[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
ELIMINATING BARRIERS TO CHRONIC CARE MANAGEMENT IN MEDICARE
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HEALTH
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
FEBRUARY 25, 2003
__________
Serial No. 108-6
__________
Printed for the use of the Committee on Ways and Means
U. S. GOVERNMENT PRINTING OFFICE
87-412 WASHINGTON : 2003
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
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COMMITTEE ON WAYS AND MEANS
BILL THOMAS, California, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
E. CLAY SHAW, Jr., Florida FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut ROBERT T. MATSUI, California
AMO HOUGHTON, New York WILLIAM J. COYNE, Pennsylvania
WALLY HERGER, California SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota GERALD D. KLECZKA, Wisconsin
JIM NUSSLE, Iowa JOHN LEWIS, Georgia
SAM JOHNSON, Texas RICHARD E. NEAL, Massachusetts
JENNIFER DUNN, Washington MICHAEL R. McNULTY, New York
MAC COLLINS, Georgia WILLIAM J. JEFFERSON, Louisiana
ROB PORTMAN, Ohio JOHN S. TANNER, Tennessee
PHIL ENGLISH, Pennsylvania XAVIER BECERRA, California
J.D. HAYWORTH, Arizona KAREN L. THURMAN, Florida
JERRY WELLER, Illinois LLOYD DOGGETT, Texas
KENNY C. HULSHOF, Missouri EARL POMEROY, North Dakota
SCOTT McINNIS, Colorado MAX SANDLIN, Texas
RON LEWIS, Kentucky STEPHANIE TUBBS JONES, Ohio
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin
ERIC CANTOR, Virginia
Allison H. Giles, Chief of Staff
Janice Mays, Minority Chief Counsel
______
Subcommittee on Health
NANCY L. JOHNSON, Connecticut, Chairman
JIM McCRERY, Louisiana FORTNEY PETE STARK, California
PHILIP M. CRANE, Illinois GERALD D. KLECZKA, Wisconsin
SAM JOHNSON, Texas JOHN LEWIS, Georgia
DAVE CAMP, Michigan JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota LLOYD DOGGETT, Texas
PHIL ENGLISH, Pennsylvania
JENNIFER DUNN, Washington
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are also published
in electronic form. The printed hearing record remains the official
version. Because electronic submissions are used to prepare both
printed and electronic versions of the hearing record, the process of
converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
Page
Advisory of February 19, 2003, announcing the hearing............ 2
WITNESSES
Centers for Medicare & Medicaid Services, Stuart Guterman,
Director, Office of Research, Development and Information...... 6
______
American Geriatrics Society, and Washington Hospital Center,
George A. Taler, M.D........................................... 24
Caremark Rx, Incorporated, Jan Berger, M.D....................... 29
Group Health Cooperative, Ed Wagner, M.D......................... 17
Progressive Policy Institute, Jeff Lemieux....................... 12
SUBMISSIONS FOR THE RECORD
AdvancePCS, letter and attachment................................ 44
American Association of Health Plans, statement.................. 49
American Association for Homecare, Alexandria, VA, statement..... 51
American Healthways, Nashville, TN, statement.................... 56
American Heart Association, statement............................ 57
American Pharmaceutical Association, statement................... 59
American Society of Health-System Pharmacists, Bethesda, MD,
statement...................................................... 61
Central Virginia Health Network, L.C., Richmond, VA, Michael
Matthews, statement............................................ 63
Disease Management Association of America, Christobel Selecky,
statement...................................................... 66
Geisinger Health System, and Geisinger Health Plan, Danville, PA,
Jaan Sidorov, M.D., statement.................................. 73
Medical Care Development Inc/Maine Cares, Augusta, ME, Richard M.
Wexler, M.D., statement........................................ 76
Pharmacist Provider Coalition, Bethesda, MD...................... 77
ELIMINATING BARRIERS TO CHRONIC CARE MANAGEMENT IN MEDICARE
----------
THURSDAY, FEBRUARY 25, 2003
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Health,
Washington, DC.
The Subcommittee met, pursuant to notice, at 4:10 p.m., in
room 1100, Longworth House Office Building, Hon. Nancy L.
Johnson (Chairman of the Subcommittee) presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
SUBCOMMITTEE ON HEALTH
CONTACT: (202) 225-3943
FOR IMMEDIATE RELEASE
February 19, 2003
No. HL-2
Johnson Announces Hearing on
Eliminating Barriers to
Chronic Care Management in Medicare
Congresswoman Nancy L. Johnson (R-CT), Chairman, Subcommittee on
Health of the Committee on Ways and Means, today announced that the
Subcommittee will hold a hearing on eliminating barriers to chronic
care management in Medicare. The hearing will take place on Tuesday,
February 25, 2003, in the main Committee hearing room, 1100 Longworth
House Office Building, beginning at 4:00 p.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only.
Witnesses will include academics, health providers, and representatives
from health plans with experience in disease management. However, any
individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Committee and for
inclusion in the printed record of the hearing.
BACKGROUND:
Americans are living longer due in part to advances in medical
procedures and technologies. However, many Americans are living with
serious, chronic illnesses, such as hypertension, asthma, diabetes, and
heart disease. The Robert Wood Johnson Foundation estimates nearly half
of all Americans are living with a chronic disease.
According to a January 22, 2003, Health Affairs article
``Confronting the Barriers to Chronic Care Management in Medicare,''
approximately 78 percent of beneficiaries have at least one chronic
disease, while 32 percent have four or more chronic conditions.
Individuals with multiple chronic conditions are more likely to be
hospitalized, have more physician and home health visits, and fill more
prescriptions for drugs. Nearly two-thirds of all Medicare spending is
for beneficiaries with five or more chronic conditions.
Such increases in spending often do not translate to better quality
care. Medicare is payer of bills when seniors get sick. Medicare does
not help them manage their chronic diseases to stay well. Some
beneficiaries receive conflicting advice on their conditions, receive
duplicate tests or are given conflicting prescriptions, or experience
unnecessary hospitalizations or unnecessary pain.
Most integrated plans utilize disease management specialists to
focus on enrollees with chronic diseases. Health care policy experts
advocate early identification of patients at risk, treatment planning
with a clear understanding of provider and patient roles, and patient
self-monitoring and follow-up to improve health outcomes. Without a
change in the law, however, traditional fee-for-service Medicare cannot
evolve with these advances in the health delivery system.
For more than a decade, the Centers for Medicare and Medicaid
Services (CMS) has run demonstration programs in the Medicare program,
particularly for high cost or especially frail seniors. The CMS is
currently managing more than a dozen demonstration programs on disease
and case management.
In announcing the hearing, Chairman Johnson stated, ``Medicare
beneficiaries with chronic disease should benefit from advances in care
management and advances in the science of medicine. It is
unconscionable Medicare cannot incorporate these changes automatically.
We need to explore and implement alternatives that provide the best
care to seniors and disabled beneficiaries who are the most ill.''
FOCUS OF THE HEARING:
The hearing will focus on the health benefits and cost saving
potential of case and disease management programs.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Due to the change in House mail policy, any person or
organization wishing to submit a written statement for the printed
record of the hearing should send it electronically to
[email protected], along with a fax copy to
(202) 225-2610, by the close of business, Tuesday, March 11, 2003.
Those filing written statements that wish to have their statements
distributed to the press and interested public at the hearing should
deliver their 200 copies to the Subcommittee on Health in room 1136
Longworth House Office Building, in an open and searchable package 48
hours before the hearing. The U.S. Capitol Police will refuse sealed-
packaged deliveries to all House Office Buildings.
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Each statement presented for printing to the Committee by a
witness, any written statement or exhibit submitted for the printed
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comments must conform to the guidelines listed below. Any statement or
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1. Due to the change in House mail policy, all statements and any
accompanying exhibits for printing must be submitted electronically to
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hearing record.
2. Copies of whole documents submitted as exhibit material will not
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3. Any statements must include a list of all clients, persons, or
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Note: All Committee advisories and news releases are available on
the World Wide Web at http://waysandmeans.house.gov.
The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four
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noted above.
Chairman JOHNSON. Good afternoon. The hearing will come to
order. I apologize for the slightly late start, but it is
unusual to hold hearings on a Tuesday afternoon for just this
reason. There is so much business before the Committee, we did
need to have this on a Tuesday. I understand Mr. Stark is
literally on his way, and since he does not need to hear my
opening statement, I am going to go ahead and start. He will
make some comments when he arrives.
Today's hearing focuses on the important subject of chronic
care management and its potential to improve healthcare and
reduce costs in the Medicare program. This is not rocket
science. I mean, it is incredible that this is the first
hearing that we have really held on this issue. We held one on
disease management a year ago, but that is kind of a subset. It
is true that things have to develop to a certain point in the
real world before government can actually see and deal with
them. This is a very important hearing, because we will pass a
Medicare bill, and we must prepare Medicare to serve our
seniors in the future and provide them with the quality care as
well as affordable care that they desperately need. They are
living longer. They are living with multiple chronic illnesses,
and some of you would attest to that in your testimony, so I am
just going to skip over that.
I do want to remind us all of the very sobering fact that
the Medicare population will double in the next 27 years. From
35 million to 71 million seniors by 2030. Of our current
adults, 84 percent have 1 or more chronic conditions, and 62
percent have 2 or more chronic conditions. Bottom line, we all
know this impending crisis is rushing toward us. This
burgeoning senior population is living longer with more chronic
illnesses, and we simply must begin to think about how to
change Medicare to meet this future.
Most integrated plans utilize care and disease management
specialists to focus on enrollees with chronic diseases. Health
care policy experts advocate early identification of patients
at risk, treatment planning with a clear understanding of
provider and patient roles and patient self-monitoring and
follow-up to improve health outcomes. However, without a change
in law, traditional fee-for-service Medicare cannot adopt these
advances.
For more than a decade the Centers for Medicare & Medicaid
Services (CMS) has run demonstration programs in the Medicare
program, particularly for high cost or especially frail
seniors. The CMS is currently managing more than a dozen
demonstration programs in disease and case management. Stuart
Guterman from CMS is here today to update us on the status of
these programs. Hopefully it will give us some insight into
what can work on a broader basis.
As the baby boom generation retires, the number of
chronically ill beneficiaries will increase, and costs to
Medicare will explode. Disease management programs, more
integrated care across the board should help to defray some of
these costs and improve health care outcomes at the same time.
We are pleased to welcome Jeff Lemieux, Senior Economist
from the Progressive Policy Institute (PPI), who will discuss
proposals to modernize Medicare, and integrate care and disease
management into the program.
Dr. Ed Wagner, one of the country's top experts in his
field, is the director of the MacColl Institute; and the senior
investigator, Group Health Cooperative. As I mentioned, Stuart
Guterman is here from CMS. Dr. Jan Berger is the Senior Vice
President of Clinical Quality and Support and the Medical
Director of Caremark. She'll discuss her company's practical
experience in implementing chronic care management and whether
it has improved health outcomes and saved money.
This will be a very important hearing for us, and we thank
you all for participating.
Mr. Stark.
Mr. STARK. Thank you, Madam Chairman. We were talking about
this last April, it seems, and I don't suppose much has
changed, but maybe we will have some new traction to deal with
chronic illnesses.
As I suppose we will hear today, us Medicare beneficiaries
are more likely than a few youngsters or nondisabled
individuals to have chronic conditions; and some of us, even,
many chronic conditions.
I suppose two-thirds of the Medicare spending goes toward
items and services for beneficiaries with five or more, and I
guess we could do a better job at encouraging the providers and
patients to improve coordinating their care for patients.
I proposed legislation in the last Congress to create a new
benefit to pay for coordination services for certain
beneficiaries and near as I could tell, nobody paid any
attention to it, at least in the Committee or our Subcommittee.
I submit it would be a good starting point if there is a
genuine interest in addressing these issues, but we should
consider this, I guess, in context.
The challenges related to the lack of well coordinated care
that were identified by the Institute of Medicine (IOM) and
others are endemic in our current health care system.
Virtually all of the problems identified, I suspect, by
today's witnesses, are not limited to Medicare. They are
present in most private plans and other government programs,
including the Federal Employee Benefit Program.
So, attempts to use this issue is justification for a
fundamental restructuring of Medicare I would view with some
suspicion. There is talk in some areas about increasing the
presence of private plans in Medicare, but one of the fatal
flaws in the managed care industry and private plans in general
is that there is no incentive for those plans to invest in the
long-term health of their enrollees. Any plan that makes a
serious investment in high quality, well coordinated care will
inevitably attract sicker patients, drive up their costs and
lose money.
So, when people switch plans, especially if there is an
opportunity to do so, they will switch to those plans which
offer better care and cost them more money. It is kind of a
losing proposition.
The traditional Medicare program is in the unique position
to avoid that quandary, and compared to the vast majority of
private health plans, Medicare covers people for a very long
time. The traditional Medicare program is thus poised to
benefit financially from investing in beneficiaries to maintain
and improve their health over the long term.
So, it is long past the time to make these improvements. We
should improve the coverage of preventative benefits. As my
Committee colleagues, Mr. Levin and Mr. Foley suggest, we
should ensure that the program incorporates better management
techniques, as I believe the Chairman and I agree.
Too many Members consistently refuse to make common sense
improvements to the Medicare program, and then they inevitably
suggest it must be privatized so it will be run properly, and
those who follow this path have only themselves to blame for
the current state of affairs. So, I look forward to our panel
of experts to tell us how to reap the best results for our
beneficiaries in the Medicare program. Thank you.
Chairman JOHNSON. Congresswoman Dunn, would you like to
comment?
Ms. DUNN. Thank you very much, Madam Chairman, and I
specifically want to spend a moment introducing Dr. Ed Wagner,
who is from my district in Washington State and has come back
here to share some of his experiences as he has used their
chronic care model in treating illness. He is, as you said,
Madam Chairman, the director of the MacColl Institute for
Health Care Innovation at Group Health's Cooperative Center for
Health Studies, and is also a professor at the School of Public
Health and Community Medicine at the University of Washington.
He has been a leader researcher in developing interventions
that prevent disability and improve the health care and the
health in general of older adults.
He developed a model for primary care patients that has
been integrated into the practice of care at Group Health
Cooperative, and it is one that we have been so impressed by
and has been, if you don't mind my giving a plug to a potential
piece of legislation, the basis for some work that I am doing
right now, to put together a bill that would increase
reimbursements to Medicare+Choice programs, and to provide a
bonus payment for health care plans that implement programs to
improve quality of care to patients.
Health plans like Group Health are improving the quality of
care to patients through disease management, and I believe they
should be rewarded for doing so. You will find in his testimony
a really clear example of a woman who has run into problems
through her--not necessarily the independent quality of her
care, but the lack of integration of her care, and I am
hopeful, Dr. Wagner, that you will address this. We are
delighted that you are here today, and on behalf of the people
I represent in Seattle, I want to thank you for good work you
have done and welcome you to the panel.
Chairman JOHNSON. Thank you, Congresswoman.
Mr. Guterman, we will start with you and go right down the
line and we will hear from everyone. Remember, you have 5
minutes. Your entire statement will be included in the record,
but that way then we will have a chance for questions and some
comments amongst you.
Mr. Guterman from CMS. Thank you.
STATEMENT OF STUART GUTERMAN, DIRECTOR, OFFICE OF RESEARCH,
DEVELOPMENT AND INFORMATION, CENTERS FOR MEDICARE & MEDICAID
SERVICES
Mr. GUTERMAN. Thank you, Chairman Johnson, Congressman
Stark, and distinguished Subcommittee Members. I am Stuart
Guterman. I am director of the Office of Research Development
and Information at the Centers for Medicare & Medicaid
Services, and I want to thank you for inviting me to discuss
Medicare's efforts to improve the care provided to its
beneficiaries through disease management.
Chronically ill beneficiaries are heavily burdened by their
illnesses, and we feel that they are not as well served by the
program, either in the fee-for-service or the Medicare+Choice
systems as they could be.
In fee-for-service, the emphasis is on provision of
services by individual providers providing no incentive, and,
in fact, discouraging the coordinated care that chronically ill
beneficiaries need.
Medicare+Choice should be an appropriate environment for
providing coordinated care, but the current payment system and
some of the rules that Medicare+Choice organizations operate
under penalize them for enrolling beneficiaries who are
chronically ill, and therefore, much more expensive than
average.
Chronic diseases play a large role in generating both the
growing level of utilization under Medicare and the finances of
the program. As you have pointed out, researchers at Johns
Hopkins University found that 78 percent of Medicare
beneficiaries have at least 1 chronic condition, and counting
for 99 percent of Medicare spending each year. Twenty percent
of beneficiaries have at least 5 chronic conditions, accounting
for 66 percent of all program's spending.
Clearly, there is a lot of money on the table here to
improve the care that these beneficiaries receive. We need to
find better ways to coordinate care for these beneficiaries,
and disease management approaches have been developed to
combine adherence to evidence-based medical practice with
better coordination of care across provider, and I am looking
forward to hearing what the rest of the panel members have to
say about their experiences as well.
We are developing an array of demonstration projects to
test our ability to apply these approaches in the context of
the Medicare program. Both fee-for-service and the
Medicare+Choice environment.
To that end, we will continue to pay in these demonstration
projects many of the same providers that we pay now. What is
new in these demonstrations is explicit additional payment for
disease management services such as the nurse call lines, e-
mail and patient education to forestall more costly covered
services such as hospitalizations and emergency room visits.
These services are not now covered as such under Medicare. For
example, in our coordinated care demo, which I will talk about
more in a minute, other services that are currently covered by
Medicare are paid just as they are in the traditional Medicare
program. We would also pay a monthly fee per member per month
for disease management services on top of those.
Our objectives in these demonstrations are to improve
access, to improve coordination of care, to improve the
performance of physicians by making them more involved and
responsive to patient needs, to improve the ability of patients
to be involved and participate in their own care.
These demonstrations will need to test and evaluate what
needs to be done to get disease management programs up and
running, how best to provide these disease management services,
which of these services work and which don't in the Medicare
context, which conditions lend themselves best to disease
management initiatives and the impact of different approaches.
This involves answering several sets of questions: What should
be the focus of disease management programs, what are the data
requirements, and how can they be achieved, and here, by this
issue, I am referring to really two things: One is the use of
data to identify potential enrollees, and the other is the use
of data to monitor their needs as the projects go on.
What organizational structures work best? That is, how do
you establish networks to provide these services and involve
physicians in the process? How do you enroll beneficiaries once
they are identified? How do you provide the services
effectively? Which disease management approaches work best?
That is, who contacts the enrollees? What do they do once they
contact them and how do they make sure there is follow-up with
these chronically ill patients? How can payment be designed to
be compatible with these approaches? This is a major issue,
both in the fee-for-service and the capitated payment and we
think we are trying to develop approaches to deal with these.
Then how can all these issues be appropriately evaluated in
terms of outcomes, costs and generalized ability to the program
as a whole?
Where are we today on this issue? We have a number of
demonstration projects currently underway, and a number that
are still in development and in the pipeline. One that is
currently in operation is the coordinated care demonstration
that was mandated by the Balanced Budget Act 1997 which informs
15 sites and focuses on patients with congestive heart failure,
hurt liver and lung diseases, Alzheimer's and other dementia,
cancer and HIV/AIDS. The sites involved are in both urban and
rural areas in a number of States, and it operates under fee-
for-service payment system. Currently we have 7,600 enrollees,
and these demonstrations will continue if they are cost-
effective and if the quality and satisfaction are improved.
There is also a disease management demonstration that was
mandated in the Benefits Improvement and Protection Act in
2000. We are working with three sites, but they are subject to
Office of Management and Budget approval, so the decision isn't
final.
The plan is to pay a disease management fee per member per
month, which includes prescription drugs, and this is not only
prescription drugs that are used to manage the particular
chronic diseases that these beneficiaries suffer from, but also
all of the prescription drugs that these patients need for all
of their medical care. The hope is here that prescription drugs
can be brought to bear on these conditions and help manage them
more effectively. We are hoping to enroll up to 30,000
enrollees, and we are hoping to get this demonstration rolling
in the summer of 2003.
We also have a physician group practice demonstration. The
timeframe for applicants--the applications were received by the
day after Christmas, and the applications have been panelled.
We are planning on making at least six awards, and the
interesting thing about this demonstration project is that we
will share the savings with the physician group practices if
outcomes are improved under those practices.
In the future, we are going to work on other demonstrations
that apply alternative approaches and involve other groups of
beneficiaries, and we can maybe talk about the kinds of things
we are looking for in the question and answer period.
I want to thank you again for allowing me to describe what
we are doing, and I will be happy to answer questions at the
appropriate time.
[The prepared statement of Mr. Guterman follows:]
Statement of Stuart Guterman, Director, Office of Research, Development
and Information, Centers for Medicare & Medicaid Services
Chairman Johnson, Congressman Stark, distinguished Subcommittee
Members--first, thank you for inviting me to discuss Medicare's
attempts to use disease management to improve the care provided to its
beneficiaries. As the delivery of health care has evolved, individual
health care providers routinely plan and coordinate services within the
realm of their own specialties or types of services. However, rarely
does one particular provider have the resources or the ability to meet
all of the needs of a chronically ill patient. Ideally, as part of a
fully integrated disease management program, a provider or disease
management organization is dedicated to coordinating all health care
services to meet a patient's needs fully and in the most cost-effective
manner. I want to discuss with you in greater detail the challenges and
opportunities we face in integrating disease management concepts into
Medicare. The lack of disease management services in traditional
Medicare is an indication of how outdated Medicare's benefit package
has become. The demonstration projects being developed and implemented
by the Centers for Medicare & Medicaid Services (CMS) can help ensure
that America's seniors and disabled beneficiaries receive high quality
care efficiently.
CMS is determined to work constructively with Congress to achieve
these goals. We are currently undertaking a series of disease
management demonstration projects designed to explore a variety of ways
to improve beneficiary care in traditional Medicare. We are looking to
these programs to bring Medicare into the 21st century and provide
beneficiaries with greater choices, enhance the quality of their care,
and offer better value for the dollars spent by beneficiaries and the
government on health care. We appreciate your efforts to strengthen and
improve Medicare, and we look forward to working with you on efforts to
make disease management services more widely available, in Medicare--
and across the health care system.
Background
Medicare beneficiaries with certain chronic diseases account for a
disproportionate share of Medicare fee-for-service expenditures. These
chronic conditions include, but are not limited to: asthma, diabetes,
congestive heart failure and related cardiac conditions, hypertension,
coronary artery disease, cardiovascular and cerebrovascular conditions,
and chronic lung disease. Moreover, patients with these conditions
typically receive fragmented health care from multiple providers and
multiple sites of care. We need to find better ways to coordinate care
for these patients and to do so more efficiently. Not only is such
disjointed care confusing and ultimately ineffective, it can present
difficulties for patients, including an increased risk of medical
errors. Additionally, the repeated hospitalizations that frequently
accompany such care are extremely costly to the patients, government,
and private insurers, and are often an inefficient way to provide
quality care. As the nation's population ages, the number of
chronically ill Medicare beneficiaries is expected to grow
dramatically, with serious implications for Medicare program costs. In
the private sector, managed care entities such as health maintenance
organizations, as well as private insurers, disease management
organizations, and academic medical centers have developed a wide array
of programs that combine adherence to evidence-based medical practices
with better coordination of care across providers.
Several studies have suggested that disease management programs can
improve medical treatment plans, reduce avoidable hospital admissions,
and promote other desirable outcomes without increasing program costs.
There is little research on the overall benefits of disease management
programs for seniors and thus, the CMS demonstration projects afford us
the opportunity to test the value of these programs.
In the largest sense, both disease management and case management
organizations provide services aimed at achieving one or more of the
following goals:
LImproving access to services, including prevention
services and necessary prescription drugs.
LImproving communication and coordination of services
between patient, physician, disease management organization, and other
providers.
LImproving physician performance through feedback and/or
reports on the patient's progress in compliance with protocols.
LImproving patient self-care through such means as patient
education, monitoring, and communication.
We are exploring a number of ways to pursue these goals even
further in the Medicare program.
Where We Are Today
In order to identify innovative ways to incorporate disease
management services into the Medicare program, we have a number of
demonstrations underway.
Coordinated Care Demonstration
We are currently implementing a demonstration in 16 sites--
including commercial disease management vendors, academic medical
centers, and other provider based programs--to provide case management
and disease management services to certain Medicare fee-for-service
beneficiaries with complex chronic conditions. These conditions
include: congestive heart failure; heart, liver and lung diseases;
diabetes; psychiatric disorders; Alzheimer's disease or other dementia;
and cancer. This demonstration was authorized by the Balanced Budget
Act (BBA) of 1997 to examine whether private sector case management
tools adopted by health maintenance organizations, insurers, and
academic medical centers to promote the use of evidence-based medical
practices could be applied to fee-for-service beneficiaries. Also,
Lovelace Health Systems in Albuquerque, New Mexico, is providing
coordinated care services to Medicare beneficiaries with congestive
heart failure or diabetes. All of these programs were designed to
address important implications for the future of the Medicare program
as the beneficiary population ages, and the number of beneficiaries
with chronic illnesses increases. We are testing whether coordinated
care programs can improve medical treatment plans, reduce avoidable
hospital admissions, and promote other desirable outcomes among
Medicare beneficiaries with chronic diseases.
To date, the 16 coordinated care demonstration sites have enrolled
more than 7,600 Medicare beneficiaries in both intervention and control
groups in care coordination and disease management programs. The BBA
allowed for effective projects under a demonstration to continue and
the number of projects to be expanded based on positive evaluation
results--if the projects are found to be cost-effective and quality of
care and satisfaction are improved.
These initial projects are varied in their scope, include both
provider organizations as well as commercial companies, utilize both
case and disease management approaches, are located in urban and rural
areas, and provide a range of services from conventional case
management to high-tech patient monitoring. In addition to Lovelace
Health Systems, some of the sites we have selected include: Carle
Foundation Hospital in Eastern Illinois; CenVaNet in Richmond,
Virginia; Mercy Health Network in North Iowa; QMed in Northern
California; and Washington University/Status One in St. Louis,
Missouri.
BIPA Disease Management Demonstration
An integral part of our overall strategy for testing disease
management, this demonstration, required by the Medicare, Medicaid, and
SCHIP Benefits Improvement and Protection Act (BIPA) of 2000, was
designed to determine whether providing disease management services to
Medicare beneficiaries with advanced-stage congestive heart failure,
diabetes, or coronary heart disease can yield better patient outcomes
without increasing program costs. As required by BIPA under this
demonstration, disease management organizations will not only receive a
fee for their services, but they will also receive payment for the cost
of all the prescription drugs their patients are taking, whether or not
the drugs are related to their patients' targeted, chronic
condition(s). Coverage of prescription drugs is a unique aspect of this
demonstration. Moreover, this demonstration was designed to determine
not only the impact on costs and health outcomes of offering disease
management services, but also the impact of prescription drug coverage
on Medicare beneficiaries. Enrollment is expected to begin this summer
and up to 30,000 beneficiaries can be covered at a time under this
demonstration.
Telemedicine
Another demonstration authorized by the BBA is our Informatics,
Telemedicine, and Education Demonstration Project. Currently, we have a
4-year telemedicine cooperative agreement aimed at evaluating the
feasibility, acceptability, effectiveness, and cost-effectiveness of
advanced computer and telecommunications technology to manage the care
of Medicare beneficiaries with diabetes.
Physician Group Practice Demonstration
Additionally, as required by BIPA, we are developing a physician
group practice demonstration which will seek to encourage coordination
of Part A and Part B services, reward physicians for improving
beneficiary health outcomes, and promote efficiency through investment
in administrative structure and process. Under the 3-year
demonstration, physician groups will be paid on a fee-for-service basis
and may earn a bonus from savings derived from improvements in patient
management. At least six physician group practices will be selected to
participate in the demonstration.
Building for the Future
We are also considering future demonstration projects that will
build on our past experiences, enhance the clinical management of the
patients, provide for more effective coordination of services, and
improve clinical outcomes. We are investigating how disease management
projects could work with a diverse group of organizations, such as
Provider Sponsored Organizations (PSO), integrated healthcare systems,
disease management organizations, and Medicare+Choice plans. Such
projects could test a variety of payment methodologies, including
capitation and risk-sharing arrangements. We also want to develop
specific health plan options for those beneficiaries with chronic
illnesses. We want to enhance the clinical management of care to better
serve the patients, provide for more effective coordination of
services, and improve beneficiaries' clinical outcomes without
increasing costs to the Medicare program.
Another potential area of investigation could be beneficiaries with
end-stage renal disease (ESRD), potentially building on lessons learned
from an ESRD demonstration program created under Social Health
Maintenance Organization (SHMO) legislation. This demonstration created
an integrated system of care for ESRD beneficiaries and tested its
operational feasibility, its efficiency, and most importantly, whether
such a system would produce health outcomes at least as good as the
fee-for-service system. Our experience taught us that this approach can
maintain or improve the quality of care for ESRD beneficiaries, and can
result in high patient satisfaction and quality of life.
Additionally, we are investigating the feasibility of a
demonstration in traditional fee-for-service Medicare that focuses on
specific chronic diseases and is targeted at underserved areas in
selected geographic regions. Our emphasis would be on early detection,
patient outreach, patient education, and lifestyle modification.
Evaluation
The objective of our evaluations is to assess the effectiveness of
these programs for chronic medical conditions. In particular, we are
evaluating health outcomes and beneficiary satisfaction, the cost-
effectiveness of the projects for the Medicare program, provider
satisfaction, and other quality and outcomes measures. Using a
combination of surveys, administrative claims and enrollment data, and
site visits, we will focus on the impact of the demonstrations on
quality of care, outcomes, and costs. We will pay particular attention
to the impact of the demonstrations on the following types of measures:
mortality, hospitalization rates, emergency room use, satisfaction with
care, changes in health status and functioning, and program
expenditures. We will examine whether the disease management
interventions result in less fragmentation in care for the given
chronic conditions. Finally, we will examine which characteristics of
disease management programs appear to be most effective in reducing
morbidity and improving quality of life for chronically ill Medicare
beneficiaries. In each of these approaches, we expect that the costs to
Medicare will be the same or lower through the efficiencies that will
result in providing the most appropriate care. Through these
demonstrations, we will continue testing and exploring new strategies
for improving care and efficiency.
