Academic journal article Health Care Financing Review

Impacts of a Disease Management Program for Dually Eligible Beneficiaries

Academic journal article Health Care Financing Review

Impacts of a Disease Management Program for Dually Eligible Beneficiaries

Article excerpt


Chronic medical conditions contribute disproportionately to increasing health care costs, morbidity, and mortality among Medicare beneficiaries. In 2001, while only one-half of all Medicare beneficiaries were treated for one or more chronic medical conditions, such as chronic obstructive pulmonary disease, diabetes, CAD, or CHF, this same group accounted for more than 95 percent all Medicare expenditures (U.S. Congressional Budget Office, 2005). Furthermore, numerous studies suggest that much of the high level of services used by beneficiaries with chronic illnesses would be unnecessary if physicians provided care consistent with evidence-based guidelines; patients practiced better self-care and adherence to recommended medication, diet, and exercise regimens; the numerous providers treating a patient with chronic illnesses communicated more clearly with each other and with the patient; and patients had adequate access to transportation, medications, and other social support services.

To address these issues, CMS has sponsored a series of demonstration programs for beneficiaries in the Medicare fee-for-service (FFS) program to test whether coordinated care or DM services can improve the quality of care and health of beneficiaries who have chronic health problems and whether they can reduce beneficiaries' health care spending. In 2002, CMS contracted with 15 small-scale programs to provide case management and DM services under the Medicare Coordinated Care demonstration. The programs each identified their own target population and intervention. Most of these programs enrolled fewer than 1,000 beneficiaries.

While these interventions provided CMS with valuable lessons on the promise of small scale, voluntary programs, some Federal policymakers sought to test population-based DM programs at a much larger scale, in a fashion similar to DM programs operating in the private sector. To this end, CMS initiated the Medicare Health Support (MHS) program to improve the quality of care and life for people living with multiple chronic illnesses. Eight MHS providers began operations between August 2005 and January 2006. Under this model, the programs are accountable for the outcomes of all beneficiaries in the assigned population, not only those who choose to engage with program staff.

Prior to MHS, CMS initiated a separate population-based demonstration, in January 2005, with LifeMasters as the program operator. The demonstration targets FFS beneficiaries who are enrolled in both Medicare and Medicaid (dual eligibles), reside in select Florida counties, and have CHF, CAD, or diabetes. Like MHS, this demonstration is large-scale and population-based. CMS prospectively identifies eligible beneficiaries, and those patients are randomly assigned to treatment and control groups (in a 5:2 ratio). LifeMasters receives a fixed monthly payment per treatment group patient and must reduce Medicare spending among its treatment group members relative to the control group by at least its fees or repay the difference to CMS, up to the full amount of its fees.

The LifeMasters program, which began 1 year before the MHS sites, provides important lessons from which newer initiatives can learn. Furthermore, the demonstration provides unique insights about the effectiveness of DM programs for improving quality of care and reducing Medicare expenditures for dually eligible beneficiaries with chronic illnesses, a particularly vulnerable and expensive group. The data presented here summarize an interim analysis of the effects of the LifeMasters demonstration program on both quality-of-care measures and Medicare service use and costs over the first 18 months of operation.


LifeMasters began providing DM services in January 2005 to dually eligible beneficiaries in Florida who receive full Medicaid benefits (Table 1). …

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