Helpful Chronic Care Initiatives in the Medicare BillsMegan Burns, Jeff Lemieux, and Matt Alpert
7/22/2003
Most think tanks have taken a dim view of the stand-alone Medicare drug benefit passed by the House and Senate in June. There are just too many reasons why a high-premium, stand-alone drug benefit either won’t work very well; or, to make it work, large infusions of additional funds or government control will be necessary.
However, some praiseworthy new proposals to improve chronic care are buried deep within the Medicare bills. Rep. Nancy Johnson (R-CT) succeeded in inserting a permanent, nationwide program to improve chronic care for all Medicare beneficiaries into the House version of the bill. The House chronic care provision was based on earlier proposals by the Progressive Policy Institute. The Senate version is based on more narrowly targeted demonstration programs, but it contains much more funding beginning in 2009.
On balance, the House proposal provides the more compelling administrative structure for long-term chronic care improvements. However, the Senate's demonstration to add extra physician fees for doctors agreeing to provide chronic care services is an intriguing attempt to match better pay for better performance, usually a very difficult prospect for Medicare. But the Senate's physician fee demonstration is also very risky. Without proper oversight, the extra fees might not be matched by real improvements in Medicare beneficiaries' health and verifiable cost savings.
House Chronic Care Proposal. The House-passed Medicare bill would create a permanent, nationwide chronic care improvement program for enrollees with chronic health conditions, such as congestive heart failure, diabetes, chronic obstructive pulmonary disease, stroke, or cancer.
Services could include:
• Self-education services that would encourage the beneficiary to take a proactive approach to managing his or her health.
• Support education for health care providers or family members to help the beneficiary meet the goals of the plan.
• Coordination of health services between home and office visits.
• Coordination among health providers to share relevant clinical information, through technology.
• Enhanced use of technology for self-monitoring of vital signs or other clinical information on a daily basis.
• Education on pain management and end-of-life care.
Rather than administering the program from its national headquarters, Medicare would establish regional offices better equipped to understand local chronic care needs and work with local health care providers. The regional oversight and accountability system would allow administrators the flexibility they need, and it would provide headquarters with cross-regional comparisons to evaluate progress and ensure accountability.
Under the House bill, enrollees in private Medicare HMO plans or Preferred Provider Organization (PPO) plans would receive chronic care services from those plans.
For enrollees in the traditional fee-for-service plan, Medicare would offer chronic care services through new contracts with disease management service providers, health insurers, physician groups, or other entities.
Contractors would be required to monitor and report on health outcomes, reductions in medical and treatment errors or hospital re-admittance rates, beneficiary satisfaction, and cost savings. The House bill also requires randomized clinical trials to compare the health outcomes and costs of seniors enrolled in chronic care improvement programs with those of Medicare beneficiaries who qualify, but decline to enroll in chronic care programs.
The contracts would be on a risk-sharing basis, and Medicare would monitor and certify that fees paid to these chronic care organizations would be offset over time by reductions in fees that otherwise have been paid on the enrollees' behalf (such as for unnecessary hospital or physician visits). That is, the programs are required to be "budget-neutral" (although the proposal doesn't specify a length of time over which budget neutrality would be determined). The House proposal allocates $100 million for the chronic care programs over the first three years. Since the programs would be budget-neutral by some measure, the $100 million is presumably intended for start-up costs, regional offices, and funding for the cost of clinical trials.
Senate Chronic Care Proposal. The Senate's approach to chronic care is based on large demonstration programs. Medicare would then evaluate the demonstrations and provide funds for their continuation and expansion beginning in 2009.
Complex Clinical Care Management Fee for Physicians. The first major demonstration program would test the effects of extra payments to physicians who agree to take on added responsibilities for patients with at least 4 complex medical conditions. Doctors would be eligible for new monthly fees if they agreed to serve as the patient’s primary care physician, coordinate care for the patient with families and outside health providers, and maintain the patient’s medical records (including those generated by the patient’s contacts with other health providers).
The demonstrations would be located in 6 sites across the country, and would extend for up to 3 years. As with the House bill, Medicare would ensure that the demonstrations would be budget-neutral.
Care Coordination Organizations. The Senate bill would also create a 6-site demonstration program for care management organizations. Those firms would be able to contract with Medicare on a risk-sharing basis to provide chronic care services for enrollees in Medicare’s fee-for-service program. Like the physician fee demonstration, the care management demonstration program would be budget-neutral. It would extend for as many as 5 years.
Quality of Care Demonstration. The Senate would establish another 5-year demonstration program for health plans or medical groups desiring to implement certain quality improvement programs. The budget-neutral arrangements would allow Medicare and groups under the demonstration to use alternative benefit or payment regimes that would spur quality and care improvements.
$6 Billion for Chronic Care Enhancements Beginning in 2009. Based on the results of the demonstration programs, the Senate bill would authorize Medicare to spend as much as $6 billion to follow-up on programs that would improve chronic care. The extra funds could be used to expand demonstration programs nationwide, or relax budget-neutrality requirements.
Perspective. The House bill goes much farther than the Senate toward creating a permanent administrative structure to oversee programs designed to improve chronic care. But the Senate's complex clinical care management fee for physicians represents a bold (and risky) attempt to raise payments to doctors providing needed chronic care services for which Medicare would otherwise not pay.
The Senate bill's complex care demonstration attempts to drive chronic care improvements down to the level of individual physicians who may otherwise not be associated with a health plan, disease management organization, or other network with systems in place to handle chronic care improvements. That is a worthy idea, but it could backfire badly if sufficient oversight and monitoring is not in place. Some physicians may sign up for the extra payments from Medicare without any real ability to improve their care of patients' chronic conditions.
At the least, the requirements for physicians participating in the Senate complex care demonstration programs should be more specific, such as development and maintenance of patients' electronic medical records, agreement to provide e-mail or phone consultations with patients and their families, and agreement to provide remote monitoring systems to keep track of patients' day-to-day conditions. As the Senate bill is currently drafted, the requirements for participating physicians are vague. With more specific systems in place, Medicare could be more confident that its extra payments to physicians would pay off in better health for patients, and fewer expensive office visits or hospitalizations.
Since improved chronic care really should be budget-neutral or close to it, at least over a long period of time, the extra funds in the Senate plan might seem unnecessary.
However, the Senate’s commitment to funding is helpful. There may be some chronic care improvement programs that are extremely valuable to seniors, but that do not save money, or cost more than would otherwise be the case. Nevertheless some of those programs might create very high value for taxpayers -- even though they cost more, the improvement in health care would be worth it. The Senate bill allocates funds that could allow some of those types of worthy chronic care programs to continue in Medicare, even if they don’t save money on a strict accounting basis.
Links:
Progressive Policy Institute Making Chronic Care the Focus of Medicare Reform (February 25, 2003).
Centrists.Org Issue Summary for Chronic Care