Conclusion
Disease management is a critical element for improving the nation's
health care and its delivery system. Along with the Secretary, the
Administrator and I want to take full advantage of all of the
opportunities for increased quality and efficiency that disease
management offers. Unfortunately, seniors are far less likely than
other Americans with reliable access to modern, integrated health care
plans to have access to disease management services. Through our
disease management demonstrations, we are working to give seniors the
same access to modern disease management services that other Americans
enjoy. We look forward to continuing to work cooperatively with you,
Chairman Johnson, Congressman Stark, this Subcommittee, and the
Congress, to find innovative and flexible ways to improve and
strengthen the Medicare program while making sure that beneficiaries,
particularly those with chronic conditions, have access to the care
they deserve. I thank you for the opportunity to discuss this important
topic today, and I am happy to answer your questions.
Chairman JOHNSON. Thank you very much, Mr. Guterman.
Mr. Lemieux.
STATEMENT OF JEFF LEMIEUX, SENIOR ECONOMIST, PROGRESSIVE POLICY
INSTITUTE
Mr. LEMIEUX. Thank you, Madam Chairman, and Mr. Stark,
Subcommittee Members. I am Jeff Lemieux from the Progressive
Policy Institute, and we have recently published a couple of
papers arguing that Medicare is not well suited to provide
disease management or care coordination services in its current
structure, and we believe the next great challenge for Medicare
will be addressing these shortcomings and shifting the
program's emphasis toward chronic care.
Rather than talking about the need for chronic care and
disease management that we already know about, and the various
trials and tribulations in Medicare's current structure in
providing those services, let me suggest a couple of things
that I think might help steer the debate on prescription drugs
and Medicare reform that we are likely to have this year toward
chronic care.
First, let me suggest a couple things I think that wouldn't
help. The first thing would be if we created a new Medicare
drug benefit in another separated silo, a separated benefit in
Medicare that wasn't linked to the other benefits in the
program. We already have a fair amount of benefits in Medicare
that aren't very well linked. We have part A and part B, and
sometimes that can be an impediment to coordinated care. I
think that Congress should essentially just scrap the idea of a
stand-alone, premium-based drug benefit, precisely because it
would create a new silo without a lot of work.
In general, health benefits should be integrated under one
administrative structure, so that the insurer or the carrier
has the ability and the incentive to evaluate tradeoffs. For
example, adding additional drug benefits that are known to
prevent hospitalizations or the extra costs of
hospitalizations. Even if benefits can't be fully integrated,
it is nice to try and find linkages where possible so that
policy makers can evaluate those tradeoffs.
Second, I think it would be helpful to remember to try and
provide more accountability and assessment of new benefits in
Medicare as we add them. The PPI believes that all new benefits
should help reorient the Medicare program toward more optimal
care of chronic illness, and that they should be accompanied by
new processes to spur systematic improvements in health quality
and outcomes.
Our proposal, as I said, has been detailed in a couple of
reports in my prepared remarks. Let me just mention a couple of
things about it in brief.
The plan is similar to a Medicare proposal that was put
forward last summer by several of your colleagues in the House,
Representatives Dooley, Tauscher, Jim Davis, Ron Kind, Charlie
Stenholm and Adam Smith, and I encourage you to consider their
plans in your deliberations in this Subcommittee and in the
full Committee. Let me briefly describe what they were
attempting to do and what we propose.
First, we propose to try and achieve far greater
accountability in Medicare through a systematic
decentralization of the program's administration, so that local
Medicare administrators and medical directors are directly
empowered to create disease management and health improvement
programs targeted to the needs of beneficiaries in their area.
Second, on benefits, we believe a universal zero premium
catastrophic drug benefit structure would help link, not
further fragment, Medicare benefits, and would provide the sort
of information that Medicare administrators and medical
directors would need to target disease management programs.
Third, on choices we would like to see a much expanded menu
of private comprehensive insurance plans like health
maintenance organizations (HMO) and preferred provider
organizations (PPO) in Medicare which, in theory, have the
strongest incentives to provide disease management and care
coordination services. We would also like to see a new type of
Medigap coverage and several other things that are mentioned in
my prepared remarks.
Let me talk just a little bit more about the first element
of our proposal, which is the accountability element. This is
somewhat different from the sort of thing we have seen in
Congress before. We are proposing to try and create in Medicare
a health care version of the CompStat system which has helped
New York City dramatically reduce violent crime rates. What
CompStat does is it holds local precinct commanders responsible
for reporting and reducing crime in their sectors.
We propose to divide the country into approximately 150 or
so health care catchment areas, establish a local Medicare
office in each area with a Medicare medical director and a
local administrator, empower those officials with the authority
to initiate new programs for disease management, education and
other items that would be budget neutral over a 10-year period,
and that would help the seniors and workers with disabilities
on Medicare in their districts with the most important problems
that they are facing.
We believe that those local officials should be required to
collect information on the outcomes of treatment and of the
most frequently occurring chronic diseases, morbidity and
mortality rates, emergency room admissions, access to and use
of preventive care, patient satisfaction, availability of
private plan options like HMOs and PPOs, availability of
comprehensive disease or care management programs that would be
available to fee-for-service beneficiaries, and other measures
of performance of the Medicare program within their
jurisdiction.
The local Medicare officials should be ranked annually on
their ability to foster improvements in health quality and
outcomes in their regions, and Congress, under our proposal,
would establish a new Congressional agency patterned after the
Joint Committee on Taxation, to oversee the local official's
actions, their proposals, their programs and their rankings.
Ideally local administrators with poor performance results
would be replaced, and Medicare's central bureaucracy could be
reduced as the local officials were put in place.
What we are trying to set up here is local experimentation
based on local needs. If telemedicine is important in one area
and diabetes control is important in another, the local
administrator should be best equipped to know that that is the
case and how to address the problem, and then we want to assess
their performance so that if the administrators of Medicare are
doing a very good job in Arkansas but Tennessee is not doing so
well, we should find out why, evaluate the trends and encourage
the administrators in Tennessee to pick up the slack or perhaps
even replace them.
In conclusion, Medicare modernization probably at its very
deepest level means establishing a fundamental basis of
accountability for improving Medicare's performance and
senior's health quality and outcomes. I believe that no
budgetary shortfall should stop us from making the structural
reforms necessary. It is wrong to say that because we no longer
have enough money for a generous add-on drug benefit, we should
therefore do nothing. On the contrary, we should reform
Medicare and create a new results-based management structure,
which in turn will accommodate the introduction of new benefits
when the budget permits. Thank you.
[The prepared statement of Mr. Lemieux follows:]
Statement of Jeff Lemieux, Senior Economist, Progressive Policy
Institute
Thank you Madam Chairman, Representative Stark, Committee Members,
for inviting me. The Progressive Policy Institute (PPI) believes that
the next great challenge for Medicare will be shifting the program's
emphasis toward chronic care. Medicare has always been a reliable bill
payer when beneficiaries suffered an acute health care crisis requiring
hospitalization or extensive medical procedures. Now, Medicare must
learn how to better help the increasing number of seniors with chronic
illnesses stay out of the hospital and maintain the best possible
health and quality of life. This, we believe, is key to improved health
outcomes, higher quality health care, and greater value for every
health dollar spent.
PPI explains the need for a dramatic shift toward chronic care in a
recent policy report: Healthy Aging vs. Chronic Illness, Preparing
Medicare for the Next Health Care Challenge, by David B. Kendall, Kerry
Tremain, Jeff Lemieux, and S. Robert Levine, M.D. I have brought copies
of that report; if possible, I recommend it be added to the record of
this hearing.
Because Medicare covers seniors and workers with long-term
disabilities--precisely the people most likely to have chronic or
ongoing health problems--Medicare beneficiaries have the most to gain
from continuity of care and comprehensive, coordinated care management
systems.
In the broadest use of the term, ``disease management'' can range
from simple educational programs to specialized programs tailored to
help people manage a particular disease, such as diabetes, to
comprehensive case management systems for patients with multiple
chronic conditions.
However, Medicare is not well suited to provide disease management
services at any level, for four reasons:
1. LMedicare's fee-for-service program cannot pay for performance.
Medicare's fee-for-service program pays for health services rendered,
regardless of quality, provider, or likely outcome. The program has
effectively become an entitlement program for health providers: If a
licensed health provider treats a Medicare beneficiary, payment will
follow. Such a system cannot steer patients with particular needs to
health providers best able to provide the most appropriate assistance
and care.
2. LMedicare's benefits are inadequate. Comprehensive, integrated
benefits are a vital part of disease management programs. The most
obvious inadequacy in Medicare's fee-for-service benefit package is the
absence of an outpatient prescription drug benefit. Other inadequacies
can include lack of reimbursement for home monitoring devices and
services, and difficulties reimbursing health providers for the extra
time, planning, and communication services that patients with chronic
conditions need to avoid acute health crises.
3. LMedicare's benefits are poorly structured and hard to change.
Medicare benefits reflect health insurance standards from the mid-
1960s. However, because it literally takes an act of Congress to change
them, Medicare's benefit structure has not changed very much since
then. In the 1960s, health insurance couldn't do much more than pay
bills for a hospitalization or an episode of care. Now, with our
success in saving the lives of patients in crisis, we have more and
more seniors living with chronic illness. As a result, health care
needs have changed. However, Medicare's benefits have not adapted. As
currently structured, the Medicare program's disjointed Part A and Part
B benefits inherently impede coordination of care for beneficiaries
with chronic illness.
4. LMedicare's HMO program is a mess. In theory, private
comprehensive health plans like HMOs have the greatest incentives to
provide comprehensive disease management programs, and, in fact some
Medicare HMOs do a very good job. However, many have dropped out of the
Medicare program or slashed their benefits. Medicare's HMO program is a
take-it-or-leave-it affair: HMOs enter the program when reimbursements
are high and exit the program when reimbursements are low. Medicare's
new PPO demonstration program, which includes risk sharing and a more
long-term partnership between plans and the government, holds promise
for restoring private plan options for seniors.
To foster improved chronic care and disease management in Medicare,
PPI encourages Congress to consider two simple tests for any
legislative proposal:
LNo new silos. Separated, unlinked, or uncoordinated
benefits can thwart disease management efforts. Congress should scrap
the idea of a premium-based stand-alone drug benefit. In general,
health benefits should be integrated under one administrative
structure, so that the insurer has the ability and the incentive to
evaluate tradeoffs--for example, adding drug benefits known to reduce
the incidence or cost of hospitalizations. Even if benefits cannot be
fully integrated under one insurance carrier, at the very least they
should be linked, so that information can be shared between primary and
supplemental insurers. Adding another separate, add-on benefit to
Medicare's current, outdated structure would work against disease
management and comprehensive, coordinated care for people with chronic
illnesses.
LNo new benefits without accountability. It doesn't make
sense to add benefits without making fundamental changes to Medicare's
processes, so that we can learn whether or not the benefits improved
seniors' health. Even preventive and screening benefits should be
accompanied by permanent evaluation systems designed to identify and
help people who are at risk for particular problems or are coping with
multiple ailments. All new benefits must help reorient the Medicare
program toward more optimal care of chronic illness and be accompanied
by new processes to spur systematic improvements in health care quality
and outcomes.
PPI's `ABC' Proposal to Modernize Medicare
CMS needs the flexibility to create disease and care management
programs for Medicare beneficiaries. However, Congress is not going to
give the CMS bureaucracy vast new powers without greatly enhanced
accountability and oversight systems. Moreover, disease management is
inherently a local system, requiring cooperation between local health
providers, community institutions, consumer and seniors' groups, and,
in some cases, local government agencies. CMS cannot run effective
localized disease management and health improvement programs from its
headquarters in Baltimore.
PPI proposes a package of Medicare reforms that would achieve three
basic ends:
La radical decentralization of Medicare's administration,
so that local Medicare administrators and medical directors are
directly empowered to create disease management and health improvement
programs targeted to the needs of beneficiaries in their area;
La drug benefit structure that helps link, not fragment,
Medicare benefits and provides information to target disease management
programs; and
La much expanded menu of private insurance plans in
Medicare, along with locally-run comprehensive disease and care
management programs for fee-for-service beneficiaries with specific or
multiple chronic conditions.
PPI's proposal is explained in greater detail in the report An
`ABC' Proposal to Modernize Medicare, and it is very similar to the
Medicare proposal announced last year by several House Members,
including Representatives Cal Dooley (D-Calif.), Ellen Tauscher (D-
Calif.), Jim Davis (D-Fla.), Ron Kind (D-Wisc.), Charles Stenholm (D-
Texas), and Adam Smith (D-Wash.). Here are some basics:
Accountability. Medicare officials should be held accountable for
measuring and improving the health of older Americans. They should be
given the freedom to make improvements at the local level, in
accordance with local needs, with clear public disclosure of results
and Congressional oversight. The model for the PPI's proposal is the
``CompStat'' system developed in New York City to help fight crime. In
that system, crime trends were tracked in real-time, and local police
commanders were given flexibility to deploy resources as needed in
their precincts in exchange for real accountability for their crime-
fighting plans and success. Unsuccessful commanders who did not have a
credible plan for performance improvement were replaced.
We propose that Congress create approximately 150 local Medicare
administrative regions and staff each local area with a Medicare
medical director and Medicare local administrator. We believe those
officials should be given flexibility to create new programs to improve
health in their areas, with budget authority to create local programs
that are budget-neutral within a 10-year period. Local officials would
be ranked annually on their ability to foster improvements in health
quality and outcomes in their regions, and Congress would establish a
new congressional agency, patterned after the Joint Committee on
Taxation, to oversee the local officials' actions, proposals, programs,
and ratings. Local administrators with poorer performance results would
be replaced. Medicare's central bureaucracy would be reduced as the
local officials were put in place.
Benefits. PPI believes the most realistic and workable Medicare
drug benefit would be a universal, zero-premium catastrophic benefit,
provided mostly through the supplemental insurers that already serve
Medicare beneficiaries, including employment-based plans, Medigap
plans, and state programs. (Seniors without any supplemental benefits
would choose a discount card that also provided the catastrophic drug
benefit.) The catastrophic benefit would be based on total drug
spending; PPI proposes that the catastrophic benefit explicitly allow
seniors to have additional coverage under the catastrophic
``deductible'' without forfeiting their catastrophic benefits. By
contrast, Congressional proposals that base a catastrophic drug benefit
only on ``out-of-pocket'' drug spending would be unfair to
beneficiaries who have and want additional drug coverage, and could
disrupt the employment-based retiree coverage many seniors receive.
PPI's preferred approach is more expensive for the government, but it
is more practical and workable. Under PPI's proposal, low-income
seniors would be eligible for additional drug benefits, including ``up-
front'' benefits that started at much lower levels of drug spending.
We believe that universal catastrophic drug coverage would create
tremendous side benefits by building an information-based
infrastructure for disease and care management programs. CMS would
obtain real-time data from the supplemental insurers and other plans
and discount cards administering the benefit, so that Medicare would
know when a patient hit the catastrophic deductible, and Medicare's
liability was triggered. Therefore, Medicare would have a nearly real-
time database of all beneficiary drug expenditures, which would help
local Medicare administrators target quality improvement and disease
management programs to particular demographic groups or regions. The
new data could also dramatically improve risk adjustment methods, which
would help private comprehensive plans stay in Medicare.
Choices. PPI proposes to revitalize Medicare's HMO program and
expand the PPO demonstration program nationwide. We would establish a
new type of Medigap coverage that included some up-front drug benefits;
however, to keep the cost down, the ``New Medigap'' plan would not have
absolute first-dollar coverage of beneficiaries' coinsurance for
Medicare's other benefits. Beneficiaries could enroll annually in
private plans, New Medigap options, and new comprehensive disease
management programs, and have premiums deducted from their Social
Security checks.
Practicality and Scalability
PPI's proposed drug benefit could be scaled up or down based on
budgetary constraints. In our model, the generosity of the benefit--
literally the level of the catastrophic drug deductible--would not
affect the proposal's workability. There would be no adverse selection,
since the benefit would be free and universal. There would be no need
for late enrollment penalties, and employer-based retiree coverage and
state pharmaceutical assistance programs would be encouraged, not
disrupted. In many cases, seniors would automatically receive the new
benefit through their current supplemental coverage--they would not
have to adjust their coverage at all.
Conclusion--A New Approach to Medicare Reform
PPI believes we must switch the Medicare debate from arguments
about how much to spend on a stand-alone, add-on drug benefit to a
discussion of what sort of benefits would create the most value in
improved health per additional dollar of health spending, and how can
we create measurement and accountability systems to assess that value.
At its deepest level, Medicare modernization means establishing a
fundamental basis of accountability for improving Medicare's
performance, and seniors' health quality and outcomes. No budgetary
shortfall should stop us from making the structural reforms necessary.
It is wrong to say that because we no longer have enough money for a
generous add-on drug benefit, we should therefore do nothing. On the
contrary, we must reform Medicare and create a new results-based
management structure, which, in turn, will be able to accommodate the
introduction of new benefits designed to improve health outcomes, when
the budget permits.
Chairman JOHNSON. Thank you.
Dr. Wagner.
STATEMENT OF ED WAGNER, M.D., DIRECTOR, MACCOLL INSTITUTE FOR
HEALTHCARE INNOVATION, CENTER FOR HEALTH STUDIES, GROUP HEALTH
COOPERATIVE, SEATTLE, WASHINGTON
Dr. WAGNER. Thank you, Madam Chairman. I am Ed Wagner. I
appreciate very much Congresswoman Dunn's generous
introduction. My interest is in the quality of the care
received by the 100-plus million Americans with 1 or more
chronic illnesses. We hear much about the growing numbers of
people. We hear much about the growing costs. What underlies
this concern is that the evidence is that probably less than
half of those people are receiving optimal chronic illness
care.
In my written testimony, I describe a composite Medicare
recipient drawn from work across the country that we have been
doing trying to improve the quality of chronic illness care.
This woman suffered needless morbidity and two preventable
hospitalizations because of breakdowns in the continuity of her
care, in the quality of the information and support she was
given to care for her illness, and because of confusion around
the management of differing physicians.
The evidence is that these problems are built into our
system, unfortunately. Although finances are certainly a
barrier, as previous speakers have testified to, there is, in
the words of the Institute of Medicine, perhaps, a larger
problem. In the ``Crossing the Quality Chasm'' report, the IOM
Committee says current care systems cannot do the job. Trying
harder will not work. Changing care systems will.
Our work has been to try to identify the specific aspects
of practice systems, that if enhanced and improved, will lead
to better care and better outcomes for patients like the one
described in my written testimony.
We have tried to summarize this evidence and experience in
a form that is useful for medical practices, health plans and
other organizations that want to do a better job. That is the
chronic care model mentioned by Congresswoman Dunn.
The chronic care model is simply a summary of evidence as
to what works in the management of patients with one or more
chronic diseases. It emphasizes the interconnectedness of
information systems, of educational support, of different
organizational structures of practice, the use of things like
e-mail that was mentioned in previous testimony.
The question is, can busy, now somewhat underfinanced
medical systems make these changes? Our work under a grant from
the Robert Wood Johnson Foundation has given us an opportunity
to try to use the chronic care model and other modern quality
improvement approaches to help a large number of health
systems, most in the fee-for-service, not the Medicare+Choice
sector, improve their care.
Using the Breakthrough Series model pioneered by Don
Berwick's Institute for Health Care Improvement, we have now
worked with almost 1,000 health care systems, the largest group
of which are the Bureau of Primary Health Care's Community and
Migrant Health Centers (Bureau).
About two-thirds of the organizations involved have been
able to make these changes and report measurable improvements
in the care of their patients. So, I think there is hope and
there is some experience that we can draw on.
The next question is, will these changes lead to reductions
in the cost of care? We think so. In the Journal of the
American Medical Association article that was distributed to
the Subcommittee, we examined the literature looking for
rigorously done interventions that used approaches like the
chronic care model and also assessed the impact on costs. We
found 27 such studies, involving people with asthma, congestive
heart failure, and diabetes. Eighteen of the studies reported,
in a reasonably short period of time, reductions in health care
utilization and costs. So, we believe that cost reduction is
possible.
Additional barriers are, as I indicated the deficiencies in
the information technology available to most medical care
systems, and the lack of non-physician personnel in offices to
provide the coordination, education and support for patients.
We recommend, whatever the Medicare legislation, however it
evolves, that it invests in improving our basic medical care
system. How might that happen? One approach would be to
disseminate in the public sector the best and most cost-
effective patient information software such as disease
registries that would help practices overcome some of the
information technology deficits that they have.
Second, develop a system of quality measurement that is
dependable, that is comprehensive and that could be linked to
reward structures as some of the previous speakers have
mentioned.
Third, support regional and national chronic disease
improvement efforts, such as the Breakthrough Series that I
described earlier and in more detail in the written testimony.
Last, I do believe that fee-for-service is a significant
barrier to integrated, coordinated care. So, anything that can
be done to stabilize Medicare+Choice and reward those health
plans that are doing a better job would be in, I think, the
patients' best interest. Thank you very much.
[The prepared statement of Dr. Wagner follows:]
Statement of Ed Wagner, M.D., Director, MacColl Institute for
Healthcare Innovation, Center for Health Studies, Group Health
Cooperative, Seattle, Washington
I. Introduction
Madam Chairwoman, and Members of the Subcommittee, I appreciate the
opportunity to share with you some experiences and insights from my
research aimed at improving the quality of care received by people with
chronic illnesses. I am Ed Wagner, Director of the MacColl Institute
for Healthcare Innovation at the Center for Health Studies, Group
Health Cooperative in Seattle. Group Health Cooperative is a consumer-
governed, nonprofit health care system that coordinates care and
coverage. The Cooperative includes medical centers, an associated
physician group practice, a research center, and a charitable
foundation. At present, Group Health serves 588,000 members.
Group Health was founded more than 50 years ago with the mission to
``transform health care.'' Research has been an integral part of
fulfilling that mission. In establishing the Center for Health Studies
twenty years ago, Group Health's Board of Trustees further solidified
the Cooperative's commitment to research. The Center's work focuses on
promoting prevention and effective treatment of major health problems--
benefiting Group Health members and the general public. The MacColl
Institute for Healthcare Innovation serves to bridge the worlds of
research and delivery-system change, both nationally and within Group
Health.
The MacColl Institute is also the national program office for the
Robert Wood Johnson Foundation's (RWJF) program on Improving Chronic
Illness Care, which supports health care organizations in their efforts
to improve care delivered to people with chronic illness. The following
experiences and opinions stem from both Group Health's quality
improvement and research work, and my work with hundreds of medical
practices and health plans across the country committed to improving
care.
II. Prevalence of Chronic Illness in America
Recent estimates suggest that well over one hundred million
Americans suffer from one or more chronic illnesses, including almost
90 percent of Medicare beneficiaries. Chronic illness afflicts nearly
half of our population and affects essentially every American family.
In our conversations with people who live with a chronic illness or who
care for close family members with chronic illness, we repeatedly hear
about their difficult experiences in receiving care. Survey data
suggest that these are not isolated anecdotes. A recent RWJF poll found
that over one-half of middle-age and older Americans disagreed with the
statement that one could receive high quality chronic illness care in
America. To give life to the problem, I'd like to share with you a
composite case history based on real patients around the country that
we've encountered in our work.
III. Case History: Ms. G.
Ms. G., a 69-year-old widowed grandmother, has had diabetes for ten
years and high blood pressure and heart disease for the past two years.
She has a primary care physician whom she likes, but sees only when she
is having trouble. She is moderately obese. With her childcare
responsibilities for her grandchildren, she finds it difficult to eat
properly or exercise. She attended a class to help learn more about
controlling her diabetes when she was first diagnosed with diabetes,
but has received only intermittent and occasionally conflicting
information since. Her kitchen drawer is full of different diet sheets.
She's not sure which one is the best and has stopped using them. As a
result, Ms. G.'s diabetes is not well controlled. Her doctor visits are
brief, focused on the problem at hand, and often don't leave time to
address issues she faces in trying to manage her chronic conditions in
her busy life.
Ms. G.'s heart disease progressed to congestive heart failure and
she began accumulating fluid and becoming short of breath. One night,
her shortness of breath became so severe that she called 911. She was
taken to the emergency room and admitted to the hospital under the care
of a cardiologist. During hospitalization, she was started on new
medications, improved rapidly, and was discharged a couple of days
later. The hospital nurses were nice, but busy and could only give Ms.
G. limited instruction on what she was to do at home. She left the
hospital with new diet plans, and six different prescriptions drugs,
three of which were new or changes from her original drug regimen.
Tests performed during her hospitalization indicated impaired kidney
function and she was referred to a nephrologist.
Upon discharge, Ms. G. was urged to make appointments with the
cardiologist, the nephrologist, and her primary care internist.
Although feeling much better, she was confused about her medications,
diet, and the need for additional doctor visits. A phone call to her
internist's office revealed that the doctor wasn't aware of her
hospitalization or new medications. She filled the prescriptions and
tried to figure out how each of the six drugs was to be taken. Given
their expense, she thought that some of the drugs could be taken only
if she didn't feel well. Over the next few weeks, she returned to her
usual responsibilities, began again to experience trouble breathing,
and tried to decide which physician she should see first. Two weeks
later while chasing after her three-year-old grandson, she became
acutely short of breath, called her daughter and was returned to the
ER, where she was found to have relatively severe congestive heart
failure and was readmitted to the hospital.
Although she receives care from competent providers and
institutions, Ms. G. is clearly not doing well. Repeated surveys reveal
that Ms. G. represents the majority of Americans with chronic illness,
who--without optimal treatment--are experiencing morbidity and high
health care costs that could be prevented. In the remainder of my
testimony, I'd like to discuss some of factors that contribute to Ms.
G's poor outcomes and high costs, what research and experience indicate
can be done to improve care, and the role that Medicare may play in
accelerating improvement for people like Ms. G.
IV. The Barriers to High Quality Chronic Illness Care
The major problem facing Ms. G., and the nearly 35 million Medicare
beneficiaries like her, is that she is receiving care from a system
that was not designed to meet her needs. High quality chronic illness
care would help assure that: (1) she receives the most effective
clinical treatments based on scientific evidence, and (2) she has the
information, skills, and confidence to make good decisions and choices
in managing her health and illness. The general structure and practice
of medical care makes it difficult for chronically ill patients to
receive these two critical elements in their care. This is a central
message of the recent Institute of Medicine (IOM) report, Crossing the
Quality Chasm. Simply stated, our care systems are not designed for Ms.
G.; they are also unfortunately not rewarded for doing better by Ms. G.
Fee-for-service payment presents the biggest single barrier to
improving chronic illness care and reducing costs. It rewards high tech
providers and treatments when people with major chronic illnesses want
and need low tech information, comfort, and guidance. Additional
disincentives within fee-for-service Medicare to improving chronic
illness care have been elucidated in Dr. Robert Berenson's recent,
excellent Health Affairs paper, and in the recent National Academy of
Social Insurance report, Building a Better Chronic Care System. Current
regulations and practices limit Medicare's ability to support the types
of services proven to be effective in managing chronic illnesses. For
example, current Medicare policies make it extremely difficult to
obtain reimbursement for the activities of non-physician members of a
practice team who, in the most effective practices and programs, play
critical roles in providing education, emotional support, care
coordination, and follow-up with the chronically ill. As a result, many
practices no longer can afford nurses and other staff, compounding
difficulties in caring for patients with complex illnesses, like Ms. G.
Also, current Medicare reimbursement emphasizes brief physician visits
and discourages other important and less costly forms of patient
interaction that are important to successful chronic disease
management, such as telephone care and group visits. From the
provider's perspective, Medicare policies reward and reinforce the
status quo.
V. What Can Be Done to Address Barriers? The Chronic Care Model
Over the past couple of decades, accumulating experience and
evidence are clarifying how medical care systems should be changed to
meet Ms. G's needs. A growing number of studies have shown that
patients like Ms. G. with diabetes, with heart failure, with
depression, with stroke are much more likely to receive effective care
and experience less morbidity when cared for in systems redesigned, at
least in part, for them. What are the characteristics of these systems
that do better for patients with chronic illness? They begin with the
assurance of a ``continuous, healing relationship'' as articulated in
the IOM's, Crossing the Quality Chasm. Given the complexity of Ms. G's
interlocking chronic conditions and her confusing, costly, and
potentially conflicting treatments, one care team must bear
responsibility for collaborating with her in developing and executing a
coherent plan of care. This care team, whether led by a generalist
physician, a nurse practitioner, or specialist, must have the systems
in place to assure that she receives effective clinical treatment and
self-management support, and that her care from other doctors and
settings is understandable and coordinated. These assurances and
routine performance of these essential tasks are very difficult to
achieve in typical American medical practices unless practice systems
are substantially overhauled.
A growing body of scientific evidence strongly suggests that a
multi-faceted, interconnected set of structural and functional changes
to medical practice can substantially improve care. For example, in the
paper provided to the Subcommittee members by Bodenheimer, Wagner, and
Grumbach published in JAMA, we examined 39 rigorous studies that tested
diabetes improvement programs in outpatient settings. While 32 improved
at least one aspect of care, the five most successful programs included
the most comprehensive set of practice changes. Each of the five had
components directed at increasing patients' self-management competence,
providers' expertise, care organization, and clinical information
availability and utility. Over the past decade, we have tried to
translate this evidence into action to improve the quality of care
received by Group Health enrollees with diabetes, heart disease, and
other conditions. Experience at Group Health confirms that the quality
of chronic illness care--as measured by the Health Plan and Employer
Data and Information Set (HEDIS) and other performance
indicators--can be substantially improved through systematic
application of a coordinated set of system changes. We also found that
improvements in care for our large population of patients with diabetes
were associated with a ten to twelve percent reduction in the total
costs of their care.
Based on Group Health's experience and the science, we tried to
synthesize and organize evidence about health system change into a
framework or model to help health care organizations translate it into
action--the Chronic Care Model. The Model recognizes that health care
organizations operate as part of a larger care community. Important
community resources and influences can impact care of their chronically
ill patients. The Model incorporates elements of successful
interventions and programs such as in the diabetes improvement programs
described above.
[GRAPHIC] [TIFF OMITTED] T87412A.000
Practices need guidelines and protocols to guide care, and practice
systems organized to assure adherence to those protocols. For patients
to be competent self-managers, they need ongoing information and
support to set goals, solve problems, and develop skills in managing
their life, their illness, and its treatment. Effective practices look
to community resources like peer support groups or exercise programs
that promote better self-management. Instead of rushed, problem-
oriented doctor visits, high quality practices use planned, structured
interactions with patients and families to assure appropriate treatment
and that information systems that remind, provide feedback to patients
and providers on their performance, and prevent patients from falling
between the cracks in our care system can guide and support these
planned interactions. Finally, these practice enhancements are unlikely
to occur without the organization and leadership that makes chronic
illness care a priority, that routinely monitors the performance of the
system, and provides incentives to its staff to do better.
