[Federal Register: February 28, 2003 (Volume 68, Number 40)]
[Notices]
[Page 9673-9680]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28fe03-104]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-5002-N]
RIN 0938-ZA39
Medicare Program; Demonstration: Capitated Disease Management for
Beneficiaries With Chronic Illnesses
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
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SUMMARY: This notice informs interested parties of an opportunity to
apply for a cooperative agreement to participate in a Capitated Disease
Management Demonstration. This demonstration uses disease management
interventions and payment for services based on full capitation (with
risk sharing options) to (1) improve the quality of services furnished
to specific eligible beneficiaries, including dual eligibles and the
frail elderly, and (2) manage expenditures under Parts A and B of the
Medicare program. We are interested in testing models aimed at
beneficiaries who have one or more chronic conditions that are related
to high costs to the Medicare program, such as stroke, congestive heart
failure, or diabetes. We intend to use a competitive application
process to select organizations to participate in this demonstration.
DATES: Applications will be considered timely if we receive them on or
before May 29, 2003.
ADDRESSES: Mail applications to: Department of Health and Human
Services, Centers for Medicare & Medicaid Services, Office of Research
Development and Information, Demonstration Program staff, Attn: Raymond
Wedgeworth, Mail Stop: C4-17-27, 7500 Security Boulevard, Baltimore,
Maryland 21244. Applications must be typed for clarity and should not
exceed 40 double-spaced pages, exclusive of the executive summary,
resumes, forms, and documentation supporting the cost proposal. Because
of staffing and resource limitations, we cannot accept applications by
facsimile (FAX) transmission. Applications postmarked after the closing
date, or postmarked on or before the closing date but not received in
time for panel review, will be considered late applications.
FOR FURTHER INFORMATION CONTACT: For information concerning this
demonstration, contact Raymond Wedgeworth, CMS Project Officer, at
(410) 786-6676, or rwedgeworth@cms.hhs.gov.
SUPPLEMENTARY INFORMATION:
Eligible Organizations
Potentially qualified applicants are provider sponsored
organizations, academic medical centers, Medicare+Choice organizations,
or disease management companies, who can demonstrate ability to
effectively supply disease management services applicable to the
Medicare population, which may include dual eligibles and frail
elderly, specific to select chronic conditions.
Administrator Initiative
The clearest statement of the Administration's priorities for
Medicare is found in the White House document, ``21st Century
Medicare,'' issued on July 12, 2001. In that document, the
Administration made a series of proposals for modernizing Medicare
benefits so that they would better meet the needs of its beneficiaries.
One of the important proposals in the document is to improve the
current limits of the program on innovative treatment. The report notes
that ``Medicare's traditional approach to paying only for discrete
visits and services has denied many seniors the opportunity to take
advantage of the advances that have been pioneered by integrated health
delivery in coordinating care for complex conditions and chronic
diseases. These programs can lead to better health outcomes and reduce
total medical costs by avoiding complications.''
In line with the above goals, the Administration is undertaking a
series of disease management demonstration projects to explore a
variety of ways to improve beneficiary care in the traditional Medicare
plan. These demonstrations provide beneficiaries with greater choices,
enhance the quality of their care, and offer better
[[Page 9674]]
value for the dollars spent on health care.
The purpose of this demonstration is to test capitated payment
arrangements with qualified organizations for the case management of
specific diseases. The targeted populations include Medicare
beneficiaries with chronic illnesses and special populations, such as
dual eligibles and frail elderly. The payment models employed are
intended to reduce costs and improve the coordination and quality of
care for Medicare beneficiaries with select chronic diseases. In
addition, the models may be applied to organizations that target dual
eligibles or the frail elderly. Specifically, we will pay predetermined
rates for each month for which an individual chooses to receive disease
management services under this demonstration, according to a disease-
specific risk adjustment approach currently being developed. (Disease
specific risk adjusters are being developed as part of the model for
M+C Risk adjustment. The legislative mandate for implementation of the
risk adjustment model is January 1, 2004 for all plans. This risk
adjuster, which will factor a greater number of comorbidities into the
payment, is to be announced March 2003.)
There will also be a risk sharing option available (that is, a
symmetrical risk sharing on profit and losses around a Medical-Loss-
Ratio).
