---
kind: "section"
citation: "42 U.S.C. § 1396w–4"
title: "42"
title_heading: "The Public Health and Welfare"
number: "1396w–4"
heading: "State option to provide coordinated care through a health home for individuals with chronic conditions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/1396w-4"
units:
  - "Chapter 7 — Social Security"
  - "Subchapter XIX — Grants to States for Medical Assistance Programs"
---

# §1396w–4. State option to provide coordinated care through a health home for individuals with chronic conditions

- (a) **In general—** Notwithstanding [section 1396a(a)(1) of this title](/usc/42/1396a.md?p=a-1) (relating to statewideness), [section 1396a(a)(10)(B) of this title](/usc/42/1396a.md?p=a-10-B) (relating to comparability), and any other provision of this subchapter for which the [Secretary](/usc/42/1301.md?p=a-6) determines it is necessary to waive in order to implement this section, beginning January 1, 2011, a [State](/usc/42/619.md?p=5), at its option as a [State](/usc/42/619.md?p=5) plan amendment, may provide for [medical assistance](/usc/42/1396d.md?p=a) under this subchapter to eligible individuals with chronic conditions who select a designated provider (as described under [subsection (h)(5)](#h-5)), a team of health care professionals (as described under [subsection (h)(6)](#h-6)) operating with such a provider, or a health team (as described under [subsection (h)(7)](#h-7)) as the individual’s health home for purposes of providing the individual with health home services.
- (b) **Health home qualification standards—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish [standards](/usc/42/1320d.md?p=7) for qualification as a designated provider for the purpose of being eligible to be a health home for purposes of this section.
- (c) **Payments—**
  - (1) **In general—** A [State](/usc/42/619.md?p=5) shall provide a designated provider, a team of health care professionals operating with such a provider, or a health team with payments for the provision of health home services to each eligible individual with chronic conditions that selects such provider, team of health care professionals, or health team as the individual’s health home. Payments made to a designated provider, a team of health care professionals operating with such a provider, or a health team for such services shall be treated as [medical assistance](/usc/42/1396d.md?p=a) for purposes of [section 1396b(a) of this title](/usc/42/1396b.md?p=a), except that, subject to [paragraph (4)](#c-4), during the first 8 [fiscal year](/usc/42/619.md?p=3) quarters that the [State](/usc/42/619.md?p=5) plan amendment is in effect, the [Federal medical assistance percentage](/usc/42/1396d.md?p=b) applicable to such payments shall be equal to 90 percent.
  - (2) **Methodology—**
    - (A) **In general—** The [State](/usc/42/619.md?p=5) shall specify in the [State](/usc/42/619.md?p=5) plan amendment the methodology the [State](/usc/42/619.md?p=5) will use for determining payment for the provision of health home services. Such methodology for determining payment—
      - (i) may be tiered to reflect, with respect to each eligible individual with chronic conditions provided such services by a designated provider, a team of health care professionals operating with such a provider, or a health team, as well as the severity or number of each such individual’s chronic conditions or the specific capabilities of the provider, team of health care professionals, or health team; and
      - (ii) shall be established consistent with [section 1396a(a)(30)(A) of this title](/usc/42/1396a.md?p=a-30-A).
    - (B) **Alternate models of payment—** The methodology for determining payment for provision of health home services under this section shall not be limited to a per-member per-month basis and may provide (as proposed by the [State](/usc/42/619.md?p=5) and subject to approval by the [Secretary](/usc/42/1301.md?p=a-6)) for alternate models of payment.
  - (3) **Planning grants—**
    - (A) **In general—** Beginning January 1, 2011, the [Secretary](/usc/42/1301.md?p=a-6) may award planning [grants](/usc/42/1397j.md?p=10) to [States](/usc/42/619.md?p=5) for purposes of developing a [State](/usc/42/619.md?p=5) plan amendment under this section. A planning [grant](/usc/42/1397j.md?p=10) awarded to a [State](/usc/42/619.md?p=5) under this paragraph shall remain available until expended.
    - (B) **State contribution—** A [State](/usc/42/619.md?p=5) awarded a planning [grant](/usc/42/1397j.md?p=10) shall contribute an amount equal to the [State](/usc/42/619.md?p=5) percentage determined under [section 1396d(b) of this title](/usc/42/1396d.md?p=b) (without regard to section 5001 of Public Law 111–5) for each [fiscal year](/usc/42/619.md?p=3) for which the [grant](/usc/42/1397j.md?p=10) is awarded.
    - (C) **Limitation—** The total amount of payments made to [States](/usc/42/619.md?p=5) under this paragraph shall not exceed $25,000,000.
  - (4) **Special rule relating to substance use disorder health homes—**
    - (A) **In general—** In the case of a [State](/usc/42/619.md?p=5) with an SUD-focused [State](/usc/42/619.md?p=5) plan amendment approved by the [Secretary](/usc/42/1301.md?p=a-6) on or after October 1, 2018, the [Secretary](/usc/42/1301.md?p=a-6) may, at the request of the [State](/usc/42/619.md?p=5), extend the application of the [Federal medical assistance percentage](/usc/42/1396d.md?p=b) described in [paragraph (1)](#c-1) to payments for the provision of health home services to SUD-eligible individuals under such [State](/usc/42/619.md?p=5) plan amendment, in addition to the first 8 [fiscal year](/usc/42/619.md?p=3) quarters the [State](/usc/42/619.md?p=5) plan amendment is in effect, for the subsequent 2 [fiscal year](/usc/42/619.md?p=3) quarters that the [State](/usc/42/619.md?p=5) plan amendment is in effect. Nothing in this section shall be construed as prohibiting a [State](/usc/42/619.md?p=5) with a [State](/usc/42/619.md?p=5) plan amendment that is approved under this section and that is not an SUD-focused [State](/usc/42/619.md?p=5) plan amendment from additionally having approved on or after such date an SUD-focused [State](/usc/42/619.md?p=5) plan amendment under this section, [including](/usc/42/1301.md?p=b) for purposes of application of this paragraph.
    - (B) **Report requirements—** In the case of a [State](/usc/42/619.md?p=5) with an SUD-focused [State](/usc/42/619.md?p=5) plan amendment for which the application of the [Federal medical assistance percentage](/usc/42/1396d.md?p=b) has been extended under [subparagraph (A)](#c-4-A), such [State](/usc/42/619.md?p=5) shall, at the end of the period of such [State](/usc/42/619.md?p=5) plan amendment, submit to the [Secretary](/usc/42/1301.md?p=a-6) a report on the following, with respect to SUD-eligible individuals provided health home services under such [State](/usc/42/619.md?p=5) plan amendment:
      - (i) The quality of health care provided to such individuals, with a focus on outcomes relevant to the recovery of each such individual.
      - (ii) The access of such individuals to health care.
      - (iii) The total expenditures of such individuals for health care.