Is the Chronic Care Model Pie in the Sky?
With generous support from RWJF, the MacColl Institute and our
partner organizations are using the Chronic Care Model and modern
quality improvement methods to assist large numbers of medical
practices and health systems to improve care. The Breakthrough Series
approach, developed by the Boston-based Institute for Healthcare
Improvement led by Dr. Donald Berwick, brings together large numbers
(10-120) of health care organizations to work with faculty on improving
care for one or more chronic conditions. To date, approximately one
thousand different health care organizations ranging from small (one or
two doctor offices) to large medical groups or health plans have
participated in a Breakthrough Series. The Health Resources and
Services Administration's (HRSA) Bureau of Primary Health Care is the
largest single sponsor of the Series as a central strategy in its
Health Disparities Initiative. This landmark effort has involved nearly
one half of the Bureau's seven hundred community health centers. Other
Breakthrough Series partners include quality improvement organizations,
purchaser coalitions, state health departments, and professional
organizations with activities underway or planned in Washington,
Oregon, New Mexico, Arizona, Alaska, Indiana, Illinois, Wisconsin,
Vermont, Maine, and North Carolina.
We and our partners have been trying to carefully evaluate the
impact of these activities. Results suggest that approximately two-
thirds of participating practice organizations implement system changes
and enhancements that have measurable positive impacts on their
patients. Many have extended these changes throughout their system.
Breakthrough Series have addressed care for people with diabetes,
congestive heart failure, depression, other heart disease and
hypertension, arthritis, HIV/AIDS, and other major illnesses. The RAND
Corporation is conducting a major evaluation of the quality and cost
impacts of the early Breakthrough Series and the results should be
available later this year.
Our experience in the Breakthrough Series and related quality
improvement activities suggests that medical practices of all types,
large and small, fee-for-service and capitated, suburban and inner
city, can--with motivated leadership--improve care for their
chronically ill patients. Our experience also indicates that these
organizations, and the countless others that don't participate in the
Breakthrough Series, face major environmental barriers to improving
their systems of care. These include financial disincentives such as
those listed above, computer systems designed to send out bills but not
take care of patients, and increasingly lean practice staffing.
Will Improving Chronic Illness Care Save Money?
In the JAMA paper discussed previously, we looked for rigorous
studies of programs to improve congestive heart failure, asthma, or
diabetes that also analyzed the program's impacts on health care costs.
We found 27 articles that met our criteria. Of these, 18 found
reductions in health care utilization and costs. I believe that we can
say with some confidence that, for most chronic diseases, activities
that improve patient health (better blood sugar, less fluid retention,
fewer symptoms, and better function) will reduce expensive health care
utilization.
VI. How Might Medicare Reform Improve Chronic Illness Care?
Major chronic illnesses such as suffered by Ms. G. require high
quality, coordinated medical care. Although disease management vendors
may have staff and tools that can complement medical care, they are not
a substitute for it. It is my strong view that we will not achieve
major improvements in health or reductions in cost for our Medicare
beneficiaries unless we take steps to improve the quality of the basic
care they receive, unrealizable as that may seem. Below I offer a
series of recommendations followed by another recommendation--the
development and implementation of a system to recognize providers who
deliver high-quality care--presented in more detail for the
Subcommittee's consideration.
L1. CMS should support the dissemination of, and provide technical
assistance for low cost electronic information systems shown to be
important adjuncts in care improvement. This should begin with
dissemination of an electronic patient registry that stores key, but
not all, clinical information about the chronically ill, and uses it to
provide reminders of needed services, facilitates planning care,
prevents patients from getting lost between the cracks, provides
performance feedback to the practice, and provides quality measures for
Medicare. As reliable, more comprehensive electronic medical record
systems become more available and affordable, these should be
disseminated.
L2. CMS should extend and improve measures of the quality of
chronic illness care, and require their routine reporting. The measures
should include, to the extent possible, indicators of disease control
and severity, and not just processes of care (e.g. doing recommended
tests or prescribing recommended drugs). These measures could and
should be collected as part of the data systems mentioned above.
L3. CMS should encourage and support regional quality improvement
activities directed at improving basic care for the chronically ill
through its contracts with Quality Improvement Organizations and other
mechanisms. The Bureau of Primary Health Care's Health Disparities
Initiative provides a relevant model as it supports its program of the
Breakthrough Series with a national infrastructure that provides
quality improvement and information system support to any Community
Health Center involved in quality improvement.
L4. Congress and CMS must continue their efforts to stabilize the
Medicare+Choice program by addressing payment and other issues that
have hindered its success. More than 25 years ago, Group Health
Cooperative was among the first organizations in the nation to serve
Medicare beneficiaries through a pre-paid model of care. Today, nearly
60,000 Washington state Medicare beneficiaries have chosen Group
Health's Medicare+Choice plan for their coverage.
LPre-payment has enabled Group Health and other organizations to
direct resources to areas of greatest need and to be creative and
innovative in designing programs. Simply stated, when you are not paid
on an encounter-by-encounter or procedure-by-procedure basis, you have
incentives to shift your focus to include longer-term improvement in
health outcomes. The pre-paid model of care also has enabled Group
Health and other plans to develop highly integrated and coordinated
care delivery systems by creating opportunities for physicians,
hospitals, other health providers, and facilities to associate with
each other. This type of integration makes it easier for providers to
communicate with one another. Communication among providers, as
presented in the case study of Ms. G., is crucial to successfully
caring for chronically ill patients.
L5. Congress should establish a program that recognizes providers
for delivering high quality care to chronically ill beneficiaries.
Medicare is in a unique position to provide leadership in changing the
patterns of medical care that have led to inadequate chronic care.
Encouraging what we know to be the best medical care and treatment of
chronic conditions should be a leading objective of Medicare. Group
Health Cooperative has been working with the Alliance of Community
Health Plans to develop a two-pronged approach to paying for better
care in Medicare. Undertaking changes will certainly be gradual.
Medicare will need to implement policies that encourage providers to
adopt new strategies. Rewarding health plans and providers who deliver
excellent chronic care is one of the best ways to accomplish this.
LTo do this, though, you need to have measures against which
providers can be assessed; you need to collect comparable and reliable
data and analyze it; and then you need to establish a method for
ranking or scoring performance, allocating rewards accordingly. Some
modest steps can be undertaken quickly, but a more expansive effort
that encompasses all of Medicare will require a long-term commitment to
this approach in the Congress.
LUnfortunately, common measures and data collection don't exist for
many of Medicare's providers. Moreover, as I have pointed out above,
the payment system within fee-for-service Medicare sets up
disincentives to improved chronic care. Beginning to make these changes
as part of reforms in Medicare should be a high priority. In the
meantime, however, Medicare could begin to test the concept of
rewarding quality care in Medicare managed care plans--where, thanks to
the capitated payment method and the National Committee for Quality
Assurance's (NCQA) performance measures that have been used for health
plans for many years--the capability to measure and begin to pay for
performance already exists.
LOn a yearly basis, Medicare collects data from every Medicare
health plan on the effectiveness of clinical care and on beneficiary
satisfaction, through the HEDIS and CAHPS measures.
Based on this data--which looks at both process and outcome measures,
including such things as use of beta blocker treatment after a heart
attack, and comprehensive diabetes care--and the ranking methodology
that NCQA has already developed, CMS and the Congress could develop a
parallel program in Medicare that would pay a little more per capita to
those plans that perform very well.
LI would hasten to add, though, that while we could learn a lot
through this modest effort, it should be only a bridge to a longer-term
and more robust initiative in Medicare to improve quality across all
types of providers and delivery systems. As I noted above, payment
disincentives are one of the major barriers to providing good chronic
care in the fee-for-service side of Medicare.
LThe Institute of Medicine (IOM) could help to address some of the
clinical issues that would need to be part of a broader payment for
quality initiative. Through one of its authoritative studies, the IOM
could identify the appropriate clinically-based measures, and the
strategies needed to implement and refresh them over time. Such a study
could provide Congress with recommendations, based on clinical
evidence, an evaluation of the strategies for rewarding and encouraging
quality and better chronic care that are already beginning to be used
in the private and public sectors, and new ideas that are just now on
the drawing board.
VII. Conclusion: Ms. G. Revisited
If her doctor's practice followed the Chronic Care Model, Ms. G.'s
care may have proceeded in the following manner. Ms. G.'s doctor's
staff checks its electronic patient registry and finds that Ms. G.'s
diabetes is not well controlled, and that she hasn't had a preventive
check-up in several months. She is scheduled for a structured visit
with her doctor and a nurse educator. At the visit, Ms. G. receives her
flu shot and recommended tests for monitoring her diabetes. The doctor
finds that Ms. G. has mild heart failure, schedules her for a
cardiologist evaluation, and advises her to reduce the salt in her
diet. Ms. G. discusses her diet and exercise regimen with the nurse
educator who helps her set new goals for reducing salt and calories,
and a modest exercise program. The nurse educator telephones Ms. G. a
week later to see how she is doing with her new goals, and with any new
medicines prescribed by the cardiologist. Further phone calls reveal
that Ms. G. feels better, her diabetes is better controlled, and the
heart failure is causing no symptoms. She is scheduled in two months
for another structured visit.
I thank the Members of the Subcommittee for the opportunity to
discuss this important issue with you and would be happy to answer any
questions you may have.
Chairman JOHNSON. Thank you very much, Dr. Wagner.
Dr. Taler.
STATEMENT OF GEORGE A. TALER, M.D., DIRECTOR, LONG TERM CARE,
DEPARTMENT OF MEDICINE, WASHINGTON HOSPITAL CENTER, ON BEHALF
OF THE AMERICAN GERIATRICS SOCIETY, NEW YORK, NEW YORK
Dr. TALER. Congresswoman Dunn----
Chairman JOHNSON. Excuse me. You have to turn your mike on
and speak right into it.
Dr. TALER. Congresswoman Dunn and Members of the
Subcommittee, thank you for allowing me to testify today on an
important issue, advancing the management of chronic care under
Medicare. I am George Taler, board certified geriatrician and
director of long-term care at the Washington Hospital Center,
and I appreciate the opportunity to participate today on behalf
of the American Geriatric Society.
Before I begin to discuss chronic care and disease
management-related issues, it is necessary to place geriatrics
in context. Geriatricians are primary care-oriented physicians
who complete at least an additional year of fellowship training
in geriatrics, following training and certification in family
medicine or internal medicine, and who are experts in caring
for older persons.
Geriatric medicine emphasizes care coordination that helps
frail elderly patients maintain functional independence and
perform the activities of daily living and improves their
overall quality of life.
Using an interdisciplinary approach to medicine, the
geriatric team cares for the most complex and frail of the
elderly population, often in special settings such as nursing
homes, hospice and as in my practice, in the patient's home.
We are actively engaged in pursuing system innovations in
the care of the elderly, especially those with advanced or
multiple chronic illnesses.
Today, chronic diseases are the major cause of illness,
disability and death in this country, and the Partnership for
Solutions, a Robert Wood Johnson Foundation-funded initiative,
of which we are a partner, has found that 78 percent of the
Medicare population has at least 1 chronic condition; 20
percent of the Medicare population has 5 or more chronic
conditions or comorbidities. In general, the prevalence of
chronic conditions increases with age. Twenty-eight percent of
those 85 and older have 5 or more chronic conditions. That is
about average for my practice.
There is a strong pattern of increased utilization as the
numbers of conditions increase. Using data again from the
Partnership for Solutions, the average beneficiary has over 15
physician visits annually and sees over 6 unique physicians a
year. There is almost a fourfold increase in visits by patients
with five or more conditions, compared with visits by patients
with one chronic condition.
Individuals with five or more chronic conditions are a
large portion of my patient base, and geriatrics tends to
provide care coordination services to those patients based on
their need for extensive family and patient consultation, heavy
use of pharmaceuticals and high need for transitional care as
these patients move through the health care system.
We are not reimbursed for providing these services, and in
fact, most geriatricians are unable to sustain private
practices because of their commitment to care for this patient
base.
At this time, I would like to discuss disease management
and care coordination services in this context. A portion of
today's hearing focuses on disease management. We believe that
disease management is an appropriate practice for certain
Medicare beneficiaries who do not have multiple chronic
conditions.
However, disease management does not address the real key
issues involved with frail elderly patients that have multiple
chronic conditions. First, disease management does not always
address the needs of persons with more than one condition.
Imagine putting one of my patients with diabetes, hypertension,
heart failure and dementia into a disease management program
for each of these conditions. Most of the people who are most
costly to Medicare have multiple conditions, and care for these
patients cannot be segmented into different disease management
programs.
Second, a major component of disease management involves
self-management in patient education. These simply do not work
for patients with Alzheimer's disease or related dementia, 60
percent of my practice.
Diabetes self-management often involves patient education
or patient self-management, which is inappropriate for such
beneficiaries; and likewise, disease management for asthma and
hypertension depends on patient compliance with treatment
recommendations, and this would simply not be effective.
Third, when used for patients with multiple comorbidities,
disease management can disrupt a patient's critical
relationships with their primary care physician. Some disease
management programs use specialists that focus on only specific
interventions tailored to one condition. The nature of chronic
illness requires a comprehensive, coordinated approach, that
uses a variety of interventions, which change over time, and
which contain both clinical and nonclinical components, such as
coordination with community-based services and environmental
changes to support functional independence.
Finally, disease management does not always address
functional issues brought on by old age or the complications
that arise from multiple conditions.
We must go beyond disease management for our Medicare
population with multiple chronic conditions and consider other
options that will improve their care, such as the Medicare care
coordination benefit. For this reason, we strongly support the
Geriatric Care Act, H.R. 102, and Senate bill 387. This bill
would authorize Medicare coverage of geriatric assessment and
care coordination for eligible Medicare beneficiaries.
Eligible persons are those with at least two activities of
daily living limitations, a complex medical condition or severe
cognitive impairment. Some examples of appropriate care
coordination services include coordination with other
providers, including telephone consultations; monitoring and
management of medications, especially those with polypharmacy;
and patient and family caregiver education and counseling
through both office visits and telephone consultations; and
finally, helping patients through the transition from chronic
to terminal care.
One other option has to do with physician training and
physician ability to care appropriately for people with chronic
conditions. The Geriatric Care Act would also provide for a
limited Medicare Graduate Medical Education (GME) exception to
hospitals' specific caps to train additional geriatricians who
specialize in providing care coordination services and who are
also in shortage across the Nation.
Changes such as these should be strongly considered by
Congress as it debates how to modernize the Medicare system. We
would like to work with you to enact these changes, and we
thank you for including us in today's hearings.
[The prepared statement of Dr. Taler follows:]
Statement of George A. Taler, M.D., Director, Long Term Care,
Department of Medicine, Washington Hospital Center, on behalf of the
American Geriatrics Society, New York, New York
Madame Chair and Members of the Subcommittee:
Thank you for allowing me to testify today on an important issue--
eliminating barriers to chronic care management in Medicare.
I am Dr. George A. Taler, a Board certified geriatrician and
Director of Long Term Care in the Department of Medicine at the
Washington Hospital Center. I appreciate the opportunity to participate
today on behalf of the American Geriatrics Society (AGS), an
organization of over 6,000 geriatricians and other health care
professionals dedicated to the care of older adults.
Today I will discuss the needs of the chronically ill Medicare
beneficiary, particularly those individuals with multiple chronic
conditions who are in need of care coordination services as well as
some aspects of disease management that relate to this population.
Brief History of Geriatrics
Before I begin to discuss chronic care issues, it is necessary to
place geriatrics in context. Geriatricians are physicians who are
experts in caring for older persons. Geriatric medicine promotes
preventive care, with emphasis on care management and coordination that
helps patients maintain functional independence in performing daily
activities and improves their overall quality of life. With an
interdisciplinary approach to medicine, geriatricians commonly work
with a coordinated team of other providers such as nurses, pharmacists,
social workers, and others. The geriatric team cares for the most
complex and frail of the elderly population.
Geriatricians are primary-care-oriented physicians who are
initially trained in family practice or internal medicine, and who,
since 1994, are required to complete at least one additional year of
fellowship training in geriatrics. Following their training, a
geriatrician must pass an exam to be certified and then pass a
recertifying exam every 10 years.
The Frail Elderly/Chronically Ill Population
Americans are not dying typically from acute diseases as they did
in previous generations. Now chronic diseases are the major cause of
illness, disability and death in this country, accounting currently for
75% of all deaths and 80% of all health resources use. The Partnership
for Solutions, a Robert Wood Johnson founded initiative of which we are
a partner has found that about 78% of the Medicare population has at
least one chronic condition while almost 63% have two or more. Of this
group with two or more conditions, almost one-third (20% of the total
Medicare population) has five or more chronic conditions, or co-
morbidities.
In general, the prevalence of chronic conditions increases with
age--74% of the 65 to 69 year old group have at least one chronic
condition, while 86% of the 85 years and older group have at least one
chronic condition. Similarly, just 14% of the 65-69 year olds have five
or more chronic conditions, but 28% of the 85 years and older group
have five or more.
Utilization Patterns
There is a strong pattern of increasing utilization as the number
of conditions increase. Using data again from the Partnership for
Solutions, 55% of beneficiaries with five or more conditions
experienced an inpatient hospital stay compared to 5% for those with
one condition or 9% for those with two conditions. 19% of Medicare
beneficiaries have an inpatient stay.
In terms of physician visits, the average beneficiary has just over
15 physician visits annually and sees 6.4 unique physicians in a year.
There is almost a fourfold increase in visits by people with five
chronic conditions compared to visits by people with one chronic
condition. The number of unique physicians seen increases almost two
and half times for people with five or more chronic conditions relative
to those with just one chronic condition.
The average Medicare beneficiary fills almost 20 prescriptions.
Within this average, the under 65 year old population fills on average
6.3 prescriptions and those 65 years and older fill 19.1 on average. We
found that beneficiaries with no chronic conditions fill an average of
3.7 prescriptions per year while those with any chronic conditions fill
an average of 22.7.
The Partnership for Solutions found that there is a strong trend in
utilization of prescriptions when examined by number of chronic
conditions.
LAverage annual prescriptions filled jumps from 3.7 for
all people studied with no chronic condition to 49.2 for people with
five or more chronic conditions.
LGrowth in usage between those with no chronic conditions
and those with one chronic condition is over 180 percent--from 3.7 to
10.4 prescriptions filled.
LUsage grows 72% between one and two chronic conditions,
from 10.4 to 17.9 prescriptions filled.
LThere is a 48% growth in average annual usage between
four and five chronic conditions (33.3 to 49.2).
Policy Implications
Individuals with 5 or more chronic conditions are a large portion
of my patient base. Geriatricians tend to provide care coordination
services to these patients based on their need for extensive family and
patient telephone consultation, heavy pharmacological usage, and high
need for transitional care as these patients move from different
settings in the health care system. We are not reimbursed for providing
these services and, in fact, most geriatricians are unable to sustain
private practice because of their commitment to care for this patient
base. At this time, I would like to discuss disease management and care
coordination services in this context.
A portion of today's hearing focuses on disease management. We
believe disease management is an appropriate practice for certain
Medicare beneficiaries who do not have multiple chronic conditions,
such as those with only diabetes, asthma or hypertension. However,
disease management does not address several key issues involved with
frail elderly patients that have multiple chronic illnesses and/or
dementia.
First, disease management does not always address the needs of
persons with more than one chronic condition. Imagine putting my
patient with diabetes, hypertension, dementia, asthma, and COPD into a
disease management program for each of these conditions. Most of the
people who are most costly to Medicare have multiple conditions and the
care for these people can not be segmented into different disease
management programs. In fact, many of these individuals with one or
more chronic conditions also have Alzheimer's disease or another
dementia. Disease management focusing on diabetes without taking
dementia into account wouldn't be successful.
Second, a major component of disease management involves self-
management and patient education. These simply do not work for persons
with Alzheimer's disease or a related dementia. Diabetes self
management often involves patient education or patient self management
which is inappropriate for a beneficiary with Alzheimer's disease or
related dementia. Likewise, disease management for asthma and
hypertension depends on patient compliance with treatment
recommendations; this would not be effective for persons with
Alzheimer's disease or related dementia.
Third, disease management does not always address functional issues
brought on by old age or the complications that arise from multiple
chronic illnesses.
Finally, when used for patients with multiple comorbidities,
disease management can disrupt a patient's critical relationship with a
primary care physician. Some disease management programs utilize
specialists that focus only on specific interventions tailored to one
condition. The nature of chronic illness requires a comprehensive, care
coordination based approach that utilizes a variety of interventions
which change over time and which contain both a clinical and a non-
clinical component.
There are indications in the data that there is a lot of care
provided to beneficiaries with chronic conditions--particularly those
with multiple chronic conditions. There are also indications that the
care may not be well-coordinated and that for beneficiaries with
multiple chronic conditions there are adverse outcomes. We believe the
lack of a care coordination benefit is a major reason for this outcome.
For instance, the Partnership for Solutions has found that as the
number of chronic conditions increase, so too do the number of
inappropriate hospitalizations for illnesses that could have received
effective outpatient treatment. These poor outcomes are likely a result
of poor care coordination among the many services used and providers
seen. It may be that different providers are recommending conflicting
treatments that result in poor outcomes including adverse drug events.
It could be that one condition is receiving treatment, while other
chronic conditions go unattended and then become acute episodes.
There is other data to support this theory. A recent national
survey of people with serious chronic conditions completed by Gallup
for the Partnership for Solutions found that:
L26 percent report receiving contradictory advice from
different doctors in the past year;
L20 percent report they were often or sometimes sent for
unnecessary or duplicate tests or procedures;
L23 percent report that they often or sometimes received
conflicting information from different health care providers; and
L25 percent report that they were often or sometimes
diagnosed with different medical problems for the same set of symptoms
from different providers.
Other Partnership for Solutions data shows that physicians think
that care coordination is both important and difficult to do. A
national survey of physicians who provide more than 20 hours of direct
patient care during the week demonstrated that almost two-thirds of
these physicians reported that their medical education training was not
adequate to the task of caring for people with chronic conditions and
17 percent reported that they had problems coordinating care with other
physicians. Most importantly, physicians in our survey think that poor
care coordination leads to poor outcomes.
This data suggests that we must go beyond disease management for
our Medicare population with multiple chronic conditions and consider
other options worth exploring that will improve their care. These
options would be modest, but important, steps to improve care for
beneficiaries and modernize the Medicare fee-for-service program. As
you can see, we know a great deal about Medicare beneficiaries and
their conditions, as well as the lack of coordination within the system
that affects them.
Thus, we believe that chronically ill Medicare beneficiaries will
receive better care and have better outcomes if a new care coordination
benefit is created. The AGS believes it is critically important to
create this new benefit under the fee for service Medicare program.
Doing so could make significant progress toward a more integrated
system for all beneficiaries. For these reasons, we strongly support
the Geriatric Care Act (H.R. 102/S. 387).
This bill would authorize Medicare coverage of geriatric assessment
and care coordination for eligible Medicare beneficiaries. Eligible
persons are categorized as those who: (1) have at least 2 activities of
daily living limitations; (2) have a complex medical condition, as
defined by the Secretary of Health and Human Services (HHS); or (3)
have a severe cognitive impairment.
Eligible individuals will have a designated care coordinator who
must enter into a care coordination agreement with the HHS Secretary.
The coordinator may include physicians, physician group practices, or
other non-physician health care professionals in collaboration with a
physician.
Examples of appropriate care coordination services include: (1)
multidisciplinary care conferences; (2) coordination with other
providers, including telephone consultations with relevant providers;
(3) monitoring and management of medications, with special emphasis on
clients using multiple prescriptions (including coordination with the
entity managing benefits for the individual; and (4) patient and family
caregiver education and counseling (through office visits or telephone
consultation), including self-management services.
Another modest change to Medicare would be to provide incentives to
physicians and other providers to provide care coordination services to
frail elderly beneficiaries. Unlike the traditional method of disease
management, which targets enrollees with particularly high cost
conditions, it may be useful to look at some of the people who are
having the most difficult time with multiple medical conditions
(whatever those conditions may be). We could focus on people with four
or five chronic conditions who, for whatever reason, have difficulty
self-managing one or more of their conditions. These are people who
typically see many physicians, who fill a large number of
prescriptions, who need an array of health care services, and who are
at risk of poor outcomes if the clinical care and other care are not
well-coordinated.
For this group of target beneficiaries, there could conceivably be
a physician payment adjustment that compensates physicians for the
additional visit and other office time necessary to work with these
patients. This type of adjustment could be available to all physicians
treating any Medicare patient who meets the criteria.
One other option that is not mutually exclusive with anything else
discussed here has to do with physician training and physician ability
to care appropriately for people with chronic conditions. One other
component of the Geriatric Care Act would provide for limited changes
to the Medicare graduate medical education (GME) program to train
additional geriatricians who specialize in providing care coordination
services and who also are in shortage across the nation. This would
allow for a limited exception to the per hospital cap on GME for small
numbers of geriatricians.
We would like to work with this Committee and the Congress to
legislate these important changes and we thank you for including us in
today's important hearing. Changes such as these should be strongly
considered as the Congress debates how to modernize the Medicare
system.
Chairman JOHNSON. Thank you very much.
Dr. Berger.
STATEMENT OF JAN BERGER, M.D., SENIOR VICE PRESIDENT, CLINICAL
QUALITY AND SUPPORT, CAREMARK RX, INCORPORATED, BIRMINGHAM,
ALABAMA
Dr. BERGER. Thank you, Madam Chairman and distinguished
Members of the Subcommittee. My name is Dr. Jan Berger, and I
am the senior vice president for clinical quality and support
for Caremark. I am also a practicing physician. I am here today
representing Caremark Rx, Incorporated. It is an honor to be
here to discuss an issue that is important to Medicare,
essential to Caremark's health management strategy and an issue
which I have been personally involved for almost 20 years, that
being disease management. As requested by the Subcommittee, a
full copy of my testimony has been submitted for the record.
Let me start by providing you with some information on
Caremark. Caremark employs over 4,000 people throughout the
United States. We provide pharmacy and health management
services through our three lines of business that include
pharmacy benefit services, biotech and injectable therapy
service and CarePatterns disease management services. Caremark
is the only pharmacy benefit provider that has received full
patient and practitioner disease management accreditation by
the National Committee of Quality Assurance (NCQA).
Caremark's clients are confronted with some of the same
challenges facing the Committee as it looks to ways to
integrate chronic care management into the Medicare program.
First, as you have heard, there is a lack of coordination of
care among all care givers and the patient. The effects of this
lack of coordination are especially apparent in the chronic
condition population. For Medicare, as noted in the Chairman's
announcement of these hearings, 32 percent of beneficiaries
have 4 or more chronic conditions. These individuals account
for a disproportional share of total Medicare spending.
Second, there is a lack of consistency of treatment
according to evidence-based guidelines. For example, according
to NCQA, only 32 percent of individuals with diabetes and
hyperlipidemia are being appropriately treated with diet,
exercise or medication.
Studies have demonstrated the clinical and financial
benefits associated with getting individuals with chronic
conditions treated to guidelines. A final challenge to our
clients was to manage their total medical expenditures and not
only focus on the pharmacy component of spending. For the
Medicare program, we believe a disease management program by
itself may yield some benefits, but without an accompanying
pharmacy benefit, would have limited impact.
Our CarePatterns programs were built to meet these
challenges, utilizing nationally recognized clinical guidelines
and protocols to educate both patients and providers.
CarePatterns participants receive regularly scheduled calls
from nurse educators. They also receive customized educational
mailings and reminders regarding key clinical tests, diet,
lifestyle and comorbidity management. Collaboration with the
treating physician is a necessary and key component of our
program.
I would like to give you an example of the success we have
seen with our program in an over-65 population. One of
Caremark's clients, the National Association of Letter Carriers
(NALC), has a large over-65 population with a high prevalence
of chronic conditions whose expenditures were rising at a rate
higher than that of their overall population. The leadership at
NALC came to Caremark to help them find solutions to address
these challenges. Along with their already interesting pharmacy
benefit, disease management programs for diabetes, asthma,
ulcer and arthritis were offered to the beneficiaries starting
in 1998. Participation in the disease management programs were
both voluntary and confidential.
I would now like to discuss the outcomes of the diabetes
disease management program for NALC. The average age of the
diabetes program participant was 75; 2,745 individuals
participated in this program. The average age of the
nonparticipant control group was 73. This group included
approximately 9,000 participants. The full details of the
study, which were published in Disease Management Journal,
volume 4, number 2, 2001, are attached for your review.
Through an agreement with the client's benefit plan,
Caremark received the medical claims data to perform an
analysis of this program. By any measure, the program was
successful. Program participants experienced a decrease in
medical spending of 9 percent from baseline and 17 percent from
the projected trend. When pharmacy costs are included in the
analysis, total health care spending, which included both
medical and pharmacy, still decreased by 3 percent.
Conversely, the nonparticipant control group saw an
increase in total medical spending of 5 percent in the program
year. Together they generated a total savings of nearly $4
million, or 4.7 percent of the total spending for individuals
with diabetes in the first year of this program.
This translates to approximately $1,400 in saving per
participant. Participants also reported a significant increase
in their quality of life and high satisfaction with this
program.
The leadership at NALC has subsequently added additional
programs. A disease management program by itself may yield some
benefits, but without an accompanying pharmacy benefit will
have limited impact. Studies have demonstrated the importance
of appropriate pharmacy utilization in managing chronic
conditions such as diabetes, heart disease and asthma, but the
results from our study demonstrate a pharmacy benefit alone is
not enough.
The individuals in the study that did not participate in
the care pattern disease management programs had access to the
same medical and pharmacy benefits as those that did
participate, yet their total medical spending continued to rise
while that of the participants decreased. It is only through a
program of total health management that includes coordinated
interventions in behavior, treatment protocols, and pharmacy
regimens that a plan sponsor such as Medicare and an individual
will see an improved clinical, quality of life, and financial
outcomes.
Thank you very much for this opportunity to address the
Subcommittee, and I will be happy to take any questions.