In exchange for the capitation amount, the applicant would be
required to cover all Medicare-covered services for an individual
participating in the demonstration, in addition to the disease
management services. The applicant would be required to make such
services available to beneficiaries participating in the demonstration,
either directly or through arrangements with other Medicare-certified
providers. Medicare beneficiaries participating in this demonstration
would be informed that it is a condition of such participation that
they receive services through the provider of disease management that
has received a payment on behalf of the participant. For non-M+C
organizations, only traditional Medicare fee-for-service (FFS)
beneficiaries are eligible to participate in the demonstration. The
intent of the demonstration is to attract traditional Medicare FFS
beneficiaries, however, we will consider, on a case-by-case basis,
allowing M+C organizations to market the demonstration to their current
M+C beneficiaries and permit participation in the demonstration by one
M+C beneficiary for every 2 traditional Medicare FFS beneficiaries they
get to participate. Current M+C beneficiaries would have to disenroll
from their current M+C plan in order to participate in the
demonstration. Organizations allowed to sign up current M+C beneficiary
who disenrolled from an M+C plan to participate in the demonstration
would have to agree to the monitoring of their Medical-Loss-Ratio
(MLR).
The capitated payment method will require the collection and
submission of simplified encounter data. The demonstration will use the
Group Health Plan Payment System to pay the sites.
Under this demonstration, selected organizations would provide the
clinical management of patients with high cost diagnoses such as
stroke, congestive heart failure, and diabetes. (Applicants may propose
a project that seeks to intervene with disease management services for
Medicare eligible beneficiaries who have the potential for renal
failure but who are not yet in dialysis. Randomization may be required
for a proposal with this model.) The demonstration would be especially
appropriate for provider sponsored organizations (PSOs), but is also
open to other types of organizations such as disease management
organizations, academic medical centers (AMCs) or M+C organizations. By
targeting or encouraging the formation of integrated delivery systems
and paying a single risk payment rather than reimbursing services on a
fee-for-service basis, we hope to improve communication and
coordination of services between patient, physician, disease management
organizations, and other providers.
I. Background
A. Legislative Background
Section 402(a)(1)(A) of the Social Security Amendments of 1967
(Pub. L. 90-248), 42 U.S.C. 1395b-1(a)(1)(A), authorizes the Secretary
to develop and engage in demonstrations ``to determine whether, and if
so which, changes in methods of payment or reimbursement * * * for
health care and services under health programs established by the
Social Security Act, including a change to methods based on negotiated
rates, would have the effect of increasing efficiency and economy of
health services under such programs through the creation of additional
incentives to these ends without adversely affecting the quality of
such services. * * *''
Under section 402(b) of the Social Security Act Amendments of 1967,
the Secretary is authorized to waive requirements in title XVIII that
relate to reimbursement and payment in order to carry out
demonstrations authorized under section 402(a) of the Social Security
Act Amendments of 1967.
Under this demonstration, we would use the authority in section
402(b) to waive the ``fee-for-service'' (FFS) payment rules that would
ordinarily apply to a beneficiary who has elected the ``Original
Medicare plan'', and would substitute the methodology discussed in this
notice, and agreed to in the demonstration contract.
B. Problem
Historically, a small proportion of Medicare beneficiaries has
accounted for a major proportion of Medicare expenditures. For example,
in 1996, 12.1 percent of all Medicare enrollees accounted for 75.5
percent ($126.1 billion) of all Medicare FFS program payments. Many of
these high-cost beneficiaries are chronically ill with certain common
diagnoses, and most of the Medicare expenditures for their care are for
repeated hospitalizations. During the next 30 years, as the population
ages, the number of individuals and estimated cost of care for these
individuals are expected to grow dramatically.
In addition, dual eligibles and special populations account for a
large proportion of Medicaid and Medicare expenditures. The 1998
Medicare Chart Book reported that in 1995, the 6 million dually
eligible beneficiaries accounted for 30 percent Medicare spending,
though they only represented 16 percent of the Medicare population.
Moreover, the dually eligible accounted for 35 percent of Medicaid
spending, though they only made up 17 percent of the Medicaid
population.
When services furnished to individuals with chronic illness are
reimbursed on a FFS basis, health care has often been fragmented and
poorly coordinated across multiple health care providers and multiple
sites of care. Evidence-based practice guidelines have not always been
followed, nor have patients always been taught how best to care for
themselves. These shortcomings are particularly true for patients
served under reimbursement systems in which providers lack incentives
for controlling the frequency, mix, and intensity of services, and
where they have limited accountability for the outcomes of care.
Many M+C organizations and private insurers have realized the
importance of effectively coordinating the care of services for persons
with select chronic conditions. The quality of care, as well as the
cost of care, can be improved through better integration of the
delivery system. In order to create incentives to maintain costs,
encourage the coordination of services, and
[[Page 9675]]
improve the quality of care, M+C and private insurers have developed
alternative payment systems that put the provider of disease management
organizations at full or partial risk for the cost of care.
