[Federal Register Volume 63, Number 112 (Thursday, June 11, 1998)]
[Notices]
[Pages 32015-32019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15509]
[[Page 32015]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[HCFA-1104-N]
RIN 0938-AI26
Medicare Program; Notice for the Solicitation for Proposals for a
Case Management Demonstration Project Focused on Congestive Heart
Failure or Diabetes Mellitus
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Notice.
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SUMMARY: This notice announces HCFA's solicitation for proposals for a
demonstration project that will use existing, innovative case
management interventions to improve clinical outcomes and quality of
life for beneficiaries with congestive heart failure or diabetes
mellitus who are in the Medicare fee-for-service program under Parts A
and B, and that will provide for Medicare program savings through
efficient provision and utilization of services and the prevention of
avoidable, costly medical complications (or consequences) that may
require hospitalizations. HCFA requires that the proposed savings, at a
minimum, be sufficient to cover the payments made for the case
management services. This notice contains critical information for
interested applicants, including the instructions for timely submission
of the required letter of intent and the proposal. Interested
applicants may propose projects focusing on case management of
congestive heart failure, diabetes mellitus, or both.
HCFA intends to select a maximum of two proposed projects for this
demonstration. The selected proposals will be those that best meet the
evaluation criteria. HCFA intends to operate the demonstration
project(s) for three years from implementation.
DATES: Letters of intent must be received by the HCFA project officer
on or before July 13, 1998.
Proposals (original and 10 copies), each with a copy of the timely
letter of intent, must be received by the HCFA project officer on or
before September 9, 1998.
ADDRESSES: Mail letters of intent and proposals to: Department of
Health and Human Services, Health Care Financing Administration,
Attention: Catherine Jansto, Project Officer, Center for Health Plans
and Providers, Mail Stop: C4-17-27, 7500 Security Boulevard, Baltimore,
Maryland 21244-1850.
Letters of intent may also be submitted electronically to the
following E-mail address: [email protected] Electronically submitted
letters of intent must be submitted to the referenced E-mail address in
order to be considered. The complete letter of intent must be
incorporated in the E-mail messages because we may not be able to
access attachments. Proposals may not be submitted electronically.
Only proposals that are received timely, and for which a timely
letter of intent is received, will be reviewed and considered by the
technical review panel.
FOR FURTHER INFORMATION CONTACT: Catherine Jansto at (410) 786-7762, or
CJansto@hcfa.gov.
SUPPLEMENTARY INFORMATION:
I. Background
A. Problem
Historically, a small proportion of Medicare beneficiaries have
accounted for a major proportion of Medicare expenditures. For example,
in 1993 roughly 10 percent of the Medicare beneficiaries accounted for
70 percent of the $129.4 billion in total Medicare expenditures.
Hospital payments accounted for a major proportion of this expense.
We believe Medicare beneficiaries with congestive heart failure and
diabetes mellitus are a population for whom innovations in care through
effective case management interventions may improve clinical outcomes
and the quality of life for the following reasons:
Research suggests that some complications related to
congestive heart failure and diabetes mellitus are avoidable; and
Control of these diseases requires a complex treatment
regimen.
Research also suggests that individuals with congestive heart
failure or diabetes mellitus may suffer fewer adverse health outcomes
and that additional more costly care might be avoided if these patients
adhere to treatment regimens or receive adequate post-hospital care.
Although neither congestive heart failure nor diabetes mellitus can be
cured, careful adherence to recommended lifestyle changes and
medication regimens can control symptoms, reduce complications, and
improve the quality of life. These lifestyle changes and medication
regimens may include restrictive diets, weight loss, exercise programs,
careful self-monitoring of symptoms, and multiple medications that must
be taken as prescribed, monitored with blood tests, and adjusted if
indicated. However, both recommended lifestyle changes and medication
regimens can be difficult for patients to understand and maintain.
Indeed, among individuals with either congestive heart failure or
diabetes mellitus, nonadherence to treatment regimens has been
identified as a major contributor to exacerbations of symptoms and to
preventable hospitalizations. The Agency for Health Care Policy and
Research's 1994 clinical practice guidelines for congestive heart
failure recommend, as a key element of comprehensive care, that ``after
a diagnosis of heart failure * * * all patients should be counseled
regarding the nature of heart failure, drug regimens, dietary
restrictions, symptoms of worsening heart failure, what to do if these
symptoms occur, and prognosis.'' Similarly, patients diagnosed with
diabetes mellitus also should be counseled regarding appropriate
measures for management of their disease. Recognizing the importance of
patient education as a component of a comprehensive plan of care for
diabetics, section 4105 of the Balanced Budget Act of 1997 (Pub. L.
