspecialty medical services and coordination of care and services from out-of-state providers 
(see discussion below of CMSs October 20, 2021 guidance on best practices for using out-of-
state providers to provide care to children with medically complex conditions).  CMS expects 
state implementation of the new health home state plan option under section 1945A of the Act to 
improve care coordination for children with medically complex conditions.  
 
Eligibility Criteria for Section 1945A Health Home Services  
 
Section 1945A of the Act gives states the option to cover health home services for Medicaid-
eligible children under age 21 with medically complex conditions who choose to enroll in a 
section 1945A health home by selecting a designated provider, a team of health care 
professionals operating with a designated provider, or a health team as the childs health home 
services provider.  Under section 1945A(i)(1) of the Act, a child with medically complex 
conditions must be under 21 years of age and eligible for medical assistance under the state plan 
(or under a waiver of the state plan, which CMS interprets to include eligibility under a section 
1115 demonstration).3  Additionally, under section 1945A(i)(1)(A)(ii), a child with medically 
complex conditions must have at least:  
 
  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 (21 U.S.C. 360ff(a)(3)).  
 
A chronic condition is defined in section 1945A(i)(2) as a serious, long-term physical, 
mental, or developmental disability or disease, including the following: 
 
  Cerebral palsy; 
  Cystic fibrosis; 
  HIV/AIDS; 
  Blood diseases, such as anemia or sickle cell disease; 
  Muscular dystrophy; 
  Spina bifida; 
  Epilepsy; 
  Severe autism spectrum disorder; and/or 
  Serious emotional disturbance or serious mental health illness. 
 
                                                            
3 Generally, CMS interprets statutory references to a waiver of the Medicaid state plan to include section 1115 
demonstrations. 
  Page 3 - State Medicaid Director 
CMS interprets section 1945A(i)(1) to require states electing to cover section 1945A health 
home services to cover these services for children who meet the eligibility criteria in section 
1945A(i)(1)(A)(ii)(I) based on having one or more chronic conditions that meet the statutory 
definition of a chronic condition, even if their condition(s) are not listed in section 
1945A(i)(2), if they choose to enroll in a section 1945A health home. For example, other chronic 
conditions that meet this statutory definition may include  long COVID,4 or other medical or 
mental health conditions nationally recognized by the Centers for Disease Control and 
Prevention (CDC), the National Institutes of Health (NIH), or the American Medical Association 
(AMA).   
 
CMS further interprets section 1945A(i)(1) to require states electing to cover section 1945A 
health home services to cover these services for children who meet the eligibility criteria in 
section 1945A(i)(1)(A)(ii)(I) based on having any one or more of the chronic conditions listed in 
section 1945A(i)(2), if they choose to enroll in a section 1945A health home.   
 
States should demonstrate to CMSs satisfaction, through documentation in their proposed 
section 1945A state plan amendments (SPAs), that they will establish a process for identifying 
chronic conditions that are not listed in section 1945A(i)(2) but that meet the statutory definition 
of a chronic condition, because they are serious, long-term physical, mental, or developmental 
disabilities or diseases.  This process should ensure that the state would cover section 1945A 
health home services for children who are eligible for these services on the basis of having one 
or more chronic conditions that are not listed in section 1945A(i)(2) but that meet the statutory 
definition of a chronic condition.  By including a description of this process in their initial 
section 1945A SPAs, states should avoid the need to submit amendments to an approved section 
1945A SPA to list new chronic conditions.  
 
Section 1945A also permits states to cover health home services notwithstanding the 
statewideness requirement at section 1902(a)(1) and the comparability requirement at section 
1902(a)(10)(B), meaning that states can cover section 1945A health home services less than 
statewide and can cover section 1945A health home services only for persons who are eligible 
for those services under section 1945A(i)(1) and enrolled in a section 1945A health home.  
However, per section 1945A(h) of the Act, states may not require a child with medically 
complex conditions to enroll in a section 1945A health home and may not limit the childs 
choice of qualified section 1945A health home services providers.  States also may not reduce or 
modify the entitlement of children with medically complex conditions to early and periodic 
screening, diagnostic, and treatment (EPSDT) services as defined in section 1905(r).  
Additionally, states may not reduce or modify the informing, providing, arranging, and reporting 
requirements under section 1902(a)(43). 
 