Concerning dual eligibles, integration across the continuum of
primary, acute, and long-term care services for vulnerable populations
has gained attention in recent years as an approach that could produce
both cost efficiencies and more appropriate decisions on the settings
in which care is delivered.
C. Disease Management
The level of interest in and knowledge about disease management is
growing dramatically. The Institute of Medicine's report, entitled
``Crossing the Quality Chasm,'' highlights the challenge of managing
chronic conditions within a system that was designed to treat acute
illness. Major national organizations such as the Disease Management
Association of America (DMAA) have been formed to advance the practice
of disease management, and the National Committee for Quality Assurance
(NCQA) has established standards for disease management programs.
Early efforts at disease management occurred mainly in managed care
settings, as the plan and the providers had clear incentives to manage
care and the patients were enrolled and ``locked into'' a delivery
system. More recently, a variety of health care organizations including
physician group practices, private insurers, commercial firms, and
academic medical centers, have developed programs designed to address
the challenges inherent in managing chronic illnesses within the
context of a FFS system oriented around episodic care. The most obvious
of these systems are called PSOs.
The NDMA, NCQA, and other organizations such as the National
Pharmaceutical Council have put forward definitions of disease
management that contain certain common elements. These definitions view
disease management as an approach to delivering health care to persons
with chronic illnesses that aims to improve patient outcomes while
containing health care costs. These programs tend to target persons
whose primary health problem is a specific disease, although certain
comorbid conditions are usually addressed as well. Patients with a
similar level of severity of a disease tend to face similar problems
and therefore receive similar treatment plans. These disease management
interventions tend to be highly structured and emphasize the use of
standard protocols and clinical guidelines.
Certain common features are found in all of these definitions:
[sbull] Identification of patients and matching the intervention
with need.
[sbull] Use of evidence-based practice guidelines.
[sbull] Supporting adherence to the plan of care.
[sbull] Supporting adherence to evidence-based medical practice
guidelines by providing medical treatment guidelines to physicians and
other providers, reporting on the patient's progress in compliance with
protocols, and providing support services to assist the physician in
monitoring the patient.
[sbull] Services designed to enhance patient self-management and
adherence to their treatment plan. Examples of these services are
patient education, monitoring and reminders, and behavior modification
programs aimed at encouraging lifestyle changes.
[sbull] Routine reporting/feedback loop (may include communication
with patient, physician, health plan and ancillary providers, and
practice profiling).
[sbull] Communication and collaboration among providers and between
the patient and providers. Related services include team conferences,
collaborative practice patterns, and routine reporting and feedback
loops. In addition, care managers are often used to relay communication
and to coordinate care across providers and between face-to-face
encounters with chronically ill patients. Programs that address
comorbid conditions extend their communication efforts to include all
of the patient's providers and the entire spectrum of care.
[sbull] Collection and analysis of process and outcomes measures.
In addition to these standard features, programs may include use of
information technology such as specialized software, data registries,
automated decision support tools, and callback systems. Although
disease management services usually do not include actual treatment of
the patient's condition, many disease management programs augment the
services provided in the traditional FFS system by adding such services
as comprehensive geriatric assessment, social services, preventive
services, transportation, including prevention services and necessary
prescription drugs and outpatient medications. The interventions
provided go beyond those services generally covered under the Medicare
FFS program.
In our recent study aimed at investigating and benchmarking case
management and disease management efforts, the suggestion was made that
case and disease management organizations provide services aimed at
addressing one or more of the following goals: improving patient self-
care, improving physician prescribing and treatment practices,
improving communication and coordination, and arranging and providing
for services. Programs vary in their relative focus on these areas.
Some disease management programs may emphasize improving physician use
of recommended clinical guidelines, others may focus on providing case
managers to support and educate the patient and enhance communication,
and others may emphasize access to additional services.
D. CMS Demonstrations of Management of Chronic Diseases
We have made three awards pursuant to section 121 of the Medicare,
Medicaid, and Benefits Improvement and Protection Act (BIPA)(Pub. L.
106-554, enacted on December 21, 2000) that directs us to conduct a
demonstration project for the Medicare FFS population to determine the
impact on costs and health outcomes of applying disease management
services. Demonstration sites plan to start enrollment in the spring of
2003. Under this BIPA demonstration, services will be supplemented with
coverage for prescription drugs provided to beneficiaries with
advanced-stage congestive heart failure, diabetes, or coronary heart
disease. A key feature of the demonstration is that the selected
organizations must guarantee either through reinsurance or some other
means, net savings to the Medicare program.
In the past, we have conducted several demonstrations of case
management for chronic illnesses, including the national channeling
demonstration and the Alzheimer's Disease demonstration. The
evaluations of these demonstrations found that none of them showed
sufficient savings to cover the additional costs of case management.
