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The Medicare Modernization Act of 2003 authorized the Centers for Medicare and Medicaid Services (CMS) to develop a pilot program that for the first time would use performance-based contracting to provide disease-management services to an elderly, fee-for-service Medicare population.
Today, eight organizations, covering nearly 180,000 patients, are involved in the program that was launched in 2005 (DOC News, October 2005) and focuses on those with diabetes and/or congestive heart failure. According to CMS, about 14% of Medicare beneficiaries have congestive heart failure, but they account for 43% of Medicare spending. The 18% who have diabetes account for 32% of spending.
"The way I look at it, the DM [disease-management] provider serves as my eyes and ears when the patient is away from the clinic," says Rosie Walker-McNair, MD, a physician in private practice in Jackson, Miss., who treats Medicare patients in the program.
In the initial 3-year phase of the voluntary Medicare Health Support (MHS) project, targeted beneficiaries in traditional fee-for-service programs are invited to participate. Those who accept are assigned randomly to either an intervention or control group. Beneficiaries in the intervention group receive a letter explaining the program and offering an opportunity to opt out. If they elect to join, they can choose their own doctors and other practitioners.
The physician is sent a questionnaire based on the patient's illness profile. The patient then is contacted by a nurse employed by the disease-management organization who will be following the patient.
SERVICE DESIGNED TO PROMOTE SAVINGS
"MHS is a major, important demonstration project to try to prove that disease management can be cost-effective at a national level with a Medicare population," says David B. Nash, MD, of the department of health policy at Jefferson Medical College in Philadelphia. "In English, this program is a bellwether for the future of Medicare payments."
CMS pays the organization a dollar amount per enrolled patient to provide disease-management services in conjunction with the primary care physician and other specialists. This per-patient fee does not affect what physicians may bill under Medicare schedules. The disease management providers are testing different types of interventions to improve outcomes, and payments will be based on performance results.
Each disease-management organization must guarantee 5% in net savings to Medicare. Failure to meet this target could result in the organization's having to pay back to CMS up to 100% of fees paid by the agency.
"There is a very detailed series of outcomes that the participating vendors have agreed to meet on a patient-specific basis," Nash says. "The guarantee of off-the-top savings when compared to usual care requires great coordination of care, good outcomes measures, practicing evidenced-based medicine, and working closely with providers."
Among the services the disease-management organizations offer:
EXTENSION OF THE PHYSICIAN'S OFFICE
"We are an extension of the physician's office and not a replacement," says Jean Bisio, RN, chief executive officer of Tampa, Fla.–based Green Ribbon Health, LLC, one of the pilot organizations. "We reinforce and follow the treatment plan and help the physician treat the person more efficiently."
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Walker-McNair agrees: "The interaction with the DM provider's nurses helps lower the number of phone calls I get for minor things." She notes that when patients have questions after they leave the office, they frequently can get answers using the hotline.
Savings are expected to accrue from different areas. For example, a patient might call the doctor in the morning with a concern. If the physician is delayed in returning the call, the patient might become worried and call an ambulance. Patient hotlines can address many concerns, alleviate the worry, and stop unneeded—and expensive—trips to the hospital.
"We want to improve the efficiency of care for these patients through communication with physicians and other care resources," says Christobel Selecky, executive chair for LifeMasters Supported SelfCare, Inc., the MHS vendor for Oklahoma. "We send physicians quarterly reports of all interactions with their patients and contact the office immediately when necessary."
Clinical guidelines and evidence-based medicine are meant to be integral to the care coordinated by the MHS organizations in order to increase the percentage of patients who are treated according to established guidelines. Studies consistently indicate community physicians fall short of optimal performance in care of diabetes and other chronic illnesses.1,2
"It is not that physicians don't know the clinical guidelines; it is rather that they have not generally put systems in place that allow them to follow them with every patient," says Bruce Bagley, MD, medical director for quality improvement at the American Academy of Family Physicians. "The DM companies are ahead in this area, since they are already set up to support and accomplish the guidelines. They can provide help with difficult patients."
Because Medicare is a large and influential part of American health care, primary care practices need to stay in touch with what is happening with these disease-management services—even in regions without pilot programs.
"If you believe that Medicare is going to use this as a model to pay
for performance, that means primary care physicians should be paying very
close attention to how your colleagues are managing in these programs,"
Nash says. "While those outside the pilot programs will not be affected
immediately, you are most likely looking at your future." 
Footnotes
More information about Medicare Health Support is available on the CMS Web site, www.cms.hhs.gov/CCIP/.
References
2. Cabana MD, Rand CS, Powe NR, et al.: Why don't physicians follow
clinical practice guidelines? A framework for improvement.
JAMA 282:1458–1465, 1999.
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