medicare chronic care improvement program (ccip): update & implications march 2005 vince...

Medicare Chronic Care Improvement Program (CCIP): Update & Implications

March 2005

Vince Kuraitis JD, MBA

Better Health Technologies, LLCwww.bhtinfo.com (208) 395-1197

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Overview

I. Capsulizing DM Today

II. The Event of the Decade for DM: Medicare’s Chronic Care Improvement Program (CCIP)

III. DM Tomorrow: Medicare’s CCIP Pilot Project Awards -- Observations/Implications

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I. Capsulizing Disease Management (DM) Today

Over The Past Few Years A Number of Publications Have Rigorously Examined DM....

http://www.rand.org/health/ICICE/tsai.html

http://www.jmir.org/2004/4/e40

http://archinte.ama-assn.org/cgi/content/abstract/164/15/1641

http://www.cbo.gov/ftpdocs/59xx/doc5909/10-13-DiseaseMngmnt.pdf

http://bmj.bmjjournals.com/cgi/content/full/325/7370/925

http://ebm.vanderbilt.edu/resources/ebcm_white_paper_2003.pdf

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• DM penetration is increasing• Cost as a major driver• Data on ROI: imperfect, controversial• Physician reactions: “skepticism to limited support”• Stand alone DM IT; integration challenges• DM improves quality of care• Patient satisfaction is high• Focus on 4-6 diseases/conditions• DM is a qualified success

Common Themes in Describing DM Today

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CCIP Program Design

Statutory:

Care Management Plan

Decision Support Tools

Clinical Information Database

Discretionary:

Physician Integration

Working with Community Organizations, Local, State Agencies

Integrative Information Infrastructures

Applications of Information and Communication Technologies

The CMS CCIP RFP Wished for the Pot of Gold at the End of the Rainbow

• Specialization

• Integration– Local Delivery

System Integration– Information and

Communication Technology (ICT) Integration

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II. The Event of the Decade for DM – Medicare’s Chronic Care Improvement Program (CCIP)

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Medicare’s Chronic Care Improvement Program is the Event of the Decade for DM

• December 8, 2003 – President Bush signs the Medicare Modernization Act, including Section 721, the Chronic Care Improvement Act (see Appendix C for details)

• April 20, 2004 – CMS releases the CCIP Phase 1 request for proposal (see Appendix D for details)

• August 8, 2004 – final date to submit proposals to CMS

• December 8, 2004 – CMS announces CCIP Phase 1 awards

Highlights From the CMS Website

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And the CCIP Winners Are....

• On December 8, 2004 the Centers for Medicare and Medicaid Services (CMS) announced nine awardees for CCIP pilot projects: – Humana, Inc. - Central Florida

– XLHealth Corporation- Tennessee

– Aetna Health Management, LLC - Chicago, Illinois

– Lifemasters Supported SelfCare, Inc. - Oklahoma

– McKesson Health Solutions, LLC - Mississippi

– CIGNA HealthCare - Georgia

– Health Dialog Services Corporation - Pennsylvania

– American Healthways, Inc. - Washington, D.C. and Maryland

– Visiting Nurse Service of New York Home Care and United HealthCare Services, Inc. - Evercare - NYC: Queens & Brooklyn

Both Integration AND Specialization Are Key Dimensions of Care Management Value Propositions

• Integration – Patients - “do my health care providers talk to one another, do they

share appropriate information about my clinical condition, do they NOT share information inappropriately…”

– Provider consortia - “We coordinate care across the continuum and provide one-stop-shopping in a defined geographic region, thereby lowering costs and improving quality.”

• Specialization – Patients - “do my providers use world-class, state-of-the-art clinical

guidelines, equipment, facilities, people…”– Disease Management Service Companies (DMSCs) - “As a national

company, we treat more people with (a specific disease, e.g., diabetes, asthma, CHF) than anybody else, so we do it better and cheaper.”


To Date DM Clinical/Business Models Have Emphasized Specialization

• Specialized companies providing services• Specialized contracting/financing model -- guaranteed savings• Specialized focus on individual diseases (migrating toward

multiple comorbid conditions)• Specialized technologies: predictive modeling, call centers,

medical management workflow software, etc.• Specialized delivery models are developing for unique customers

– Managed Care Organizations• HMOs• PPOs• other

– Medicaid (in various flavors)

– Medicare

– Employers

–Specialty pharma–State high-risk pools–Multiple diseases–Comorbid patients–Highest cost/risk patients–etc., etc.