There are several possible reasons for the lack of positive
results. First, the most appropriate individuals were not always
targeted and enrolled into the demonstration. In many cases, the sites
enrolled patients with less severe, and therefore less costly
conditions, making it more difficult to achieve cost savings by
avoiding normal utilization patterns of acute or long-term medical
care. The disease management demonstration Web site www.cms.hhs.gov/
healthplans/research/DMDemo.asp
contains
[[Page 9676]]
additional information about these demonstrations.
We are currently conducting other demonstrations that test either
case or disease management. In one demonstration, Lovelace Health
Systems in Albuquerque, New Mexico was chosen to operate demonstrations
of intensive case management services for high-risk patients with
congestive heart failure and diabetes to improve the clinical outcomes,
quality of life, and satisfaction with services. The other is a larger
scale demonstration involving 15 sites authorized by the Balanced
Budget Act (BBA) of 1997 (Pub. L. 105-33, enacted on August 5, 1997) to
evaluate methods such as case management and disease management that
improve the quality of care for beneficiaries with a chronic illness.
The coordinated care demonstration was designed based on the findings
of a review of best practices for coordinating care in the private
sector. More information about the Coordinated Care Demonstration can
be found on our Web site www.cms.hhs.gov/healthplans/research/
coorcare.asp.
E. The Capitated Disease Management Demonstration
This demonstration will provide clinical management of--
(1) Patients with high cost diagnoses such as stroke, congestive
heart failure, and diabetes, (2) people who receive both Medicare and
Medicaid, or (3) frail elderly patients that would benefit from a
greater coordination of services. The project will allow us to build on
the experiences of existing clinical disease management organizations.
The delivery system will be targeted to PSOs but is open to other types
of organizations such as disease management organizations, AMCs, or M+C
organizations. Participation by qualified beneficiaries currently in
the traditional fee-for-service Medicare program is the intended
objective, however, we will consider allowing M+C organizations, on a
case-by-case basis, to accept one M+C beneficiary for participation in
the demonstration for every 2 traditional Medicare FFS beneficiaries
that participate. Organizations allowed to accept a current M+C
beneficiary (who must actively disenroll in the plan first) must allow
the monitoring of their Medical-Loss-Ratio (MLR).
In developing this demonstration, we reviewed the work and
recommendations of organizations such as the NDMA and NCQA, and
examined our prior and current experience with similar demonstrations.
This demonstration differs from its predecessors in that the focus
is on paying a risk adjusted capitated rate with negotiated risk
sharing arrangements to qualified organizations in order to create
incentives to improve the quality and coordination of care. Moreover,
we will be using the recently developed risk-adjustment payment
methodology that will apply to all M+C organizations beginning in 2004.
It is a selected significant disease model, which includes many chronic
illnesses that are relevant to predicting future expenditures.
For the purpose of this demonstration, disease management is
defined as a systematic approach to managing health care that aims to
improve patient care, physician treatment practices, communication and
coordination, and access to needed services, and incorporates the
following features:
Eligible Population
Beneficiary participation in this demonstration is strictly
voluntary. Each beneficiary must be fully informed about the
demonstration and must sign an informed consent form in order to
participate. In addition to indicating informed consent, Medicare
beneficiaries must satisfy the following conditions in order to be able
to participate in the demonstration project:
Eligibility Criteria
[sbull] Must be a Medicare beneficiary enrolled in Part A and Part
B.
[sbull] Medicare must be primary payer.
[sbull] Must have a chronic disease, such as stroke, congestive
heart failure, or diabetes (except for dual eligible or frail elderly).
Medicare beneficiaries will be excluded from eligibility if they:
[sbull] Are currently enrolled in a M+C plan; however, we will
consider allowing M+C organizations to allow participation in the
demonstration by one M+C beneficiary for every 2 traditional Medicare
FFS beneficiaries.
[sbull] Are receiving hospice or end stage renal disease benefits.
[sbull] Are currently participating in another CMS demonstration.
[sbull] Are unable to participate in self-care activities due to
severe dementia or other serious mental illness.
Payment
A contracting provider or provider organization will be paid for
the services it provides to demonstration participants (without regard
to the frequency and intensity of the services received by a given
individual) on a monthly capitation basis. In exchange for this
payment, the contractor would be responsible for furnishing or
arranging for all covered Medicare Part A and Part B services. A
listing of the beneficiaries who have elected to receive disease
management services through the demonstration will be furnished to us
on a monthly basis, which will be submitted to the Group Health Payment
System to process payments for the services furnished to these
beneficiaries.