[The prepared statement of Dr. Berger follows:]
Statement of Jan Berger, M.D., Senior Vice President, Clinical Quality
and Support, Caremark Rx, Incorporated, Birmingham, Alabanm
Thank you Madam Chairman and distinguished Members of the
Committee. My name is Dr. Jan Berger. I am the Senior Vice President
for Clinical Quality and Support for Caremark. I am also a practicing
physician. I am here today representing Caremark Rx, Incorporated. It
is an honor to be here to discuss an issue that is important to
Medicare, is central to Caremark's health management strategy, and is
an issue with which I have been personally involved for almost twenty
years, that being disease management. As requested by the Committee, a
full copy of my testimony has been submitted for the record.
Let me start by providing you with some information on Caremark.
Caremark is headquartered in Birmingham, Alabama, with most of our
operations centered in Northbrook, IL. Caremark employs over 4,000
people in over 30 facilities throughout the United States and provides
pharmacy and health management services through our three lines of
business. First, Caremark provides pharmacy benefit services to over 23
million people in all fifty States and Puerto Rico. Second, we provide
biotech and injectable therapies to physicians and patients. Third,
Caremark provides disease management services through our CarePatterns
disease management programs. Our commitment to this area is
demonstrated by the fact that Caremark is the only pharmacy benefits
provider that has received full patient and practitioner disease
management accreditation by the National Committee for Quality
Assurance.
Caremark's clients are confronting some of the same challenges
facing the committee as it looks at ways to integrate chronic care
management into the Medicare program. First, there is a lack of
coordination of care among all caregivers and the patient. The effects
of this lack of coordination are especially apparent in the chronic
condition population. For Medicare, as noted in the Chairman's
announcement of these hearings, 78 percent of Medicare beneficiaries
have one chronic condition. 32 percent have four or more chronic
conditions. These individuals account for a disproportionate share of
total spending. Secondly, there is a lack of consistency of treatment
according to evidence-based guidelines. For example, according to NCQA,
only 32 percent of individuals with diabetes and hyperlipidemia are
being appropriately treated with diet, exercise or medication. Studies
have demonstrated the clinical and financial benefits associated with
getting individuals with chronic conditions treated to guidelines. A
final challenge to our clients was to manage their total medical
expenditures and not only focus on the pharmacy component of spending.
For the Medicare program, we believe that a disease management program
by itself may yield some benefits, but without an accompanying pharmacy
benefit would have had a very limited impact.
Our CarePatterns programs were built to meet these challenges,
utilizing nationally recognized clinical guidelines and protocols to
educate both patients and providers. The focus is on the participant as
a whole rather than on acute episodes, and provides an integrated
systems-based approach that facilitates communication among different
providers. CarePatterns participants receive regularly scheduled calls
from nurse educators. They also receive customized educational mailings
and reminders regarding key clinical tests, diet, lifestyle, and co-
morbidity management. Collaboration with and intervening on the
treating physician where appropriate are necessary and key components
of the program.
I would like to give you an example of the success we have seen
with our program in an over-65 population. One of Caremark's clients,
the National Association of Letter Carriers (NALC), has a large, over-
65 population with a high prevalence of chronic conditions whose
expenditures were rising at a rate higher than that of their overall
population. The leadership at NALC came to Caremark to help them find
solutions to address these challenges. Along with their already-
existing pharmacy benefit, disease management programs for diabetes,
asthma, ulcer and arthritis were offered to beneficiaries starting in
1998. Individuals were identified through pharmacy claims data and
invited to enroll in the program.
Participation in the disease management programs was both voluntary
and confidential. Through an agreement with the NALC benefit plan,
Caremark received the medical claims data to perform an analysis of the
program. The data allowed us to compare the outcomes of the program
participants to their projected trend, and to those individuals with
the same conditions that did not enroll in the plan. The average age of
the diabetes program participants was 75. The average age of the non-
participant control group was 73. Due to high levels of co-morbidities
among both participants and non-participants and to avoid counting the
same savings in more than one program, our published study focused on
the diabetes population. The full details of the study may be found in
the Disease Management Journal, Volume 4, Number 2, 2001.
By any measure the program was successful. Program participants
experienced a decrease in medical spending of 9 percent from baseline,
and of 17 percent from the projected trend. When pharmacy costs are
included in the analysis, total health care spending, which includes
both medical and pharmacy, still decreased by 3 percent. Conversely,
the non-participant control group saw an increase in total medical
spending of 5 percent in the program year when overall plan spending on
a per person basis remained stable. 2,745 individuals participated in
the diabetes program. Together they generated a total savings of nearly
$4 million, or 4.7 percent of total spending for individuals with
diabetes in the first year of the program. Participants reported a
significant increase in their Quality of Life (QOL) and high
satisfaction with the program.
Since the initial implementation, the leadership at NALC has
subsequently added additional programs that target coronary artery
disease, chronic obstructive pulmonary disease, and heart failure.
A disease management program by itself may yield some benefits, but
without an accompanying pharmacy benefit will have a limited impact.
Studies have demonstrated the importance of appropriate pharmacy
utilization in managing chronic conditions such as diabetes, heart
disease and asthma. But the results from our study demonstrate that a
pharmacy benefit alone is not enough. The individuals in the study that
did not participate in the CarePatterns disease management programs had
access to the same medical and pharmacy benefits as those that did
participate, yet their total medical spending continued to rise while
that of the participants decreased. It is only through a program of
total health management (such as that outlined by Slezak and Stine in
Benefits Quarterly, First Quarter, 2003 edition, ``The Role of the PBM
in Total Health Management Strategies for Individuals with Chronic
Conditions'') that includes coordinated interventions on behavior,
treatment protocols and pharmacy regimens that a plan sponsor such as
Medicare and an individual will see improved clinical, quality-of-life,
and financial outcomes.
Thank you very much for this opportunity to address the Committee,
and I would be happy to take any questions you may have.
Chairman JOHNSON. I thank the panel. There really is no
controversy about the fact that seniors are aging and there is
more of them and that they live with chronic illnesses. I also
think there is broad agreement that management works. One of
the most difficult issues is whether or not one can develop a
payment to coordinate care, or whether you have to change the
system so that the coordination is inherent in the structure. I
want each of you to express your opinion on this issue of a
payment for coordination versus other changes that creates
structural coordination.
Now, I am coming to this from an experience in a system
that has not been able to define the difference between a
comprehensive physical and a detailed physical for payment
purposes. I am also coming as a Member who spent a year and a
half trying to help Washington figure out what partial
hospitalization meant so that it could pay its providers who
were caring for our elderly. I am currently getting the
government up to my district so that they can determine how
they will define an intensivist, because they have defined it
in the law, they have a payment code, but all requests for
payment are rejected. This is not new. This code has been
there.
On the other hand, the intensivist in the intensive care
unit is saving Medicare money hand over fist by coordinating
intensive care.
So, even in the narrow focus of specific care categories,
where we actually have payment capability for some integrated
care, we often are unable to accept documentation of that fact,
and we leave our providers exposed to the Inspector General. If
you think a payment structure is the answer, then I need for
you to be able to document to me that the definitions will be
clear enough so the Inspector General will not be down the
provider's back. Also, that they will be broad enough so
something resembling management can occur.
We are now, as you may know, looking at the average
wholesale price. The big controversy here is that we care
manage oncology services. We pay for it through the drug
benefit, but we care manage. When you get in to look at what
the practice expense factor should be, we pay for a lot of
things in oncology service delivery that we don't pay for under
Medicare. So, we are having trouble developing a code that will
make a lot of new activities eligible that are actually care
management in the delivery of cancer treatment.
So, rather than letting this big issue hold us back about
whether there should be a care coordination payment or there
should be systems changes, I want to hear you discuss this
issue. That is my only question, so that is all my time. So, I
just want to hear you comment, and then we will move on to
Pete.
Mr. GUTERMAN. Madam Chairman, I would address that by
saying that we recognize that there are certainly problems
built into both parts of the Medicare program. One of the
objectives of our demonstration projects is to be able to test
out different potential solutions, and we have tried to design
different forms of management fees that can be applied sort of
to cover disease management services explicitly, and we have
also in the demonstration projects that are up and running and
the ones that we hope to do in the future will be soliciting
innovative ideas for ways to structure both the services and
the payment for those services so that we can provide the best
services for our beneficiaries.
Mr. LEMIEUX. Mrs. Johnson, I think that the answer from our
point of view would be that we should have a payment for care
coordination services, and we should have structural processes
in place to make sure that it is done under controlled
conditions and that we can tell that it is working and that it
is improving seniors health. Stu mentioned the nationally
administered disease management demonstrations, which are great
ideas. Our only value added to that would be to try to
decentralize those demonstrations and make them local, and then
also beef up Congress' ability to keep an eye on how well they
are doing.
Dr. WAGNER. Well, I would be contradicting myself if I
didn't say structural changes. I do believe that a care
coordination reimbursement or package on top of unchanged
practice will probably be money down the drain. On the other
hand, there is no question that such a payment, if combined
with structural changes, could both reward and contribute to
further investment in those system changes would be a good
idea.
Dr. TALER. I think that structural change is absolutely
necessary, and that care coordination payments should emanate
from how we wish to see that structural change occur. From my
perspective, I think in some ways we are looking at the wrong
issue. I would like to see structural change based around
patient-centered care, rather than around their illness. I
think most of the demonstration programs and most of the ideas
that we have been seeing are focused around diseases and not
patient needs. People want to stay at home as long as they can.
They want to be as independent as they can be. They wish to
avoid the health care system as much as possible. When that
time comes, they wish to die at home and not in a nursing home
and not in a hospital. I think we need to look at systems that
provide that level of care to individuals so that they can
maintain their independence at home as long as possible and
feasible.
As we create those new structures, I think we can then look
at what kind of payments make sense to entice health care
providers to develop new systems of care along those lines.
Chairman JOHNSON. Thank you.
Dr. BERGER. I think the care coordination payments can be
structured in several different ways because we know that there
are a variety of models and approaches for care coordination,
as you have heard today. It can be either on the active
enrollee that we are participating with in their care
coordination, or it can be across a population basis if you can
specify and identify those populations that are in need of this
care coordination.
You asked about the issue of how do we define what these
activities should be. In light of disease management and how we
are working with it, we have used the Disease Management
Association of America's definition of disease management to
help us delineate those necessary activities in order to have a
positive outcome for all that are participating.
Chairman JOHNSON. Thank you. There are many thoughts in
what each of you said as succinctly as you could. I recognize
Mr. Stark.
Mr. STARK. Thank you, Madam Chairman. Let me just see if I
can get to all in focus, and please excuse any damnation by
comparison here. I am just trying to get you in focus with my
own experience. Dr. Wagner, you are a staff model, group model
similar to Kaiser? Okay. That is so I can focus there.
Dr. Taler, you practice in a group or practice in what I
would call a solo practitioner? I am just trying to----
Dr. TALER. I am in a geriatrics group, and we are totally
fee-for-service.
Mr. STARK. Okay. Well, there you go. Now, between the two
of you, the management of chronic care would be just part of
your program in Washington State, right? I mean, that is just--
and as I suspect it is at Kaiser. I mean, it is just part of
the system. If you have a campus system, exposure to Kaiser is
you just bled right across the hallway or the lawn or whatever
it is to go over and see somebody else or get your
prescription, and it is all coordinated and the patient's
records are all swapped. Probably you sit around and talk about
patients with some multi-discipline; if you have got a sticky
one you sit and talk with other specialists about what is
going. Is that? Okay. How do you, Dr. Taler, in a fee-for-
service, what I would call a primary care family doctor for old
folks like me, right? How do you provide the services that Dr.
Wagner's organization would provide? You have to coordinate.
You have to--do you do it through your hospital? I mean, what
is the practical--how do you do it?
Dr. TALER. Our program is a hospital-based house call
practice.
Mr. STARK. Okay.
Dr. TALER. So, we provide primary care in the patient's
home.
Mr. STARK. Keep going.
Dr. TALER. The care coordination is done through regular
team meetings and on the fly communications through cell
phones.
Mr. STARK. Now, you mean teams within your group practice?
Dr. TALER. Correct.
Mr. STARK. Okay.
Dr. TALER. Our coordination with the community providers,
with housing support, with other specialists who are involved
in the care is currently unfunded.
Mr. STARK. So, let me see if I can say that a different
way. You are doing it.
Dr. TALER. Yes.
Mr. STARK. As part of your physician/patient relationship.
Your, at least as far as Medicare is concerned, if somebody has
got diabetes and they have an office visit, and if there is a
code for that, it doesn't make any difference if you have got
to call six other people to arrange appointments, you get the
same fee?
Dr. TALER. Correct.
Mr. STARK. You don't get anything extra if a 40-year-old
employed individual happened to come in to a family
practitioner and had diabetes; they would get the same rate or
they get a regular fee--if they were disabled, let us say, so
they were still under Medicare--the same rate that you would
charge? I mean, there is nothing--there is no difference if you
are managing care or if just come in for one office visit. Is
that what you are suggesting?
Dr. TALER. Under the current system, that is the way it is.
Yes.
Mr. STARK. Okay. Well, do you--Dr. Wagner would like to get
paid more, but so would Kaiser and so would all the managed
care operators for their services. I understand that. You would
like to get paid for what I would call a more intensive service
to a physician because you are not capitated so you are not
expected to do all these other services. It seems to me that we
would have no trouble paying you, but you guys have to come up
with the--and define what that service is. I mean, it is sort
of like me suggesting that I should dream up a new kind of
operation and how much to pay for it. I mean, you dream up the
operation and I suppose there is staff at CMS that can tell you
how much we ought to pay you for it if it is not new and
unusual, we don't use it yet. I think we are trying to do two
things here, and I don't think we are--I think we are all
right, with the help of CMS, but I think those of you who are
professionals have a--should in fact come up with, as you did,
I guess, in the resource-based relative value scale. I mean,
you guys got together--I am not sure your folks did, Dr.
Wagner, but Dr. Taler's group did--and decided in some
agreement what they ought to get paid on an index basis. Well,
I would urge you to come to us.
Dr. Wagner, do you sell any of the information that you get
from your patients or your studies or your operation? Do you
make that commercially available to pharmaceutical companies?
Dr. WAGNER. Absolutely not.
Mr. STARK. Now, you do, Dr. Berger?
Dr. BERGER. No, we do not.
Mr. STARK. What is this item then in your U.S. Securities
and Exchange Commission (SEC) report, the source of revenue
resulting from data access?
Dr. BERGER. The information that we----
Mr. STARK. It says it is the sale of participant blinded
pharmaceutical claim data.
Dr. BERGER. That is correct. The information that we get
for our disease management programs is separate from the
information that we receive from our pharmacy benefits
services. They are totally independent.
Mr. STARK. You sell some of that data?
Dr. BERGER. No. The data we received from disease
management is not----
Mr. STARK. What about the data you get from pharmaceutical
data, or your pharmaceutical management?
Dr. BERGER. From our pharmaceutical management?
Mr. STARK. Yeah.
Dr. BERGER. I would have to have the people who utilize
that data and work with that data daily come and speak to you
and respond to that.
Mr. STARK. I am just curious. I mean, it is listed in your
SEC filing as a substantial source of data, and I just wondered
who you sold it to. Thank you, Madam Chairman.
Chairman JOHNSON. Representative Dunn.
Ms. DUNN. Dr. Wagner, from your research, you developed the
chronic care model that integrates six core elements into the
practice of care, Group Health. How does an organization like
Group Health decide which parts of its research on chronic care
can be applied in practice to patient care? What factors do you
take into consideration?
Dr. WAGNER. Group Health has had for years a very
deliberative process managed by a multi-disciplinary committee
that reviews all suggested changes to our clinical programs as
well as benefits. The single most important criterion is the
scientific evidence as to whether it works or not. That is
overwhelmingly what most of the discussion revolves around.
Once the conclusion is reached that something has a solid base
of scientific evidence proving that it works better than
anything else, then the discussion gets to the logistics and
the cost of how we try to put it into the system. That is
really the way it works.
Ms. DUNN. In order to add benefits to the Medicare program
Congress has to pass legislation. You know that can be a very
long and a very slow process. As a researcher and as a
practitioner, do you believe that we need to create a process
at CMS to determine coverage of preventative or chronic care
management benefits?
Dr. WAGNER. I am not one to comment on whether Congress or
CMS should determine benefits, it would certainly help if there
were a speedier and a more scientifically driven process. That
to me is more critical than perhaps whether the responsibility
or accountability for decisionmaking should shift.
Ms. DUNN. What are the barriers to implementing a chronic
care model or disease management program in the private sector
and in the Medicare system? What are the unique challenges that
you face in either of these, in both of these systems?
Dr. WAGNER. Well, I think the major challenges that we have
encountered in working with these some thousand systems, most
fee-for-service, are the leadership's commitment to improvement
in this era of financial strain for most of the health system.
Information technology and the absence of sufficient patient
information to support modern chronic disease management is
also a barrier. One of the adverse effects of the financial
stress on all medical systems right now is the loss of non-
physician staff to support the physicians. Those non-physician
staff, nurses, et cetera, are absolutely critical to modern
chronic disease care. Number four is finance, no question.
Ms. DUNN. Thank you very much. Thank you, Doctor.
Chairman JOHNSON. Thank you.
Mr. Doggett.
Mr. DOGGETT. Mr. Guterman, you indicated in your testimony
that the demonstration projects would continue if they were
cost effective, I believe was your testimony.
Mr. GUTERMAN. In the coordinated care area.
Mr. DOGGETT. The coordinated care area. So, I gather from
that testimony that it is premature to determine whether these
programs are saving or are likely to save any money in the
immediate future.
Mr. GUTERMAN. We haven't completed that. We haven't
completed that analysis.
Mr. DOGGETT. They may be a good idea; they may not, from a
cost savings standpoint?
Mr. GUTERMAN. From a cost savings standpoint.
Mr. DOGGETT. It may actually cost us more, because the data
is not in yet?
Mr. GUTERMAN. Right.
Mr. DOGGETT. The same with reference to quality of care.
There is not any evidence, is there, that providing--that these
Medicare+Choice plans provide a higher quality of care than
traditional Medicare beneficiaries receive? Is there?
Mr. GUTERMAN. The results I think are mixed on that in the
literature. Our aim in these demonstration projects is to
improve the coordination of care in both. As I said in my oral
testimony, there are problems in both the fee-for-service and
Medicare+Choice arenas in terms of encouraging the appropriate
coordination of care for chronically ill beneficiaries.
Mr. DOGGETT. Did you hear the President's State of the
Union Address?
Mr. GUTERMAN. Yes, sir.
Mr. DOGGETT. My recollection was that he was pretty firm
about saying that he didn't want to turn health care over to
HMOs; he wanted to turn it over to physicians and to nurses and
to other health care providers. I gather if we ever see his
Medicare plan, it is going to rely on turning over much more of
the care to HMOs.
Mr. GUTERMAN. I couldn't speak to that.
Mr. DOGGETT. Is your part of the department involved in
providing any information for that plan?
Mr. GUTERMAN. I haven't seen that, and I believe it is
still being worked on.
Mr. DOGGETT. Thank you. Dr. Taler, we of course are now in
year three of this Administration, and they have yet to come
forward with any specific legislation on prescription drug
benefits, and I gather after the strong reaction against what
were the leaked out portions of their plan, they have kind of
backed off doing it this time. What is it that you find
superior in the Geriatric Care Act that you mentioned to the
approach that some of the other witnesses have suggested today?
Dr. TALER. I think that there are two specific elements.
One is the comprehensive geriatric assessment. Within that, we
need to look very carefully at what makes good sense for the
management of a disease but also what makes sense within the
preferences and goals of that individual. Another domain that
we need to look at are what kind of social supports would
augment the medical care plan and support the caregiver in
continuing their independence at home. Third, what kind of
environmental changes are necessary to support that individual
given their functional limitations. So, a payment for a more
comprehensive evaluation that looks beyond medicine but looks
at the whole patient and looks at what they want the most,
which is to maintain their independence.
The second is the clinical care coordination that emanates
from that comprehensive assessment to keep those programs in
place, and as the patient's condition continues along its
natural trajectory that things change. I think one of the most
difficult parts of medicine is that transition from chronic
care to terminal care, and that also as people move from one
setting of care to the next, that there is continuity across
those settings.
So, care coordination helps to support physicians in
maintaining the relationship rather than focusing on the
disease or focusing on the small business of your office; it is
really focused around providing patient care over the remainder
of their life.
Mr. DOGGETT. I know you don't have any demonstrations like
Mr. Guterman has been working on, but do you have any opinion
as to whether there would be any cost savings associated with
that? Is this all likely to be a cost addition to the Medicare
program?
Dr. TALER. We don't have any studies per se. I can only
tell you from my own experience in my own practice. When we
have looked at patients who have the same demographics and the
same illnesses, and also comparing our own patients prior to
entry into our program versus afterward, we are able to show a
reduction in hospitalizations of about 10 percent, reduction of
emergency room visits of about 15 percent, reduction in length
of stay of about 2 days per hospitalization. I think one of the
most dramatic differences--and you have to put that into the
context of Washington, DC--71 percent of people in the District
die in hospitals; 66 percent of the patients in our practice
die at home.
Mr. DOGGETT. Thank you.
Chairman JOHNSON. Very interesting.
Mr. Johnson of Texas.
Mr. JOHNSON. Thank you, Madam Chairman. Dr. Taler, one of
the provisions in the bill that is out there, 101, lifts the
graduate medical education cap for geriatric students. As you
know, Congress set limits on the number of GME resident slots
it would pay for in the Balanced Budget Act. Overall those
programs are unable to fill their current number of slots, so
many hospitals have fewer residents than the number of
positions Medicare is willing to pay to hospitals. So, what is
the purpose of lifting the cap for geriatric residents if these
hospitals can't fill the current slots? Tell me, if you agree
that they should be lifted, what specific hospitals benefit
from that?
Dr. TALER. I think that part of the problem in filling
slots is the difficulty of geriatric practice as it is
currently funded and currently structured, and I think that
what we are looking at providing is actually an overall change
in the way in which geriatrics is practiced and funded; if
there were additional funds for comprehensive geriatric
assessment and if there were funds for coordination of care,
that those would support geriatric practice and make it more
attractive financially as well as professionally. We then
anticipate that there would be a greater demand for those
positions. If there is a greater demand, then we anticipate
that we would also like to have broader representation
throughout academic hospitals. There is one other thing that we
are doing.
Mr. JOHNSON. So, are you telling me the academic hospitals
are the ones that would benefit from that?
Dr. TALER. Actually, all teaching hospitals would. If you
were to look at what are the spin-off dollars for geriatric
practices, currently most practices in academics are losing
money and, when looked at in a silo fashion, are under attack.
If you look at the spinoff dollars that come from those
geriatric practices, they provide a substantial amount of
support for the overall hospital enterprise. In Arkansas, there
is a geriatric health care center. It probably just about
breaks even, but they were able to demonstrate that they spin
off approximately $17 for every dollar that they generate. That
kind of information will get out to other health care centers,
and they will recognize the value of providing services for
geriatric patients. Without geriatric staff and without
geriatric fellows, it is very difficult to get those
enterprises up and running.
Mr. JOHNSON. Okay.
Mr. Lemieux, I agree with you that CMS isn't doing a very
good job, and I think all of us probably would agree. Your
testimony states that Medicare's fee-for-service program cannot
pay for performance. Programs become an entitlement program for
health care providers. If a licensed health provider treats a
Medicare beneficiary, payment will follow. Since Medicare's
structure is set by statute and governed by CMS coverage in
coding process, you are saying often seniors don't have access
to the latest and best health products and services. How would
you fix that?
Mr. LEMIEUX. Well, I didn't mean to imply that I thought
that CMS was doing a bad job, just that the nature of fee-for-
service in a public----
Mr. JOHNSON. Well, I will imply it if you won't. Go ahead.
Mr. LEMIEUX. Our idea is that it is very difficult for the
fee-for-service program sometimes to pay for these sorts of
care coordination programs or services that we have been
talking about, also for remote monitoring devices and other
things just by the nature of the program. Our only insight into
how to fix that is to--we all agree that CMS needs the
flexibility to design disease management programs, care
coordination protocols. However, I don't think that Congress is
very likely to give CMS vast new power to go off and do
whatever it wants unless there is a tremendous amount of new
oversight over that process. I also think that disease
management tends to be something that is best organized at a
local level rather than at a national basis, especially
comprehensive care management services as opposed to simple
education.
So, the idea of trying to send CMS out into the field and
have local medical directors working with providers and seniors
group and consumer organizations and other institutions at the
local level seems like the place where they need to be to make
these sorts of demonstration programs the most effective.
Mr. JOHNSON. Will they believe the statistics or the
results? It seems to me they are always about 2 or 3 years
behind.
Mr. LEMIEUX. Yes. It is difficult in our current program to
evaluate trends especially in costs because the data come in so
slowly. One thing that we are very hopeful on is in the context
of a universal catastrophic drug benefit every Medicare
beneficiary would have a drug card from Medicare, probably
provided from one of their supplemental coverage sources.
Medicare would get the data because Medicare would have to know
when its liability began. With a real-time data base of
seniors' drug utilization patterns, we might be better able to
target disease management for particular things to particular
regions of the country or particular demographic groups.
Mr. JOHNSON. Thank you. Thank you, Madam Chairman.
Chairman JOHNSON. Mr. Cardin.
Mr. CARDIN. Thank you, Madam Chairman.
Mr. Guterman, I want you to know that I think CMS is doing
a good job, particularly in light of the budget restrictions
that we impose and the parameters in which we ask you to work.
I really want to congratulate our Chairman, because I think she
has really been looking at ways in which we can streamline the
system to make it easier for CMS to do its work. That is what
we should be looking at, ways to facilitate the adoption of new
technology accompanied by rational reimbursement levels. We can
obviously do a better job, and that is one of the reasons we
are having this hearing and to see whether we can't determine
ways to provide disease management.
Madam Chairman, there are two things that I have taken out
of this hearing: First is that there is a need for disease
management to be better handled under the Medicare
reimbursement structure. Whether we make structural changes or
provide direct reimbursement, there is a need for us to examine
better ways to deal with disease management.
The second thing I noticed, Mr. Guterman, in the
demonstration program, is that you are covering prescription
medicines for the diseases affecting the individuals. So, as we
look at covered services it seems to me that if we are going to
have disease management we need to cover the prescription
medicine costs of those ailments.
The Chair is aware that I have been interested in moving
forward on this issue, I believe we should cover prescription
medicines within Medicare; but if we can't cover all
prescription medicines at a reasonable level, then we at least
should cover those illnesses for which disease management is
necessary, whether it is diabetes or high blood pressure or
rheumatoid arthritis or severe depression or other types of
diseases where we know that medicines are absolutely essential
to disease management. We should at least cover those
medicines. I think we should cover all, but if we don't have
the money to do it, let us set a priority and cover those that
are most critical for disease management.
Dr. Wagner, I see you shaking your head in the affirmative,
so I will call you then to respond to that, because maybe I
will get a----
Dr. WAGNER. Oh, good. I agree with you. I would add one
addition, that we should certainly cover the critical medicines
that are essential to improving health of patients with these
conditions. What would make it more affordable is if we picked
and chose in some scientific way the more cost effective among
the options, because there are options in the treatment of most
of these conditions.
Mr. CARDIN. That is part of good disease management and
practices. I would very much encourage that; most of the
proposals here have been aimed at encouraging individuals to
use the most cost effective way.
Mr. Guterman, I take it this was a conscientious decision
that you couldn't have good disease management without covering
the prescription medicines of the people in the program?
Mr. GUTERMAN. Well, actually it was Congress that mandated
the coverage of prescription drugs under the Beneficiary
Improvement Protection Act (BIPA) in this project. One of the
things we hope to learn is how drugs can be used best in
disease management activities from this demonstration, and we
will be paying careful attention to that, and I think that is
one of the critical aspects of this project.
Mr. CARDIN. Let me make another observation that Mr.
Doggett made, and that is if we are going to expand covered
services for better disease management, I expect that the
Congressional Budget Office will score it as additional cost,
even though we all know that it will reduce hospital days, it
will save in all the areas that Dr. Taler raised: Clearly we
are going to see significant cost savings. We have to be
prepared to understand that this effort will require us to
cover the extra initial costs in order to effect a more cost-
effective system in the long run, and we should be prepared to
do that. Thank you, Madam Chairman.
Chairman JOHNSON. I would like to ask the panel if you
would all agree if we are going to really provide coordinated
care we are going to have to cover some things we don't now
cover, both in services and in people services?
Mr. GUTERMAN. Yes. I think that is one of the things we are
doing.
Chairman JOHNSON. In addition to prescription drugs. I
mean, in all of your plans there is a social service management
component where there is a lot of telephone calls, there is
remote monitoring. There are all kinds of things that you are
going to have to cover that Medicare does not cover now. Right?
So, it is important to recognize that it isn't just about
prescription drugs. There are services that Medicare doesn't
provide that you can't manage care without.
The second thing I want to be sure is that we notice for us
to pay for those softer services the payments are not going to
the doctor's office. Even there we have trouble. Remember, we
have five levels. People would be appalled if they knew the
amount of private information we know about them that the
auditors get to know about them in order to determine what
level of service. Are you comfortable that you can actually
define the soft services necessary for care management and that
we could have an auditing system that wouldn't drive your
offices absolutely nuts and leave you exposed to fraud and
abuse charges? Anyone can comment.
Dr. TALER. Let me weigh in on that one. There is currently
a code for care plan oversight. It is limited to recipients of
skilled nursing services through the home care benefit.
Physicians or nurse practitioners often provide services for
these patients that include either consultation with other
health care providers, the home care nurse, physical therapist,
or other consultants, as they have team meetings, as they
review records in order to have a better grasp of the overall
care, and as you document time spent in those endeavors. If
these services consume at least 30 minutes in a calendar month
you are allowed to bill a Current Procedural Terminology code
and are reimbursed at about $120 to $125, depending on your
region.
Chairman JOHNSON. You have used that, and it works
satisfactorily?
Dr. TALER. Yes. There are physicians around the country,
especially those who are involved more with homebound patients,
who have recognized that that is a mechanism for supporting
their services while those patients are receiving the home care
benefit.
Chairman JOHNSON. I just got a note that Dr. Wagner is
going to have to leave. The second question I want to ask, and
I will put it on the table and anyone can comment, is that the
breakthrough series demonstrations--and I am particularly
interested on Mr. Guterman commenting on this after Dr. Wagner.
The breakthrough series is almost entirely--I believe it is
entirely--in either community health centers or staff model
groups?
