U.S. Department of Health and Human Services

PCMH Payment Approaches

You Can Do It

This Patient-Centered Primary Care Collaborative Payment Rate Brief (PDF, 153 KB), published in 2011, provides a detailed look at payment arrangements and dollar value of 12 medical home initiatives. Examples represent a diverse mix of initiatives and a range of payment models.

PCMH payment approaches seek to encourage and sustain practice transformation by incentivizing high-quality and efficient care and supporting costs that are traditionally not reimbursable. Traditional fee-for-service methods that reward volume over value are being combined with new payment models designed to “support and promote the delivery of high-value primary and preventive services and reward improved health outcomes, while stabilizing or reducing total health care costs.”1

New payment components that are generally combined with fee-for-service payments include a monthly care coordination fee or fixed supplemental payment and some form of pay-per-performance payment. Monthly care coordination fees cover expenses related to care team services that occur outside of the typical patient encounter (e.g., care coordination, patient education, staff training on ways to improve patient self-management support or enhance patient-provider communication) and system infrastructure (e.g., information systems) that support improvements in patient health outcomes. These are typically administered on a per-member-per-month basis. Pay-for-performance payments as well as shared savings arrangements reward practices and providers for achieving quality and efficiency goals. Payment rates typically depend on several factors, such as size of practice and patient population as well as proportion of high-risk or high-need patients.

Let the Evidence Guide You

van Hasselt M, McCall N, Keyes V, Wensky SG, Smith KW. Total cost of care lower among Medicare fee-for-service beneficiaries receiving care from patient-centered medical homes. Health Serv Res. 2015;50(1):253-72.


  • Find health care resources about medical home payment models presented by the Safety Net Medical Home Initiative.

  • Mapping the Medical Home Movement. Use the Patient-Centered Primary Care Collaborative’s interactive map to see what PCMH activities and payment programs are underway in your state.


1. Safety Net Medical Home Initiative. Bailit M, Phillips K, Long A. Paying for the Medical Home: Payment Models to Support Patient-Centered Medical Home Transformation in the Safety Net. Seattle, WA: Bailit Health Purchasing and Qualis Health; 2010.

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