Medicare News

The Centers for Medicare & Medicaid Services (CMS) today announced a three-year demonstration project for disease management of the chronically ill that includes coverage for prescription drugs.

In a notice that went on display today at the Office of the Federal Register, CMS is soliciting proposals for disease management projects for Medicare beneficiaries with advanced-stage congestive heart failure, diabetes, or coronary heart disease. The notice is to appear in the February 22 Federal Register.

"Disease management has great potential for improving the lives of people with advanced diabetes, heart disease and other chronic illnesses by ensuring that they have coordinated care," said Health and Human Services Secretary Tommy G. Thompson. "This demonstration can help us learn how well these programs work and how best to make these services available to Medicare beneficiaries."

Studies have shown that a relatively small number of beneficiaries with certain chronic illnesses -- including congestive heart failure, diabetes, and coronary heart disease -- account for a disproportionate share of Medicare expenditures.

Patients with these conditions typically receive fragmented health care across multiple providers and multiple sites of care, and they often require repeated, costly hospitalizations. Compounding these problems for people with Medicare is that Medicare does not generally cover outpatient prescription drugs.

"Coordinating their care and enabling patients to work with their doctors orders and monitor their medication will mean better health and fuller lives for Medicare patients and a more efficient Medicare program," said CMS Administrator Tom Scully.

Under the demonstration, disease management organizations will be paid a monthly premium for coordinating the care of patients in the studies and for the cost of prescription drugs. The demonstration will require each organization to improve health outcomes and reduce Medicare program expenditures.

The demonstration project was authorized by the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA). The legislation specifies that awards go to no more than three organizations with up to 30,000 Medicare beneficiaries covered in any year.

The demonstrations will use disease management interventions to (1) improve the quality of services furnished to specific beneficiaries, (2) introduce full prescription drug coverage to encourage patients to comply fully with medical instructions and requirements, and (3) manage expenditures under Parts A and B of the Medicare program.