; 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 medical home shall arrange for payment for the services of affiliated physicians and facilities. (B) Medical home sharing in savings 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 reduced 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, hospitalization rates, medical errors, and adverse drug reactions. (2) Alternative payment model (A) In general The Secretary may provide for payment under this paragraph instead of the amounts otherwise payable under paragraph (1). (B) Establishment of target spending level For purposes of this paragraph, the Secretary shall compute an estimated annual spending target based on the amount the Secretary estimates would have been spent in the absence of this section, for items and services covered under parts A and B furnished to applicable beneficiaries for each qualifying medical 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 variation in expenditures for