Health Home Services for Children with Medically Complex Conditions 
 
Section 1945A(i)(4) of the Act defines health home services for children with medically 
complex conditions as comprehensive and timely high-quality services provided by a designated 
                                                            
4 See information from the Centers for Disease Control and Prevention (CDC) about long COVID, at 
https://www.cdc.gov/coronavirus/2019-ncov/long-term-effects/index.html.  
  Page 4 - State Medicaid Director 
provider, team of health care professionals operating with a designated provider, or health team.  
Section 1945A(i)(4) further specifies that these services include: 
  Comprehensive care management; 
  Care coordination, health promotion, and the provision of access to the full range of 
pediatric specialty and subspecialty medical services, including services from out-of-state 
providers, as medically necessary; 
  Comprehensive transitional care, including appropriate follow-up, from inpatient to other 
settings; 
  Patient and family support (including authorized representatives); 
  Referrals to community and social support services, if relevant; and 
  Use of health information technology to link services, as feasible and appropriate.  
 
CMS recommended health home services definitions will be available in the implementation 
guide that CMS will provide to states.  CMS expects that states will encourage their health home 
providers to operate under a whole-person philosophy that considers all the medical, 
behavioral, and social supports and services needed by a child with medically complex 
conditions. The health home services provided under section 1945A include providing access to 
the full range of pediatric specialty and subspecialty medical services, which would include 
providing access to behavioral health services. This implementation guide will be linked to the 
section 1945A SPA template in the Medicaid and CHIP Program (MACPro) system.  
 
Payment Methodologies  
 
Section 1945A(c)(1) of the Act provides that state payments to a designated provider, a team of 
health care professionals operating with a designated provider, or a health team for section 
1945A health home services are generally considered to be medical assistance for purposes of 
section 1903(a) of the Act.  This means that, generally, state expenditures on these payments are 
federally matched at the federal medical assistance percentage (FMAP) described in section 
1903(a)(1) of the Act and defined in section 1905(b) of the Act.  However, section 1945A also 
makes an increased FMAP available to states for these expenditures during the first two fiscal 
year quarters that the states section 1945A health home SPA is in effect, as further described 
below.   
 
Section 1945A(c)(2) requires the state to specify the payment methodology used for determining 
payment for section 1945A health home services in its SPA that adds coverage for those 
services, and requires that this payment methodology be established consistent with section 
1902(a)(30)(A), but otherwise permits states considerable flexibility to establish payment 
methodologies for section 1945A health home services.  Section 1945A(c)(2)(A)(i) of the Act 
permits states to create a tiered payment methodology for section 1945A health home services 
that accounts for the severity or number of a childs chronic conditions, life-threatening illnesses, 
disabilities, or rare diseases, or the specific capabilities of the designated provider, team of health 
care professionals operating with the designated provider, or health team.  In addition, section 
1945A(c)(2)(B) of the Act provides that state payment methodologies for section 1945A health 
home services are not limited to per-member per-month payments, and permits states to propose 
alternate models of payment for CMS approval.  
 
  Page 5 - State Medicaid Director 
Consistent with section 1902(a)(30)(A) of the Act, CMS will review proposed SPAs establishing 
section 1945A health home payment methodologies for consistency with the goals of efficiency, 
economy, quality of care, and sufficient access to providers.  Therefore, states should provide a 
comprehensive description of the rate-setting policies in the proposed SPA.   
 