Dr. WAGNER. No. Not at all. Of the 1,000 organizations we
work with, over 500 are----
Chairman JOHNSON. Oh, good. All right.
Dr. WAGNER. Are private.
Chairman JOHNSON. The ones I have heard about are all
community health centers. So, I want to be sure that we are
thinking about how do we do this where there is not a staff
model or a community health center, because they are just not
around.
Dr. WAGNER. Oh, no. That is the biggest single program, but
it is still a minority of the systems that have been involved.
Chairman JOHNSON. The management component can function
just as well?
Dr. WAGNER. It sure helps having an organized system like
the Bureau does. Yes. The answer is yes. I would like to, if I
might, address your previous question. I agree with you that if
we try to define disease management or care coordination as a
set of specific services, they will be subject to abuse. I
suspect they will be abused, and that is why I would prefer not
to view it as a set of services, but as a demonstrated system
of care that can meet the needs of patients with chronic
illness. There are some measures now to try to identify----
Chairman JOHNSON. So, in other words, we should focus on
holding the system accountable rather than defining all the
little parts because the parts are going to change. In 10 years
they are going to be different. I would think that
accountability you pointed to earlier, some of you in your
testimony----
Dr. WAGNER. Parts can be gamed.
Chairman JOHNSON. Oh, very much. I mean, I don't know who
decides appropriateness of this team meeting. Okay, thanks.
Thanks, Dr. Wagner, for being with us. We appreciate it.
Mr. GUTERMAN. Madam Chairman, if I may address your
question as well. I think at CMS our approach is rather than
specifying individual services, also to just have a bundle for
disease management. All of our demonstrations involve either--
involve some sort of payment on a per member, per month basis,
and that we feel that that rather than prescribing which exact
services are provided that we have the entity that is managing
these patients be at some risk for the effectiveness for the
package that they decide to put together and apply to this.
Chairman JOHNSON. So, even though you are doing this within
the fee-for-service system, you are using a capitated payment
for this function?
Mr. GUTERMAN. There are--we are trying different
approaches, but that is certainly the approach in the BIPA
demonstration, and we are using accountability in the
coordinated care demonstration to accomplish the same goal. We
will of course be collecting information on which services
actually seem to work best, and when we get the information on
that we will know better, you know, what works and what
doesn't. We think that in the interest of flexibility, that it
is better to define the bundle and let the practitioners define
what they do.
Chairman JOHNSON. I think if we do this without preserving
flexibility, we defeat ourselves.
Any other comments from the panel? Thank you very much for
your time, for your written testimony, and for your involvement
in this process, and we look forward to working with you.
[Whereupon, at 5:44 p.m., the hearing was adjourned.]
[Submissions for the record follow:]
AdvancePCS
Washington, DC 20005
March 4, 2003
The Honorable Nancy Johnson
Chairwoman, Subcommittee on Health
Committee on Ways and Means
1136 Longworth House Office Building
Washington, DC 20515
Dear Chairwoman Johnson:
On behalf of AdvancePCS, I would like to formally request the
inclusion of our statement into your hearing record for your hearing
entitled ``Confronting the Barriers to Chronic Care Management in
Medicare,'' on Tuesday, February 25, 2003.
AdvancePCS is the nation's largest independent provider of health
improvement services, touching the lives of more than 75 million health
plan members and managing more than $21 billion annually in
prescription drug spending--totaling over 525 million pharmacy claims.
Our statement was submitted last year to the Senate Special
Committee on Aging for their hearing entitled ``Disease Management and
Coordinating Care: What Role Can They Play in Improving the Quality of
Life for Medicare's Most Vulnerable?'' At that hearing, on September
19, 2002, our Chief Science Office, Alan Wright, focused on AdvancePCS'
commitment to pursuing research in and implementation of disease
management programs, the current status of and future plans for
AdvancePCS' disease management programs, and lastly the potential value
of disease management to the Medicare program.
We are very interested in the work of your committee on this issue
and would like to be of assistance in any way. Please feel free to
contact me with any questions regarding this statement.
Regards,
Wendy C. Parker
AVP Federal Affairs
__________
Statement of Alan Wright, M.D., Chief Science Officer, AdvancePCS
Thank you, Senators Breaux and Craig. I would like to thank the
Committee for calling this hearing today on disease management. Our
company, AdvancePCS, has been creating and implementing disease
management programs to improve the delivery of healthcare in this
country for many years. We are pleased that the Congress is interested
in integrating disease management into the Medicare program and look
forward to working with you as you begin to examine this important
opportunity.
My name is Alan Wright and I am a physician and the Chief Science
Officer for AdvancePCS. I have worked for AdvancePCS for ten years.
During my tenure here, I have been responsible for the development and
oversight of disease management products and I am currently focused on
integrating new and emerging technologies into our programs.
AdvancePCS is the nation's largest independent provider of health
improvement and pharmacy benefit management services, touching the
lives of more than 75 million health plan beneficiaries. Our clients
include a broad range of health plan sponsors, such as Blue Cross and
Blue Shield plans, self-insured employers and other employer groups,
labor unions and government agencies--including the Federal Employees
Health Benefit Program (FEHBP). On behalf of our clients, we administer
and monitor over 550 million prescription claims each year representing
over $28 billion in annual prescription drug spending.
AdvancePCS is committed first and foremost to health improvement;
we offer our clients a wide range of health improvement products and
services designed to enhance the quality of care delivered to
beneficiaries, and manage their costs. The company's core capabilities
include prescription benefit plan design consultation, home
prescription delivery, and formulary development and management. Within
these programs, we also set up retail pharmacy networks, negotiate drug
discounts, and administer claims.
The delivery of these services is in part facilitated by
AdvancePCS' contractual relationships with retail pharmacies and
prescription drug manufacturers. The company's pharmacy relationships
extend to over 59,000 pharmacies, virtually all retail pharmacies in
the United States.
AdvancePCS' more advanced health improvement capabilities include
clinical programs, disease management and specialty pharmacy services.
We believe these services are critical components to helping our
clients balance their cost containment and quality improvement goals.
AdvancePCS is an independent, publicly traded company. We employ
approximately six thousand employees and have operations in 18 States,
Washington, DC and Puerto Rico. We provide services to beneficiaries in
every State of the Union, Washington, DC and in Puerto Rico.
My testimony today is divided into three parts:
LThe first section will describe disease management and
highlight AdvancePCS' commitment to pursuing research in and
implementation of disease management programs. It will also address the
company's internal structures as well as the external partnerships we
pursue to facilitate continuous improvement of our disease management
interventions.
LThe second section will highlight the current status of
and future plans for AdvancePCS' disease management programs--how we
launched into this area, how our programs work, and how they will
evolve in the future.
LThe final section will focus on the potential value of
disease management to the Medicare program and discuss our support for
continuing efforts in this arena.
AdvancePCS' Focus on Disease Management
Providing care for the chronically ill is a constant challenge for
our healthcare system and one that we strive to address day after day.
We have been developing and delivering disease management interventions
to a broad range of population groups since the early 1990s. These
programs all seek to optimize the healthcare of, and maximize the
health and quality of life for people with chronic illnesses. While
change in disease progress is often incremental, the results our
programs achieve in terms of quality of life, self-esteem, and cost
efficiencies, are significant.
Disease management programs apply managed care approaches to
address the healthcare system's challenge of caring for the chronically
ill. Relying on a wide range of models, including case management and
interdisciplinary teams, disease management programs improve the
overall health of targeted populations. AdvancePCS' client population-
based approach enables us to offer everyone with a given disease
services tailored to individuals' disease severity. We work closely
with individual patients to minimize the pace of their health
deterioration.
The benefits of our disease management programs are numerous.
Aggressively managing chronic illness typically enables individuals to
require less invasive care, which enhances their quality of life and
reduces medical costs. In addition to providing health and financial
benefits, disease management also reinforces care standards and
strengthens the physician-patient relationship.
Program Development
AdvancePCS develops disease management programs internally using
established national guidelines from such sources as the Joint National
Committee on Hypertension sponsored by the American Medical
Association, the National Institutes of Health, the American Heart
Association, and the American Diabetes Association. We select programs
for development based on the potential quality of life and cost impacts
for a population.
We rely on a team of internal and external clinical experts to
develop leading programs. The range of clinical expertise used includes
physicians, nurses, pharmacists, patient educators, and health
economists. When a health improvement program has a pharmaceutical care
component, pharmaceutical companies may be enlisted to provide
supporting materials.
The qualitative and quantitative effectiveness of AdvancePCS'
disease management programs are measured using specific indicators that
compare results to clinical benchmarks and/or goals. We enhance
programs periodically based on changes in clinical guidelines, feedback
from practitioners, patient experiences and/or program effectiveness.
Using the principles of continuous quality improvement, AdvancePCS'
programs, in collaboration with and on behalf of our client sponsors,
are executed in compliance with the National Committee for Quality
Assurance (NCQA) criteria. When possible, the programs also incorporate
the Health Plan Employer Data Information Set (HEDIS) indicators. All
of AdvancePCS' programs advocate appropriate care through the effective
application of data and scientific evidence. In 2002, we achieved the
new NCQA Disease Management Accreditation.
Health Care Research Division
Effective disease management depends on a firm foundation in
quality improvement and medical research. Our disease management
programs are based on proven outcomes. With Innovative Medical
Research, Inc.'s (IMR, an AdvancePCS subsidiary) research methodology,
we explore intervention alternatives, measure outcomes, and then
implement the most effective interventions through our disease
management programs.
Our research is organized in centers focused on population-based
issues. For example, our Center for Healthier Aging is dedicated to the
development of programs targeting the specific needs of older
individuals, while our Center for Priority Populations focuses on
interventions for the Medicaid population.
Partnerships
AdvancePCS also partners with a range of government entities to
ensure we remain on the cutting edge of research; in turn, we hope that
our expertise can be helpful to Federal agencies looking to address
healthcare quality and outcomes. One example is our longstanding
collaboration with the Agency for Healthcare Research and Quality
(AHRQ) in their Centers for Education and Research on Therapeutics
(CERTs). We were one of the first private-sector companies to partner
with the CERTs to focus on community-based research programs to improve
patient safety through reduced drug-drug interactions.
Another mutually beneficial AdvancePCS and government partnership
we have developed is with the Food and Drug Administration (FDA).
Working with the FDA, we help to facilitate post-marketing drug
surveillance, and assess and moderate the risk of adverse drug
outcomes.
Another example of our continuous improvement efforts includes past
work with a leading healthcare foundation. We have participated in
Robert Wood Johnson funded research to study a group of Medicaid
patients with asthma. The study purpose was to understand patient and
physician knowledge levels, beliefs, and views on asthma care. As
expected, the research showed that there is a significant knowledge gap
between best practices and actual practices among both patients and
physicians. A knowledgeable patient is key to achieving the desired
health outcomes.
Disease Management Programs--Yesterday, Today and Tomorrow
Acting on behalf of our plan sponsors, we initiated our disease
management programs in the early nineties with targeted mailings to
patients and expansion of traditional managed care case management
programs. Initially, we emphasized implementation and action, focusing
less on results. Although these programs laid the groundwork for
today's disease management methodologies, we had no way of measuring
whether or not they were effective or successful.
Our programs have evolved over time. They now emphasize efficiency
of interventions and quantifiable results. We have a built-in total
quality improvement feedback loop to help us identify which program
components are most effective. Our disease management programs are now
tailored to specific conditions with interventions that extend from
Internet publication of information to personal nurse counseling. (See
Chart A).
Chart A: Examples of Disease Management Services
[GRAPHIC] [TIFF OMITTED] T87412A.001
Our existing disease management programs use targeted interventions
to educate and support our plan sponsors' beneficiaries and their
caregivers. We maximize the number of methods available to communicate
and educate patients, recognizing that compliance, and ultimately
program success, result from informed, knowledgeable patients. Today's
state of the art programs primarily rely on three forms of patient and
physician communication.
LFirst, we use telephonic outreach to assess and educate
patients, and to evaluate self-care. Through direct telephone
conversations, we communicate with our patients about the value of
appropriate care management and encourage positive health-seeking
behavior.
LSecond, we use mail-based interventions to disseminate
disease-specific member education material and invite individuals to
join our programs. The mail also allows us to conduct patient and
physician profiling to measure program success as well as evaluate
patient/pharmacy utilization patterns and compliance with recommended
regimens.
LFinally, our web-based communication provides yet another
opportunity for us to share relevant educational materials and
interface with patients.
A good disease management program begins with the development of
plan-sponsored, defined program goals and quantifiable outcome
objectives. Using industry standard HEDIS measures, AdvancePCS closely
tracks health outcomes to monitor the impact of our programs. We
recognize that progress can be slow in disease management and that
results are incremental--while we aim for 100 percent compliance, we
recognize that incremental achievements are often what are achievable
in the short run.
Results from one of our diabetes programs illustrate our focus on
outcomes. In this program, we saw a 6 percent improvement in the rate
of eye exams for diabetic patients over a 3-year period, a significant
step in preventing blindness among these patients. While this was only
one of our outcomes measures in this program, it is representative of
the type of outcomes that may be possible and that help to reduce the
costs associated with disease.
AdvancePCS is continuously working to enhance the company's
existing disease management interventions, integrating new technologies
and research as it becomes available. For example, our researchers
currently are using proven behavioral models, as well as remote patient
monitoring devices, to understand interventions that result in
behavioral change. Regular program review enables us to determine how
we as a company can have the greatest impact on our patients.
Finally, patient privacy is a priority in all of our disease
management programs. We work closely, in collaboration, with our plan
sponsors to ensure the protection of patient confidentiality in
consideration of all applicable state and Federal regulations.
Disease Management and the Medicare Program
Progress to Date
Congress and the Administration have already made some progress in
bringing disease management approaches into the Medicare program. The
coordinated care demonstrations that were part of the Balanced Budget
Act have begun to test fee for service approaches and disease
management. The Beneficiary Improvement and Protection Act
demonstration that was announced this year will go a step further in
testing innovative fee for service approaches.
There is more that can be done. We look forward to the future
demonstration projects that CMS is contemplating. Models that are
consistent with the approach we successfully employ in the private
sector, structured around performance risk and targeted across a
population, would provide another testing ground for CMS.
Looking Forward
The Medicare program could greatly benefit from appropriately
designed and tailored disease management programs. As we all know,
chronic conditions are most prevalent in the senior population and are
a major contributor to high Medicare costs. According to the Kaiser
Family Foundation, 57 percent of Medicare beneficiaries have arthritis,
55 percent have hypertension, 37 percent have heart disease, 19 percent
have cancer, and the list continues. (See Chart B). Some of these more
common diseases that afflict the Medicare population are particularly
amenable to disease management interventions.
Chart B: Most Common Conditions Among Medicare Beneficiaries
[GRAPHIC] [TIFF OMITTED] T87412A.002
Source: Kaiser Family Foundation Medicare Chartbook. Non-
institutionalized Medicare Beneficiaries, 1999.
The health benefits of disease management that we have seen in the
commercial population could likely be replicated within the Medicare
population, potentially producing even greater improvements in health
outcomes. However, given the complexity of care needs for the Medicare
population, our expertise leads us to believe that one would need to
refine such disease management programs based upon on-going experience
in order to realize the significant improvement and savings opportunity
potential.
Even so, there are a number of disease management programs that
could be adopted within Medicare today, by focusing on the
pharmaceuticals already covered by Medicare. Medicare Part B covers
drugs for chronic conditions such as arthritis (e.g., HylanG-F20,
Remicade), cancer (e.g., Taxol, Gemzar, Paraplatin, Taxotere), and
emphysema (e.g., Albuterol). Given the high cost of these drugs and
established treatment protocols for these conditions, disease
management programs would be an ideal way to help manage the care of
these beneficiaries while also addressing the high Medicare costs.
AdvancePCS is working to adapt the company's existing disease
management programs and develop new interventions that incorporate the
therapies already covered by Medicare Part B. We only expect this focus
to increase in the future as more biotechnology drugs focused on
chronic diseases are approved.
Ultimately, implementation of disease management into the Medicare
program on a large scale will require Medicare payment reform. We look
forward to working with Congress on achieving payment flexibility
wherever necessary and giving CMS the tools it needs to effectively
integrate disease management into Medicare. Congress can also support
CMS by ensuring that the agency has broad authority and latitude within
the Medicare program to test new models.
As we face the challenges of the future, growing drug costs, an
aging population, the growing biotech industry--the compounding effect
will be a Medicare program with spiraling costs. Disease management
interventions directly address these challenges by delivering cost-
effective, high quality care to the chronically ill populations.
Thank you for the opportunity to testify before the Committee
today. I would be happy to answer your questions.
Statement of the American Association of Health Plans
Madam Chair and Members of the Subcommittee, the American
Association of Health Plans (AAHP) appreciates the opportunity to
provide a written statement on the important topic of health benefits
and cost saving potential of chronic care management programs. AAHP
represents more than 1,000 HMOs, PPOs, and similar network plans
providing coverage to more than 170 million Americans. AAHP member
plans are dedicated to a philosophy of care that puts patients first by
providing coordinated, comprehensive health care.
Over 100 million Americans of all ages have one or more chronic
conditions. With aging, the chances of developing a chronic condition
such as arthritis, heart disease, diabetes, depression, or a
respiratory ailment increase. In recent years, a growing body of
scientific evidence has underscored the efficacy of proactive
management of physical and mental health, as well as the social issues
related to these conditions.
Health plans have long understood that formal programs of disease
management can be extremely effective in helping members to maintain or
improve their quality of life despite having a chronic condition. These
programs are built on the knowledge of what interventions can improve
patient outcomes and scientific evidence that outreach to those with
chronic conditions, coupled with educational programs and consistent
monitoring, can effectively manage many conditions. In order to have
the best outcomes, patients need to be active participants in their
care, monitoring their blood sugars, checking their weights, and
exercising on a regular basis. While empowering patients for self-
management is a key goal, health plans understand that caregivers must
also be supported through access to programs specifically designed to
meet their needs, and health care providers benefit from health plan
reminders and support of patient care. Disease management programs have
many of these components: patient education and support, active
outreach to remind patients of the care they need, support and
education for caregivers, and reports and reminders to the patients'
physicians.
Medicare+Choice Plans Offer Innovative Disease Management Programs
Medicare+Choice has been on the cutting edge of developing
innovative health care coordination programs. In fact, nearly every
health plan that participates in the Medicare+Choice program has at
least one disease management program today, and the average health plan
has four such programs. A recent AAHP survey, based on responses from
131 health plans, also found that 97 percent had implemented disease
management program or chronic care programs for diabetes, 86 percent
had programs for asthma, and 83 percent had programs for congestive
heart failure. Health plans are also developing programs for end-stage
renal disease, depression, and cancer.
A recent AAHP report about innovations by Medicare+Choice plans
outlines dozens of examples of the many programs health plans are
implementing on behalf of Medicare+Choice enrollees:
LPacifiCare is improving health care for patients with
congestive heart failure through a program that makes sure they are on
the correct medications and helps enrollees make lifestyle changes
involving weight management, diet, exercise, and smoking cessation.
This program also helps physicians provide care consistent with
evidence-based guidelines by sharing information such as a list of
congestive heart failure patients who may not be asking for ACE
inhibitors that could stabilize their cardiac conditions.
LHarvard Pilgrim Health Care has implemented a disease
management program that uses a combination of strategies--patient
education, intensive interventions for high-risk enrollees that
includes phone calls from nurse practitioners and mailings to
beneficiaries, sharing of best practices, and community outreach--to
improve clinical outcomes of care for Medicare+Choice enrollees who
have diabetes.
LA disease management program developed by Geisinger
Health Plan is lowering blood pressure readings for Medicare+Choice
enrollees by distributing quarterly newsletters on blood pressure
control and by involving nurses in educating seniors who have
hypertension, in one-on-one and group sessions, and lifestyle
modifications and medication management.
LAnother Geisinger Health Plan program, recently featured
on National Public Radio, provides reminders to patients with diabetes
to visit their primary care physicians and interventions from nurse
practitioners that help them maintain healthy blood sugar readings.
LA Care CoordinationSM program implemented by
UnitedHealthcare allows members to work directly with their physician
to determine the best way to coordinate their own health care needs.
Care Coordination is designed to make it easier to get care while
identifying and addressing gaps in care. It encompasses hospital
admission counseling, health education, prevention and reminder
programs, inpatient care advocacy, phone calls to high-risk members
post-hospitalization, identification and support programs for members
with complex and chronic illnesses and long-term assessment and
education programs to support members with asthma, cardiovascular
disease and diabetes.
LFallon Community Health Plan is improving the clinical
and functional status of Medicare+Choice enrollees who have congestive
heart failure through a program that includes educational seminars led
by pharmacists and nutritionists and one-on-one discussion between care
managers and patients. Chronic conditions require patients to take
medication even when they are feeling well. One important aspect of
disease management programs is the reinforcing of the need to stay on
these medications and to ask about side effects that could cause
patients to stop taking them.
LIn the early 1980's, Group Health partnered with the
University of Washington to examine key determinants of seniors' health
and found that regular exercise and social interaction were the two
most important factors. Since then, other studies have validated their
findings. There is no segment of the population for whom exercise is
not important. Whether an individual is 65 or 95, whether they are
already physically active or restricted to wheelchairs, whether they
are healthy or have painful crippling conditions, exercise can make a
difference. With this in mind, Group Health set out to bring the
benefits of exercise to individuals who have disabilities or serious,
chronic medical conditions such as heart disease, chronic obstructive
pulmonary disease (COPD), arthritis, diabetes, and depression.
LAetna U.S. Healthcare has launched a program to educate
Medicare+Choice enrollees and their doctors about the potential for
dangerous drug interactions and adverse events relating to the use of
multiple medications.
LKaiser Permanente Northwest has implemented a program to
improve the healing process and the quality of life for immobile, frail
elderly Medicare+Choice enrollees who are at high risk for developing
chronic wounds such as pressure ulcers.
In recognition of the value of disease management programs for
congestive heart failure (CHF), CMS has implemented a program that
provides ``Extra payment in Recognition of the Costs of Successful
Outpatient CHF Care.'' Under this program, qualifying Medicare+Choice
organizations that meet CMS performance criteria could receive extra
payments for enrollees with CHF who were not hospitalized due to
effective management of their disease. AAHP supports this program and
recommends that CMS consider similar programs for other disease states.
Conclusion
AAHP appreciates this opportunity to submit written testimony and
thanks the Subcommittee for considering this important issue. The main
goal of organized disease management is to help patients continue or
improve their current level of functioning and reduce the risk of
preventable disability. For Medicare+Choice beneficiaries, these
patient-centered programs offer efficient and supportive ways to learn
more about their illnesses, understand treatment options, and access
services. These programs have also demonstrated effectiveness in
helping enrollees with behavioral health conditions such as depressive
disorders that are often overlooked in the older adult population. In
general, the management of chronic disease requires the knowledge of
what needs to be done and means of identifying when there are gaps.
Since the Medicare benefit is designed to pay for services delivered,
not monitoring for services that are missed, the programs include many
activities that are not covered under the traditional Medicare benefit.
These services include patient education, calls from nurse case
managers to remind patients of optimal care, phone calls from the
health plan to remind patients to keep their appointments and to have
the screening necessary to avoid complications, education of
caregivers, and reminders and reports to physicians about the status of
their patients and the services they have received or missed.
Ideally, all Medicare beneficiaries should have access to these
services. However, in the current Medicare FFS system, coverage for
benefits to help those with chronic conditions, such as prescription
drugs, extended nursing home or home health services, are not provided.
In addition, the traditional Medicare FFS program does not adequately
address the needs of those with chronic conditions. In fact, the
traditional Medicare FFS system does not historically promote disease
management but instead is based on treatment goals to improve or cure a
condition. These aims are in contrast to the treatment goals for those
individuals with chronic conditions, which are to maintain the ability
to function and/or to prevent additional deterioration. Medicare+Choice
programs have demonstrated that disease state management programs are
an important component of a comprehensive, integrated health care
benefit.
The future success of these innovative disease management programs
offered by Medicare+Choice plans depends on the long-term stability of
the Medicare+Choice program. As effective as Medicare+Choice plans are
at using disease management strategies to improve health care quality
for Medicare beneficiaries, we cannot succeed without adequate funding
and a sensible regulatory environment. The current system has forced
many plans to make difficult decisions regarding their participation in
the Medicare+Choice program. Regrettably, this loss of choices means
that fewer Medicare beneficiaries have access to the high quality
health care services that are delivered through the disease management
programs that Medicare+Choice plans are implementing.
Statement of the American Association for Homecare, Alexandria,
Virginia
The American Association for Homecare (AAHomecare) would like to
take this opportunity to thank the Ways and Means Health Subcommittee,
Chairwoman Johnson, and Ranking Member Stark for their continued
involvement in Medicare Regulatory Reform. AAHomecare is a national
association whose members represents a continuum of home healthcare
including suppliers of durable medical equipment (DME), orthotics and
prosthetics, home health agencies (HHAs) and suppliers of re/hab and
assistive technology. As a representative of both DME suppliers and
HHAs, AAHomecare supports the Subcommittee's effort to improve the
regulatory, appeals and contracting processes under the Medicare
program. However, we would like to take this opportunity to express
some of our concerns regarding specific provisions in H.R. 3391, which
we believe may affect a provider's or supplier's due process rights.
CORRECTION OF MINOR ERRORS AND OMISSIONS
H.R. 3391 establishes a process for correcting minor errors and
omissions on claims without requiring the provider or supplier to go
through the expense of an appeals process. Currently, most claims are
denied because the claims failed to comply with one or two technical
requirements. For instance, a provider or supplier may have failed to
secure the physician's signature on all verbal orders prior to billing,
or may have failed to include any minor treatment changes. These
omissions or errors are easily correctible, but because supplier or
provider are required to appeal claims, payment can be delayed for up
to a year. This can put a substantial amount of financial stress on a
provider or supplier and can severely interfere with their capacity to
continue their business operation.
AAHomecare strongly supports the Subcommittee's position that
providers and suppliers should not have to undergo an appeal simply
because of a minor error or omission. By allowing them to correct
discrepancies in claims submitted to a carrier, without an appeal, the
Subcommittee is ensuring a more efficient and cost-effective Medicare
system. Furthermore, this provision is a useful tool in ensuring, not
only that a provider or supplier will not undergo economic hardship,
but also that a beneficiary will have continued access to services. We
urge that any regulatory reform should include a provision such as this
for correction of minor errors and omission.
NEW EVIDENCE AND ALJ HEARINGS
While we are supportive of the general intent behind the regulatory
reform provisions of H.R. 3391, we are extremely concerned by Section
403(a)(3). Under Section 403(a)(3) a supplier or provider may not
introduce evidence in an appeal that was not presented at the
reconsideration hearing conducted by the Qualified Independent
Contractor (QIC), unless there is good cause which precluded the
admittance of such evidence before or during reconsideration.
The Centers for Medicare and Medicaid Services (CMS) are adopting a
similar stance to the one potentially created by Section 403(a)(3). On
November 15, 2002, CMS issued its proposal for the implementation of
BIPA, which included a provision that would severely curtail evidence
presented by a supplier or provider during an ALJ hearing.
Specifically, the proposed rule 405.1019 states submission of any new
evidence that was not presented to the QIC must be accompanied by a
written statement. Under this proposed rule the statement must explain
why the evidence was not previously submitted to the QIC, and the ALJ
can only admit the evidence if good cause exists.
Both Section 403(a)(3) and the CMS proposed Section 405.1019
significantly restrict the opportunity a provider or supplier has to
offer additional and new evidence during an ALJ hearing, in effect
requiring a full and early presentation of evidence at the QIC level.
CMS has based this proposed regulation, on its long held belief that a
high reversal rate on appeals is due to the presentation of new
evidence at the ALJ level. While it is true that many claims have been
reversed at the ALJ level, the decisions to reverse denials are not
arbitrary but rather are founded on the new evidence substantiating a
provider's contention that the overpayments are unfounded.
Furthermore, a provider's and supplier's right to introduce new
evidence should be safeguarded by any regulatory reform. Often, the ALJ
will reverse a denial based on evidence that was unavailable to the
interest party during the QIC review.
For example, the probe sample data and methodology used by the
carrier is not available to a supplier or provider before the ALJ
hearing. A supplier or provider will have to request the probe sampling
methodology from the carrier after the reconsideration decisions have
been rendered. Therefore, the interested party does not have immediate
access to this information from the carrier, but must wait for the
information to be turned over. Once the interested party received the
information, he or she would need to consult with experts and expend a
significant amount of resources to review the sample methodology after
receiving it, so as to determine whether the contractor's sample lacks
statistical weight or whether the methodology used was erroneous.
We strongly urge this Committee to make sure that any regulatory
reform allows providers and suppliers to introduce evidence of
erroneous sampling techniques during an ALJ hearing. Many cases that
reaches the ALJ have been reversed after the interested party presented
evidence showing that the sampling methodology was biased or that a
sample was incorrectly taken. In order to maintain due process and
ensure fairness, a provider or supplier should be allowed to introduce
this type of evidence.
Currently, providers and suppliers can provide live testimony and
may introduce new evidence during an ALJ hearing. They are not required
to provide good cause or submit a statement by explaining why the
information was not included. In fact, the ALJs have come to rely on
provider and supplier testimony as an aid when deciding whether the
interested party did have a reasonable basis to believe that the claim
would be covered. This has helped to ensure fairness and due process
during appeals. Both H.R. 3391 and 67 CFR 405.1019 would prohibit live
testimony that has repeatedly helped exemplify why the contractors
denial was incorrect.
In one case, the fiscal intermediary denied $20,000 in home health
claims representing an entire year of services for a patient who
suffered from Multiple Sclerosis (MS). The reason given for the denial
was that the patient's physician had not prescribed the commonly used
medicine for MS. The denial stated that the drug Athcar was not
identified by the Physicians Desk Reference for treatment of MS,
despite other references that list it as an alternative. In this case
the physician had prescribed it as an alterative because the patient
could not afford the commonly prescribed Interferon. At the ALJ level,
the HHA introduced evidence from the treating physician and relied on
other authoritative reference to show why the Athcar had been used
instead of Interferon. The physician was also able to show how the
alternate medication had been effective. Based on this testimony, the
ALJ was able to reverse the denial.
