CMS’s quiet announcement also came just a day after Congressional Budget Office Director Peter Orszag criticized the agency for being stingy with information about how its pilot programs and demonstration projects were doing.

“It’s almost like they’re conducting a variety of experiments in disease management and various other things. And they are doing so with public subsidies,” he said, according to Congress Daily.

Disease management has become a cause célèbre among health policy wonks and politicians, including the current crop of presidential candidates. It is supposed to work by helping patients with chronic conditions stay on top of their treatment regimens. For example, diabetes patients are reminded to refill their insulin prescriptions and get regular check-ups so they can detect problems before they become severe and require hospital stays.

The Medicare care-coordination program emerged from the negotiations on the 2003 bill that created the Medicare prescription-drug benefit. The pilot was intended to inject some coordination into how Medicare patients get treated in a fee-for-service system that simply pays bills when patients go to the doctor rather than manages their medical care, as private insurance companies do.

CMS rolled out the Medicare Health Support (MHS) program in 2005, heralding it in a press release. “This program is just one component of the greatest changes in Medicare since it was founded 40 years ago,” then-CMS Administrator Mark McClellan said at the time. Health and Human Services Secretary Mike Leavitt said, “We are providing beneficiaries with additional tools to help them manage their health more effectively and avoid preventable complications.”

Then-DMAA President Sam Nussbaum went even further in 2004: “For seniors with chronic health problems, this pilot program represents a significant opportunity to improve their health and optimize health care costs through highly coordinated care.”

According to CMS now, that did not happen.

“The experience of the MHS program indicates that phase one of the program is not meeting the statutory requirements of improved clinical quality outcomes, improved beneficiary satisfaction, and the achievement of financial savings targets,” the agency explained at the bottom of the second page of the document it posted Tuesday afternoon.

The care coordination plans themselves strongly object to CMS’s actions. “It’s frankly disingenuous of CMS,” Moorhead said. “CMS has made this [decision] without any formal evaluation or report.”

She noted that a July 2007 report by  CMS’s private auditors concluded there were not enough data to determine whether the program was working.

Bad news about Medicare’s experience with coordinated care could give investors and private employers pause. But Moorhead said her group’s members are not concerned about that.

“We are seeing a rapid growth in other sectors of the purchaser community,” including private employers and state Medicaid programs, she said. Moorhead expressed optimism that care-coordination could still work in Medicare.

“We do believe that there continues to be an opportunity within fee-for-service Medicare for these types of programs,” she said.