CMS reminds states of the requirement to provide public notice of any significant proposed 
changes in their methods and standards for setting payment rates for services prior to the 
effective date of any SPA implementing those changes, consistent with the public notice 
requirements at 42 CFR  447.205.  Additionally, documentation of the delivery of the health 
home services in the individuals health record is useful not only when billing for services, but 
also in the event that a government audit takes place.5 Additionally, consistent with 42 CFR  
433.32(a), states must maintain an accounting system and supporting fiscal records to assure that 
claims for federal funds are in accord with applicable federal requirements. 
 
States interested in proposing to establish a capitated payment methodology for section 1945A 
health home services are encouraged to work with CMS informally prior to developing an 
official submission.  We are happy to provide technical assistance to states interested in other 
payment methods or strategies.  
 
Increased Federal Medical Assistance Percentage (FMAP) 
 
Section 1945A(c)(1) of the Act provides that the FMAP for state expenditures on health home 
services for children with medically complex conditions shall be increased by 15 percentage 
points, but in no case may exceed 90 percent, for the first two fiscal year quarters that a section 
1945A health home SPA is in effect.  After the end of this increased FMAP period, states will 
receive the regularly applicable FMAP for their expenditures on section 1945A health home 
services.  However, a state may be eligible for new periods of increased FMAP under section 
1945A(c)(1) if the state receives approval of another section 1945A SPA to expand section 
1945A health home services to new geographic areas.  
 
After a states section 1945A health home SPA takes effect, the state can submit a claim to CMS 
for federal financial participation for its expenditures on section 1945A health home services on 
a new Category of Service (COS) line through the quarterly Form CMS-64 in the Medicaid and 
Childrens Health Insurance Program Budget Expenditure System (MBES/CBES).  States should 
report their expenditures on this COS line throughout the period when the section 1945A health 
home SPA is in effect.  The new COS line will be called Line 49, Health Homes for Children 
with Medically Complex Conditions. CMS suggests that states select a SPA effective date at the 
beginning of a fiscal year quarter, based on when providers will be ready to implement.  Please 
note that the increased FMAP is available only for services provided on or after the effective date 
                                                            
5 States that are considering bundled payment methodologies for section 1945A health home services should also be 
aware of CMS guidance on bundled payment rates, which explains that States can only report expenditures for 
which all supporting documentation is available (i.e. date of service, name of recipient, Medicaid identification 
number), in readily reviewable form, which has been compiled and is immediately available when the claim for 
expenditures is filed on the CMS-64.  https://www.medicaid.gov/state-resource-center/downloads/spa-and-1915-
waiver-processing/bundled-rate-payment-methodology.pdf.   
  Page 6 - State Medicaid Director 
of the approved section 1945A health home SPA, and only during the first two fiscal year 
quarters that the approved SPA is in effect.  If there is a delay in implementation, a state might 
be able to claim increased FMAP during only part of the first two fiscal year quarters its section 
1945A SPA is in effect.  This is because, if the state is not covering health home services during 
part of that period, it would not have any expenditures on which to base a claim for the increased 
FMAP.  There is no date by which a states section 1945A health home SPA must take effect in 
order for the state to receive the two quarters of increased FMAP.  
 
Provider Infrastructure 
 
Section 1945A of the Act describes three distinct possible types of health home providers from 
which a beneficiary may receive health home services: designated providers, as defined in 
section 1945A(i)(5) of the Act; a team of health care professionals, as defined in section 
1945A(i)(6) of the Act, that is operating with a designated provider; and a health team, as 
defined in section 1945A(i)(7) of the Act.  Each health home provider must satisfy certain 
qualification standards listed in section 1945A(b) and further described below. 
 
According to section 1945A(i)(5) of the Act, a designated provider includes a physician 
(including a pediatrician or a pediatric specialty or subspecialty provider), childrens hospital, 
clinical practice or clinical group practice, prepaid inpatient health plan or prepaid ambulatory 
health plan (as defined in 42 CFR  438.2), rural clinic, community health center, community 
mental health center, or home health agency.  Designated providers may also include providers 
who are employed by, or affiliated with, a childrens hospital.  This is not an exhaustive list. 
Section 1945A(i)(5) also defines a designated provider as including any other entity or provider 
that is determined by the state and approved by the Secretary to be qualified as a health home for 
children with medically complex conditions on the basis of documentation that the entity has the 
systems, expertise, and infrastructure in place to provide health home services.  States should 
describe all proposed designated providers in their proposed section 1945A health home SPAs 
for CMS review and approval.  
 