Conversely, H.R. 3391 and 67 CFR 405.1012 would allow contractors
to present any additional evidence, change the basis of their denial of
the claims and present additional testimony that they believe is
pertinent. Under both H.R. 3391 and CMS' proposed rule, contractors
would be required to provide the ALJ with any additional information
requested by the ALJ, so as to aid it in understanding the contractor's
position and helping it formulate its decision. Allowing contractors to
testify and present new evidence during the appeals process while
denying the same opportunity to an interested party would severely go
against due process and fairness. In essence, this would severely
undermine the position of suppliers and providers because they would
not be allowed to present evidence to contradict the contractor's new
arguments, and would not be allowed to adapt their position to reflect
contractor changes in arguments during an appeal.
AAHomecare urges the Subcommittee to establish a standard that does
not limit the type of information presented during an ALJ hearing. We
recommend that any regulatory reform should allow suppliers and
providers to present testimony of a treating physician opinions, expert
opinions, and provider and supplier testimony, as necessary, to the
ALJ. Furthermore, a supplier or provider should be allowed to present
evidence which was previously not available, or which at the time was
not relevant to the claim set forth by the contractor. It is important
to ensure that regulatory reform legislation should distinguish between
new evidence that involves readily available clinical documentation
from the provider or supplier from other Medicare evidence such as
expert opinion, clarifying treating physician opinions and documentary
evidence from providers or suppliers that are not directly involved in
a disputed claim, if due process is to be maintained.
LIMITED USE OF EXTRAPOLATION
The use of extrapolation can often lead to significant problems for
both DME suppliers and HHAs. Often the sampling methodology used during
extrapolation lacks any semblance of statistical validity, which in
turn can result in a significant expenditure of resources by providers
and suppliers. Furthermore, the use of extrapolation often results in
the drastically inflated overpayment. This large inflation will force
many providers and suppliers to pay hundreds of thousands of dollars,
and forces some into bankruptcy.
In one instance, the ALJ ruled in favor of an HHA after throwing
out the denials as well as finding the extrapolation and the sampling
methodology used by the physical intermediary as erroneous. While the
HHA received a favorable verdict, it had suffered irreparable harm,
leading to its bankruptcy even before the decision was rendered. This
case is of particular concern, given that the home health agency was
the only provider in that area for medically complex home health
patients.
Currently, the Durable Medical Equipment Regional Carriers (DMERCs)
also use extrapolation in determining overpayments. Not unlike HHAs,
DMEs are faced with inflated overpayments that are based on erroneous
sampling methodology. However, what is particularly disturbing is that
the DMERCs use extrapolation and base their denials on rules that have
not come into effect at the time the service was rendered. For these
reasons, AAHomecare strongly urges that the use of extrapolation and
sampling methodology should be curtailed.
AAHomecare believes that H.R. 3391 addresses many of the concerns
shared both by HHAs and DME suppliers. We support limiting the
circumstances in which a Medicare contractor can request a provider or
supplier to produce records or supporting documentations, to those two
circumstances delineated in Section 405(f)(3):
1. Lwhere either there is a sustained high level of payment error,
or
2. Lwhere documented education intervention has failed in
correcting the payment error.
Despite the limited use created by Section 405(f)(4), there is
still a great room for Medicare contractors to interpret Section 405
which may lead to unjustified use of extrapolation. Therefore,
AAHomecare urges that the Subcommittee clearly define the phrase ``high
level of payment error.'' The Subcommittee needs to provide contractors
with guidance (preferably detailed written guidelines within this bill)
as to what constitutes a high payment error. If this term is not
defined, the contractor could apply his own subjective definition of
``high level of payment error.'' By clearly defining what constitutes a
``high level of payment error'' the Subcommittee can prevent the
inconsistent application of extrapolation by different Medicare
contractors, as well as by the same contractor when reviewing different
health supplier or provider claims.
We would further urge the Subcommittee to add a provision that
would state that any payment errors will not be deemed to exist where
the provider can show that there exists some basis in the law to
support the claim as submitted. In this instance, we feel that it is
important to create a sense of security amongst providers and
suppliers, that they can in fact rely on existing laws and regulations
when submitting a claim. We strongly believe that a supplier or
provider should not be required to second guess the law, nor be
penalized for submitting claims based on a reasonable interpretation of
law. Under such a provision, the Medicare contractor would be allowed
to deny individual claims, but the provider or supplier could rely on
law relied on when appealing.
REGULATORY REFORM SHOULD NOT INCLUDE CONSENT SETTLEMENTS
Section 405(f)(5) of H.R. 3391 grants to the Secretary the power to
settle a projected payment with a provider or supplier by the use of a
consent settlement. Before offering a consent settlement, the Secretary
is required to inform the suppliers or providers of the contractors
finding of overpayment. The supplier or provider is then given the
opportunity to either accept the consent settlement or undergo
statistical valid random sampling.
Routinely, Medicare contractors have used consent settlement
agreements to strong-arm a provider into waiving their right to appeal,
despite their honest and usually well-founded belief that the denial
was an error. Often, a home health provider will settle its claims with
the contractor, not because it supports the contractor's finding, but
rather because of the costs they will incur if they fail to accept.
Providers and suppliers who do not settle will be forced to incur
greater costs associated with appealing the decision as illustrated in
the example below.
In one post payment audit, the fiscal intermediary denied 56% of a
sample of claims submitted by one small HHA. This percentage was
extrapolated to a $65,000 overpayment. In this case, the provider
refused to accept a consent settlement agreement and appealed all
claims to the ALJ. The ALJ in turn reversed over 95% of the denials.
Although, the HHA did receive a favorable outcome, it incurred
substantial costs associated with the appeal over the four years that
it took from the time of denial to the time of reversal.
If a provider or supplier chooses not to accept a proffered
settlement, then the contractor may apply the Statistically Valid
Random Sample (SVRS). An SVRS examines a larger number of claims,
usually consisting of 200-400 claims. Such an investigation by its very
nature is largely disruptive to the operation of home health agencies
and DME providers, and may force the business to cease all business
activity. Therefore, it is not surprising that many providers and
suppliers feel the need to settle, despite their honest belief that the
initial probe sample findings where inaccurate because of the
exorbitant costs associated with SVRS.
AAHomecare urges the Subcommittee to reconsider including consent
settlements in H.R. 3391 or any other regulatory reform legislation.
While the Subcommittee has addressed at least one problem associated
with consent settlements, i.e. limiting the use of extrapolation, we
believe that the detrimental effects associated with consent agreements
outweigh any potential benefits. If the Subcommittee allows the use of
consent settlements, it will unwittingly provide contractors with a
tool by which it may strong-arm service providers into settling, even
if consent settlements are used only in a fraction of reviewed claims.
Those providers who challenge the sampling methodology may be forced
into economic hardship associated with a SVRS or a lengthy appeal. The
Subcommittee may unwittingly place the provider or supplier in a
position in which it can no longer provider any services. This is of
particular concern where the home health provider or DME supplier
provide a specialized type of service in an area.
AAHomecare further recommends that if the Subcommittee decides to
include consent settlements in H.R 3391, it should create a provision
that allows a provider to settle, while still maintaining the right to
appeal the sample probe methodology used by the provider. A provider or
supplier should be allowed to appeal the probe method without
undergoing an SVRS, otherwise they may be subjected to unjust financial
burdens.
DEFERRING RECOUPMENT DURING APPEAL
H.R. 3391 prohibits any recoupment of overpayment until the
conclusion of the reconsideration hearing. We applaud this
Subcommittee's continued effort to create an insulating mechanism to
protect providers from wrongful payment recoveries. Currently,
providers and suppliers are required to make payment before going forth
in their appeals process, causing many of these companies to undergo
substantial financial hardship for a claim where an error exists in the
overpayment determination.
While AAHomecare agrees that the Secretary should not be allowed to
recoup overpayments until the conclusion of a reconsideration hearing,
we believe that this Subcommittee should further extend this provision
by limiting recovery until the claim has run its full course throughout
the appeals process and a final and binding decision has been rendered.
As Tom Scully testified last year, physicians, providers and suppliers
should have the same rights taxpayers enjoy. A taxpayer who is audited
has the right to withhold payment, as long as interest accrues, while
an appeal is pending. Both suppliers and providers should be entitled
to the same right throughout their entire appeal process. Instead, HHAs
and DME suppliers are required to pay the amount after the
reconsideration hearing, not allowing the party to avail himself of the
benefits of an ALJ hearing.
AAHomecare fully appreciates that a substantial controversy exists
concerning further delaying recoupment beyond reconsideration. However,
we base this recommendation on two well-founded premises. First,
recoupment of an extrapolated amount often results in eliminating an
opportunity for a provider or supplier to seek an appeal. If a provider
or supplier is forced to make payment of potentially hundreds of
thousands of dollars, they will undergo a severe financial burden if
they continue to incur the cost associated with an appeal. Second, it
is administratively difficult to recompute the amount of the
extrapolated overpayment after each level of appeal where some of the
sample claims are usually reversed.
We also recommend that any extrapolation should be dropped if the
provider or supplier obtains a reversal of 10% or more of the sample
claim denial on appeal. In such a case, the sample denials would seem
to not be a statistically valid representation of denied claims in the
universe of claims. If the overpayment represents more than 10% of the
provider or supplier revenue, we believe that the interested party
should be able to repay the amount during a three-year period. By this
means, the Subcommittee could ensure that companies will not suffer
financial hardship that will cause the HHA or DME supplier to either
cut back on the services it provides or file for bankruptcy.
AAHomecare would further recommend that an additional provision be
added to H.R. 3391. We believe that the Subcommittee should establish a
provision that would protect home health providers where overpayment
relates to an error in the administration of benefits by Medicare
itself. HHAs are susceptible to unknown amounts of liability due to
Medicare's own inability to appropriately process Medicare home health
PPS claim. A year ago, CMS determined that its system failed to make
the payment adjustment when a patient was admitted to another home
health agency or readmitted to the same agency within 60 days of
discharge.
AAHomecare recommends that the Subcommittee include legislation
that would limit the ability of CMS to institute retroactive payment
adjustments on any claims to more than one year previous. Financial
integrity cannot be maintained by a provider or services who is
required to carry on an indeterminate amount of financial liability
from one year to the next.
OASIS:
As of December 2002, CMS have instituted changes aimed at
decreasing the burdens associated with the collection of information
under the Outcome and Assessment Information Set (OASIS). CMS
eliminated two OASIS collection time point and seventeen data items.
Thirteen of the seventeen data items consist of demographic
information, which have been moved to the tracking sheet and should be
completed by agency office staff.
AAHomecare supports the implication of OASIS and the reduction of
paperwork. AAHomecare recommends that certain policy changes should be
incorporated as soon as possible. We believe that the Subcommittee
should also instruct the Secretary to request CMS to lengthen the
definition of ``in patient stay'' from 24 hours to 72 hours. We also
feel that it is important to instruct the CMS to widen the
recertification window from 5 days to at least 10 days to ensure
greater flexibility among for an agency to schedule assessment during
the patient scheduled visits. Lastly, we urge the Subcommittee to
instruct the Secretary to take steps to make OASIS electronic program
specification and the risk adjustment methodology readily available to
the public and allow the public to submit comments on any program
specification changes.
GUIDANCE BY SECRETARY OR AGENT
We strongly support limiting any sanctions on providers or
suppliers if they reasonably rely on the guidance of Section 102(c) of
H.R. 3391. Providers and suppliers should not be subject to repayment
of amounts that they received in reasonable reliance on the guidance
from the Secretary or an agent of the Secretary.
CONCLUSION
We appreciate this opportunity to express our concerns and present
our suggestions to the Subcommittee. We greatly value your continued
effort on these matters. AAHomecare strongly believes that there is
much at stake in regulatory reform, and recommend that any legislation
adopted should maintain due process and fairness. H.R. 3391 is a good
starting point for Medicare appeal and regulatory reform. We hope that
these comments and suggestions are helpful and look forward to working
with you to pass a regulatory reform legislation that will further the
objective of efficiency and fairness.
Statement of American Healthways, Nashville, Tennessee
American Healthways applauds the Subcommittee for their leadership
on the issue of disease management. We absolutely concur with Chairman
Johnson's belief that, ``Medicare beneficiaries with chronic disease
should benefit from advances in care management and advances in the
science of medicine.''
Without question, disease management programs are:
LEffective in improving and managing patient health;
LPromoting enhanced patient and physician satisfaction;
and
LReducing the costs of care, particularly for those
suffering from chronic diseases such as diabetes, heart failure,
cardiac disease, asthma and COPD.
In fact, peer-reviewed results from American Healthways clearly
demonstrate that well-conceived disease management programs can deliver
these outcomes for commercial, Medicare+Choice and Medicare Fee-for-
Service (FFS) populations.
As the leader in the industry, American Healthways has shown
statistically significant improvements in patient outcomes while at the
same time reducing aggregate costs of care--producing first year
savings in a diabetes program for Medicare FFS patients of
approximately $800 per patient.\1\ Since 1996, American Healthways'
aggregate savings for all programs for all customers have been greater
than $750 million.
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\1\ Cap Gemini Ernst & Young Study: Diabetes Care Coordination
Program Performance Evaluation for FFS Medicare Members with Diabetes,
2002.
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Yet despite this well-documented, empirical evidence, Federal law
does not provide the majority of Medicare beneficiaries access to
comprehensive, evidence-based disease management programs. Absent such
legislation, care for the millions of beneficiaries suffering from
chronic diseases will continue to be fragmented, and their costs to the
Medicare Trust Fund will continue to be significantly higher than they
would otherwise be.
In the face of new budgetary demands for a comprehensive
prescription drug benefit as well as much needed modernizations to the
existing Medicare program, the continued loss of these proven savings
adversely impacts patients, physicians, and taxpayers. With the onset
of millions of Baby Boomers into the Medicare program in the near
future, we must explore and implement responsible alternatives that
provide the best and most cost-effective care to all our seniors and
disabled Americans.
We thank Chairmen Johnson and Thomas for holding today's hearing.
We look forward to working with Members of Congress and interested
parties to advance this issue for the benefit of beneficiaries.
Statement of the American Heart Association
Heart Disease and Stroke Contribute Significantly to Chronic Illness
The American Heart Association is dedicated to improving the
quality of care available to patients suffering from or at risk for
heart disease, stroke and other cardiovascular diseases. Heart disease
is the nation's leading cause of death. Stroke is the number three
killer. Both are leading causes of significant, long-term disability.
Over 61 million Americans--about 1 in 5--suffer from some form of
cardiovascular disease, ranging from high blood pressure to myocardial
infarction, angina pectoris, stroke, congenital heart and vascular
defects and congestive heart failure. It is expected that heart
disease, stroke and other cardiovascular diseases will cost the nation
$351.8 billion in 2003, including $209.3 billion in direct medical
costs.\1\
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\1\ Statistics compiled from the American Heart Association Heart
Disease and Stroke Statistics--2003 Update.
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As Congress considers reform of the Medicare program, the enormous
burden that chronic diseases present to beneficiaries and to the
Medicare program must be addressed. According to recent research, 78
percent of Medicare beneficiaries have at least one chronic illness.
Almost 32 percent of beneficiaries have four or more chronic diseases,
and this group drives almost 79 percent of program spending.\2\
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\2\ Robert A. Berenson & Jane Horvath, Confronting Barriers to
Chronic Care Management in Medicare, January 22, 2003, Health Affairs
online (www.healthaffairs.org).
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The American Heart Association applauds the Committee on Ways and
Means Subcommittee on Health for holding a hearing to examine the
barriers to chronic care management. Effective ways to better manage
Medicare beneficiaries with chronic illness must be explored and
tested. While our testimony focuses on disease management as one
approach for addressing chronic illness, the Association looks forward
to continuing to work closely with Members of the Subcommittee to
address this and other important strategies for managing chronic
illness.
Disease Management as an Approach to Confronting Chronic Illness
The growing desire by public and private payers to manage
individuals with chronic conditions and to contain rising health care
costs has resulted in a growing interest in disease management
strategies. This interest is driven in part by the demographics of an
aging population.
Disease management has emerged as a potential strategy for
enhancing the quality of care received by patients suffering from one
or more chronic conditions. Cardiovascular disease, including
congestive heart failure and hypertension, are often the focus of
disease management programs. Given this growing interest in disease
management, the American Heart Association recently convened a group of
volunteer experts in cardiovascular disease and disease management to
study the issue and prepare an in-depth report examining the trend and
it's potential impact on the quality and cost of health care. The goal
of the project was to develop core principles for disease management of
patients with cardiovascular disease. We would be pleased to share
additional information about our research with Members of the
Subcommittee.
The American Heart Association Urges Policymakers to Focus on Quality
After conducting extensive research, the American Heart Association
established a set of principles to guide its work in disease
management. We believe that these general principles should be applied
to disease management programs in both the public and private sectors
and consistently across disease states and patient populations.
Although a number of existing disease management programs seek to
balance cost containment and quality, quality and improved patient
outcomes must always be the priority.
Principles for Disease Management
The American Heart Association recommends the following guiding
principles for disease management:
(1) The main goal of disease management should be to improve the
quality of care and patient outcomes.
Evaluation of disease management programs should be based on more
than just a reduction in health care expenditures. The emphasis should
be on the ``value'' of disease management (i.e., the extent to which
disease management efforts result in better quality for a given
investment rather than on cost savings alone). Improvements in quality
of care and patient outcomes should be the primary indicator of
successful disease management. The use of performance standards in
assessing quality of care and outcomes is critical in evaluating
success.
(2) Scientifically derived, evidence-based, consensus-driven peer
reviewed guidelines should be the basis of all disease
management programs.
Disease management strategies should be derived when available from
scientifically-based guidelines such as those written by the American
Heart Association/American Stroke Association and groups such as the
American College of Cardiology and the American Academy of Neurology.
These guidelines represent consensus in the cardiovascular disease and
stroke communities regarding appropriate treatment and management of
patients with cardiovascular disease and stroke. Careful attention must
be given to the appropriate translation of these scientifically based
guidelines into disease management practices.
(3) Disease management programs should increase adherence to treatment
plans based on best available evidence.
An important focus of disease management should be to influence the
behavior of providers, patients and other caregivers to better
understand and adhere to treatment plans that will help improve patient
outcomes. The targets of such efforts may include a broad community of
caregivers, e.g., physicians, nurse practitioners, family members and
community-based organizations. To be meaningful, it is essential that
such treatment plans be derived from the best available clinical and
scientific evidence. The evidence and resulting treatment plans should
be revisited periodically to reflect evolving standards and scientific
knowledge.
(4) Disease management programs should include consensus-driven
performance measures.
Improved quality of care and outcomes for patients with
cardiovascular disease and stroke should be the pivotal measurement
upon which the success of a disease management program is evaluated. To
measure improved quality of care and outcomes, consensus-based
performance measures should be used to evaluate a disease management
program's effectiveness. Performance measures used in evaluating
disease management programs should be those measures that are developed
by a broad consensus-driven process such as the National Quality Forum
and/or others. Ideally, these performance measures should be evidence-
based.
(5) All disease management efforts must include ongoing and
scientifically based evaluations, including clinical outcomes.
Disease management programs have not traditionally undergone
rigorous scientific evaluation regarding their impact on patient
outcomes. The true measure of any health intervention is whether
patients are better off having received the service or care provided.
This determination requires a meaningful examination of clinical
outcomes. Frequent scientifically-based evaluations should be included
as a critical component of any disease management program, and these
evaluations should allow for continued improvement in the program to
maximize benefit.
(6) Disease management programs should exist within an integrated and
comprehensive system of care, in which the patient-provider
relationship is central.
Disease management services should not substitute for the patient-
provider relationship(s), particularly the physician-patient
relationship that is critical to the delivery of effective care.
Instead, disease management programs should be one of several
strategies employed to support and enhance the patient-provider
relationship, resulting in an overall improvement in the quality of
care and coordination of care delivered to patients with cardiovascular
disease and stroke.
(7) To ensure optimal patient outcomes, disease management programs
should address the complexities of medical co-morbidities.
Many disease management programs are designed to treat single
disease states. A significant population of patients with chronic
disease suffers from multiple co-morbidities. Some of the greatest
challenges in caring for these patients involve the complex
interactions of these co-morbidities. Disease management programs and
guideline committees should develop algorithms and management
strategies to fully address patients with co-morbidities.
(8) Disease management programs should be developed to address members
of the under-served or vulnerable populations.
Currently, most disease management programs arise from employer-
based, private health plans. Although a number of states have begun
using disease management approaches within their Medicaid programs, in
general, most disease management programs serve an employed, insured
and healthier population. Disease management programs should be
developed to incorporate or to specifically address the unique
challenges of the under-served and vulnerable populations.
(9) Organizations involved in disease management should scrupulously
address and avoid potential conflicts of interest.
Organizations that provide disease management services should act
in the best interest of the patient and avoid conflicts of interest.
The primary goal of disease management organizations should be to
improve patient outcomes. Efforts to achieve secondary goals such as
product marketing or product sales, should not adversely affect the
primary goal of improving patient outcomes. To the extent any conflict
of interest arises that may compromise the primary goal of improving
patient outcomes, it should not be pursued.
The American Heart Association Provides Leadership and Consensus
It is fitting that the American Heart Association adds its voice to
the many that are currently speaking to the issue of disease
management. The American Heart Association is at the forefront of
investigating ways to improve the quality of care for patients with
cardiovascular disease and stroke. We have developed and are currently
operating a number of patient-centered programs. Our scientific and
programmatic efforts have increased and evolved with the dynamic
advances made in cardiovascular and stroke care. Importantly, the
American Heart Association represents not just providers but all
stakeholders in cardiovascular and stroke care--physicians, nurses,
emergency medical support personnel and others. Most significantly, the
American Heart Association represents the patient.
Conclusion
It is critical to ensure that disease management programs are
driven by the clinical needs of patients rather than by cost
containment or financial profit alone. While we recognize the need for
cost containment and careful allocation of health care resources,
improving quality of care must be the primary goal of any disease
management program. While disease management has the potential to have
a profound affect on patients with chronic illness, additional study is
needed to better document the impact on quality of care and cost
containment. The Association recommends:
LDisease management programs in the public and private
sector adhere to the principles delineated above.
LBefore adopting disease management for all Medicare and
Medicaid beneficiaries, the Association recommends that Congress
continue to evaluate disease management techniques until objective
outcomes research has demonstated efficacy. Continued evaluation of
disease management programs is critical.
The American Heart Association appreciates the opportunity to
provide these comments to the Committee on Ways & Means Subcommittee on
Health on this timely and important issue, and we look forward to
working with the Subcommittee as it continues to consider the
appropriate integration of disease management into the Medicare
program.
Statement of the American Pharmaceutical Association
The American Pharmaceutical Association (APhA) appreciates the
opportunity to provide our perspective on the important topic of
chronic disease management. APhA is the national professional society
of pharmacists, representing approximately 50,000 pharmacists. Chronic
care management, best provided through collaboration between
physicians, pharmacists, and other health care providers is valuable
for the most important person in the health care system: the patient.
It is an appropriate step towards preventing the long-term human and
financial costs associated with chronic disease.
Considerable evidence demonstrates that improved patient health and
cost savings are achieved when pharmacists play an integral role in the
health care team. A 1990 study by the HHS Inspector General concludes,
``there is strong evidence that clinical pharmacy services add value to
patient care and reduce healthcare utilization costs. . . . Such value
includes not only improvements in clinical outcomes and enhanced
patient compliance, but also reductions in health care utilization
costs associated with adverse drug reactions.'' Clearly, there is much
to be gained with implementing chronic care management that includes
pharmacist-provided medication therapy management services.
Disease management represents the evolution of health care and its
response to the onset of chronic diseases--which until pharmaceuticals
became more prevalent were often deadly diseases. Little else provides
as great a return on investment as disease management when dealing with
the chronic care population. A recent analysis using 1999 Medicare
claims data showed that approximately 78 percent of Medicare
beneficiaries have at least one chronic disease; almost 32 percent have
four or more, and these patients drive almost 79 percent of program
spending.\1\ Clearly, it is necessary for us to address the situation
before it becomes a crisis.
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\1\ R.A. Berenson and J. Horvath, ``The Clinical Characteristics of
Medicare Beneficiaries and Implications for Medicare Reform.''
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We are encouraged by the Administration's attention to the issue,
particularly the recent announcement of the Centers for Medicare &
Medicaid (CMS) new demonstration projects. Clearly they have recognized
that disease management allows health care practitioners to provide
focused, coordinated care resulting in better patient outcomes while
using our scarce health care resources more efficiently. Medication
therapy management is a critical component of any successful chronic
care management program and encourage the Committee to consider
including authorization and payment for this pharmacist-provided care
in any of their proposals.
An Evolution to ``Self-Care''
Patients have become ``self-managers'' of their care, as they
function in outpatient settings, including their homes. The greater
number of diseases being treated with pharmaceuticals combined with the
higher level of medication complexities demands that we partner with
patients to manage their care. Assisting patients with managing their
chronic diseases has been proven to result in a positive impact.
Pharmacists--the medication experts--are the best equipped and most
appropriate health care providers to manage the pharmacy component of
chronic care management.
Others support this concept of self-care and the need for non-
physician provider involvement, including the Journal of the American
Medical Association which reported, ``Under a system designed for acute
rather than chronic care, patients are not adequately taught to care
for their own illnesses. Visits are brief and little planning takes
place to ensure that acute and chronic needs are addressed. Lacking is
a division of labor that would allow non-physician personnel to take
greater responsibility in chronic care management. . . . For chronic
conditions, patients themselves become the principal caregivers.'' \2\
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\2\ JAMA, October 9, 2002--Vol. 288, No. 14.
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No Better ``ROI''
Challenges in chronic care management include making the best use
of medications, including helping patients to comply with medical
regimens. The inclusion of pharmacists in chronic care management
programs yields a significant return on investment. Studies showcase
the positive impact pharmacists have on managing the chronic conditions
associated with stroke, asthma, high cholesterol, and diabetes. The
data calls for the inclusion of pharmacists as a participating member
of the health care team when developing chronic disease management
programs.
One of the most successful chronic care management programs is
Project ImPACT: Hyperlipidemia. Project ImPACT was a two-year,
community-based demonstration project of the America Pharmaceutical
Association Foundation \3\ documenting the contributions pharmacists
make in reducing the risk of heart attack and stroke for patients with
high cholesterol. Project ImPACT involved 397 patients, 26 pharmacy
practice sites in 12 States, and over 60 pharmacists and 180
physicians. Once patients were enrolled, the process of collaborative
care included the pharmacist taking blood samples, conducting follow-up
visits, and informing physicians about the patient's progress.
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\3\ Funded by Merck & Co. Inc.
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The study showed that the risk for heart attack is reduced by one-
third when patients, pharmacists, and physicians collaborate.
Specifically, 90% of the patients stayed on their medications, a
compliance rate of two to four times better than the average 40%
reported in the literature for similar studies. Project ImPACT shows
that pharmacists, working together with patients and their physicians,
can save lives and make a significant contribution in reducing the
annual expenditure of $100 billion spent on treating coronary artery
disease.
Lack of Payment: A Barrier to Chronic Care Management in Medicare
While there are several components to a good chronic care
management program, management of the patient's drug regime is at the
heart of any program. Pharmacists are the critical member of the health
care team needed to manage this care. As non-physician providers,
however, pharmacists face an uphill battle when trying to provide these
services to the patients they serve. Currently, the Social Security
Act's definition of ``covered services'' does not include medication
therapy management services of pharmacists. Lack of payment by Medicare
is a key obstacle in implementing these cost-saving, life-enhancing
programs.
This lack of payment reflects the practice of pharmacy and
construct of Medicare when the program was created. Obviously, health
care, including the practice of pharmacy, has evolved since the
creation of Medicare. Amending Medicare to include medication therapy
management services provided by pharmacists would better reflect
pharmacists' integral part of the health care team. Without this
change, the most well-intentioned programs may never materialize due to
lack of compensation. Payment for the provided services, in addition to
the drug product, is critical to any program's success.
All Medicare beneficiaries should receive the attention they need
to avoid medication-related complications. Drug therapy management goes
far beyond the pharmacists' traditional dispensing services, with
pharmacists working collaboratively with physicians to match therapies
to patients' unique needs, to streamline multiple drug regimens, or to
monitor patient response and advise physicians on changes in dosage,
medicine, or delivery method.
If we were to design Medicare today, it is highly unlikely that we
would pay for the services necessary to diagnose a patient's disease
but not cover the treatment, both the product and the services provided
by practitioners, necessary to address the disease. We encourage the
Committee to consider paying for these pharmacist-provided medication
management therapy services. Such a simple step would make significant
inroad in addressing these preventable, costly health problems.
Statement of the American Society of Health-System Pharmacists,
Bethesda, Maryland
The American Society of Health-System Pharmacists (ASHP) is pleased
to submit this statement for the record of the Subcommittee on Health's
hearing on eliminating barriers to chronic care management in Medicare.
ASHP is the 30,000-member national professional association that
represents pharmacists who practice in hospitals, long-term care
facilities, home care, hospice, health maintenance organizations, and
other components of health care systems. ASHP believes that the mission
of pharmacists is to help people make the best use of medicines.
Assisting pharmacists in fulfilling this mission is ASHP's primary
objective.
Pharmacist medication therapy management services are important to
improving patient care, particularly for high-risk patients with
chronic conditions or taking multiple medications. ASHP facilitates
pharmacists in this role by offering educational programming and
clinical information to assist pharmacists in creating an environment
in which medication therapy management services can be fully utilized.
ASHP promotes and encourages pharmacists to complete postgraduate
residency training and to seek board certification in specialty
practice. ASHP also advocates that state legislators and licensing
boards update their pharmacy practice acts and regulations to
explicitly authorize pharmacists to work in a collaborative
relationship with physicians and others on the health care team to
improve medication use. Currently, thirty-nine states, the Indian
Health Service, the Department of Veterans Affairs, and other federal
facilities authorize pharmacists to provide medication therapy
management services.
The Medicare program does not recognize nor compensate pharmacists
for providing these services. ASHP, as part of a coalition including
six national pharmacist organizations, is seeking to amend Medicare
statutes to include pharmacists as providers of medication therapy
management services. We firmly believe this will eliminate an important
barrier in the Medicare program to improved chronic care management.
Pharmacists Have an Integral Role to Play in Any Successful Chronic
Care Management Program
Health care in the United States, particularly chronic care, relies
extensively on a growing array of complex medications. In fact, the
average Medicare beneficiary fills almost 20 prescriptions each year.
Beneficiaries with chronic conditions average more than 26
prescriptions a year.