      For purposes of this subparagraph, the [Secretary](/usc/42/1301.md?p=a-6) shall specify all applicable measures for determining quality, access, and expenditures.

    - (C) **Best practices—** Not later than October 1, 2020, the [Secretary](/usc/42/1301.md?p=a-6) shall make publicly available on the internet website of the Centers for Medicare & Medicaid Services best [practices](/usc/42/17061.md?p=19) for designing and implementing an SUD-focused [State](/usc/42/619.md?p=5) plan amendment, based on the experiences of [States](/usc/42/619.md?p=5) that have [State](/usc/42/619.md?p=5) plan amendments approved under this section that include SUD-eligible individuals.
    - (D) **Definitions—** For purposes of this paragraph:
      - (i) **SUD-eligible individuals—** The term “SUD-eligible individual” means, with respect to a [State](/usc/42/619.md?p=5), an individual who satisfies all of the following:
        - (I) The individual is an eligible individual with chronic conditions.
        - (II) The individual is an individual with a substance use disorder.
        - (III) The individual has not previously received health home services under any other [State](/usc/42/619.md?p=5) plan amendment approved for the [State](/usc/42/619.md?p=5) under this section by the [Secretary](/usc/42/1301.md?p=a-6).
      - (ii) **SUD-focused State plan amendment—** The term “SUD-focused [State](/usc/42/619.md?p=5) plan amendment” means a [State](/usc/42/619.md?p=5) plan amendment under this section that is designed to provide health home services primarily to SUD-eligible individuals.
- (d) **Hospital referrals—** A [State](/usc/42/619.md?p=5) shall include in the [State](/usc/42/619.md?p=5) plan amendment a requirement for [hospitals](/usc/42/300s–3.md?p=1) that are participating providers under the [State](/usc/42/619.md?p=5) plan or a waiver of such plan to establish procedures for referring any eligible individuals with chronic conditions who seek or need [treatment](/usc/42/11851.md?p=11) in a [hospital](/usc/42/300s–3.md?p=1) emergency department to designated providers.
- (e) **Coordination—** A [State](/usc/42/619.md?p=5) shall consult and coordinate, as appropriate, with the Substance [Abuse](/usc/42/1397j.md?p=1) and Mental Health Services [Administration](/usc/42/1301.md?p=a-10) in addressing issues regarding the prevention and [treatment](/usc/42/11851.md?p=11) of mental illness and substance [abuse](/usc/42/1397j.md?p=1) among eligible individuals with chronic conditions.
- (f) **Monitoring—** A [State](/usc/42/619.md?p=5) shall include in the [State](/usc/42/619.md?p=5) plan amendment—
  - (1) a methodology for tracking avoidable [hospital](/usc/42/300s–3.md?p=1) readmissions and calculating savings that result from improved chronic care coordination and management under this section; and
  - (2) a proposal for use of [health information](/usc/42/1320d.md?p=4) technology in providing health home services under this section and improving service delivery and coordination across the care continuum ([including](/usc/42/1301.md?p=b) the use of wireless patient technology to improve coordination and management of care and patient adherence to recommendations made by their provider).
- (g) **Report on quality measures—** As a condition for receiving payment for health home services provided to an eligible individual with chronic conditions, a designated provider shall report to the [State](/usc/42/619.md?p=5), in accordance with such requirements as the [Secretary](/usc/42/1301.md?p=a-6) shall specify, on all applicable measures for determining the quality of such services. When appropriate and feasible, a designated provider shall use [health information](/usc/42/1320d.md?p=4) technology in providing the [State](/usc/42/619.md?p=5) with such information.
- (h) **Definitions—** In this section:
  - (1) **Eligible individual with chronic conditions—**
    - (A) **In general—** Subject to [subparagraph (B)](#h-1-B), the term “eligible individual with chronic conditions” means an individual who—
      - (i) is eligible for [medical assistance](/usc/42/1396d.md?p=a) under the [State](/usc/42/619.md?p=5) plan or under a waiver of such plan; and