105-33, enacted on August 5, 1997) expanded coverage for diabetes
outpatient self-management training. Thus, at a minimum, individualized
patient education and counseling to improve understanding of, and
adherence to, complex self-care regimens should be basic features of
case management models for patients with congestive heart failure or
diabetes mellitus. However, models may be more complex, including
frequent monitoring of patients' signs and symptoms, adherence to the
prescribed treatment plan, as well as other sophisticated
interventions.
While case management interventions may not result in the same
level of measurable improvements in all beneficiaries with congestive
heart failure or diabetes mellitus, properly identified patients have
the potential to benefit significantly. Beneficiaries who are likely to
experience avoidable hospitalizations are prime candidates for case
management interventions that will identify medical problems early,
improve treatment regimen compliance, and coordinate post-hospital
care. The expectation is that a case management intervention that
achieves these improvements will reduce overall costs substantially by
reducing the frequency of hospital admissions and other costly aspects
of treatment. The case management intervention is expected to maintain
or improve the quality of care.
Based in part on the potential for chronic care case management to
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improve beneficiary health status and to lower costs through reduced
hospitalizations and disease complications, HCFA sponsored a series of
case management demonstrations. These demonstrations, mandated by
section 4207(g) of the Omnibus Budget Reconciliation Act of 1990 (OBRA
'90), Pub. L. 101-508, included case management approaches aimed at a
number of chronic illnesses, including congestive heart failure.
Specifically, the legislation called for demonstrations to ``provide
case management services to Medicare beneficiaries with selected
catastrophic illnesses, particularly those with high costs of health
care services.'' The resulting demonstrations were implemented in three
sites, AdminaStar Solutions, Iowa Foundation for Medical Care (IFMC),
and Providence Hospital. The projects began operation in October 1993
and continued through November 1995.
Although all three demonstration sites generally focused on
increased education regarding proper patient monitoring and management
of the specified chronic condition, the targeted conditions and case
management protocols differed in each site. The AdminaStar site focused
exclusively on congestive heart failure, the IFMC project focused on
congestive heart failure and chronic obstructive pulmonary disease, and
the Providence Hospital site case management intervention applied to a
wider range of chronic conditions. None of the projects were aimed
specifically at diabetes case management. Rather, these projects varied
in the extent to which management of diabetes as a co-morbid condition
was addressed. At the start of the project, all three sites anticipated
sharply reduced hospitalizations and lower medical costs compared to
the beneficiary control groups.
B. Evaluation and Findings
The legislation required a formal evaluation of the project. The
evaluation (Costs and Consequences of Case Management for Medicare
Beneficiaries, NTIS: PB98-103328), performed by Mathematica Policy
Research, Inc., found the following:
The three demonstration projects successfully identified
and enrolled populations of Medicare beneficiaries who were likely to
incur much higher than average Medicare reimbursements during the
demonstration period. In all three sites, beneficiaries with chronic
illnesses who were identified for the project used far greater
resources than those in the general Medicare population.
Each project encountered unexpectedly low levels of
enthusiasm for the demonstration from beneficiaries and their
physicians. For all three sites, recruiting volunteer beneficiaries was
more difficult than anticipated, and refusal rates were sometimes as
high as 90 percent. Although the project teams engaged in outreach
activities, participation by and coordination with beneficiaries'
physicians was difficult.
The projects failed to improve client self-care or health,
or to reduce Medicare spending, despite engendering high levels of
satisfaction among the high cost, chronically ill beneficiaries who
eventually participated. Comparisons of health status, functional
status, and expenditures between the control and the intervention
groups showed no improvements due to the case management intervention.
The evaluation report suggested the following primary reasons for
the lack of outcome and cost impacts found in these case management
demonstrations:
The clients' physicians were not involved in the
interventions. The evaluation study found that case managers received
little or no cooperation from clients' physicians. Despite outreach by
the case managers, most physicians provided little interaction with the
case managers, and few opportunities for constructive rapport
developed. The case managers at all three projects indicated that they
would have been more effective if their activities had been coordinated
with the clients' physicians' advice, and if these physicians had
generally supported the case management efforts.