Section 1945A(i)(6) of the Act defines a team of health care professionals as a team of health 
care professionals that may include physicians and other professionals, such as pediatricians, 
pediatric specialty or subspecialty providers, nurse care coordinators, dietitians, nutritionists, 
social workers, behavioral health professionals, physical therapists, occupational therapists, 
speech pathologists, nurses, and/or individuals with experience in medical supportive 
technologies.  States may also include on such a team any professionals determined to be 
appropriate by the state and approved by the Secretary.  Further, a team of health care 
professionals may include an entity or individual who is designated to coordinate such a team, or 
community health workers, translators, and other individuals with culturally appropriate 
expertise.  A provider comprising part of the team may be freestanding, virtual, or based at a 
childrens hospital, hospital, community health center, community mental health center, rural 
clinic, clinical practice or clinical group practice, academic health center, or any entity 
determined to be appropriate by the state and approved by the Secretary.  The SPA should 
include a description of the composition of these teams. 
 
  Page 7 - State Medicaid Director 
Section 1945A(i)(7) of the Act defines health team to have the same meaning given this term 
in section 3502 of the Patient Protection and Affordable Care Act (42 U.S.C.  256a-1), titled 
Establishing Community Health Teams to Support the Patient-Centered Medical Home.  
Section 3502(b)(4) of the Patient Protection and Affordable Care Act provides that a health team 
under that section is an interdisciplinary, inter-professional team of health care providers, as 
determined by the Secretary, and that the team may include medical specialists, nurses, 
pharmacists, nutritionists, dieticians, social workers, behavioral and mental health providers 
(including substance use disorder prevention and treatment providers), doctors of chiropractic, 
licensed complementary and alternative medicine practitioners, and physician assistants.  
 
CMS recognizes that there is diversity in provider arrangements across states.  However, CMS 
will expect the state to apply the provider qualification standards described in section 1945A(b) 
of the Act to all types of section 1945A health homes operating in a state, and to be accountable 
for the providers adhering to and upholding those standards.  
 
Provider Standards  
 
CMS encourages states to propose SPAs under section 1945A that would support a whole-
person approach to care for children with medically complex conditions and promote 
continuous quality improvement.  A whole-person approach identifies needed services and 
supports through person-centered planning6 resulting in care and linkages to care that address an 
individuals needs.  Consistent with section 1945A(b)(2) of the Act, states must require that their 
providers of section 1945A health home services for children with medically complex conditions 
are able to use a family-centered care planning approach that accommodates patient preferences.  
In addition, health home providers, as is common practice, are expected to document the delivery 
of the health home services in the individuals health record.  
 
Section 1945A(b) of the Act provides that the Secretary shall establish standards for qualification 
as a section 1945A health home provider.  Under these standards, section 1945A health home 
providers must demonstrate to the state the ability to do the following:  
 
(1) Coordinate prompt care for children with medically complex conditions, including 
access to pediatric emergency services at all times; 
 
(2) Develop an individualized comprehensive pediatric family-centered care plan for 
children with medically complex conditions that accommodates patient preferences; 
 
(3) Work in a culturally and linguistically appropriate manner with the family of a child 
with medically complex conditions to develop and incorporate into such childs care 
plan, in a manner consistent with the needs of the child and the choices of the childs 
                                                            
6 As discussed in an October 20, 2021 CMCS Informational Bulletin (CIB), CMS recommends that states with 
health homes for children with medically complex conditions encourage or require their section 1945A health home 
providers to develop a person-centered service plan like that described in 42 CFR 441.725(a) and (b) for children 
with medically complex conditions.  See https://www.medicaid.gov/federal-policy-
guidance/downloads/cib102021.pdf  
  Page 8 - State Medicaid Director 
family, ongoing home care, community-based pediatric primary care, pediatric inpatient 
care, social support services, and local hospital pediatric emergency care; 
 
