In stealthy move, CMS eyes end to care-coordination program

A dry notice buried on a government website has been triggering alarm among health insurers and lobbyists ever since the news was posted late Tuesday afternoon.

The source of anxiety: an announcement from the Centers for Medicare and Medicaid Services (CMS) that a pilot program designed to improve the health and satisfaction of sick patients and save taxpayers money had failed.


Starting in July, 68,000 Medicare beneficiaries in five states and the District of Columbia will be dropped from care-coordination programs treating their diabetes and congestive heart failure. In addition, five health insurance companies will lose out on lucrative government contracts, and the industry could be deprived of a new area for revenue growth.

The announcement was atypically low-key. CMS did not issue a press release acknowledging the end of the program’s first phase. The agency advised congressional staff Tuesday afternoon, but the first public statement about the decision to close out the program came in the form of a mass e-mail from the agency’s capital markets adviser, which goes primarily to Wall Street analysts.

CMS downplayed the significance of the way it made its findings on the program public.

“We provided this information to the five organizations affected by the program yesterday afternoon and followed with a notice to the Hill just after 4 p.m.,” a spokesman wrote in an e-mail. “There was no press release because the program is not ending. It is continuing until the end of phase one and the programs will be working with their enrollees to help them continue to get their Medicare coverage.”

But the participating companies say they were caught flat-footed when word found its way to their trade group, DMAA: The Care Continuum Alliance. Participating companies include health industry giants Aetna, Humana and McKesson Health. (DMAA refers to its former name, the Disease Management Association of America.)


[Editors note: McKesson Health Solutions is no longer participating in the Medicare care coordination pilot project, having withdrawn from the program in May 2007.]

“We had no advance notice,” DMAA President and CEO Tracey Moorhead said.

CMS will not make its final determination about whether to launch the second phase of the program until it receives a report for its outside auditors. But the negative assessment this week does not bode well for the program’s future prospects.

The under-the-radar nature of CMS’s decision contrasts with promises of transparency from acting Administrator Kerry Weems, who said when he took office last September that he would conduct “business in daylight” and stop “cocktail-hour press release[s].”{mospagebreak}

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.


“In exchange for this publicly funded set of experiments, we should be getting a set of rigorous data back on what works and what doesn’t, and that is unfortunately not as complete and as rigorous as one would hope,” he added.

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.