Low

Low

High

High

INT

EG

RA

TIO

N

SPECIALIZATION

DM1996

DM Models Have Emphasized Specialization

DM2004


III. DM Tomorrow: Medicare’s CCIP Pilot Project

Awards --Observations/Implications

1) While Medicare’s RFP Said “We want local integration”, All CCIP Awards Went to Specialized Companies

2) Wall Street is Increasingly Impacting DM

3) Scale, Scale, Scale

4) One-Stop-Shopping (OSS) Beats Best-of-Breed (BOB)

5) Distinctions Between Care and Care Coordination Blur Even Further


1) While Medicare’s RFP Said “We want local integration”, All CCIP Awards Went to

Specialized Companies

• All awardees are large, publicly traded DM service companies or health plans (with 1 possible exception, discussed later)

• No awards were made to locally driven consortia, e.g., hospitals/delivery systems, physician groups

• There are major gains yet to be made in integrating DM models into local care– Physician relations, financial incentives– Information technology: data sharing, EHR

• Can specialized DM companies achieve better local integration??


2) Wall Street is Increasingly Impacting DM

“The score at the bottom of the third inning is Wall Street 8.5, Main Street 0.5”


The score at the bottom of the third inning is Wall Street 8.5, Main Street 0.5

• “bottom of the third inning” – it’s still very early in the game; the CCIP awards are not the end of the game – they are a very important milestone that hopefully will result in a major restructuring in the way that chronic care in America is delivered and financed.

• “Wall Street 8.5” – of the 9 CCIP awards, all included major health plans or disease companies that are publicly traded and/or venture capital backed.


• “Main Street 0.5” – it is remarkable (and disappointing) that none of the CCIP awards went to locally driven and backed consortia, i.e., hospitals/delivery systems, physician groups, and the like. – The Main Street team does score 0.5 for the Visiting

Nurse Service of NY (VNSNY)/Evercare award. – VNSNY is a home health agency based in New York City,

and thus is distinguished from the other health plan/DM company awardees. Nonetheless, it is the largest home health agency in the US, completing 20,000 patient visits every day!


• Several DM companies are actively exploring options to become publicly traded on a stock exchange.

• Many other DM related companies are putting themselves up for an auction. They have hired investment bankers and are exploring options for sale, acquisition, merger.

• Several ventures are actively attempting to consolidate a number of DM companies.


Expect to See More Deals Like This One....


3) Scale, Scale, Scale

• Medicare’s awards suggest that company scale (size), IT systems, and experience in DM processes weighed heavily in Medicare’s determination. The most likely scenario for the future is that Medicare will continue to contract with a few large, specialized companies for disease management services; it will likely NOT contract with hundreds of regionally based hospital and/or doctor organizations.


4) One-Stop-Shopping (OSS) Beats Best-of-Breed (BOB)

• In the past, there has been an ongoing marketplace battle between two competing clinical/business models:– One-stop-shopping (OSS): vendors covering multiple

disease states, e.g., American Healthways, Lifemasters– Best-of-breed (BOB): vendors cover individual disease

states, e.g., Alere for CHF, AirLogix for respiratory.

• Prediction: the Medicare CCIP awards will strike a final blow to BOB. BOB companies are a dying breed – expect to see consolidations and mergers.


5) Distinctions Between Care and Care Coordination Blur Even Further

• DM companies and health plans traditionally have seen themselves in the business of coordinating care, NOT in the business of providing clinical care.– Licensing issues with providing “care”, e.g., avoiding the

practice of medicine which requires a MD license– Liability issues associated with providing care and/or being

obligated to provide care– Desire not to interfere with local providers, especially

physicians• While conceptually defensible, the practical distinctions

between clinical care and care coordination are muddy.• Due to the challenges associated with the unique Medicare

population, the distinctions between providing clinical care and providing care coordination will become even more blurred.– The CCIP projects will be caring for some very sick patients,

ones’ whose conditions are subject to day-to-day and hour-to-hour changes requiring clinical intervention and action


• One example: sub-acute and long-term care – Matrix www.matrixhealth.net is a physician practice

company developed to provide care to patients in the long-term care setting.

– Matrix’ CEO Mike Quilty estimates that 10% of CCIP patients will be residents of sub-acute or long-term care facilities.

– McKesson’s CCIP award embeds Matrix’ services to provide care to patients in sub-acute and long-term care facilities.