(4) Coordinate access to 
 
(A) subspecialized pediatric services and programs for children with medically 
complex conditions, including the most intensive diagnostic, treatment, and 
critical care levels as medically necessary; and 
 
(B) palliative services if the state provides Medicaid coverage for such services; 
 
(5) Coordinate care for children with medically complex conditions with out-of-state 
providers furnishing care to such children to the maximum extent practicable for the 
families of such children and where medically necessary, in accordance with guidance 
issued under section 1945A(e)(1) and 42 CFR 431.52;7 and 
 
(6) Collect and report information in accordance with section 1945A(g)(1) of the Act.  
 
States should describe in their section 1945A health home SPAs the infrastructure they expect to 
put in place to ensure that timely, comprehensive, high-quality health home services are 
available.  A state with established medical home provider standards wishing to submit a SPA 
under section 1945A of the Act that would authorize the existing medical home providers to 
become section 1945A health home services providers should describe how its existing medical 
home standards align with the statutory health home provider qualifications listed above, and/or 
have been modified to address the specific provider qualifications and health home services 
required under section 1945A, including the use of health information technology and quality 
reporting.  
 
States should also ensure that providers of health home services can perform the functions listed 
below.  
 
  Demonstrating clinical competency for serving the complex needs of section 1945A health 
home enrollees;   
  Demonstrating the application of person- and family-centered practices in the delivery of 
section 1945A health home services.  
  Demonstrating application of the Life Course approach,8 integrating services in the 
continuum of the childs life and assisting the family to anticipate needs as the child grows 
and changes;  
  Providing access to timely health home services 24 hours a day, 7 days a week to address 
any immediate care needs of health home enrollees;  
                                                            
7  See https://www.medicaid.gov/federal-policy-guidance/downloads/cib102021.pdf.  
8  See research information: https://www.hrsa.gov/sites/default/files/ourstories/mchb75th/images/rethinkingmch.pdf 
       and toolkit here: https://www.citymatch.org/mch-life-course/ 
 
  Page 9 - State Medicaid Director 
  Maintaining conflict of interest safeguards to assure that services are coordinated in 
accordance with enrollee needs expressed in the family-centered care plan, rather than 
based on financial interests or arrangements of the health home provider; 
  Providing quality-driven, cost-effective, culturally appropriate, and trauma-informed health 
home services; 
  Coordinating and providing access to high-quality health care services informed by 
evidence-based clinical practice guidelines;  
  Coordinating and providing access to preventive and health promotion services, including 
prevention of mental illness and substance use disorders;  
  Coordinating and providing access to comprehensive care management, care coordination, 
and transitional care across settings (Note: Transitional care should include appropriate 
follow up from inpatient to other settings (such as participation in discharge planning), and 
facilitating transfer from a pediatric to an adult system of health care); 
  Having protocols to assist in removing barriers, such as those posed by transportation, to 
ensure safe transition of care between providers.  Protocols could include relationships 
between the health home provider and hospitals or other health care providers; 
  Coordinating and providing access to chronic disease management, including self-
management support for individuals and their families;  
  Coordinating and providing access to behavioral health and recovery services; 
  Coordinating and providing access to individual and family supports, including referral to 
home and community-based services, respite care and family support groups; 
  Coordinating with school-based health services providers; 
  Coordinating and providing access to long-term care services and supports; 
  Demonstrating a capacity to use health information technology to link services as feasible 
and appropriate, including by facilitating communication among health team members and 
facilitating communication among the health team, individual, and family caregivers;  
  Demonstrating a capacity to use health information technology to provide feedback to 
providers to improve service delivery across the care continuum;  
  Use of health information technology that supports interoperability through alignment 
with, and incorporation of, industry standards adopted by the Office of the National 
Coordinator for Health IT in accordance with 45 CFR part 170, subpart B, where 
applicable, as well as other relevant consensus-based, non-proprietary standards;9 and 
  Establishing a continuous quality improvement program, and collecting and reporting on 
data that permits an evaluation of increased coordination of care, efforts to advance health 
equity, program performance, and the management of complex conditions.  
 
