BOX 6-1

Medicare Care Coordination Demonstration Projects

Medicare Health Support Demonstration. In this ongoing demonstration (authorized in 2003), the Centers for Medicare & Medicaid Services (CMS) entered into agreements with eight organizations to test disease management and other approaches to care coordination to see whether they could improve the quality of care and life for people who have heart failure and/or complex diabetes among their chronic conditions. This demonstration represents the first time a large-scale initiative of this type has been tried in fee-for-service (FFS) Medicare. Its design randomizes participants into intervention and control groups. Each participating organization offers self-care guidance and support to beneficiaries to help them manage their health, adhere to their physicians’ plans of care, and ensure they know when to seek medical care. Organizations also are required to assist participants in managing their health holistically, including all comorbidities and relevant health care services, in a manner that is responsive to any unique individual needs (CMS, undated). Each organization is paid a prospective fee for the care coordination that is at partial risk if targeted savings are not achieved (MEDPAC, 2006).

Physician Group Practice Demonstration. This first pay-for-performance initiative for physicians under the Medicare program is testing whether performance-based payments would result in better care. During the 3-year project, CMS will reward physician groups that improve patient outcomes by coordinating care for chronically ill and high-cost beneficiaries. Because they will share in any financial savings that result, the groups have incentives to use care management strategies that, based on clinical evidence and patient data, can improve patient outcomes and lower total medical costs. Performance payments will be derived from savings expected through improvements in care coordination for an assigned beneficiary population; by law the demonstration is required to be budget neutral. Approaches to be used for better care coordination include disease management and case management services, improved access to care and providers, and use of electronic medical records and disease registries (CMS, 2007).

Care Management for High-Cost Beneficiaries. This 3-year demonstration, begun in 2005, is designed to test approaches to helping Medicare beneficiaries with complex medical needs achieve better health outcomes through improved care coordination. In addition to providing traditional FFS Medicare benefits, participating health care organizations offer a variety of additional services to coordinate care, including home visits, in-home monitoring devices, electronic medical records, self-care and caregiver support, education and outreach, tracking and reminders of individuals’ preventive care needs, 24-hour nurse telephone lines, behavioral health care management, and transportation services. Organizations receive a monthly fee for each beneficiary to cover their administrative and care management costs; however, they are at financial risk if they do not meet established performance standards for achieving cost savings. Participating organizations also have the flexibility to stratify targeted beneficiaries according to risk and need and to customize interventions to meet individuals’ personal needs (CMS, 2005b).

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