– Are Matrix’ services “care” or “care coordination”? It’s becoming increasingly hard to defend the traditional DM business/clinical model that works hard to draw this distinction.

http://www.matrixhealth.net/


• Predictions: expect to see two schools of thought about the distinction between care and care coordination– Defensive “As a DM company, we are not in the business of

providing clinical care. For example, gathering real-time patient data through remote patient monitoring (RPM) technologies apprises us of situations which might require immediate clinical intervention. We don’t have a license to practice medicine and we want to avoid liability. Therefore, we should avoid using RPM technologies.”

– Offensive. “There is no way that we can worry about the semantic differences between care and care coordination. To provide the best service to patients, we must gather real time data about patients using RPM technology. We must act on that data ASAP. We must set up systems to get patients care when they need it, e.g., getting standing orders from physicians when clinical parameters exceed pre-established norms.”

• A further prediction: The “offensive” school of thought will become predominant.


APPENDICES


APPENDIX ABetter Health

Technologies, LLC


Better Health Technologies, LLC

• Creating value for patients and shareholders

• Strategy, business models, partnerships• Disease/care management and e-health • Consulting/Business Development

• E-Care Management News– Complimentary e-newsletter– 3,000+ subscribers in 27 countries worldwide– Subscribe at www.bhtinfo.com/pastissues.htm

http://www.nap.edu/books/0309072808/html/

http://www.nap.edu/books/0309072808/html/


BHT Clients

Pre-IPO CompaniesCardiobeat

EZWeb

Sensitron

Life Navigator

Medical Peace

Stress Less

DiabetesManager.com

CogniMed

Caresoft

Benchmark Oncology

SOS Wireless

Click4Care

eCare Technologies

The Healan Group

Fitsense

Established organizationsSamsung Electronics, South Korea

-- Global Research Group

-- Samsung Advanced Institute of Technology

Medtronic

-- Neurological Disease Management

-- Cardiac Rhythm Patient Management

Siemens Medical Solutions

Joslin Diabetes Center

National Rural Electric Cooperative Association

Disease Management Association of America

Blue Cross Blue Shield of Massachusetts

PCS Health Systems

Varian Medical Systems

VRI

Washoe Health System

S2 Systems

CorpHealth

Physician IPA

Centocor


APPENDIX BDescribing Medicare’s

Challenges With Chronic Conditions


Acute Care is Fundamentally Different than Chronic Care

Source: British Medical Journal VOLUME 320 26 February 2000, 526

Patients Have Increasing Life Spans

Source: Robert Wood Johnson Foundation,Chronic Care in America: A 21st Century Challenge, 1996


The Prevalence of Chronic Conditions Increases With Age

Percent of Americans Saying“I Have A Chronic Condition”Percent of Americans Saying“I Have A Chronic Condition”

15%

24%

35%

58%66%

0%

10%

20%

30%

40%

50%

60%

70%

18-29 30-39 40-49 50-64 65+Age

Chronic Illness and Caregiving Survey, Harris Chronic Illness and Caregiving Survey, Harris 20002000


The Number of People with Chronic Conditions is Increasing

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Medicare Beneficiaries With Chronic Conditions Account for Disproportionate Expenditures

Partnership for SolutionsPartnership for Solutions

Beneficiaries With 5 or More Chronic Conditions Account for Two-Thirds of

Medicare Spending

Beneficiaries With 5 or More Chronic Conditions Account for Two-Thirds of

Medicare Spending

1 Chronic Condition

3%

4 Chronic Conditions

12%


10%


6%


1%

5+ Chronic Conditions

68%

Source: Medicare 5% Sample, 2001

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

2000 2010 2020 2030 2040 2050 2060 2075

(Per

cen

tag

e o

f G

DP

)

Medicare Deficit

Spending

Revenues

Source: The Congressional Budget Office, Social Security and the Federal Budget: The Necessity of Maintaining aComprehensive Long-Range Perspective (August 1, 2002).

The CBO Sums Up Medicare’s Problem:A Sea of Red Ink


APPENDIX C Overview and

Background -- The Chronic Care

Improvement Act


• Sections 721-23 of the Medicare Modernization Act (MMA) are known as the Chronic Care Improvement Act. With this program, Medicare will pilot coverage of chronic care services to fee-for-service beneficiaries. The Act is aimed at improving clinical quality, improving beneficiary and provider satisfaction, and reducing Medicare spending.

http://www.dmaa.org/PDFs/pdf2.pdf


• The legislation calls for a two-phased approach– Phase I requires a three-year pilot project. The Centers

for Medicaid and Medicare Services (CMS) is required to enter into contracts with chronic care improvement organizations (CCIOs) using randomized controlled groups.