      - (ii) has at least—
        - (I) 2 chronic conditions;
        - (II) 1 chronic condition and is at risk of having a second chronic condition; or
        - (III) 1 serious and persistent mental health condition.
    - (B) **Rule of construction—** Nothing in this paragraph shall prevent the [Secretary](/usc/42/1301.md?p=a-6) from establishing higher levels as to the number or severity of chronic or mental health conditions for purposes of determining eligibility for receipt of health home services under this section.
  - (2) **Chronic condition—** The term “chronic condition” has the meaning given that term by the [Secretary](/usc/42/1301.md?p=a-6) and shall include, but is not limited to, the following:
    - (A) A mental health condition.
    - (B) Substance use disorder.
    - (C) Asthma.
    - (D) Diabetes.
    - (E) Heart disease.
    - (F) Being overweight, as evidenced by having a Body Mass Index (BMI) over 25.
  - (3) **Health home—** The term “health home” means a designated provider ([including](/usc/42/1301.md?p=b) a provider that operates in coordination with a team of health care professionals) or a health team selected by an eligible individual with chronic conditions to provide health home services.
  - (4) **Health home services—**
    - (A) **In general—** The term “health home services” means comprehensive and timely high-quality services described in [subparagraph (B)](#h-4-B) that are provided by a designated provider, a team of health care professionals operating with such a provider, or a health team.
    - (B) **Services described—** The services described in this subparagraph are—
      - (i) comprehensive care management;
      - (ii) care coordination and health promotion;
      - (iii) comprehensive transitional care, [including](/usc/42/1301.md?p=b) appropriate follow-up, from inpatient to other settings;
      - (iv) patient and family support ([including](/usc/42/1301.md?p=b) authorized representatives);
      - (v) referral to community and [social](/usc/42/1397j.md?p=20) support services, if relevant; and
      - (vi) use of [health information](/usc/42/1320d.md?p=4) technology to link services, as feasible and appropriate.
  - (5) **Designated provider—** The term “designated provider” means a [physician](/usc/42/1301.md?p=a-7), clinical practice or clinical group practice, rural clinic, community health center, community mental health center, home health [agency](/usc/42/1397n–12.md?p=1), or any other entity or provider ([including](/usc/42/1301.md?p=b) pediatricians, gynecologists, and obstetricians) that is determined by the [State](/usc/42/619.md?p=5) and approved by the [Secretary](/usc/42/1301.md?p=a-6) to be qualified to be a health home for eligible individuals with chronic conditions on the basis of documentation evidencing that the [physician](/usc/42/1301.md?p=a-7), practice, or clinic—
    - (A) has the systems and infrastructure in place to provide health home services; and
    - (B) satisfies the qualification [standards](/usc/42/1320d.md?p=7) established by the [Secretary](/usc/42/1301.md?p=a-6) under [subsection (b)](#b).
  - (6) **Team of health care professionals—** The term “team of health care professionals” means a team of health professionals (as described in the [State](/usc/42/619.md?p=5) plan amendment) that may—
    - (A) include [physicians](/usc/42/1301.md?p=a-7) and other professionals, such as a nurse care coordinator, nutritionist, [social](/usc/42/1397j.md?p=20) worker, behavioral health professional, or any professionals deemed appropriate by the [State](/usc/42/619.md?p=5); and
    - (B) be free standing, virtual, or based at a [hospital](/usc/42/300s–3.md?p=1), community health center, community mental health center, rural clinic, clinical practice or clinical group practice, academic health center, or any entity deemed appropriate by the [State](/usc/42/619.md?p=5) and approved by the [Secretary](/usc/42/1301.md?p=a-6).
  - (7) **Health team—** The term “health team” has the meaning given such term for purposes of [section 256a–1 of this title](/usc/42/256a–1.md).

