plan for ongoing medical care developed in part-
nership with patients and including all other 
physicians furnishing care to the patient in-
volved and other appropriate medical personnel 
or agencies (such as home health agencies). 
‘‘(B) The personal physician uses evidence- 
based medicine and clinical decision support 
tools to guide decisionmaking at the point-of- 
care based on patient-specific factors. 
‘‘(C) The personal physician is in compli-
ance with the standards for meaningful use of 
electronic health records under this title. 
‘‘(D) The personal physician participates 
with the State’s health information exchange, 
as available, or the federally sponsored Direct 
Project. 
‘‘(E) The personal physician uses health 
information technology, including appropriate 
remote monitoring, to monitor and track the 
health status of patients and to provide patients 
with enhanced and convenient access to health 
care services. 
‘‘(F) The personal physician uses elec-
tronic prescribing and provides medication man-
agement. 
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‘‘(G) The personal physician encourages 
patients to engage in the management of their 
own health through education and support sys-
tems. 
‘‘(H) The personal physician utilizes the 
services of related health professionals, includ-
ing nurse practitioners and physician assistants. 
‘‘(d) LONG-TERM ILLNESS OR MEDICAL CONDITION 
DEFINED.—In this section, the term ‘long-term illness or 
medical condition’— 
‘‘(1) includes a chronic condition which meets 
criteria specified by the Secretary for a specialized 
MA plan for special needs individuals; and 
‘‘(2) also includes another condition that the 
Secretary determines would provide a beneficial 
focus for an effective and efficient medical home. 
‘‘(e) PAYMENT MECHANISMS.— 
‘‘(1) MEDICAL HOME CARE MANAGEMENT FEE 
AND MEDICAL HOME SHARING IN SAVINGS.—Except 
as provided in paragraph (2)— 
‘‘(A) MEDICAL HOME CARE MANAGEMENT 
FEE.—Under this section the Secretary shall 
provide for payment under section 1848 of a 
care management fee to the medical home and 
may include performance incentives. The med-
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ical home shall arrange for payment for the 
services of affiliated physicians and facilities. 
‘‘(B) MEDICAL
HOME
SHARING
IN
SAV-
INGS.—The Secretary shall provide for payment 
under this section of a medical home based on 
the payment methodology applied to health 
group practices under section 1866A. Under 
such methodology, 80 percent of the reductions 
in expenditures under this title and title XIX 
resulting from participation of individuals that 
are attributable to the medical home (as re-
duced by the total care management fees paid 
to the medical home under this section) shall be 
paid to the medical home. The amount of such 
reductions in expenditures shall be determined 
by using assumptions with respect to reductions 
in the occurrence of health complications, hos-
pitalization rates, medical errors, and adverse 
drug reactions. 
‘‘(2) ALTERNATIVE PAYMENT MODEL.— 
‘‘(A) IN
GENERAL.—The Secretary may 
provide for payment under this paragraph in-
stead of the amounts otherwise payable under 
paragraph (1). 
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‘‘(B) ESTABLISHMENT OF TARGET SPEND-
ING LEVEL.—For purposes of this paragraph, 
the Secretary shall compute an estimated an-
nual spending target based on the amount the 
Secretary estimates would have been spent in 
the absence of this section, for items and serv-
ices covered under parts A and B furnished to 
applicable beneficiaries for each qualifying med-
ical home under this section. Such spending 
targets shall be determined on a per capita 
basis. Such spending targets shall include a risk 
corridor that takes into account normal vari-
ation in expenditures for items and services cov-
ered under parts A and B furnished to such 
beneficiaries with the size of the corridor being 
related to the number of applicable beneficiaries 
furnished services by each medical home. The 
spending targets may also be adjusted for such 
other factors as the Secretary determines ap-
propriate. 
‘‘(C) INCENTIVE
PAYMENTS.—Subject to 
performance on quality measures, a qualifying 
medical home is eligible to receive an incentive 
payment under this section if actual expendi-
tures for a year for the applicable beneficiaries 
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it enrolls are less than the estimated spending 
target established under subparagraph (B) for 
such year. An incentive payment for such year 
shall be equal to a portion (as determined by 
the Secretary) of the amount by which actual 
expenditures 
(including 
incentive 
payments 
under this paragraph) for applicable bene-
ficiaries under parts A and B for such year are 
estimated to be less than 95 percent of the esti-
mated spending target for such year, as deter-
mined under subparagraph (B). 
‘‘(3) SOURCE.—Payments paid under this sec-
tion shall be made in appropriate proportions (as 
specified by the Secretary) from the Hospital Insur-
ance Trust Fund, the Federal Supplementary Med-
ical Insurance Trust Fund, and funds appropriated 
to carry out title XIX. 
‘‘(f) EVIDENCE-BASED.—The contracting entity shall 
follow evidence-based guidelines for care of the long-term 
illness or medical condition under this section. 
‘‘(g) PATIENT SERVICES QUALITY AND PERFORM-
ANCE REPORTING.—The contracting entity shall report at 
least by the end of every month data specified by the Sec-
retary on the operation of this section, including quality 
measures of process, outcome, and structure. 
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