– Phase II. If results of Phase I indicate improved clinical quality of care, improved beneficiary satisfaction and achieved spending targets, CMS is required to expand the program nationwide. Phase II reflects the full implementation of the program for all beneficiaries.

• The CCIP-I RFP informs interested parties of an opportunity to apply to implement and operate a chronic care improvement program as part of Phase I under Section 721 of the MMA.

• The RFP is 75 pages long!• The RFP is available on the

Chronic Care Improvement Program page of the Medicare website.

• The RFP incorporates CMS’ thinking-to-date about broader chronic care improvement opportunities, as well as laying out the path for prospective applicants to submit applications. THIS IS A VERY IMPORTANT DOCUMENT!

http://www.cms.hhs.gov/medicarereform/ccip/default.asp

Timeline Summary

• December 8, 2003 -- MMA legislation enacted

• April 20, 2004 -- CMS releases the CCIP-I (Chronic Care Improvement, Phase 1) RFP

• August 6, 2004 -- proposals due back to CMS

• Mid-Fall 2004 -- awardee selection

• Late-Fall 2004 -- negotiations with presumptive awardees

• December 8, 2004 -- latest date on which CMS can announce the first contract

• December 2005 -- Interim progress report due from Medicare to Congress

• December 2006 -- earliest date on which Medicare could announce that the projects are successful and begin Phase II -- national implementation of contracting

• December 2007 -- end date for 3 year demonstration projects (assuming all contracts are announced in December 2004)

• May 2008 -- Final project analysis report due from Medicare to Congress

• May 2008 -- Latest date at which Phase II can begin if Phase I projects prove successful

Don’t Be Confused by Other Medicare Chronic Care Improvement Projects and/or

other MMA Demonstration Projects.

• For the past several years, Medicare has already been experimenting with various ways of financing and delivering chronic care improvement services to chronically ill patients. These programs are described on the Demonstration Projects and Evaluation Reports page on the Medicare website.

• The MMA also authorizes many other demonstration projects. These are summarized on the CMS Demonstrations Projects under the Medicare Modernization Act (MMA) page of the Medicare website.

http://www.cms.hhs.gov/researchers/demos

http://www.cms.hhs.gov/researchers/demos/MMAdemolist.asp

http://www.cms.hhs.gov/researchers/demos/MMAdemolist.asp

Acronyms

• CMS: - Centers for Medicaid and Medicare Services• CCIP-I: Phase I of the CMS Chronic Care Improvement

project• CCIP-II: Phase 2 of the CMS Chronic Care Improvement

project• CCIO: Chronic Care Improvement Organization --

organizations that are awardees of Chronic Care Improvement contracts from CMS

• DM: disease management• MMA: Medicare Modernization Act• RFP: request for proposal


APPENDIX DA Summary of the CMS

Chronic Care Improvement-I RFP

Chronic Care Improvement Program:Highlights From the CMS Website


A Conceptual Model of the CCIP


Purpose/Design of the RFP (pp. 15-39)

1) Eligible Organizations: DM organizations, health insurers, integrated delivery systems, physician groups, a consortium of entities, and anybody else that CMS “deems appropriate”

2) Identification of Intervention Groups– CMS is focusing on patients with CHF, complex

diabetes, COPD– CMS will identify eligible beneficiaries through claims

data– Beneficiaries will be randomized into intervention and

control groups


3) Identification of Potential Geographic Areas. CMS is interested in applications that target areas– with higher than average prevalence of CHF or complex

diabetes, or COPD– with low Medicare quality rankings– that do not conflict with current chronic care

improvement projects


4) Outreach to Intervention Group– Beneficiary participation will be “voluntary”

– Eligible beneficiaries in the intervention group will receive a letter and given an opportunity to opt-out of participation.

– Organizations awarded contracts will then be expected to confirm participation with those who do not decline to participate.

– Applicant’s proposals are expected to specify detailed outreach protocols; the outreach period will be 6 months.