Because medications are a significant component of most treatment
strategies, pharmacists must be involved in all stages of planning and
implementing disease management and/or case management programs. The
entire health care team, including patients, physicians, nurses, and
other practitioners, should have access to the pharmacist, the health
care professional with specialized academic and professional training
focused most extensively on pharmacotherapeutics and medication therapy
management.
Pharmacists are experts in drug therapy utilization and management.
Working closely and collaboratively with physicians, the pharmacist can
serve as a trusted counselor to help streamline drug therapies
prescribed by a number of different specialists and match effective
therapies with patients' unique needs. The pharmacist can also play a
vital role in educating patients about their medications and the
condition for which they are prescribed, completely reviewing the
patient's medication history, monitoring the patient's drug therapy
over time, screening for adverse effects, and monitoring for patient
compliance.
These services are already being provided on a widespread basis for
a number of chronic conditions, including asthma, cardiovascular
disease, depressive disorders, diabetes, and pain. It is important to
point out however, that 32 percent of Medicare beneficiaries have four
or more chronic conditions. Thus, a more comprehensive approach to
caring for patients is often needed. Pharmacists have a unique
expertise that allows them to focus on a patient's overall drug regimen
rather than on any one disease state.
Over the past two decades, ASHP has seen pharmacists become
increasingly involved in improving patient care through the provision
of medication therapy management services. This is due in part to the
growth in managed care organizations that have a financial incentive to
reduce the frequency of expensive and largely preventable medication-
related complications. Under managed care programs, pharmacists have
expanded their function to include reviewing drug therapies for
appropriateness, monitoring patients' responses to therapy, and
counseling patients about compliance, potential drug interactions, and
other matters. Many plans have even moved to support specialized
pharmacist-run clinics for patients with chronic diseases like
hypertension, asthma, and diabetes.
ASHP's 2001 national survey of the ambulatory care responsibilities
of pharmacists in managed care and integrated health systems confirms
that there has been a dramatic rise in the number of practice sites at
which pharmacists provide this type of care, jumping from 38% to 69% of
those surveyed from 1999 to 2001. With the continued growth of
medication use and the focus on improving therapy while controlling
health care spending, this number is expected to continue to grow.
Research Demonstrates That Integrating Pharmacists into the Health Care
Team Improves Care, Reduces Health Care Spending
Drug-related morbidity and mortality are significant problems in
the United States. The 1999 Institute of Medicine report, ``To Err is
Human: Building a Safer Health System,'' noted that medication-related
complications are a leading cause of death in the United States. A
study published in the March/April 2001 edition of the Journal of
American Pharmaceutical Association also reported that medication-
related complications among ambulatory patients cost the United States
an estimated $177.4 billion in 2000, a number that has more than
doubled since last studied in 1995.
According to the 1999 IOM report, ``[b]ecause of the immense
variety and complexity of medications now available, it is impossible
for nurses or doctors to keep up with all of the information required
for safe medication use. The pharmacist has become an essential
resource . . . and thus access to his or her expertise must be possible
at all times.''
Pharmacist involvement on the health care team helps to avoid
unnecessary or counter productive treatments and streamlines the
overall drug regimen to improve patients' quality of life. In addition,
pharmacists help avoid medication-related complications that result in
unnecessary physician office and emergency room visits, and therefore
increased health care spending. A study in the March/April 2001 edition
of the Journal of the American Pharmaceutical Association demonstrates
that for every $1 spent on prescription drugs, $1.60 is currently spent
correcting problems associated with prescription drug use. Including
pharmacists on the health care team represents a meaningful response to
this expensive problem.
As noted previously, many managed care programs and other private
payers have recognized this benefit and have begun to utilize
pharmacists in this role. This includes the city of Asheville, NC,
which offered certain disease state management and medication therapy
management services to city employees and found that these services
decreased cost, improved care, and improved work absentee rates.\1\
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\1\ The Asheville Project. Pharmacy Times. Romaine Pierson
Publishers, Inc. Westbury: NY. October 1998. Updated, Asheville Project
Continues to Produce Positive Results. America's Pharmacist. May
2000:43-44.
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Several State Medicaid programs and demonstration projects have
also designed case management programs that utilize pharmacist
medication therapy management services. For example, the Iowa Medicaid
program designed a benefit to allow physicians and pharmacists to work
together to closely scrutinize the total drug regimens of their most
complex patients, those taking at least four medications and with at
least one of twelve disease states. Eligible patients who participated
in the program received an initial assessment by the pharmacist who
then made written recommendations to be reviewed by the patient's
physician. The pharmacist then worked with the patient to resolve any
problems and provide follow-up assessments. The December 2002 final
report of the Iowa Medicaid Pharmaceutical Case Management Program
found that the program served to significantly improve medication
safety and did not result in any increased costs to the Medicaid
program.\2\ This suggests that payment for professional patient care
services was offset by reductions in emergency room and outpatient
facility utilization.
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\2\ PCM Evaluation Team from the University of Iowa Colleges of
Public Health, Pharmacy, and Medicine, ``Iowa Medicaid Pharmaceutical
Case Management: Report of the Program Evaluation.'' As posted on the
Iowa Pharmacy Association's website, www.iarx.com, on 02/25/2003.
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The report notes:
LPharmacists detected 2.6 medication-related problems per
patient.
LThe most common recommendation (52%) made by pharmacists
was to start a new medication, indicating that many patients have
untreated conditions.
LPharmacists also recommended discontinuation of
medications 33% of the time.
LPhysicians and pharmacists responding to the survey
agreed that inter-professional discussions led to better quality of
care, better health outcomes and increased continuity of care.
The medical literature overwhelmingly recognizes and supports the
value of including pharmacists on the health care team as means to
improve patient care and control health care spending.
The Current System is a Barrier to the Role Pharmacists Play in Chronic
Care
Some third-party payers are heeding the medical literature and
covering pharmacist participation on the health care team. However, the
Medicare program currently does not recognize nor compensate
pharmacists for providing medication therapy management services. Thus
access to pharmacist medication therapy management services remains
inconsistent among different patient populations, with our nation's
most ``high-risk patients,'' Medicare beneficiaries, having
significantly limited access to these services.
In order to ensure access to pharmacist medication therapy
management services, Congress should amend Medicare Part B to recognize
pharmacists as providers of service in a similar manner as nurse
practitioners, physician assistants, registered dieticians, and other
non-physician providers are recognized.
Six national pharmacy organizations, the Academy of Managed Care
Pharmacy, American College of Clinical Pharmacy, American
Pharmaceutical Association, American Society of Consultant Pharmacists,
American Society of Health-System Pharmacists, and the College of
Psychiatric and Neurologic Pharmacists, have created the Pharmacist
Provider Coalition to promote legislation to recognize pharmacist as
providers in the Medicare program. Legislation was introduced in the
House in the 107th Congress, H.R. 2799, the Medicare Pharmacist
Services Coverage Act, and is expected to be introduced again soon in
the 108th Congress.
In an effort to eliminate a significant barrier to chronic care
management, ASHP strongly urges this Subcommittee to pass legislation
that would ensure Medicare beneficiaries have access to pharmacist
medication therapy management services.
Statement of Michael Matthews, Chief Executive Officer, Central
Virginia Health Network, L.C., Richmond, Virginia
Millions of Medicare patients suffer from multiple chronic
illnesses that affect the quality of their lives and, as we well know,
drive up healthcare spending. These individuals require complex care to
address a variety of needs, and those with the most severe illnesses
account for the greatest spending. Nearly two-thirds of Medicare costs
are spent on beneficiaries with five or more chronic conditions.\1\
Nationally, payers incurred about $510 billion in medical costs in
2000,\2\ and Congressional Budget Office testimony given last September
before the Special Committee on Aging indicates that in 1997, almost 90
percent of all Medicare costs stemmed from the costliest 25 percent of
Medicare patients.\3\
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\1\ Berenson and Horvath. ``Confronting the Barriers to Chronic
Care Management in Medicare.'' Health Affairs, January 22, 2003.
\2\ Baker G. ``Integrating Technology and Disease Management--The
Challenges.'' Healthplan Magazine, September/October 2002, Vol. 43, No.
5.
\3\ Crippen/Congressional Budget Office. ``Disease Management in
Medicare: Data Analysis and Benefit Design Issues.'' Testimony given
September 19, 2002, before the Senate Special Committee on Aging.
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These patients include people like a 77-year-old man with type 2
diabetes whose health has improved significantly since he enrolled on
September 13, 2002, in a care management program we offer at CenVaNet
(Central Virginia Health Network, L.C.), an integrated delivery system
comprised of 10 not-for-profit hospitals and 900 community-based
physicians. Like many Medicare patients, this man was unable to control
his diabetes on his own, and his high blood sugar levels made him feel
fatigued.
By coaching this elderly man on the phone, through mailings and
even during three personal visits to the man's home, our nurse care
managers helped him learn to take an active role in better managing his
disease. Our care managers also coordinated with his doctors to adjust
his insulin dosage appropriately and schedule the tests he needed. Such
proactive intervention is possible with the help of a user-friendly
software platform that helps care managers identify potential problems
and direct patients to appropriate healthcare providers, while
providing evidence-based national treatment guidelines, medical
information and other resources.
Since enrolling in our program, this particular patient has seen
some significant changes. He now exercises and monitors his blood sugar
levels every day, follows diet recommendations and takes his medicine
as instructed by his physician. Importantly, his blood sugar levels
also have improved, making him less likely to end up in the emergency
room or be hospitalized, thus avoiding costly health complications in
the future.
This man is not alone. CenVaNet has seven care managers (registered
nurses and social workers), each treating between 50 and 70 patients,
who provide in-home, telephonic and online care management focusing on
four chronic diseases common in the Medicare population: congestive
heart failure, chronic obstructive pulmonary disease, diabetes and
asthma.
Our program is one of 16 sites nationwide participating in the
Medicare Coordinated Care Demonstration (MCCD) project sponsored by the
Centers for Medicare and Medicaid Services to evaluate the
effectiveness and cost savings of such care management programs. We
have enrolled more than 1,000 patients in this project, with about 460
patients actively receiving care management services (vs. those in the
control group). Our successful recruitment effort has been possible
because of the support of leading physician groups in our area.
Barriers to the Care of Chronically Ill Medicare Patients
Our care management program at CenVaNet seeks to address the four
main barriers to treating chronically ill Medicare patients:
1. LLack of prescription drug coverage for Medicare patients--Many
Medicare patients cannot afford their medicines, so they simply stop
taking them. Scientific literature indicates that patient behaviors,
including whether they comply with their doctors' instructions, have a
real effect on clinical outcomes. In fact, the American Heart
Association testimony given at this hearing stated that ``An important
focus of disease management should be to influence the behavior of
providers, patients and other caregivers to better understand and
adhere to treatment plans that will help improve patient outcomes.''
2. LPoor health literacy--People with multiple conditions may not
be well informed about their diseases, and often are prescribed a
variety of medicines, each with its own instructions on when and how to
take it. When patients do not understand these instructions, they may
take their medicines or follow other treatments incorrectly, leading to
additional health problems. Unfortunately, the people who most need to
understand their conditions and treatments tend to be those with the
greatest deficits in knowledge, which leads to poor health status in
these already at-risk patients.
3. LMultiple data sources, which result in fragmented care--Our
current healthcare system segments information about a patient's health
into separate ``silos'' (hospitals, group practices, pharmacies, home
care companies) that rarely have the capability of exchanging data with
each other. Patients with multiple chronic conditions can visit several
different physicians, and none will have a record of the medications
the others prescribed. To provide more thorough care, medical
professionals must coordinate their efforts, yet in many cases their
information systems are not compatible and do not allow for such
integration.
4. LLack of reimbursement for the care coordination needed--
Medicare does not reimburse for the vital services of care managers,
who address these problems in the healthcare system by educating
patients and facilitating the physician/patient relationship. Nor does
Medicare reimburse for the purchase of software platforms that
integrate the different aspects of a patient's care.
This last barrier is a significant one. Proper reimbursement for
care management services and technology may encourage more health
organizations to take on the costly, complicated process of
implementing a robust care management program, which involves:
LDetermining which patients have a particular disease, and
of those, which patients are most at risk for complications and may
benefit most from appropriate intervention
LRecruiting and enrolling patients, which takes
considerable time and effort
LPerforming interventions, such as educating patients and
coordinating care
LObtaining care management support, such as a software
platform, which requires:
LPurchasing the technology
LTraining staff on its use
LImplementing the system
LSupplying ongoing maintenance and support
LEnsuring patient retention in the program
LMeasuring and analyzing clinical, financial and
behavioral outcomes
LEvaluating the program and making necessary adjustments
As the eHealth Initiative stated at this hearing, there is a need
for the Medicare payment system to reimburse physician services for
care coordination.
CenVaNet has Made Progress Overcoming These Barriers
Although there still are challenges to overcome, particularly in
the area of reimbursement, CenVaNet has made significant progress, as
our success with the 77-year-old diabetic man described above shows.
While Congress debates the issue of a Medicare prescription drug
benefit, CenVaNet has taken a creative approach to pursuing other
funding sources for our patients' prescription medicines. We educate
patients about prescription drug savings cards and encourage providers
to prescribe less costly medications, knowing that patients will be
more likely to take medicines they can afford. We also are exploring
grant funding opportunities.
Additionally, our care management program addresses health literacy
through in-depth patient education efforts. We have sevencare managers
dedicated to the Medicare demonstration project, and they offer not
only telephone counseling, but also actual in-home visits with patients
to provide more individualized care.
To supplement our care managers' patient education efforts, we
offer other resources for patients to learn about their health, such as
printed and electronic materials. Through the care management software
technology developed by Pfizer Health Solutions Inc (PHS), the care
management subsidiary of Pfizer Inc, our patients can take advantage of
a vast library of reliable health information and access patient tools
designed to improve their care and increase their knowledge of their
chronic conditions.
This technology also addresses the problem of fragmentation of
information. Care managers, physicians and patients are linked together
by using the same software, increasing communication and improving the
quality of care. We will further strengthen this connectivity by 2004,
when automated interfaces will allow hospital labs, home care companies
and others involved in a patient's care to download information
directly into our software platform. This will eliminate the need for
patients to recall which diagnostic tests they had performed and why.
All of these capabilities are important steps in improving the care our
Medicare patients receive.
Finally, we are encouraging Medicare reimbursement for care
management services by participating in the Medicare Coordinated Care
Demonstration project, which we are confident will show that proactive
care management is both clinically effective and cost-effective, and
should qualify for Medicare reimbursement.
What Sets CenVaNet Apart?
The overwhelming number of patients we have enrolled in the
Medicare demonstration project makes CenVaNet unique. Patient
enrollment is a key component of making a care management program
viable, and our enrollment figures are a testament to our success.
Many care management programs, especially in the commercial sector,
do not take the extra step we do of providing home visits with
patients; however, we find the personal interaction in a patient's home
environment gives us greater insight into our patients' needs. In-home
visits can even alert us to other problems, such as patients who do not
have working smoke detectors in their homes, so our care managers can
coordinate a solution with the local fire department.
Finally, early behavioral outcomes from our participation in the
demonstration project are promising. As of January 2003, more patients
with cardiovascular disease had become competent in the following areas
after an average of six months of follow-up care at CenVaNet:
LTaking their medications (31 percent increase)
LMonitoring their own blood pressures and weight
(increases of 31 percent and 23 percent, respectively)
LUnderstanding the symptoms of cardiovascular disease (15
percent increase)
LManaging their diet and nutrition (12 percent increase)
Although it is still too early in the five-year demonstration
project to determine whether our patients' health has improved (i.e.,
through clinical outcome measurements such as blood pressure values,
etc.), these changes in behavior indicate that patients are taking a
more active role in managing their conditions, which can only benefit
their overall health.
Conclusion
The Medicare demonstration project is an important step in
overcoming the barriers to treating chronically ill patients in this
population, and CenVaNet is proud to be a part of this study. The
success of our program--as well as others--points to the need for
Medicare reimbursement for care coordination services to help improve
the quality of healthcare delivery, increase access to care and reduce
the overall cost of care.
Statement of Christobel Selecky, Chair, Government Affairs Committee,
Disease Management Association of America
I. Introduction
Thank you for the opportunity to submit testimony on behalf of the
Disease Management Association of America (DMAA) on the need to
eliminate barriers to chronic care management in Medicare.
Disease Management (DM) is fundamentally concerned with the
management of chronic illness toward the twin goals of improving
quality of life and reducing health care expenditures. Properly
designed and administered DM programs can produce quality improvements
and cost savings. This is not news in the private sector where DM has
been incorporated into private health insurance. It is not news to
Medicare+Choice, where DM is frequently utilized. And it is not news to
FEHBP or Medicaid, where the use of DM is increasing. A growing body of
evidence from these programs shows that DM works.
DM represents an important strategy to address the need, as
detailed in such reports as the Institute of Medicine's ``Crossing the
Quality Chasm,'' to re-engineer our healthcare system to address the
growing chronically ill population. Making DM available to the
approximately 35 million fee-for-service Medicare beneficiaries
currently denied these services would represent a major step forward in
addressing this need.
The purpose of this testimony is to discuss the role that Disease
Management (DM) should play in Medicare, and to address some of the
definitional and benefit design issues that must be answered in order
to better incorporate DM into Medicare.
In the testimony that follows, DMAA will--
LExplain what DM is and how it is distinguishable from
other services.
LExplain how DM has been incorporated into Federal health
care programs other than fee-for-service Medicare.
LProvide information concerning the cost savings and
quality improvements that can result from a properly designed and
administered DM program.
LAddress some of the questions that have been raised about
how to programmatically include DM in the fee-for-service Medicare
program.
II. Understanding Disease Management
A. What is DM?
The central premise behind DM is elegant in its simplicity. Simply
stated, the value proposition for DM is that ``healthier people cost
less.'' Put another way, if we can improve the health of the
population, we will reduce their demands on the health care system and
that reduced demand translates into lower costs. Chronic illness is a
major driver of health care costs. One reason for this is that many
chronically ill individuals experience acute episodes that require
expensive (and often traumatic) treatment in institutional settings.
The incidence of such episodes can be reduced or entirely avoided
through proper management of chronic conditions, as can the progressive
worsening of chronic conditions that leads to complications and co-
morbidities. Thus, if health care payors can efficiently deliver
interventions that result in improved management of their chronic
condition to those beneficiaries, quality improvement and cost savings
will result.
The types of illness that are most amenable to disease management
interventions are those where evidence-based practices have been shown
to reduce costs and improve quality of life. Candidates for DM services
are typically identified through review of their health insurance and
available medical data by health insurers and Disease Management
Organizations (DMOs), or by their primary care providers. Disease
managers then reach out to these individuals and, in concert with their
physicians, enroll them in DM programs.
Many of the interventions that can be provided to individuals with
these chronic illnesses are often relatively simple. For example, great
progress can be made by promoting smoking cessation, improvements in
diet and exercise, and teaching patients to better self-manage many
aspects of their condition like blood glucose level self-monitoring and
adherence with prescription drug regimens. These interventions are
supported by regularized, ongoing communication between beneficiaries,
care providers and disease managers through a variety of media
including phone, mail and electronic, that serves to promote adherence,
monitor clinical status, ensure a continuum of care, and to proactively
identify and address situations that could lead to avoidable acute
events. Most DMOs have proved adept at addressing populations with
multiple conditions--this is important because of the high percentage
of overlap (co-morbidity) among these diseases.
One challenge in delivering effective DM services lies with the
fact that the beneficiary population can be a difficult one to impact.
Often, the harmful behaviors and habits that DM programs seek to
address have become highly ingrained over decades. In other cases,
beneficiaries are depressed as a consequence of their condition, have
grown skeptical of health care interventions, and may have developed
hostility toward the health care system. DM programs have developed
techniques for successfully reaching these populations and are able to
uncover and motivate the underlying desire of most chronically ill
individuals for improved quality of life.
Another important feature of Disease Management is the integration
with the beneficiary's personal physician. Many DM programs assist the
physician as well as the patient by helping to provide evidence-based
practice guidelines specific to their patients and their conditions. DM
programs develop programs and techniques for reaching out to physicians
and have generally been successful in achieving positive physician
satisfaction and participation.
DM has demonstrated that it works. Not making DM available to the
Medicare fee-for-service population creates a situation whereby health
care quality is not what it could be and the Medicare Trust Fund is
tapped for billions of dollars per year in unnecessary spending. While
the Center for Medicare and Medicaid Services (CMS) has recently
initiated new DM demonstration projects that are comprehensive in
approach, the three year delay in benefiting from these demonstration
projects represents three years of delays in helping Medicare patients
suffering from chronic disease.
B. Definition and Accreditation
After many years of development, the Disease Management community
has been able to balance the need for continuing innovation with the
desire for definitions and standards. In order to capture the essential
elements that are required for a successful DM program, the DMAA
several years ago worked to develop a definition of DM programs and
entities. The DMAA definition--established in consultation with primary
care and specialty physicians, and incorporating private practice,
health plan and institutional perspectives--has become the standard
definition and is relied upon widely: \1\
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\1\ The definition is cited by CMS in its February 28, 2003
solicitation for capitated Disease Management demonstration projects,
in its February 22, 2002 solicitation for proposals to conduct the DM
demonstration projects authorized in the Benefits Improvement and
Protection Act of 2000 (BIPA), by DM accreditors, and by payors and
providers.
Disease management is a multidisciplinary, systematic
approach to health care delivery that: (1) includes all members
of a chronic disease population; (2) supports the physician-
patient relationship and plan of care; (3) optimizes patient
care through prevention, proactive, protocols/interventions
based on professional consensus, demonstrated clinical best
practices, or evidence-based interventions; and patient self-
management; and (4) continuously evaluates health status and
measures outcomes with the goal of improving overall health,
thereby enhancing quality of life and lowering the cost of
care. Qualified Disease Management programs should contain the
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following components:
LPopulation Identification processes;
LEvidence-based practice guidelines;
LCollaborative practice models that include physician
and support-service providers;
LRisk identification and matching of interventions
with need;
LPatient self-management education (which may include
primary prevention, behavior modification programs, support groups, and
compliance/surveillance);
LProcess and outcomes measurement, evaluation, and
management;
LRoutine reporting/feedback loops (which may include
communication with patient, physician, health plan and ancillary
providers, in addition to practice profiling); and
LAppropriate use of information technology (which may
include specialized software, data registries, automated decision
support tools, and call-back systems).
DM organizations may voluntarily apply for accreditation by the
National Committee for Quality Assurance (NCQA), which has a specific
DM accreditation program.\2\ DM organizations may also pursue
accreditation from the American Accreditation Healthcare Commission
(URAC) or the Joint Commission on the Accreditation of Healthcare
Organizations (JCAHO). These three national organizations have all
recognized the importance of DM and created meaningful standards and
programs that serve to maintain the high quality of DM services and to
standardize many of the new processes and terms that have evolved with
the development of DM. These accreditation programs, combined with the
consensus definition of DM, provide a clear basis for the Department of
Health & Human Services to identify DM organizations that should be
eligible for contracting under Medicare.
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\2\ NCQA is an independent organization that evaluates health care
in three different ways: through accreditation (a rigorous on-site
review of key clinical and administrative processes); through the
Health Plan Employer Data and Information Set (HEDIS--a tool
used to measure performance in key areas like immunization and
mammography screening rates); and through a comprehensive member
satisfaction survey. Criteria for accreditation and certification can
be found at: http://www.ncqa.org/Programs/Accreditation/DM/dmmain.htm.
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C. Distinguishing Disease Management
There are a variety of other health care activities and
interventions that seek to improve public health, address the costs and
consequences of chronic illness, or better promote a continuum of care.
Whatever their relative merits, it is important to understand how these
terms and activities relate to DM.
First, it should be recognized that DM contains a preventive
component but it is not co-extensive with ``prevention.'' Preventing
the onset of chronic or other major illness is a highly meritorious
goal, and one that the Secretary of Health & Human Services has made a
priority. Through promoting proper diet, exercise and lifestyle choice,
it is hoped that the future incidence of conditions such as diabetes,
COPD, CAD and CHF can be reduced. In addition, Federal policymakers
have in recent years sought to improve the availability of primary and
preventive health care, including screening to detect and address
conditions that can lead to chronic illness. DM can be distinguished
from these types of prevention efforts in that DM programs work with
identified populations of individuals that already suffer from chronic
illness (and with their personal physicians) to manage the consequences
of those illnesses. As a general proposition, it is easier to
demonstrate measurable cost savings and quality improvements through a
DM program than through these other, more generalized forms of
prevention.
Nor is DM the same as ``case management'' although there are
similarities. The cardinal distinction is that DM programs seek to
proactively identify an entire population of individuals suffering from
a chronic illness and to provide evidence-based educational,
monitoring, and coaching interventions to that population. Case
management by contrast generally denotes an intervention based around
the particular health and economic circumstances of high-risk
beneficiaries, regardless of their chronic health conditions, and
frequently involving the coordination of social service and other non-
health benefits.\3\ While DM programs often provide case management-
type services for identified beneficiaries, DM programs begin by
identifying a group of beneficiaries that share common attributes
(chronic illness) and then provide a more defined service to that
group. Whatever their merits, it is much more difficult to demonstrate
and realize cost savings on a population basis from heterogeneous case
management services than from targeted, accredited DM programs.
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\3\ As MEDPAC has noted, ``[b]oth case management and disease
management programs seek to coordinate care for people who are at risk
of needing costly medical services. The two programs differ in their
emphasis and target populations. Case management tends to focus on
medically or socially vulnerable ``high risk'' patients, while disease
management programs focus on a single disease. . . . MEDPAC, Report to
Congress, June 2002 at 54-55.
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The relationship between DM and ``care coordination'' also merits
comment. Care coordination generally describes a function that should
be--but too often is not--part of a competent health care system but
that is always a central element of a competent DM program. While
primary health care providers and health systems generally assert that
they provide care coordination, in practice such service is often
absent due to institutional barriers, the absence of an economic
incentive to provide such service, or functional difficulties. In those
provider environments where formal care coordination service is
available, it typically reaches a smaller population of beneficiaries
(e.g., the patients of an individual provider or group practice) than
can be reached through a DM program. Case management programs also seek
to promote care coordination but, as mentioned above, often with a
smaller, more disparate population. Care coordination is an integral
part of DM. Successful DM programs work closely with primary care,
specialty and institutional providers to coordinate service, and
research has shown that such providers typically recognize the value of
this service to their patients and their practice.\4\
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\4\ A Fernandez, et al, Primary Care Physicians' Experience with
Disease Management Programs, J. of Gen. Internal Med., pp. 163-167
(March, 2001).
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III. The Use of DM in Federal Health Care Programs
At this point in time, fee-for-service Medicare can be
distinguished from other major Federal health care programs by the fact
that disease management programs are not available to its
beneficiaries. The involvement of other Federal programs with DM can be
briefly summarized as follows:
A. Federal Employee Health Benefits Plan (FEHBP)
The Office of Personnel Management (OPM) administers FEHBP by
qualifying certain plans to provide services under the program to
current and retired Federal workers. FEHBP offers a range of plans
including fee-for-service (FFS), PPO and closed plans and beneficiaries
elect a plan under which to receive coverage. The Federal Government
pays a portion of the monthly premium, and the beneficiary is
responsible for the remainder. Plan costs vary. Health plans typically
contract with health care clearinghouses to conduct a variety of claims
processing and payment functions. Today, FEHB plans provide DM services
to beneficiaries. For example, the FEHB plan offered through Blue
Cross/Blue Shield of Delaware and other Blue Cross/Blue Shield plans
across the country contract directly with a Disease Management
Organization (DMO) for DM services. These programs have been shown to
be successful in improving health status and reducing cost for members
with chronic disease.
B. Medicare+Choice
Under Medicare+Choice, CMS contracts with a Medicare+Choice
Organization (MCO)--typically a closed health plan or HMO--that enrolls
beneficiaries for the receipt of all Medicare services covered by fee-
for-service Medicare and sometimes additional services (e.g.
prescription drugs). The MCO receives a capitated payment from CMS that
may be adjusted for a variety of factors. DM services are often
available under Medicare+Choice. The arrangement is similar to that
seen under FEHBP--the MCO typically contracts directly with a DMO for
the provision of DM services. In addition, M+C has promoted some
minimal incentives to encourage successful DM interventions by
providing an additional risk adjustment payment for outpatient DM
services to CHF patients who demonstrate certain quality improvements.
Again, these programs have been shown to be successful in improving
health status and reducing cost for beneficiaries with chronic disease.
C. Fee-for-Service Medicare
As mentioned above, DM is largely unavailable to the fee-for-
service Medicare population. However, one study is available and
deserving of note. This unpublished study conducted by Dr. David W.
Plocher, Vice President of Cap Gemini Ernst & Young, reviewed the first
ten months of results on an American Healthways program involving
approximately 6,000 Hawaii Medicare fee-for-service beneficiaries with
diabetes. The study shows concurrent and statistically significant
improvement in all clinical outcomes measures and a net, after-fee
reduction in total health care cost of approximately $5.1 million, or
17.2% on an inflation adjusted basis. This study strongly suggests the
potential for DM in fee-for-service Medicare.
D. Medicaid
A growing number of States are incorporating DM into both
traditional and managed care Medicaid. Among the first States to become
involved with adopting DM programs were Texas, Florida, North Carolina,
Virginia, West Virginia, and Maryland. Today, over half the States have
incorporated at least limited DM initiatives into their Medicaid
programs, while others, such as California, are considering language to
promote DM. There are a wide variety of State programs and approaches,
many of which have shown promising results. Florida has perhaps the
most ambitious DM program in the country. Under this Medicaid Primary
Care Case Management Program (called ``MediPass''), nine diseases have
been managed through risk-based contracts with Disease Management
Organizations (``DMOs''). The Florida Agency for Health Care
Administration has contracted with DM organizations to provide DM
services to Medicaid recipients enrolled in MediPass who have been
diagnosed with diabetes, HIV/AIDS, asthma, hemophilia, CHF and end
stage renal disease (ESRD).
IV. Demonstrated Cost Savings and Quality Improvement from DM
Evidence on the growing nexus between health care expenditures and
chronic illness continues to mount. People with chronic illnesses such
as diabetes and CHF account for more than 60 percent of the medical
care dollars spent in the United States.\5\ According to 1997 data, 25%
of the Medicare population consumed almost 90 percent of Medicare
spending while a Johns Hopkins study has shown that 90% of Medicare
spending is attributable to beneficiaries with three or more chronic
conditions.\6\ As this data suggests, the cost implications for
Medicare of more effectively managing chronic illness are potentially
quite large.