The capitated payment rate will be based on the higher of the rate
paid under the M+C program or 99 percent of a county-level fee-for-
service base rate that will be calculated using a method developed by
our Office of the Actuary. The payment rate will be fully risk adjusted
using the new risk-adjustment methodology.
In compliance with the legislative mandate in BIPA, we have
announced a draft risk adjustment model that includes inpatient and
ambulatory diagnosis data, which will be implemented in January 1,
2004. The specific payment methodology will be announced in March 2003.
We have chosen a selected significant disease model with approximately
61 condition groups. This model incorporates multiple chronic diseases
into the payment system. Although the new risk adjustment payment
methodology will not be implemented for the M+C program until January
2004, demonstration payment amounts will be calculated using the new
risk-adjustment payment methodology, and will be fully risk adjusted,
rather than being phased-in as is the case in the M+C program. (M+C
organization payments are subject to the congressionally mandated
phase-in of risk adjustment whereby only a portion of the payment is
risk adjusted and the other portion of the payment is calculated using
demographic factors. Under this demonstration, the payment amount will
be fully risk adjusted.)
The following example is for applicants to estimate risk scores
based on the current model of the selected significant condition model.
This example is for illustrative purposes only.
Our example is a female, age 76, and she is Medicaid eligible. She
has the following conditions:
[sbull] Chronic obstructive pulmonary disease (COPD).
[sbull] Congestive heart failure (CHF).
Go to illustrative table found at www.cms.hhs.gov/healthplans/
encounter/RAmodels.pdf
for determining estimated payments. Use the
draft coefficient under the ``61-condition'' model column to find
estimates.
Payment estimate = Female, age 76 ($2,500) + Medicaid ($1,000) +
COPD
[[Page 9677]]
($2,000) + CHF ($2,300) + CHF*COPD Interaction ($1,400) = $9,200.
In determining the risk score, notice that all the coefficients are
added together (demographic characteristics and risk factors). Also,
there is additional payment in the model for the interaction between
COPD and CHF.
The total predicted expenditures equal $9,200, which is divided by
$5,300 to arrive at a 1.74 risk factor estimate. The $5,300 amount is
average cost for a Medicare beneficiary in fee-for-service.
An actual payment estimate requires a ratebook that is not
available until May 2003. If that rate book were available, you would
multiply the risk factor by the rescaled county capitation amounts for
the enrollee (Part A and Part B amounts). For more information on this
model go to www.cms.hhs.gov/healthplans/riskadj/.
If the applicant is proposing risk sharing, the arrangement must be
described in detail. The applicant should include examples that
illustrate the risk sharing arrangement. The shared risk of gain and
loss between us and the participating organization must be symmetrical,
and the organization must always remain at significant financial risk.
Because we intend to implement any approved demonstrations as soon
as possible, we do not intend to make any significant changes to the
payment system used under the M+C program, which would be used to make
payments under this demonstration. Thus, we will use the same risk-
adjustment method developed for M+C plans to be used beginning in
January 2004, except the payment amount will be fully risk-adjusted.
The reporting systems used under the M+C data will also apply. If the
applicant believes it is necessary to modify any aspects of the payment
process, the application should request the modification and provide a
detailed justification for the request.
Network
Since the key to a successful disease management product is the
composition of the provider network employed by the applicant, and the
effectiveness of the network providers' care management, the applicant
should describe the structure of the proposed network it would use, and
the structure of its existing networks, to the extent applicable. If
possible, the applicant should illustrate with a diagram the layering
of networks (PSO, HMO, etc.) and describe the important differences in
contracting provisions in each network. For the proposed capitated
disease management demonstration, the applicant should describe which
networks would be used, how existing networks would be modified for
Medicare users, and if necessary, how existing networks will be
expanded.
As noted above, beneficiaries electing to receive case management
through this demonstration would agree, as a condition for doing so, to
receive services through the case management provider.
Claims Processing
The application should contain a discussion of the methods for
processing and paying claims in the demonstration, including in-network
and out-of-network services. The applicant should indicate whether
existing claims processing systems used in commercial business will be
used or whether new systems must be developed for the Medicare
demonstration.
If there are any interface requirements for Medicare intermediaries
and carriers, this should be noted and discussed. Estimates of effort
required to establish payment protocols should also be included.
Budget Neutrality
This demonstration must be budget neutral. This means that the
expected costs that we incur under the demonstration can be no more
than the expected costs were the demonstration not to occur. The
applicant must submit a budget neutrality calculation in the
application. Using the proposed payment methodology (including any risk
sharing arrangements), the applicant should estimate our payments with
and without the demonstration for each year of the demonstration.