– The control group will be passive -- they will not be offered participation, nor will they be aware of their status


5) Program Characteristics– Programs must develop a care management plan for

each participant• Guide the participant in managing their health

• Use decision support tools such as evidence based guidelines

• Develop a clinical information database

– CMS expects “transparency” of proprietary protocols and systems, but does not expect to transfer any intellectual property rights


6) Billing and Payment– Each awardee will be paid a Per Member Per Month Fee

for each participant– “The fee amounts to be paid to awardees may vary

because we envision testing a range of program models that may have different cost structures. We will establish fee amounts by agreement with each awardee.”


7) Performance Standards: Clinical Quality, Beneficiary Satisfaction and Savings Guarantees– Applicants are expected to set forth projected improvements

in clinical quality and savings– Awardees will be penalized financially for not meeting agreed

upon performance standards; applicants will be expected to propose performance guarantees for quality improvement and beneficiary satisfaction

– Performance will be measured on the entire intervention group (including those who chose not to be contacted, those who dropped out, and those unable to be reached)

– Awardees are required to guarantee 5% net financial savings to Medicare


– Organizations must assume financial risk for performance. In the event that 5% net savings are not achieved, the awardee will be required to refund the difference to the government, up to the total amount of fees paid to the awardee (i.e., awardees assume financial risk for fees, not insurance risk)

8) Reconciliation Process– An independent contractor will monitor outcomes– Applicants will need to demonstrate financial solvency

(presumably through a strong balance sheet and/or by obtaining reinsurance)


9) Program Monitoring– CMS will conduct ongoing program monitoring– Awardees will be expected to provide ongoing program

monitoring information

10)Independent Formal Evaluation– CMS will hire an independent contractor for formal

evaluation of program results– Experience of intervention groups will be compared to

control groups


Requirements for SubmissionAwardee Selection Process (pp. 39-41)

• Awardee Selection Process. There will be a 2 stage process.– Stage 1:

• Prospective applicants will be given a de-identified set of Medicare claims data

• Applicants will analyze the data and submit an application and bid• Applicants should base their proposals on 20,000 beneficiaries in

the intervention group

– Stage 2:• CMS’ review panel will evaluate applications and will recommend

applicants for the second stage of the process• Applicants selected as finalists will be provided actual historical

data for the applicable target population in the applicant’s proposed geographic area.


• Finalists will be allowed to propose adjustments in proposed payments or savings guarantees

– The CMS administrator will make final decisions


Requirements for SubmissionApplication (pp. 41-67)

1) Cover Letter

2) Application Form

3) Executive Summary

4) Rationale for Proposed Geographic Area and Target Population

5) Chronic Care Improvement Program Design– A plan for outreach– A plan to assess and stratify participants– Frequency and type of interventions– Appropriate services and educational materials for participants– Adequate mechanisms for ensuring physician integration with the program– Adequate mechanisms for ensuring coordination with State and local agencies– Adequate mechanisms for supporting participants with more intensive needs– Data to be collected, data sources, and data analyses

6) Organizational Structure and Capabilities– Staff– Facilities– Equipment– Strong working relationships with local providers– Strong working relationships with community organizations– Appropriate information and financial systems– Clinical protocols to guide care delivery and management– Ongoing performance monitoring– Organizational background and references– Accreditation

7) Performance Results– Past Performance: Clinical Quality, Beneficiary and Provider Satisfaction and Savings– Performance Projections

• core set of clinical quality indicators• projected savings for each year• projections on operational metrics


8) Payment Methodology & Budget Neutrality

9) Implementation Plan

10)Supplemental Materials (Appendices)


Application Evaluation Process Criteria (pp. 67-72)

• Application Evaluation Criteria and Weights– Rationale for Proposed Geographic Area and Target

Population (5 points)– Chronic Care Improvement Program (25 points)– Organizational Capabilities and Structure (25 points)– Performance Results: Past Performance and

Performance Projections (25 points)– Payment Methodology & Budget Neutrality (20 points)


• What will winning proposals look like?– The Foundation: Demonstrate proficiency at the basics

-- a rigorous understanding of DM contracting and program design elements

– Differentiators: Demonstrate creativity at the “discretionary” elements

• Physician integration

• Working with community organizations, local, state agencies

• Integrative information infrastructures

• Application of information and communication technologies


END

medicare chronic care improvement program (ccip): update & implications march 2005 vince...

Documents

awards slide

health care providers

ccip phase

cms website slide

observationsimplications

chronic care improvement

cms ccip rfp

ccip winners