Medicare Chronic Care Management

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

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Abstract

The Center for Medicare & Medicaid Services (CMS) has developed and is conducting several initiatives aimed at testing how care for those with chronic illnesses can be improved for Medicare beneficiaries.

Purpose of health policy or idea

The Medicare Coordinated Care Demonstration was mandated by Congress in the Balance Budget Act of 1997 and is designed to test whether providing coordinated care services to Medicare fee-for-service beneficiaries with complex chronic conditions can yield better patient outcomes without increasing program costs. The project involved 15 sites in both urban and rural areas in 16 states, focusing on various chronic conditions. Enrollment began in April 2002, and there are about 15,000 enrollees including the control group. Although the original term of the demonstration has ended, most of the sites have been continued until more complete evidence can be collected and analyzed on their performance.

The Medicare Disease Management Demonstration, mandated in the Benefits Improvement and Protection Act of 2000, provides disease management for up to 30,000 eligible beneficiaries, as well as a comprehensive drug benefit. This project, which began in January 2004, is particularly interesting because it will provide the first indication of how well prescription drugs can be used to help chronically ill beneficiaries in the context of the Medicare program.  The three sites - in California/Arizona, Texas, and Louisiana - will be at risk for higher Medicare spending among their enrollees.

The Physician Group Practice Demonstration began in April 2005. It involves 10 large, multi-specialty physician groups that will receive bonus payments for improving the coordination of care for their patients. The size of the bonus will depend on savings on total Medicare spending compared to costs for other beneficiaries in the same areas, subject to improvement according to several quality measures to be collected during the project.

Another demonstration currently awaiting final approval is an End-Stage Renal Disease (ESRD) Disease Management Demonstration, which will provide a per beneficiary per month payment to organizations that will be responsible for coordinating not only the dialysis services received by ESRD patients, but all Medicare services, to which these patients are entitled by virtue of their condition. These beneficiaries are high users of medical care because they tend to have multiple medical problems, and are in great need of better coordinated and less fragmented care for their conditions.

Another project in development is the Medicare Care Management Performance Demonstration, which was mandated in the Medicare Modernization Act of 2003 (MMA). This project will provide financial incentives to physicians who improve their office systems (including healthcare information technology, or HIT) and use those improvements to more effectively coordinate care for selected groups of chronically ill Medicare patients. It will provide a direct link between HIT, chronic care management, and financial incentives in the physician office setting.

A major initiative mandated in the MMA is the Medicare Voluntary Chronic Care Improvement Program, now known as Medicare Health Support.  This pilot program, which is expected to be implemented late in 2005, will involve about 180,000 beneficiaries in nine sites around the United States with high prevalence of diabetes and congestive heart failure. The participating organizations will be responsible for increasing adherence to evidence-based care and reducing unnecessary hospital stays and emergency room visits in an entire geographic area. The Secretary of Health and Human Services has the authority to expand the breadth and scope of this program based on initial evaluation findings.

A related project which has been developed by CMS is the Care Management for High-Cost Beneficiaries Demonstration. This project, which will begin enrolling beneficiaries in six sites late in 2005, will study various care management models for high-cost beneficiaries. It is similar in concept to the Medicare Health Support program, but it is explicitly designed to use provider-centered, rather than third-party models of chronic care management.

Main points

Main objectives

The Center for Medicare & Medicaid Services (CMS) has developed and is conducting several initiatives aimed at testing how care for those with chronic illnesses can be improved for Medicare beneficiaries.

Type of incentives

The Medicare Disease Management Demonstration puts disease management organizations at risk for overall Medicare savings for the enrolled populations.

The Physician Group Practice Demonstration will provide financial incentives to providers for improving the coordination of care for their Medicare patients and reducing Medicare spending, subject to quality improvement.

The End-Stage Renal Disease (ESRD) Disease Management Demonstration will provide a fixed per beneficiary per month payment to organizations that will be responsible for coordinating care for ESRD patients.

The Medicare Care Management Performance Demonstration will provide financial incentives to physicians who improve their office systems and coordination of care for selected groups of chronically ill Medicare patients.

The Medicare Health Support Pilot and the Care Management for High-Cost Beneficiaries demonstration put disease management organizations at risk for overall Medicare savings up to the amount of their fees.

Groups affected

Medicare beneficiaries, providers, physician groups, Medicare program

Innovationsgrad	traditionell		innovativ
Kontroversität	unumstritten		kontrovers
Strukturelle Wirkung	marginal		fundamental
Medienpräsenz	sehr gering		sehr hoch
Übertragbarkeit	sehr systemabhängig		systemneutral

This is an attempt to address the inconsistency between Medicare's acute care orientation and its increasingly chronically ill population. It is imperative that attempts such as these be developed and implemented.

Political and economic background

In the U.S., the growth of managed care in the 1990s focused attention on better coordination of care as a way to control costs and improve care. In theory, the traditional managed care model should be at its best in addressing the needs of an increasingly chronically ill population, with the emphasis on preventive and primary care and the requirement that care be explicitly coordinated by a physician gate-keeper. It was commonly accepted that the traditional fee-for-service financing mechanism did not encourage (in fact, discouraged) the coordination of care, because it made no payment available to compensate for the resources required for such care (in fact, the time spent coordinating care took away from the time that could be spent providing more services that were well-compensated) and because it paid more for procedures and for specialists' services, which discouraged physicians from going into the primary care fields that are more compatible with the role of care coordination. Moreover, fee-for-service payment encourages the treatment of individual conditions by individual providers, while many people with chronic conditions have multiple chronic conditions, which can be exacerbated (or at least not helped) by this type of specific-condition oriented care.