Applicants must use both FFS and M+C expenses calculated on a county
basis for the without-demonstration baseline for comparison to the
with-demonstration costs. The calculation should indicate how the
estimates were derived. If risk sharing is proposed, there should be
three calculations of budget neutrality--optimistic or best-case
assumptions, expected or normal assumptions, and pessimistic or worst-
case assumptions. The risk-sharing proposal must include a 2 percent
full-risk corridor above and below a targeted Medical-Loss-Ratio. In
addition, prior to awards, CMS will work with applicants to determine
whether the proposed Medical-Loss-Ratio is set at a level where the
risk-sharing arrangement is projected to be budget neutral.
The applicant should include a revenue and expense statement
showing calendar year 2003 estimated per member per month Medicare
revenue and member premium; benefit expenses (hospital inpatient,
hospital outpatient, professional, other Medicare services, and non-
Medicare services); and administrative expense. The statement should
show any copay credits for the various services.
If risk sharing is proposed, we will share risk only on medical
benefit expenses. Administrative expense must be reasonable and
consistent with prior practices. The applicant should describe a
reconciliation process to be used to determine savings or losses. The
administrative cost will not be guaranteed and should be recovered from
savings. A reconciliation based on the participating organizations'
accumulated medical claims expenses must include an independent audit,
funded by the organization, verifying the calculations.
Medigap Issues
Many Medicare beneficiaries have health insurance that supplement
Medicare, such as a Medicare supplement (Medigap) policy or coverage
through an employer-sponsored group plan. Thus, to be enrolled in the
demonstration, beneficiaries must be informed about supplemental health
insurance, including Medigap policies and protections. With respect to
Medigap policies, a beneficiary who enrolls in the demonstration would
generally have the following protections:
[sbull] Under section 1882(s)(3)(B)(iii) of the Social Security
Act, if an individual is enrolled in an organization operating under
demonstration project authority and enrollment ceases under the same
circumstances that would permit an individual to disenroll from a
Medicare+Choice plan as set forth in 1851(e)(4), (for example, contract
termination, moving out of the service area), the individual has a
right to purchase certain Medigap policies (generally Plan A, B, C, or
F) on a guaranteed issue basis.
[sbull] Under section 1882(s)(3)(B)(v) of the Social Security Act,
if an individual has a Medigap policy and drops the Medigap policy to
enroll, for the first time, in a M+C plan or any similar organization
operating under demonstration project authority (emphasis added) and
the beneficiary disenrolls during the first 12 months of such
enrollment, the individual has the right to buy his or her former
Medigap policy, if it is still available from the same insurance
company. If the former policy is not still available, the individual
has the right to buy Plan A, B, C, or F.
[[Page 9678]]
While a beneficiary is free to keep his or her Medigap policy,
there may be little benefit in doing so, as these policies are designed
to complement payments under Original FFS Medicare payment rules.
State Insurance Commission Licensure
Depending on the design of the demonstration, programs under this
demonstration may be considered to fall within State laws regulating
insurance, and State licensure thus may be required before an applicant
can participate. The applicant should discuss State-licensing issues
for the proposed demonstration site, and indicate any potential
problems in obtaining the appropriate license to participate in the
capitated disease management demonstration. If potential problems
exist, there should be a discussion of methods for their resolution.
The applicant should also discuss any other requirements from local
jurisdictions that could impact on the implementation of the capitated
disease management demonstration. We will work closely with
organizations and their respective States to ensure that all of the
State requirements are met before the demonstration is implemented.
Other Features
Applicants will also be expected to follow additional features that
include--(1) Identification and assessment of patients, and
documentation of their decision to elect to receive disease management
through the demonstration, following the rules that apply under the M+C
program; (2) Implementation of an appropriate treatment plan based on
clinical guidelines; (3) Monitoring, feedback, and communication
concerning the patient's condition; and (4) Arranging for and/or
providing needed services, including preventive services.
I. Provisions of This Notice
This notice solicits applications for demonstration projects that
use disease management to improve the quality of services furnished to
specific beneficiaries and manage expenditures under Parts A and B of
the Medicare program. Demonstration awardees will receive a capitated
payment for all Medicare-covered services for beneficiaries with select
diseases electing to receive disease management through the
demonstration. The demonstration anticipates savings from more
efficient provision and utilization of Medicare-covered services and
the prevention of avoidable, costly medical complications. Applicants
may propose to manage chronic conditions in which they have
demonstrated expertise and ability.