## Source credit

(Aug. 14, 1935, ch. 531, title XIX, § 1945, as added Pub. L. 111–148, title II, § 2703(a), Mar. 23, 2010, 124 Stat. 319; amended Pub. L. 115–271, title I, § 1006(a), Oct. 24, 2018, 132 Stat. 3913.)

## Notes

### Editorial Notes

### References in Text

Section 5001 of Public Law 111–5, referred to in subsec. (c)(3)(B), is section 5001 of Pub. L. 111–5, div. B, title V, Feb. 17, 2009, 123 Stat. 496, which was formerly set out as a note under section 1396d of this title.

### Amendments

2018—Subsec. (c)(1). Pub. L. 115–271, § 1006(a)(1), inserted “subject to paragraph (4),” after “except that,”.

Subsec. (c)(4). Pub. L. 115–271, § 1006(a)(2), added par. (4).

### Statutory Notes and Related Subsidiaries

### Survey and Interim Report

Pub. L. 111–148, title II, § 2703(b)(2), Mar. 23, 2010, 124 Stat. 322, provided that: In general.—Not later than January 1, 2014, the Secretary of Health and Human Services shall survey States that have elected the option under section 1945 of the Social Security Act [42 U.S.C. 1396w–4] (as added by subsection (a)) and report to Congress on the nature, extent, and use of such option, particularly as it pertains to— hospital admission rates; chronic disease management; coordination of care for individuals with chronic conditions; assessment of program implementation; processes and lessons learned (as described in subparagraph (B)); assessment of quality improvements and clinical outcomes under such option; and estimates of cost savings. Implementation reporting.—A State that has elected the option under section 1945 of the Social Security Act (as added by subsection (a)) shall report to the Secretary, as necessary, on processes that have been developed and lessons learned regarding provision of coordinated care through a health home for Medicaid beneficiaries with chronic conditions under such option.”