However, several aspects of the financing mechanism that developed around and became an integral part of the managed care model also were incompatible with the original vision of coordinated care as it applies to chronically ill enrollees. Although capitation - a fixed payment per month for each enrollee member of the plan - should provide a strong incentive to help chronically ill enrollees manage their conditions and avoid expensive hospital stays, it also provides an even stronger incentive to avoid chronically ill enrollees in the first place - they are much more costly than the average enrollee, and the payment rates that managed care plans receive rarely are adequately adjusted for the higher anticipated costliness of some types of individual enrollees. This lack of adequate risk adjustment means that plans face potentially severe financial penalties for making themselves attractive to chronically ill populations. Moreover, in the case of Medicare, which has a much higher proportion of chronically ill beneficiaries than do private plans that cover the working population, managed care plans were (until 2006) prohibited from specializing in subsets of the population; consequently, a plan that was designed to be particularly well-suited to treating beneficiaries with a particular condition or cluster of conditions (such as congestive heart failure or asthma and other chronic respiratory conditions) also had to be prepared to offer the full range of services to the entire beneficiary population, which it might not have been prepared to do. (The Medicare Modernization Act of 2003 allows for Special Needs Plans (SNPs) to participate in the Medicare Advantage (MA) program with other private (mostly managed care) plans beginning in 2006. Although MA payment rates are risk adjusted, that adjustment applies to only 75 percent of the rates received by plans in 2006, so SNPs will be only partially compensated for the often higher anticipated costliness of their targeted enrollee populations. Beginning in 2007, MA payment rates will be fully risk-adjusted.)

Some managed care plans persisted in attempting to develop ways of providing more appropriate care to their chronically ill enrollees. Many of these efforts involve third-party organizations that are contracted to provide services to specific sets of enrollees; this has become a flourishing industry - a quick query of the Disease Management Association of America's web site produced a list of 46 different disease management organizations. (Disease Management Association of America 2005.)

Despite the decline of the traditional indemnity insurance model in the U.S., most people are still treated under an arrangement that involves fee-for-service payment to their providers. The prevalence of the traditional managed care model that was anticipated in the early 1990s has not materialized. In Medicare, this is true to an even greater extent, as 87 percent of Medicare beneficiaries remain in the traditional fee-for-service program, with only 13 percent enrolled in managed care arrangements offered by private plans. (Congressional Budget Office March 2005.)

Purpose and process analysis

Current Process Stages

	Idee	Pilotprojekt	Strategiepapier	Gesetzgebung	Umsetzung	Evaluation	Veränderung/Richtungswechsel
Implemented in this survey?

Origins of health policy idea

Most of the Medicare chronic care initiatives were mandated by legislation, beginning in the Balanced Budget Act of 1997 and most recently in the Medicare Modernization Act of 2003.

Initiators of idea/main actors

• Regierung

• Leistungserbringer

• Patienten, Verbraucher

Approach of idea

The approach of the idea is described as:
new:

Innovation or pilot project

Stakeholder positions

The demonstration projects are relatively uncontroversial and supported by all stakeholders.

Actors and positions

Regierung
Government	sehr unterstützend		stark dagegen
Leistungserbringer
Physicians/providers	sehr unterstützend		stark dagegen
Patienten, Verbraucher
Medicare beneficiaries	sehr unterstützend		stark dagegen

Influences in policy making and legislation

Most of the demonstration projects have already been legislatively approved and implemented. Evaluation of the outcomes will determine whether the projects will be implemented nationally.

Legislative outcome

n/a

Actors and influence

Regierung
Government	sehr groß		kein
Leistungserbringer
Physicians/providers	sehr groß		kein
Patienten, Verbraucher
Medicare beneficiaries	sehr groß		kein

Positions and Influences at a glance

Adoption and implementation

The U.S. Secretary of Health and Human Services has the authority to continue or expand the Medicare Health Support Program. Ultimately, the U.S. Congress will determine whether the initiatives continue or are expanded.

Monitoring and evaluation

Most of these initiatives will have independent evaluations. Some are ongoing, but none are yet completed.

Review mechanisms

Abschlussevaluation (extern)

Dimensions of evaluation

Struktur, Prozess, Ergebnis

Results of evaluation

Not yet done.

Expected outcome

Outcomes of these demonstrations can be assessed when further information becomes available as these initiatives mature and more information on their results becomes available.

Impact of this policy

Qualität	kaum Einfluss		starker Einfluss
Gerechtigkeit	System weniger gerecht		System gerechter
Kosteneffizienz	sehr gering		sehr hoch

References

Sources of Information

• Centers for Medicare & Medicaid Services, Office of the Actuary: National Health Expenditures Tables, Table 2: National Health Expenditures Aggregate Amounts and Average Annual Percent Change, by Type of Expenditure: Selected Calendar Years, 1980-2003. Internet address: http://cms.hhs.gov/statistics/nhe/historical/t2.asp (accessed July 31, 2005).
• Congressional Budget Office: An Analysis of the Literature on Disease Management Programs (report on analysis for Don Nickles, Chairman, Senate Budget Committee, October 13, 2004).  Internet address: www.cbo.gov/ftpdocs/59xx/doc5909/10-13-DiseaseMngmnt.pdf (accessed November 12, 2004).
• Congressional Budget Office: Fact Sheet for CBO's March 2005 Baseline: MEDICARE (revised March 8, 2005). Internet address: www.cbo.gov/factsheets/2005/Medicare.pdf (accessed July 31, 2005).
• Congressional Budget Office: High-Cost Medicare Beneficiaries (Washington, DC: Congressional Budget Office, May 2005).

Author/s and/or contributors to this survey

Stuart Guterman

Empfohlene Zitierweise für diesen Online-Artikel:

Stuart Guterman. "Medicare Chronic Care Management". Health Policy Monitor, 6 October 2005. Available at http://www.hpm.org/survey/us/c6/2