Medicare disease-management pilot faces closure over costs

Physicians are among those calling on Congress to repair and renew the demonstration program.

By David Glendinning — Posted April 28, 2008

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Medicare's first run at incorporating chronic care management techniques into the program is closing at the end of this year, with most observers already describing the effort as a false start.

The Centers for Medicare & Medicaid Services launched the Medicare Health Support pilot project three years ago with high hopes. By hiring eight private disease management firms to set up voluntary chronic care improvement programs for beneficiaries, CMS aimed to improve health care quality while lowering costs. At one point more than 150,000 seniors were enrolled in the programs.

By using trained nurses or health coaches to contact patients and remind them to check their vital statistics and take their medications, among other activities, the companies encouraged the seniors to take better care of themselves between office visits. The desired result was fewer unnecessary hospitalizations and emergency department trips.

CMS has not yet determined whether the project improved health outcomes or raised patient satisfaction, but it has determined that the effort is not saving the government or taxpayers money. A preliminary report issued by the agency in January found that the pilot was not meeting the statutory requirement that enrollees' Medicare claims amounts be lower than or equal to those for a control group of seniors who were not enrolled in the project.

In part, the cost overrun issues already had prompted three of the original eight disease management companies to drop out before their three years were up.

Medicare Health Support will terminate in December and not be renewed unless the five remaining firms help slash enrollees' Medicare claims by $600 to $800 per participant per month from now until the contracts end, CMS said in January. Without such a major turnaround, the administration cannot under statute move into a phase II of the project, agency officials said.

Physicians go to bat

The participating firms said they could not meet the CMS requirement that their programs be budget neutral, but some want Congress to keep the pilot program alive anyway.

Doctors involved in the demonstration are joining the call. More than 300 physicians active in the program administered by Healthways in Maryland and Washington, D.C., wrote to lawmakers urging that it be continued past its initial phase. They reported that their enrolled patients were more in control of their chronic conditions, better informed and less likely to be hospitalized.

"Doctors want our patients to be healthy, interested in their own welfare and, ultimately, leading healthy lives," wrote Richard Walsh, MD, an internist in Baltimore. "The Medicare Health Support program is reinforcing that to patients in a way that can't be done through just a doctor's visit. I have a better relationship with my patients because they are more involved, and that involvement is more likely to prevent future problems."

By focusing just on the cost side of the pilot program, CMS is not addressing its important quality gains, said Patrick Mattingly, MD, chief medical officer at Health Dialog Services Corp., one of the Medicare Health Support contractors. A preliminary internal analysis has pointed to improvements in quality scores for seniors in the company's Western Pennsylvania program.

"We'd hate to see this opportunity go by," Dr. Mattingly said. "We know from all of our work with patients that we can, in fact, improve both their care and their satisfaction."

Sound theory, poor design

The calls to extend the program's current run or to seek bids for a second phase have generated some interest on Capitol Hill. Sens. John Kerry (D, Mass.) and Lamar Alexander (R, Tenn.) have said Medicare must continue the program or risk worsening the health of the roughly 68,000 beneficiaries who still receive the chronic care improvement services. The disease management firms are working to get legislation renewing Medicare Health Support attached to a Medicare physician payment bill currently being drafted in the Senate.

Even if the pilot project receives a reprieve, the administration will need to make major changes before the program can achieve its full potential, said Christobel E. Selecky, president and CEO of LifeMasters Supported SelfCare Inc. Her firm terminated its Medicare Health Support program in Oklahoma after only 16 months when it became clear that CMS had set it up in such a way that the company could not produce the required cost savings given the greater health needs of the enrollees the agency had tapped to participate.

"We were like the canaries in the coal mine," she said. By the time CMS produced data to show why the participants it chose needed more costly care than the controls, LifeMasters had pulled out to avoid further risking both taxpayer money and its own payment -- which was dependent on the level of cost savings it produced.

Health Dialog ran into a similar situation when many of its assigned enrollees proved far too sick to benefit from disease management, Dr. Mattingly said. Of its original population of 20,000 enrollees, only 10,000 are still in Medicare, and the majority of those who are not have died. A redesigned program would need to involve physicians heavily in choosing which beneficiaries would benefit from the chronic care services that the firms are offering, he said.

Bumps in the road aside, the concept of battling health care problems and costs through chronic care management is a sound one, said Richard H. Carmona, MD, MPH, the former U.S. surgeon general.

"The fact that one pilot is viewed as being not successful by whatever the metrics are should not cast a cloud over the whole process," he said.

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And then there were 5

The Medicare Health Support pilot project aimed to test chronic disease management techniques through eight programs over three years. Three of the eight private firms administering the demonstration dropped out before their contracts were completed, due in part to cost overruns.

Care management firm Region End date
Aetna Health Management LLC Illinois 8/31/2008
Cigna Healthcare Northwest Georgia 1/14/2008
Green Ribbon Health Central Florida 10/31/2008
Health Dialog Services Corp. Western Pennsylvania 8/14/2008
Healthways Washington, D.C., Maryland 7/31/2008
LifeMasters Supported SelfCare Oklahoma 12/31/2006
McKesson Health Solutions LLC Mississippi 5/31/2007
XLHealth Corp. Tennessee 12/31/2008

Note: Cigna Healthcare, LifeMasters Supported SelfCare and McKesson Health Solutions LLC were terminated early.

Source: Centers for Medicare & Medicaid Services

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