Service Delivery System for Section 1945A Health Home Services. 
 
States have flexibility to determine what service delivery system or combination of systems will 
be used in their section 1945A health homes programs.  As a reminder, section 1945A(h)(2) 
provides that nothing in section 1945A may be construed to limit the choice of a child with 
medically complex conditions in selecting a designated provider, team of health care 
professionals operating with such a provider, or health team that meets the health home 
                                                            
9 See ONCs Interoperability Standards Advisory (ISA) at https://www.healthit.gov/isa/.  
  Page 10 - State Medicaid Director 
qualification standards established under [section 1945A(b)] as the childs health home.  This 
means that there cannot be a closed provider network for section 1945A health home services 
delivered via managed care and the choice of section 1945A health home services providers 
through a managed care organization cannot be limited.  If states managed care contracts need 
to be updated to reflect this, CMS will provide technical assistance.  
 
Provider Reporting Requirements 
 
Section 1945A(g)(1) of the Act requires section 1945A health home services providers to report 
to the state, at such time and in such form and manner as may be required by the state, the 
following information: 
 
1.  Provider name; 
2.  National Provider Identification number; 
3.  Provider address; 
4.  Specific health care services offered to children with medically complex conditions who 
have selected the specific provider reporting this information as their health home; 
5.  Information on all applicable measures for determining the quality of health home 
services provided by the health home services provider, including, to the extent 
applicable, child health quality measures and measures for centers of excellence for 
children with complex needs developed under titles XIX and XXI of the Act, and section 
1139A of the Act; and 
6.  Such other information as the Secretary shall specify in guidance. 
This reporting should help the state and its participating section 1945A health home providers to 
assess the quality of section 1945A health home services.  At this time, CMS is considering the 
following measures for possible use as part of the section 1945A(g)(1) quality measure reporting, 
several of which are part of the current Child and/or Health Home Core Sets: 
 
1.  Well-Child Visits in the First 30 Months of Life (W30-CH); 
2.  Child and Adolescent Well-Care Visits (WCV-CH); 
3.  Childhood Immunization Status (CIS-CH); 
4.  Immunizations for Adolescents (IMA-CH); 
5.  Oral Evaluation, Dental Services (OEV-CH); 
6.  Ambulatory Care: Emergency Department (ED) Visits (AMB-HH); and 
7.  Inpatient Utilization (IU-HH) 
 
These measures are expected to capture information on clinical and quality of care outcomes 
specific to the provision of section 1945A health home services.  This list of measures will be 
added to the annual Health Home Quality Measures Core Set workgroup review process.  CMS 
will provide more information in the future on these reporting requirements.   
 
State Monitoring and Reporting Requirements 
 
  Page 11 - State Medicaid Director 
To support continued improvement and evaluation, section 1945A(f) of the Act requires states 
that implement section 1945A health homes for children with medically complex conditions to 
include in their section 1945A health home SPAs: 
 
(1)  A methodology for tracking reductions in inpatient days and reductions in the total 
cost of care resulting from improved care coordination and management under section 
1945A; 
 
(2)  A proposal for the use of health information technology in providing health home 
services under section 1945A and improving service delivery and coordination across the 
care continuum (including the use of wireless patient technology to improve coordination 
and management of care and patient adherence to recommendations made by their 
provider); and 
 
(3)  A methodology for tracking prompt and timely access to medically necessary care 
for children with medically complex conditions from out-of-state providers. 
 