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\5\ Broad Disease Management Interventions Reducing Health Care
Costs for Plan Members with Congestive Heart Failure. Joel C. Hoffman,
Ernst & Young, LLP. Citing United States Department of Health and Human
Services, Centers for Disease Control and Prevention. New Brunswick
(NJ): The Robert Wood Johnson Foundation.
\6\ See, Disease Management in Medicare: Data Analysis and Benefit
Design Issues, Statement of Dan Crippen, Director of Congressional
Budget Office, before the United States Senate Special Committee on
Aging, September 19, 2002.
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Quality of life considerations aside, the cost effectiveness of
successful DM programs results from the decreased utilization of other
health care services--especially such institutional services as
hospitalization and emergency department visits--to a degree that more
than offsets costs. While the proper and comparative measurement of
such costs and savings is no easy matter, a constantly growing body of
evidence demonstrates the cost savings and outcome improvements that
can result from DM.\7\ And recent efforts, like the recently released
Johns Hopkins Consensus Panel paper on measurement guidelines and
metrics are helping to bring increased standardization concerning
outcomes studies.
---------------------------------------------------------------------------
\7\ DMAA has commissioned a comprehensive review of DM literature
as part of its ``Outcomes Validation Project.'' The purpose of the
project is to create a complete reference of DM peer-reviewed
publications that exhibits the outcomes of DM programs. 133 articles
have been selected for full-length review. The Outcomes Validation
Project is focused on formal evaluation of outcomes and hopes to
increase awareness regarding methodologies and outcomes.
LA peer-reviewed study of the American Healthways, Inc.
(``AMHC'') Healthways' Diabetes NetCareSM program shows a
17.1 percent or $114 per diabetes member per month reduction in total
direct health care costs for the first year of operation.\8\ Patients
also demonstrated improved adherence to recognized standards of care.
For example, 74 percent of patients took their A1c test, a signal
measure of a diabetic's health status, versus 61 percent in the base
year; 16 percent took cholesterol exams versus 4 percent in the base
year; and 12.2 percent took foot exams versus 2.5 percent in the base
year.\9\ AMH patients experienced reduced admissions per 1,000 by an
average of 15.6 percent, reduced days per 1,000 by 21.7 percent, and
reduced average length of stay by 7.2 percent.\10\ Indeed, ``[h]ospital
costs decreased by $47 per diabetic plan member per month, or $564 per
year.'' \11\
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\8\ Robert J. Rubin et al., Clinical and Economic Impact of
Implementing a Comprehensive Diabetes Management Program in Managed
Care, 83 J. Clin. Endocrinol. and Metab. 2635, 2640 (1998) (Attachment
B).
\9\ http://www.americanhealthways.com/res__art01.pdf (visited
January 18, 2003).
\10\ http://www.americanhealthways.com/res__art01.pdf (visited
January 18, 2003).
\11\ Rubin, at 2641.
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LLifeMasters Supported Self-Care, Inc. (``LifeMasters'')
has demonstrated that a multidisciplinary DM program including patient
education, interactive vital sign monitoring, nurse support and
physician intervention can significantly reduce utilization and improve
quality of care. One study published in a peer reviewed cardiology
journal followed the progress of a population of CHF patients enrolled
in the LifeMasters program through a San Francisco-based managed care
organization.\12\ Evidence compared against baseline data showed
significant improvements 12 months post enrollment. Clinical impact
included 48 percent reduction in inpatient (acute) days, 36 percent
reduction of inpatient admissions, 31 percent decrease in emergency
department visits, and a 20 percent decline of average length of stay.
Per member per month financial savings of the same study group over the
same enrollment period averaged a total reduction in disease-specific
claims of 54 percent, while an average reduction in all claims
associated with the group improved by 42 percent on average.\13\
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\12\ Am Heart J 1999; 138:633-40.
\13\ Id.
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LCorSolutions, Inc. demonstrated impressive results for
its business partner, Highmark, through implementation of a DM program
for Highmark's chronic population. For the health plan's target patient
group, hospital admissions declined 65 percent, hospital days declined
52 percent, the number of patients receiving appropriate drug therapy
rose 43 percent, and optimal drug regimen adherence climbed to 58
percent.\14\ Finally, CorSolutions has been able to reduce total costs
for nearly 13,000 patients in the Medicare+Choice program by about 50
percent compared to a baseline of $22,236, or an actual savings of
$11,000 per patient per year. These results are based on fully-
reconciled administrative data available for this subset of total
patients managed.\15\
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\14\ Jean Lawrence, High Marks for Chronic Care, HealthCare
Business, DM6, 14 (June 2000).
\15\ Medicare+Choice Disenrollment: Consequences and Opportunities,
presented to CMS by CorSolutions, Inc., Aug. 9, 2000.
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LA coronary artery disease (CAD) study conducted over
twenty one months found that a physician decision supported disease
management model by QMed, Inc. reduced the incidence of heart attacks
by 30 percent, hospitalizations for angina or suspected infarction by
32 percent, cardiac catheterizations by 20 percent and coronary
angioplasties by 22 percent, while coronary artery bypass grafting was
unchanged. Costs for CAD, the most costly among Medicare members,
declined 17 percent. The model used in this study has been selected in
both the Care Coordination demonstration and the CHF and CAD
demonstration.\16\
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\16\ Levin et al, Risk Stratification and Prevention in Chronic
Coronary Artery Disease: Use of a Novel Prognostic and Computer-based
Clinical Decision Support System in a Large Primary Managed-Care Group
Practice, DM Journal 5:197-213 (Winter 2002). The referenced
demonstrations are discussed below in part III.C.3 of this paper.
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LParticipants in Humana's CHF DM program ``eat less salt,
can walk farther, are more mobile, and generally have a higher quality
of life and a lower mortality rate'' than those enrollees not utilizing
the programs. Humana saved an estimated $22 million in costs through
disease management last year.\17\
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\17\ Chris Rauber, Disease Management Can be Good For What Ails
Patients and Insurers, 29 Modern Healthcare 48, 51 (1999).
With regard to Medicare specifically, the literature contains an
expanding body of evidence regarding the savings DM can bring,
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including the following:
LMeasuring Outcomes of a Chronic Obstructive Pulmonary
Disease Management Program. This study, focusing on members with asthma
and COPD, showed a 24.7 percent cost-savings for the Medicare group of
1,700 beneficiaries.\18\
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\18\ Barry Zajac, MHSA, Measuring Outcomes of a Chronic Obstructive
Pulmonary Disease Management Program, Disease Management, V5(1): 9-23
(2002).
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LEconomic Impact of a Diabetes Disease Management Program
in a Self-Insured Health Plan: Early Results. This study showed a 5
percent decrease in spending over three years for the study group and a
3 percent increase over the same time period for the control group.\19\
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\19\ Jan Berger et al, Economic Impact of a Diabetes Disease
Management Program in a Self-Insured Health Plan: Early Results,
Disease Management, V4(2): 65-73 (2002).
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LEvaluation of Disease-State Management Dialysis Patients.
1,541 Medicare patients enrolled in a renal DM program in 1998 and 1999
had 19 to 35 percent better survival rates compared with ESRD patients
in traditional FFS Medicare and hospitalizations for the renal program
patients were 45 to 54 percent lower than the FFS Medicare group.\20\
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\20\ Allen A. Nissenson et al, Evaluation of Disease-State
Management Dialysis Patients, American Journal of Kidney Disease,
V37(5): 938-944 (2001).
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LDoes Diabetes Disease Management Save Money and Improve
Outcomes? The per member per month cost averaged $424 for Medicare
patients enrolled in a diabetes DM program and averaged $500 for non-
program participants, a difference of 15.2 percent.\21\
---------------------------------------------------------------------------
\21\ Jean Sidorov et al, Does Diabetes Disease Management Save
Money and Improve Outcomes? Diabetes Care, V25(4): 684-689 (2002).
Effectively run DM programs often involve certain increased
expenditures that result from the provision of new services.\22\ In
addition, a DM program may result in greater utilization of certain
other healthcare goods and services. In a number of DM programs this
has proven true with regard to the utilization of prescription drugs
because the programs' strive to promote access to and compliance with
drug regimens. In this way, DM actually results in the most effective
use of healthcare resources by funding potential cost increases caused
by appropriate utilization from the cost reductions caused by the
elimination of preventable hospitalizations and procedures. Typically,
physician visits increase as well.
---------------------------------------------------------------------------
\22\ It should be noted, however, that providing effective
comprehensive DM services is not the same as providing the most
intensive intervention possible. For example, telecommunications
between beneficiaries and DMOs is ordinarily effective to facilitate
enhanced clinical outcomes and cost savings and the added cost of a
home visit is not necessary except in particularized circumstances.
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V. Applying DM to Fee-For-Service (FFS) Medicare
In testimony to this Subcommittee last year, the Congressional
Budget Office (CBO) defined the challenge of providing DM under FFS
Medicare as requiring the consideration of a number of questions,
including: how beneficiaries would be identified and enrolled in DM
programs, how Medicare would pay for DM services, and how it would
capture the resultant savings. We would like to offer some thoughts on
these issues.
At the outset, it should be understood that incorporating DM into
FFS Medicare does not mean that Congress should simply authorize the
reimbursement of DM as another covered Part B service. To do so would
create a difficult situation where CMS, through its carriers, would
need to become heavily involved in controlling utilization on a per-
beneficiary basis through payment, coverage and other controls similar
to those it employs for any Part B service. More fundamentally, any
such approach to a DM benefit would not encourage the type of structure
and organization necessary to provide DM services on an area-wide or
population basis absent extensive intervention by CMS with individual
providers.
Rather, it makes more sense and would result in less administrative
burden for CMS to incorporate DM into FFS Medicare at a broader level.
For example, CMS could be authorized to contract directly for DM
services. This could be done through pending Medicare contractor reform
legislation or in any other Medicare legislative vehicle. A possible
alternative approach might involve the creation of the authorities and
incentives necessary for carriers to contract with DMOs to provide
coordinated DM services within a region (an arrangement that would be
similar to what is done under FEHBP or M+C). This alternative, would
likely be less efficient, however, with respect to the minimization of
administrative costs. The vendor selection process would be facilitated
by the existence of standardized definitions and external accreditation
of DM programs and organizations, as well as through the application of
other factors such as the ability to deliver services at scale,
experience with Medicare beneficiaries and demonstrated and validated
clinical and financial outcomes.
As discussed above, private sector health insurers, M+C
organizations, DMOs, and FEHB plans review encounter information to
identify candidates that would benefit from DM services, and to refer
those candidates for DM services that are ordinarily provided by an
accredited Disease Management Organization that has a contract with the
insurer. The DMO then contacts the beneficiary (and, when appropriate,
their physician) to deliver the DM program. Similar mechanics could be
used to create a DM service under FFS Medicare if policy makers can
effectively address the cardinal difference between FFS Medicare and
these other forms of care, namely that the medical information
necessary to identify candidate beneficiaries is processed through Part
A Intermediaries, Part B Carriers and through CMS itself. This
difference can be addressed in any one of several ways: CMS could
undertake the data review function itself; CMS could direct its
carriers and intermediaries to do so and provide guidance to providers
on the identification of candidates; or CMS could contract with a DMO,
clearinghouse or other entity to perform this function.
The first of the aforementioned options is likely the most
administratively efficient. In the case that CMS chooses to utilize the
resources and services of an outside company to perform this function,
in order to protect patient health information, CMS, as a covered
entity under the Health Insurance Portability and Accountability Act of
1996, HIPAA, would enter into agreements with the third parties to
ensure the confidentiality of patient health information. These
agreements would allow CMS to share patient health information with
third parties for the purposes of treatment, payment, and health care
operations. As defined under HIPAA, health care operations include the
typical functions of DMOs including data review and identification of
candidates for participation in DM programs. CMS would be permitted to
share patient health information with a third party who would then
utilize the patient information to identify candidates on behalf of CMS
without compromising the confidentiality of such information.
With regard to the identification of proper candidates for DM
services, it is elemental that only beneficiaries who are in need of
and can benefit from DM services--namely, those suffering from an
appropriate chronic illness--should be qualified to receive services.
Identifying this population is not difficult, but must be undertaken
with care to avoid using algorithms that identify an unnecessarily
large number of false positives. These techniques are well developed in
the private sector and CMS need only import this learning into fee-for-
sevice Medicare. Again, reference to and use of only accredited DMOs is
advisable to ensuring appropriate population identification.
As for enrollment, it is critical that participation be voluntary
but, at the same time, DM programs create the most benefit by engaging
as large a proportion of the population as possible. Private sector
practice suggests that an opt-out approach to enrollment is the most
effective method of meeting these twin goals.
Finally, payment could be approached in a number of ways. One
method, utilized by essentially all commercial plans and in many
Medicare+Choice plans and state Medicaid agencies, is to pay a monthly
fee to the DMO on a per enrollee per month basis to cover the cost of
the disease management services provided to a population of
beneficiaries with chronic disease. Under this payment methodology,
beneficiaries can retain their fee for service coverage and savings
immediately accrue to the Medicare Trust Fund with some upside risk
sharing possible for the DMO.
We appreciate the opportunity to submit this testimony to the Ways
and Means Health Subcommittee concerning the need to address barriers
to the incorporation of disease management in the Medicare fee-for-
service program. As this testimony should make clear, we believe that
DM can be successfully incorporated in FFS Medicare to improve the
lives and well being of the chronically ill and we hope that our
recommendations assist the Subcommittee in so doing.
Statement of Jaan Sidorov, M.D., Medical Director, Care Coordination
Geisinger Health Plan, and Geisinger Health System, Danville,
Pennsylvania
Chairman Johnson and Members of the Committee, I am Jaan Sidorov,
MD, Medical Director, Care Coordination of Geisinger Health Plan (GHP).
GHP, a part of the Geisinger Health System, is a not-for-profit health
maintenance organization (HMO), serves the health-care needs of members
in 38 counties throughout central and northeastern Pennsylvania. Begun
in 1985, the Health Plan has steadily evolved into one of the nation's
largest rural HMOs by providing high quality, affordable health-care
benefits.
I appreciate the invitation to present our views on eliminating
barriers to chronic care management in Medicare.
Overview
Disease management is a system of coordinated healthcare
interventions and communications for populations in which patient self-
care efforts are significant. The components included 1) population
identification processes, 2) evidence based practice guidelines, 3)
collaborative practice models, 4) patient self-management education, 5)
process and outcomes measurement, and 6) routine reporting and
feedback.
Diseases in which disease management has been shown to result in
improved outcomes are: Congestive Heart Failure (CHF), cardiac disease,
Chronic Pulmonary Obstructive Disease (COPD), diabetes, asthma and
cancer.
Geisinger Health Plan has implemented a ground breaking, national
role model disease management program. For its 240,000 enrollees in
northeastern and central PA, over 10,000 Medicare+Choice (+C) and
Commercial insurance enrollees have avoided unnecessary
hospitalizations, become better able to manage their diabetes, CHF,
hypertension, COPD and asthma, simultaneously avoiding complications
and reducing health care costs. The reason they have been able to do
this is because they are enrolled in a health care insurance plan that
is able to use premium to support this novel health care strategy. In
addition, please note that disease management is a strategy that is
more `virtual' than the traditional one-on-one health care; the latter
is hostage to the availability of providers, which in rural PA remains
a challenge. Disease management--which is independent of location or
level of service--is able to project services outside the outpatient
clinic setting. We are not talking just home visits by non-physicians,
but novel use of the telephone, the internet, groups visits etc.
Up until now, Medicare has not explicitly recognized disease
management for beneficiaries who are not enrolled in a +C program. As a
result, these individuals are at increased risk for unnecessary
hospitalizations and are effectively shut out from taking the advantage
of clinical programs that have been shown to improve clinical outcomes
and reduce health care costs.
We salute Tommy Thompson, Secretary, HHS for his willingness to
expand demonstration projects that will ultimately prove the value of
disease management programs. Congress should approve expansion of these
projects as well as the ongoing research being conducted by AHRQ, the
CBO and GAO.
Recommendations for +C
HHS should actively encourage the expansion of ``accredited''
disease management programs for the +C program. One example of a good
start is the extra payment provided to participating organizations that
meet certain requirements for the treatment of enrollees with CHF. This
should be expanded to other diseases. In addition to promoting the
attainment of measurable outcomes, this would help slow the exit of
Managed Care Organizations from the +C Program.
Recommendations for FFS Medicare
The Secretary of HHS may designate entities that can provide
disease management services to eligible individuals--eligibility is
determined by diagnoses such as CHF, Diabetes, Asthma, Coronary Artery
Disease or Cancer or any other diagnosis that is deemed by the
Secretary to be amenable to disease management services. This would
mean that M'care could contract directly with organizations to provide
services, preferably on a geographic or population basis.
Disease management services include but is not necessarily limited
to health screening and assessment, coordination of providers and
referrals to same, monitoring and controlling medications, patient
education and counseling, nursing visits, consultations by phone, email
or web-site, and transitioning to programs outside disease management
if the enrollee elects to opt out.
The Secretary may enable entities to use cost sharing (within the
limits of the law) with respect to health care items and services.
Entities should be qualified by criteria set by the Secretary.
Qualifications should include JURAC, JCAHO, or NCQA accreditation.
The Secretary should also set performance standards regarding
clinical outcomes, based on a standardized baseline assessment of
individuals' health prior to entry into disease management with re-
measurement at specified intervals. The Secretary should establish
performance measures of baseline and follow-up aggregate costs.
Recommendations for the Pharmacy Benefit
Drug coverage is an important component of any total health care
package, and disease management entities have a proven track record of
educating and coordinating patient contact that provides optimum
compliance and reductions in drug-drug interactions. As a pharmacy
benefit is made available, disease management entities should be
engaged in helping to assure that enrollees use the benefit to maximum
advantage.
Thank you for the opportunity to present views on this most
important issue. If I can be of any further assistance to the
Committee, please feel free to contact me.
Attachments:
Sidorov, J., Shull, R., Tomcavage, J., Girolami, S.: Diabetes
Disease Management Is Associated With Pharmacy Savings in a Managed
Care.
Sidorov, J., Shull, R., Tomcavage, J., Girolami, S., Lawton, L.,
Harris, R.: Does Diabetes Disease Management Save Money and Improve
Outcomes? Diabetes Care 25:684-689, 2002.
Diabetes Disease Management Is Associated With Pharmacy Savings in a
Managed Care Setting
Jaan Sidorov, MD, FACP, CMCE, Robert Shull, Ph.D., Janet Tomcavage,
RN, MSN, Sabrina Girolami, RN, Care Coordination Program Geisinger
Health Plan. Geisinger Health Plan, Hughes Office Building, Danville,
PA USA 17822-3020, Tel: 570-271-8763, Fax: 570-271-7860.
Objective
Little is known about the impact of disease management programs on
medical costs for patients with diabetes mellitus. This study compared
pharmacy costs for patients fulfilling HEDIS criteria for
diabetes who were in an HMO sponsored diabetes disease management
program versus those who were not in diabetes disease management.
Research Design and Methods
We examined HMO paid pharmacy costs for all medications, insulin
products, oral hypoglycemic agents (OHAs), diabetes supplies and other
pharmaceuticals among 1,362 continuously enrolled Geisinger Health Plan
(GHP) members who fulfilled HEDIS criteria for diabetes and
had an insurance benefit for prescription drug coverage from January 1,
2000-December 31, 2001. Two groups were compared: those patients who
were enrolled in an ``opt-in'' diabetes disease management program
versus those patients who were not enrolled. Multiple linear regression
was used to control for the impact of age and gender on pharmacy costs.
Results
Of 1,362 patients fulfilling HEDIS criteria for the
diagnosis of diabetes mellitus with prescription drug insurance
coverage, 1,273 (93.5%) were enrolled in this diabetes disease
management program (``Program'') versus 89 (6.5%) who were not enrolled
(``Non-program''). Both groups were similar in male/female ratio
(Program M/F=52.4%/47.6% vs. Non-program M/F=58.6%/41.4.1%, p=0.07),
and Program patients were 1.9 years younger than Non-program patients
(56.0 years vs. 57.9 years, p=0.15). Mean per member per month overall
paid pharmacy claims (PMPM) for Program patients was $92.24 (standard
deviation or STD = $99.18) versus a mean of $143.98 (STD = $136.78)
among Non-program patients (see Table). This difference was
statistically significant (t=4.63, p<.0001). The mean PMPM for insulin
products ($20.17 Program vs. $15.49 Non-program), other diabetes
medications ($29.71 Program vs. $25.39 Non-program) and diabetes care
supplies ($4.31 Program vs. $5.77 Non-program) were not statistically
different between the two groups. Program patients experienced a lower
mean PMPM of $61.06 (STD = $81.91) for all other medications vs. Non-
program patients, who had a mean PMPM of $123.34 (STD = $131.97). This
difference remained statistically significant after controlling for age
and gender (p<.0001).
----------------------------------------------------------------------------------------------------------------
Other
Total Insulin diabetes Diabetes Other
Category Pharmacy PMPM medication supplies medications*
PMPM* PMPM PMPM
----------------------------------------------------------------------------------------------------------------
Program $92.24 $20.17 $29.71 $4.31 $61.06
($99.18) ($19.68) ($33.58) ($6.67) ($81.91)
N=1,273
(standard
deviation)
----------------------------------------------------------------------------------------------------------------
Non Program $143.98 $15.49 $25.39 $5.77 $123.34
($136.78) ($27.27) ($131.97)
N=89 ($14.79) ($6.71)
(standard
deviation)
----------------------------------------------------------------------------------------------------------------
* Statistically significant after controlling for age and gender, p<0.001.
Conclusions
In this HMO, an opt-in disease management program appeared to be
associated with a significant reduction in overall pharmacy costs. The
savings we observed were among pharmacy costs that were not directly
associated with diabetes care, which may be partially explained by
improved control of diabetes. In addition, these data suggest that
diabetes disease management is not necessarily associated with an
increase in costs for medications directly related to diabetes care.
Statement of Richard M. Wexler, M.D., Medical Director, Medical Care
Development Inc/Maine Cares, Augusta, Maine
Maine Cares (ME Cares) is a coalition of 32 rural and urban Maine
hospitals that offer community-based, telephonic disease management
programs for patients with heart failure (HF) and coronary heart
disease (CHD). Medical Care Development (MCD) is a Maine-based not-for-
profit corporation that plans, develops and operates health programs.
MCD serves as the facilitating organization for the ME Cares coalition.
Since implementing our program over two years ago, we have seen
significant improvement in our HF and CHD patients that previously may
not have had access to disease management services. We know that
community-based programs combined with the right technological support
are effective in improving the lives of our patients. We believe that
the ME Cares program may serve as a model for Medicare, and we are
honored to have been chosen to participate in the Medicare Coordinated
Care Demonstration. On behalf of ME Cares, I would like to thank
Representative Johnson and the Ways and Means Subcommittee on Health
for holding this important hearing.
An Innovative Approach to Disease Management
Every year, nearly 30,000 hospitalizations in Maine are caused by
heart disease at a cost of more than $400 million. Maine also has an
older-than-average population, more than half of who live in rural
areas. In the effort to improve and reorganize HF and CHD management,
the ME Cares coalition of hospitals was formed based on the shared
beliefs that: 1) the care of ambulatory patients with chronic illness
is aided by building an infrastructure to extend the scope and reach of
traditional office-based care; 2) community-based programs will
encourage resource development that will benefit patients with chronic
illness as well as patients at-risk; 3) physician support will increase
the likelihood of success of the program; and 4) physician support is
more apt to occur if the program is locally accessible and available to
patients regardless of their payer affiliation.
When we developed the ME Cares coalition health plan based programs
were at various stages of development using plan staff or contracted
out to private firms. From the patient's perspective, there would
undoubtedly be a disruption of care should their employers switch
health plans. From the provider's perspective, complexity of
interfacing with numerous plans and programs posed a significant
problem, so our challenge was to create a community-based care
management support program that was an alternative to the diverse
health plan-based programs.
Our first order of business was to develop a set of key program
elements. These include: explicit patient eligibility criteria and
physician enrollment orders; regular communication between the nurse,
patient and physician to coordinate care and optimize care management;
patient-specific goals set at program entry and monitored throughout
participation; individualized treatment plans for each patient;
educational interventions on medications, diet, exercise, smoking
cessation, stress management, and symptom identification and response;
continuous telephonic access for patients to nurse support services;
ongoing monitoring of medical regimen adherence; and active outreach to
physicians to gain endorsement and feedback.
We then sought to establish standardization of care across
coalition sites to assure quality. To achieve this, we decided that all
participating hospitals should use the same information system that
would support patient-specific care plans using evidence-based clinical
guidelines and facilitate measuring outcomes. After reviewing several
systems, we chose Pfizer Health Solutions' (PHS) disease management
software technology for its ability to collect patient histories, key
symptoms, clinical and laboratory data, and treatment status
information. More importantly, PHS' software was user-friendly and
enabled local providers to use the technology.
Proven Results
Today, ME Cares has grown to include 32 hospitals that provide
health services to over 90% of Maine's population. Over 1,400 patients
have enrolled in the HF and CHD programs and for the most part, care
support services have been non-reimbursed services. Despite this
limitation, the level of participation among providers has been
exceptional.
When outcomes were measured in December of 2001, average patient
participation lengths were 9.4 months for HF and 7.5 months for CHD.
Outcomes were measured by the New York Heart Association (NYHA)
physical activity classification, the Short-Form 12-Item Survey (SF-12)
for mental and physical health scores, and symptom relief, adherence
and cholesterol values. At follow-up, 78 percent of HF patients
improved or maintained their NYHA class and improved their SF-12 mental
scores. HF patients also reported a reduction of HF symptoms (shortness
of breath, cough), less weight gain and leg swelling, increased self-
monitoring and beta-blocker use. CHD patients had improved SF-12 mental
and physical health scores, and experienced a reduction in mean LDL
cholesterol.
Conclusion
Implementing a statewide, provider-sponsored care support program
in Maine using PHS' care management technology significantly improved
HF and CHD patient outcomes. What does this mean for Medicare? We know
that disease management can improve quality of life and reduce
hospitalizations, yet at the present time, these services are only
available to Medicare+Choice members who represent only a small
percentage of Medicare beneficiaries. Our model is significant to
Medicare not only because our program has proven outcomes, but also
because we operate outside the managed care and fee-for-service
environment. It is our hope that our participation in the Medicare
Coordinated Care Demonstration will clearly validate the importance of
the ME Cares model for disease management in Medicare.
Statement of the Pharmacist Provider Coalition, Bethesda, Maryland
The Pharmacist Provider Coalition is pleased to submit this
statement for the record of the Subcommittee on Health's hearing on
eliminating barriers to chronic care management in Medicare.
The Pharmacist Provider Coalition is composed of six national
pharmacy organizations, which represent pharmacists working in all
sectors of pharmacy practice. The coalition partners joined forces to
educate Members of Congress and the public about the role pharmacists
play in the safe and effective use of medications and to provide
patients access to pharmacist medication therapy management services
under the Medicare program. Our membership consists of the following
groups: the Academy of Managed Care Pharmacy, American College of
Clinical Pharmacy, American Pharmaceutical Association, American
Society of Consultant Pharmacists, American Society of Health-System
Pharmacists, and the College of Psychiatric and Neurologic Pharmacists.
Need: Improved Care, Avoid Medication-Related Complications
On average, persons aged 65 and older take 5 or more medications
each day.\1\ The high utilization rate of medications is particularly
common in patients who have one or more chronic conditions that call
for drug treatment. These medications are often prescribed by several
different physicians for concurrent chronic and acute conditions. As a
result, these patients are at high-risk for medication-related
complications, resulting in up to 11.5% of all hospitalizations.
---------------------------------------------------------------------------
\1\ ASHP Consumer Survey, ``Medication Use Among Older Americans,''
2001.
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Recently published research indicates that drug-related problems
cost the U.S. health care system as much as $177 billion each year.\2\
A substantial portion of this expense is preventable through
collaborative medication management services provided by pharmacists
working with patients and their physicians.
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\2\ Ernst FR, Grizzle, AJ. Drug-Related Morbidity and Mortality:
Updating the Cost-of-Illness Model. Journal of the American
Pharmaceutical Association. 2001: Mar-Apr; 41(2):192-199.
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Solution: Access to Pharmacist Medication Therapy Management Services
Pharmacist medication therapy management services help to eliminate
unnecessary or counterproductive treatments and assure that patients
are receiving the most appropriate drug therapy for their medical
conditions. For example, pharmacists working closely with the health
care team can identify or prevent duplicate medications, drugs that
cancel each other out, or combinations that can damage hearts or
kidneys. Pharmacists may also find that a newer multi-action drug may
be exchanged for two older drugs or an alternative drug may be
substituted for another therapy that causes side effects and results in
the patient either taking additional medication or stopping their
medication--the result of which may lead to their medical condition
worsening. Drug interactions, adverse effects, and low patient
adherence with prescribed therapies are costly and preventable medical
complications of usual care.
The specialized training pharmacists have in medication therapy
management has been demonstrated repeatedly to improve the quality of
care patients receive and to control health care costs associated with
medication-related complications. As the Institute of Medicine report
``To Err is Human: Building a Safer Health System'' stated: ``Because
of the immense variety and complexity of medications now available, it
is impossible for nurses and doctors to keep up with all of the
information required for safe medication use. The pharmacist has become
an essential resource . . . and thus access to his or her expertise
must be possible at all times.''
Current Medicare payment policies are woefully outdated and fail to
recognize pharmacists as providers of health care services. This
restricts the patient's ability to access pharmacist services. To
ensure access, Medicare statutes must be updated to explicitly
recognize services provided by pharmacists just as nurse practitioners,
physician assistants, registered dieticians and other non-physician
providers have been recognized in recent years.
Conclusion
Pharmacist medication therapy management services can and will make
a real difference in the lives of patients with chronic conditions.
This is a logical and very affordable step towards eliminating barriers
to chronic care management and establishing the essential
infrastructure of a Medicare prescription drug benefit. The Coalition
strongly encourages the Subcommittee to pass legislation to provide
patients access to pharmacist provided medication therapy management
services under Part B of the Medicare program.
Thank you for the opportunity to present the views of pharmacists
who care for Medicare patients on a daily basis.
-