The projects did not have sufficiently focused
interventions. Even at the two demonstration sites that focused
specifically on congestive heart failure, little guidance was built
into the interventions regarding the types of activities to be
emphasized, how often to contact and monitor clients at different
levels of severity, or the content of the education provided.
The projects lacked staff with sufficient case management
expertise and the specific clinical knowledge to generate the desired
reductions in hospital use. The case managers in these projects,
virtually all of whom were nurses, received only a few days of initial
training to review project procedures and clinical topics; however,
some completed additional in-service training or attended seminars.
This limited training may have been an inadequate substitute for more
comprehensive experience or background in the specific target disease
and in community-based care or case management.
The projects had no financial incentives to reduce
Medicare spending. In these projects, the case management intervention
focused on providing education or arranging services, but had no target
outcomes (for example, holding hospital readmission rates at or below a
pre-determined level) upon which manager reimbursement was based. In
addition, since the clients' physicians played almost no role in these
interventions, there was no incentive for the providers of care to
render services efficiently. If payment either for the case management
services, or to the providers of care had been based in part on
measurable outcome targets, the projects' personnel might have
monitored patient outcomes more closely and focused efforts more
consistently on activities that would increase the likelihood of
improving outcomes or reducing costs.
C. Issues To Address in Future Studies
The results of this evaluation indicate that the following issues
need to be addressed in any future work related to chronic illness case
management:
The importance of the involvement of the client's
physicians;
The need for focused interventions based upon the etiology
of the disease, severity of the condition, co-morbid conditions,
psychosocial factors, and other factors specific to the Medicare
population;
The need for staff specifically trained in case
management; and
The necessity for some incentives, particularly financial
incentives, to control costs and improve outcomes. In addition, we
expect that future studies will benefit from testing whether the added
costs of modifying and intensifying case management interventions to
address limitations identified by the prior demonstrations can be
implemented in a fiscally responsible manner (both in terms of costs
for the case management services and of the overall financing
strategy). Specifically, we recommend that future studies clarify
whether savings from reduced medical costs would be sufficient to cover
the case management costs in the Medicare fee-for-service environment
(where beneficiaries are not bound to primary care physicians for
service approvals). The Mathematica evaluation estimated that the costs
associated with providing the relatively generic case management
interventions tested in the AdminaStar congestive heart failure
demonstration reached about 14 percent of average client medical
expenditures. Based on the most successful trial to date, if an
estimate of the possible savings from
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focused congestive heart failure interventions is about 23 percent of
client medical expenditures, then the potential net savings could be up
to 9 percent (23 percent minus 14 percent). Whether the cost of more
focused case management interventions would be less than the savings
provided by the interventions, and whether these interventions could
lead to measurable improvement in beneficiary outcomes are unknown.
Another consideration for future studies is that HCFA's experience
with case management demonstration projects has established, as a key
element for success, the need for creative incentive arrangements that
promote interdisciplinary collaboration to affect appropriate provision
and substitution of services. In essence, development of a financing
strategy that supports the goals of a Medicare fee-for-service case
management demonstration is as important to the potential success of
the project as is the design of the delivery model and specific
interventions. However, given the nature of the Medicare fee-for-
service program, HCFA recognizes that the feasibility of implementing a
case management delivery model in the program may be complicated.
Particularly challenging is that Medicare fee-for-service beneficiaries
are able to seek services from any qualified provider (there are no
lock-in provisions), the program does not offer an oral medication
benefit, and that separate payment for non-face-to-face interventions
is typically not allowed. Further, because Medicare fee-for-service
providers receive payment for discrete units of service, physicians and
other providers face direct incentives to increase volume and intensity
of their services and to avoid the marginal costs of providing services
that are not directly reimbursed.
In addition, there are other system-wide challenges to case
management implementation in a fee-for-service environment. For
example, a large proportion of Medicare beneficiaries have supplemental
insurance that typically covers co-payments and deductibles, thereby
leaving them little incentive to use the health care delivery system
efficiently.
Despite these challenges, in the Medicare fee-for-service program,
and in its payment demonstrations, there are numerous examples of
alternative financing methodologies that have been developed and
implemented successfully (such as the hospital prospective payment
system). However, these experiences have indicated that careful
attention to the efficient pricing of services, incentive and
administrative arrangements, and the interaction between the provision
of discrete services and the broader service delivery system is
required. Therefore, a successful demonstration project to implement a
case management delivery model in the Medicare fee-for-service program
must efficiently provide and oversee well-integrated case management
services, use a fiscally responsible financing strategy that involves
appropriate, carefully crafted incentive arrangements, and address the
challenges presented by the nature of the fee-for-service program.
