Learn The Lingo

Learn the Lingo: Key Terms for Navigating the Value Based Care World

With the shift toward value-based payment models, pharmacists are seizing new opportunities to improve patient care in medical homes, accountable care organizations, and other innovative care models. This resource includes acronyms and terminology commonly used when practicing in or discussing innovative practice models. Each term includes a short description and references so you can further your practice in a value based care world. This is the first of multiple volumes that will be published by the Medical Home/ACO SIG.

Shruthi Gowda
/ Categories: Learn the Lingo

NCQA Patient-Centered Medical Home Recognition

Definition: The National Committee for Quality Assurance (NCQA) establishes quality standards and guidelines for health plans, providers, and practices with a mission of improving the quality of health care. NCQA conducts various programs, including but not limited to measure development for the Healthcare Effectiveness Data Information Set (HEDIS), accreditation, credentialing, and recognition programs. One of the most well-known recognition programs distinguishes a practice as a patient centered medical home (PCMH). There are 3 PCMH level designations. 

  • Tier 1 (Basic) 
  • Tier 2 (Advanced) 
  • Tier 3 (Optimal) 

Tier 1 recognition is requisite with additional surveys for those practices seeking Tier 2 or Tier 3 status.1 For a practice to earn recognition in one of the level designations, they must complete criteria in 6 concept areas which include: 

  • team-based care and practice organization 
  • knowing/managing your patients 
  • patient-centered access and continuity 
  • care management and support 
  • care coordination and care transitions 
  • and performance measurement and quality improvement.2 

The cost and work required for submitting a Tier 3 designation is substantial; these practices are rewarded with higher reimbursement from payers due to the optimal care they provide.3  While achieving PCMH recognition is a voluntary process, some payers require recognition or accreditation from an approved entity to participate in PCMH incentive programs. 

How does it relate to PCMH: All PCMHs must seek this recognition at least every three years. It is important to understand both the difference in workload and financial impact of these different tiers.  NCQA acknowledged PCMHs promote and push for better outcomes, lower healthcare costs, and healthier patients. Pharmacists are integral in PCMHs by providing services such as collaborative drug therapy management, medication reconciliation, and optimizing drug therapy regimens based on evidence-based guidelines. 

Involved organizations/oversight: National Committee for Quality Assurance  


  1. Kumar, Jay. 2018. A Comparison of Tier 1 and Tier 3 Medical Homes Under Oklahoma Medicaid Program. Doctoral dissertation, Harvard Medical School.  

  1. PCMH concepts. NCQA. Published August 25, 2021. Accessed April 3, 2023.  

  1. Patient Centered Medical Home (PCMH) - Published November 1, 2022. Accessed April 10, 2023.  


 Contributing Author:  

Heather A. Johnson, PharmD, BCACP Assistant Professor of Clinical Pharmacy and Family Medicine West Virginia University Morgantown, WV 

Last updated:  May 25, 2023 


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