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The Centers for Medicare & Medicaid Services (CMS) today announced that it has selected three organizations to participate in a pilot project aimed at improving care for chronically ill Medicare patients who suffer from heart problems and diabetes through better disease management.

The organizations will recruit up to 30,000 Medicare beneficiaries throughout California, Arizona and parts of Louisiana and Texas. The project will include payment for all disease management services and prescription drug costs, whether or not they relate to the beneficiary's chronic health condition.

"Through this demonstration project, Medicare will work to find better ways to promote an improved quality of life for people with diabetes and chronic heart disease," Health and Human Services Secretary Tommy G. Thompson said. "This project also can help us determine the benefits of disease management programs for chronically ill persons and ways to make these services available to Medicare beneficiaries."

"The results obtained from this demonstration project will be important to the nation and taxpayers because a small proportion of beneficiaries covered by Medicare fee-for-service account for a large share of expenditures," CMS Administrator Tom Scully said. "These individuals often suffer from one or more chronic illnesses and require repeated hospitalizations. And very often these patients are receiving expensive, fragmented health care, from multiple health care providers and multiple sites of care."

CMS selected CorSolutions of Rosemont, Ill; Diabetex/XLHealth of Baltimore, Md.; and HeartPartners SM, a Santa Ana, California-based collaboration among PacifiCare, QMed, Alere Medical, and Prescription Solutions, as the three organizations to participate in the three-year pilot project.

Starting next year, the three organizations will recruit beneficiaries with heart problems and complex diabetes to help CMS test whether and how providing disease management services to those enrolled in the traditional Medicare fee-for-service program can result in better patient outcomes. This organization will be responsible for improving the coordination of care for the beneficiaries they enroll without increasing Medicare costs.

CorSolutions plans to serve 5,000 Medicare beneficiaries with heart failure, diabetes and/or coronary heart disease in the Shreveport to New Orleans, Louisiana corridor. Diabetex/XLHealth will enroll 10,000 beneficiaries with heart failure (HF), cardiovascular disease (CVD), or diabetes with co-morbidities of HF, CVD or lower extremity complications in the metropolitan areas of Texas. HeartPartnersSM expects to serve 15,000 beneficiaries with heart failure in California and Arizona.

The pharmacy benefit for CorSolutions will be provided through Express Scripts, for Diabetex/XLHealth through PBM Plus (an Omnicare Company), and for HeartPartners SM through PacifiCare's Prescription Solutions.

The demonstration will enable CMS to assess whether disease management programs, along with outpatient drug coverage, can improve medical treatment plans, reduce unnecessary hospital admissions, and promote other desirable outcomes. Each participating organization is required to provide a guarantee of its projected savings to the Medicare program.

The organizations will work with CMS to finalize the details of the project and expect to begin enrolling beneficiaries in January 2004.

The demonstration program was mandated by the Medicare, Medicaid and State Child Health Insurance Program Benefits Improvement and Protection Act of 2000. It is the latest in an ongoing series of disease management demonstrations:

  • Earlier this year, Secretary Thompson announced demonstration projects that will allow health care organizations to offer tailored coordinated health plans exclusively to Medicare beneficiaries with conditions such as stroke, congestive heart disease and diabetes.
  • In April 2002, a coordinated care demonstration began to test whether coordinated care can improve medical treatment plans, reduce avoidable hospital admissions and promote other desirable outcomes among Medicare beneficiaries with chronic diseases.
  • A case management demonstration began in the fall of 2001, to test whether intensive case management services for congestive heart failure and diabetes mellitus are cost-effective means of improving clinical outcomes, quality of life, and satisfaction with services for high-risk Medicare fee-for-service beneficiaries.
  • CMS will soon send guidance to states on how Medicaid programs can incorporate disease management services into their benefit plans through the use of waivers or state plan amendments. The new guidance will help states tailor benefits to the needs of enrollees with chronic, or long-term illnesses.
  • CMS plans to launch other disease management demonstrations in the near future, including one focused on beneficiaries with end-stage renal disease and a Medicare fee-for-service population-based demonstration targeting specific diseases such as congestive heart failure, diabetes, and chronic obstructive pulmonary disease in selected areas with underserved and disadvantaged populations.