D. Demonstration Authority
Our authority to engage in this proposed demonstration project is
based upon section 402 of the Social Security Amendments of 1967, as
amended (42 U.S.C. 1395b-1). Specifically, section 402(a)(1) of the
Social Security Amendments of 1967, as amended (42 U.S.C. 1395b-1),
authorizes the Secretary ``either directly or through grants to public
or nonprofit private agencies, institutions and organizations or
contracts with public or private agencies, institutions, and
organizations, to develop and engage in experiments and demonstration
projects'' for one of eleven specified purposes. Of these specific
purposes, we believe that the most appropriate category for the
demonstration announced in this notice is section 402(a)(1)(B).
Specifically, the purpose given in section 402(a)(1)(B) is:
to determine whether payments for services other than those for
which payment may be made under such programs (and which are
incidental to services for which payment may be made under such
programs) would, in the judgement of the Secretary, result in more
economical provision and more effective utilization of [Medicare
covered services] where such services are furnished by organizations
and institutions which have the capability of providing--
(i) comprehensive health care services,
(ii) mental health care services (as defined by section 2691(c)
of [title 42],
(iii) ambulatory health care services (including surgical
services provided on an outpatient basis), or
(iv) institutional services which may substitute, at lower cost,
for hospital care.
Thus, for consideration, proposals must provide evidence that the
applicant and the proposed project fall within the parameters of the
demonstration authority of section 402(a)(1)(B).
II. Provisions of This Notice
A. Purpose
This notice announces HCFA's solicitation for proposals for
demonstration projects that will use existing, innovative case
management interventions to improve clinical outcomes and quality of
life for beneficiaries diagnosed with congestive heart failure or
diabetes mellitus who are in the Medicare fee-for-service program under
Parts A and B, and that will provide savings to the Medicare program at
least sufficient to cover the payment made for the case management
services. These savings are to result from more efficient provision and
utilization of services and the prevention of avoidable, costly medical
complications. Under the demonstration, using a fiscally responsible
payment methodology that, at a minimum, is budget neutral, HCFA will
make payment for the proposed case management services. Thus, over the
course of the project, the aggregate Medicare payment for the case
management services may be no greater than the total expected program
savings from the case management interventions.
Applicants must propose an all-inclusive payment amount (for
example, per service, case rate, monthly fee, per diem) for their
proposed unit of case management services. No separate payment will be
made for capital investments, administrative, implementation,
operating, data collection, research, evaluation, or any other costs
incurred by the demonstration selectee(s) in the provision of the
proposed case management services. The selectee(s) will be required to
cooperate in a formal evaluation of the demonstration. No additional
funding will be provided for this cooperation.
HCFA intends to award a maximum of two proposed projects that best
meet the evaluation criteria, and plans to operate the demonstration
project(s) for three years from implementation. The selected
projects(s) will test congestive heart failure case management,
diabetes case management, or both.
B. Requirements for Submissions
1. Innovative Proposals
In this solicitation, HCFA seeks innovative proposals that test
whether case management interventions improve clinical outcomes and
quality of life for Medicare fee-for-service beneficiaries with
congestive heart failure or diabetes mellitus, while providing savings
to the Medicare program at least sufficient to cover the expenditures
for these services. HCFA is interested in case management models that
are specifically targeted to the Medicare population and that take into
account
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the beneficiaries' relative health status, age, and other factors,
rather than the application of generic clinical case management
delivery system models. Of particular importance is the fact that many
Medicare beneficiaries have multiple medical conditions. Case
management interventions that focus exclusively on one condition may
fail to address the interaction of various disease states. While a
diagnosis of congestive heart failure or diabetes mellitus is a basic
condition for beneficiary participation in the demonstration, HCFA is
interested in and will give preference to proposals that focus on
beneficiaries most likely to benefit from case management interventions
that take patient co-morbidities into account in the case management
interventions provided.
HCFA seeks to test existing case management delivery protocols and
interventions that, at a minimum, have been pilot tested, thus,
preventing the need for a long developmental time frame. Proposals must
build upon lessons learned in HCFA's previous case management
demonstrations and must address specifically the following issues in
the context of the Medicare fee-for-service program under Parts A and
B:
Integration and involvement of the client's physicians in
case management activities;
Well-defined clinical case management delivery model
protocols that focus on congestive heart failure or diabetes mellitus,
and that demonstrate an individualized approach to patient education,
counseling, and other services;
Focused training and experience of the case management
staff; and
Budget neutral payment methodology and incentive
arrangements that are administratively feasible, and that support
measurable outcome targets, such as reduced medical spending and
improved beneficiary clinical outcomes or health status.