Through this solicitation, project awards will be made to qualified
organizations. PSOs, M+C organizations, AMCs, or disease management
companies, may propose one or multiple sites for any of their targeted
diseases or for multiple diseases. The demonstration projects will
operate for 3 years from implementation during which time a formal
independent evaluation will be conducted. Each awardee is expected to
fully cooperate in all phases of the evaluation. A project officer will
be assigned to each selected project that will serve as the point of
contact with the demonstration project staff. Our project officer will
provide technical consultation regarding cooperative agreement
procedures, monitor demonstration site activities, and forward feedback
to the demonstration project's staff.
II. Requirements for Submissions
We are seeking innovative proposals from qualified organizations
that can test whether capitated models for disease management using a
newly developed disease-specific risk-adjustment model will improve
clinical outcomes and appropriate use of Medicare-covered services for
targeted Medicare beneficiaries, while managing Medicare expenditures
under Parts A and B to achieve reduced aggregate Medicare expenditures.
Models that are targeted specifically at the traditional FFS
Medicare population and that take into account the beneficiaries'
relative health and functional status, age, mental functioning, and
other relevant factors, are of particular interest. Preference will be
given to proposals that focus on beneficiaries most likely to benefit
from disease management interventions and that take patient
comorbidities into account in the services provided.
Applicants must submit their applications in the standard format
outlined in CMS's Medicare Waiver Demonstration Application in order to
be considered for review by the technical review panel. Applications
not received in this format will not be considered for review.
The Medicare Waiver Demonstration Application may be accessed at
the following Internet address: http://www.cms.hhs.gov/healthplans/
research.
The application outlines all application requirements
including the format and content requirements.
III. Evaluation Process and Criteria
A panel of experts will conduct a review of responsive proposals.
This technical review panel will convene in the months following the
due date for submission of proposals. The panelists' recommendations
will contain numerical ratings based on the evaluation criteria, the
ranking of all responsive proposals, and a written assessment of each
applicant. In addition, we will conduct a financial analysis of the
recommended proposals and evaluate the proposed projects to ensure that
aggregate Medicare program expenditures are reduced.
A. Evaluation Criteria and Weights
1. Statement of the Problem (5 Points)
The proposal describes--
[sbull] The population;
[sbull] Patterns of health care;
[sbull] Incidence of disease in the geographic area to be served by
the disease management program;
[sbull] Enhancements planned in the disease management program; and
[sbull] Obstacles to providing disease management services.
2. Targeting the Appropriate Population (15 Points)
[sbull] The proposal provides details on how the applicant plans to
identify, recruit, and obtain participation by eligible Medicare
beneficiaries into the demonstration.
[sbull] The strategy and plan for recruiting the required number of
patients in the control and experimental groups appear reasonable and
achievable.
[sbull] The applicant describes the process by which it will ensure
that participation in the demonstration is voluntary, and the
beneficiary is fully informed of all aspects of the demonstration. A
draft consent form is included in the proposal and is sufficient. If
applicable, the form should include, but not be limited to, information
about the randomization process, and use of the patient's medical
records (for example, for monitoring quality of care and for evaluating
the demonstration project).
[sbull] Applicant explicitly states how its referral sources will
use common or readily available information, tests, or instruments to
properly identify appropriate candidates before soliciting
participation in the demonstration in order to reduce the incidence of
beneficiary rejection due to ineligibility.
[sbull] The applicant provides sufficient information on how many
beneficiaries it expects to treat each year at each site.
[[Page 9679]]
3. Description of Disease Management Intervention Services (20 Points)
[sbull] The proposal provides clear and convincing evidence and
supporting materials that proposed disease management services are
appropriate for the targeted population, likely to improve the quality
of care for these individuals, and likely to result in savings from
efficiencies in the use of medical services/products.
[sbull] There are adequate mechanisms for ensuring the medical
necessity and reasonableness of the disease management services
furnished under the demonstration.
[sbull] There are adequate mechanisms for ensuring that
beneficiaries' physicians are integrated with the project.
[sbull] The proposal provides sufficient detail on exactly how each
service will be provided, the type and level of staff that will be
providing the service, the proposed level of effort required, and a
discussion of any special equipment, such as monitoring or electronic
input devices.
[sbull] The data to be collected, data sources, and data analyses
planned are specified in detail and are sufficient to ensure optimal
medical management and efficient use of health care services.
4. Organizational Capabilities (20 Points)
[sbull] The proposal provides evidence of the availability and
adequacy of the following components, which are necessary to ensure
adequate service delivery and the provision of high quality of care:
+ Facilities.
+ Equipment.
+ Trained staff.
+ Clinical protocols to guide care delivery and management.
+ Linkages to providers and services necessary to deliver care.
+ Appropriate information systems including the ability to collect
and submit data for risk adjustment.