Comprehensive Report 
 
Section 1945A(g)(2)(A) of the Act requires a state with an approved section 1945A SPA to 
report to the Secretary (and, upon request, to the Medicaid and CHIP Payment and Access 
Commission (MACPAC)), at such time and in such form and manner determined by the 
Secretary to be reasonable and minimally burdensome, the following information: 
 
(1)  Information reported by health home providers under section 1945A(g)(1)  
of the Act, as described on page 10 of this letter; 
 
(2)  The number of children with medically complex conditions who have selected a 
section 1945A health home;  
 
(3)  The nature, number, and prevalence of chronic conditions, life-threatening illnesses, 
disabilities, or rare diseases that such children have; 
 
(4)  The type of delivery systems and payment models used to provide services to such 
children under section 1945A; 
 
(5)  The number and characteristics of designated providers, teams of health care 
professionals operating with such providers, and health teams selected as section 
1945A health homes, including the number and characteristics of out-of- state 
providers, teams of health care professionals operating with such providers, and 
health teams who have provided health care items and services to children with 
medically complex conditions who have selected a section 1945A health home; 
 
(6)  The extent to which children with medically complex conditions who have selected a 
section 1945A health home receive health care items and services under the state 
plan; and 
  Page 12 - State Medicaid Director 
 
(7)  Quality measures developed specifically with respect to health care items and    
services      provided to children with medically complex conditions.   
CMS expects to provide information in the future on the requirement for states to submit the 
comprehensive report described in section 1945A(g)(2)(A).   
 
Report on Best Practices for Coordinating Care from Out-of-State Providers 
 
Federal statutory and regulatory provisions govern coverage of services provided by out-of-state 
providers under Medicaid.  Section 1902(a)(16) of the Act requires states to include provisions 
in the state plan with respect to furnishing medical assistance under the state plan to individuals 
who are residents of the state but absent from it.  These state plan provisions should be 
consistent with CMS regulations at 42 CFR  431.52. 
 
Under 42 CFR  431.52, any one of the following circumstances requires a state to pay for out-
of-state services furnished to beneficiaries who are residents of the state, to the same extent the 
state would pay for services furnished within its boundaries: 
 
  Medical services are needed because of a medical emergency; 
  Medical services are needed and the beneficiarys health would be endangered if required 
to travel to their state of residence; 
  The state determines, on the basis of medical advice, that the needed medical services or 
necessary supplementary resources are more readily available in the other state; or 
  It is general practice for beneficiaries in a particular locality to use medical resources in 
another state. 
 
In accordance with section 1945A(e) of the Act, CMS issued detailed guidance on October 20, 
2021,10 regarding: 
 
  Best practices for using out-of-state providers to provide care to children with medically 
complex conditions; 
  Coordinating care for children with medically complex conditions provided by out-of-
state providers (including when provided in emergency and non-emergency situations); 
  Reducing barriers that prevent children with medically complex conditions from 
receiving care from out-of-state providers in a timely fashion; and 
  Processes for screening and enrolling out-of-state providers in the respective state plan 
(or a waiver of such plan), including efforts to streamline these processes or reduce the 
burden of these processes on these providers. 
 
In accordance with section 1945A(g)(2)(B) of the Act, states implementing the section 1945A 
health homes option must, no later than 90 days after CMS approval of the states section 1945A 
health home SPA, submit to CMS and make publicly available on the appropriate state website, 
                                                            
10 https://www.medicaid.gov/federal-policy-guidance/downloads/cib102021.pdf 
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a report on how the state is implementing the CMS guidance issued on October 20, 2021, 
including through any best practices adopted by the state.  
 
Coordinating Care - State Assurances 
 
In accordance with section 1945A(d), states implementing the section 1945A health home 
benefit must comply with all of the following requirements: 
 
  Hospital Notification: A state with an approved section 1945A health home SPA must 
require each hospital that is a participating provider under the state plan (or waiver of such 
plan) to establish procedures to notify the states section 1945A health home(s) about the 
treatment of any child who is enrolled in a section 1945A health home and who seeks 
treatment in the hospitals emergency department.  Accordingly, CMS will ask states to 
provide an assurance in their section 1945A SPAs that they have required their Medicaid-
participating hospital providers to establish these procedures. 
 