+ Appropriate financial systems.
[sbull] The proposal includes a detailed implementation plan
describing tasks, time lines, and costs associated with implementing
the demonstration program.
[sbull] If any modifications to the applicant's current structure
are proposed, they have been sufficiently described and justified.
Modifications may involve protocols, services, outreach, education
initiatives, timelines, etc.
[sbull] The organizational and reporting structure of personnel are
provided.
[sbull] The application should contain a discussion of the methods
for processing and paying claims in the demonstration, including in-
network and out-of-network services.
[sbull] The application provides a detailed plan of all tasks
necessary to implement the disease management project, a schedule with
timelines for all essential tasks, a listing of key personnel for the
project, including an overall point of contact for the demonstration,
and a break out of the responsibilities for persons working on the
project.
[sbull] The applicant expresses willingness to cooperate in an
independent formal evaluation of the demonstration, including
submission of cost and other program data and site visits, conducted by
us and/or our contractor.
[sbull] The proposal does not include targeting or treatment
protocols that are proprietary in nature, or, if proprietary protocols
are included, the proposal clearly indicates the applicant's agreement
to the following statement:
``At any phase in the project, including at the project's
conclusion, the awardee if so requested by the project officer, must
deliver to CMS materials, systems, or other items applied, developed,
refined or enhanced in the course of or under the award to be used to
further the purpose of this demonstration project. These materials,
systems, or other items shall not be subject to use for any other
purpose.''
5. Effectiveness of Intervention(s) (20 Points)
[sbull] For existing disease management programs, the applicant
demonstrates prior experience in operating successful disease
management programs.
[sbull] For existing disease management programs, the applicant
shows evidence of positive outcomes from prior and current efforts.
Claims of prior success must include definitions of the outcomes
measures used, as well as explanations of the length of time over which
they were measured and how the measures were calculated. Results from
similar projects are cited.
[sbull] The applicant expresses a willingness to work with us, the
evaluation contractor, and the consortium of awardee sites to determine
the specific data to be collected across sites for each disease
category, as well as to develop consistent measurement strategies
between sites.
[sbull] The proposal provides convincing evidence that the
intervention will likely increase the appropriate utilization of
evidence-based and guideline-recommended therapies, as well as improve
patient outcomes.
[sbull] Existing information systems and/or proposed new data
collection are adequate to meet the quality of care reporting
requirements. Applicants should list data to be collected in
demonstration.
[sbull] The proposal reports strong, credible likelihood of savings
and improved patient outcomes calculated from data collected during
implementation of similar disease management interventions by the
applicant.
6. Payment for Disease Management Services and Reduction of Medicare
Expenditures (20 Points)
[sbull] The proposal provides justification and explanation for the
proposed payment methodology.
[sbull] The proposal provides clear, convincing evidence that, over
the three years of the demonstration, the aggregate Medicare
expenditures under Parts A and B (including incentives and start-up
funding, if made) will be less than expected Medicare expenditures in
the absence of the demonstration.
B. Final Selection
From among the most highly qualified applicants, the final
selection of projects for the demonstration will be made by our
Administrator and will take into consideration a number of factors,
including operational feasibility, geographic location, and program
priorities (such as testing a variety of approaches for delivering
services, targeting beneficiaries, and payment). CMS reserves the right
to determine the scope of the project, which includes limiting the
number of awards and beneficiaries covered under the demonstration. In
evaluating applications, we rely on our past experience with successful
and unsuccessful demonstrations. We expect to make the awards in 2003.
IV. Collection of Information Requirements
In compliance with the requirement of section 3506(c)(2)(A) of the
Paperwork Reduction Act of 1995, we are publishing the following
summary of proposed collections for public comment. Interested persons
are invited to send comments regarding this burden estimate or any
other aspect of this collection of information, including any of the
following subjects: (1) The necessity and utility of the proposed
information collection for the proper performance of the agency's
functions; (2) the accuracy of the estimated burden; (3) ways to
enhance the quality, utility, and clarity of the information to be
collected; and (4) the use of automated collection techniques or other
forms of information technology to
[[Page 9680]]
minimize the information collection burden. However, the collection
requirements associated with this notice have been approved by OMB,
under control number 0938-0880, with a current expiration date of 3/31/
2003.
Authority: Section 402 of the Social Security Act Amendments of
1967 (42 U.S.C. 1395b-1)
(Catalog of Federal Domestic Assistance Program No. 93.779, Health
Care Financing Research, Demonstrations and Evaluations)
Dated: September 9, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 03-3879 Filed 2-24-03; 8:45 am]
BILLING CODE 4120-01-P