  Education with Respect to Availability of Health Home Services: States must include in 
their section 1945A health home SPAs a description of their processes for educating 
providers participating in the state plan (or a waiver of such plan) on the availability of 
health home services for children with medically complex conditions, including the 
process by which providers can refer such children to a section 1945A health home 
provider.  
 
  Family Education: States must include in their section 1945A health home SPAs a 
description of their processes for educating families with children eligible to receive 
section 1945A health home services of the availability of section 1945A health home 
services.  This process must include the participation of family-to-family entities, other 
public or private organizations, or entities that provide outreach and information on the 
availability of health care items and services to families of Medicaid-eligible individuals. 
 
  Mental Health Coordination: States with an approved section 1945A health home SPA 
must consult and coordinate, as appropriate, with the Secretary in addressing issues 
regarding the prevention and treatment of mental illness and substance use among children 
receiving section 1945A health home services.  The Secretary will expect states, as part of 
this requirement, to consult with the Substance Abuse and Mental Health Services 
Administration (SAMHSA) about their section 1945A health home SPAs before 
submitting the SPA, and on an ongoing basis, as needed, once the SPA is implemented. 
CMS anticipates that the SPA template for the section 1945A health home benefit will 
include a field for the state to note the date of its initial consultation with SAMHSA. 
 
General Information 
 
States interested in establishing a Medicaid health home program for children with medically 
complex conditions should submit a SPA via MACPro for CMS review and approval.  CMS 
will inform states when the new SPA template becomes available in the MACPro system. 
States will be able to work on the draft SPA submissions in the system while receiving technical 
  Page 14 - State Medicaid Director 
assistance from CMS prior to submitting the SPA officially.  In addition to the SPA template, 
CMS will provide a link to the implementation guide in the MACPro system.  The 
implementation guide will include recommended service definitions and provider standards for 
state consideration, which states may reference while developing their SPA submissions.  States 
and interested parties can submit questions about the new section 1945A health home benefit for 
children with medically complex conditions to healthhomes@cms.hhs.gov. 
Support for State Planning Activities 
Section 1945A(c)(3) of the Act provides that, beginning October 1, 2022, the Secretary may 
award planning grants to states for purposes of developing a section 1945A SPA.  The total 
amount of payments made to states under section 1945A(c)(3) shall not exceed $5,000,000. 
CMS expects to provide further details on these planning grants in a future, separate 
announcement, pending available funding.   
Conclusion 
We look forward to working with states to help them implement this new health home state plan 
option for children with medically complex conditions.  For specific information about this new 
Medicaid state plan option please contact Sara Rhoades, Technical Director for Health Homes, 
Disabled and Elderly Health Programs Group, at 410-786-4484 or at 
Sara.Rhoades@cms.hhs.gov.  
Sincerely, 
Daniel Tsai 
Deputy Administrator and Director 
Center for Medicaid & CHIP Services 
Attachment 
cc:  
Ann Flagg 
Senior Director 
Policy and Practice 
American Public Human Services Association 
Matt Salo  
Executive Director  
National Association of Medicaid Directors 
Haley Nicholson  Page 15 - State Medicaid Director 
Health and Human Services Committee 
National Conference of State Legislatures 
 
Shelby Hockenberry 
Director, Healthcare Delivery 
National Governors Association 
 
Debra Miller 
Director for Health Policy 
Council of State Governments 
 
Carolyn McCoy 
Director, Government Relations  
Association of State and Territorial Health Officials 
 
Hemi Tewarson 
Executive Director 
National Academy for State Health Policy 
 
 
 
 
The contents of this document do not have the force and effect of law and are not meant to bind 
the public in any way, unless specifically incorporated into a contract. This document is intended 
only to provide clarity to the public regarding existing requirements under the law.