Proposals must show clearly that the demonstration design
incorporates the four issues described above. In addition, applicants
must provide a scientific, clinically-based rationale for their design.
We recommend that, at a minimum, the applicant include a detailed
discussion of the following project elements:
Process for a beneficiary participant's identification,
selection, and discharge from the program;
Definition and scope of services to be provided;
Process for ensuring adequate post-hospital care and flow
of patient information from setting to setting;
Process for payment allocation across the proposed
providers;
Details of any risk or risk sharing arrangements;
Existing quality improvement processes and study results;
Description of the pertinent research questions related to
cost and health outcomes;
Proposed data elements that will be collected to support
the measurement of these outcomes;
Data system capabilities;
Qualifications of staff and management;
Scope of the project, including the number of
beneficiaries, number and types of providers, location, and period of
performance; and
Implementation plan.
Proposals for models that rely on medication management regimens
must address issues related to the cost of the medications,
beneficiaries' ability to afford the medications, and implications for
the applicant's protocols, and other pertinent information. In
addition, applicants must provide clear evidence of actual net cost
savings and outcomes achieved during prior pilot testing or
implementation. Preference will be given to proposals that include the
following:
Evidence of cost effective clinical case management
delivery model protocols, specific to the Medicare population;
Clinically-based approach to identify patients with
congestive heart failure or diabetes mellitus who are most likely to
benefit from case management;
Use of focused interventions and appropriateness
screening, based upon the etiology of the disease, severity of the
condition, and other relevant factors; and
Protocols that have been tested specifically with a
Medicare population diagnosed with congestive heart failure or diabetes
mellitus.
2. Experimental Design and Implementation Plan
Many of the design elements of the proposed demonstration project
will depend on the protocol offered by the applicant. At a minimum, for
consideration, the proposed demonstration project must provide for
voluntary participation for Medicare beneficiaries, a randomized
experimental design, and budget neutrality (that is, no expected
increase in Medicare program costs).
Proposals that include existing case management delivery protocols
and interventions that have never been implemented on a Medicare
population must detail the modifications to the protocols for
application to the Medicare fee-for-service population. Proposals must
include a detailed implementation strategy and plan, and provide
evidence of how the plan supports the project's goals. In addition,
proposals must include evidence of the feasibility of implementing the
proposed payment model in a fee-for-service environment.
3. Replication of Models
HCFA's purpose in this solicitation is to identify clinical case
management delivery system models for congestive heart failure or
diabetes mellitus that, if evaluated as successful, could be replicated
throughout the Medicare fee-for-service program under Parts A and B.
Accordingly, the protocols tested in this demonstration cannot be
proprietary in nature to the extent that the application of the
intervention beyond the demonstration will require HCFA to contract
only with the demonstration selectee.
4. Eligible Organizations and General Policy Considerations
HCFA is interested in proposals from a variety of qualified
organizations. However, to be considered responsive, the applicant must
satisfy all of the requirements described in sections I.D., II.A., and
II.B. of this notice. Organizations that believe they meet these
requirements may submit a letter of intent to submit a complete
proposal.
5. Letter of Intent
A signed letter of intent must be received by the HCFA project
officer as indicated in the DATES and ADDRESSES sections of this
notice. The letter of intent must indicate the applicant's intention to
submit a completed proposal for congestive heart failure case
management, diabetes case management, or both. By submitting a letter
of intent, the applicant is not obligated to submit a proposal. The
letter must be signed by a duly authorized official and include the
applicant's name, address, contact person, business telephone number,
and all existing HCFA provider number(s) and an Employer Identification
Number (EIN) for basic identification purposes.
For each timely submitted letter of intent, the HCFA project
officer, or designee, will contact the specified representative
(contact person) to discuss the application process. Organizations that
submit a timely letter of intent may submit a completed proposal and 10
copies (along with a copy of the previously timely submitted letter of
intent) to the HCFA project
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officer as indicated in the DATES and ADDRESSES sections of this
notice. Applicants submitting proposals for both congestive heart
failure case management and diabetes case management should submit 2
completed proposals (one for congestive heart failure and one for
diabetes) along with 10 copies of each proposal and a copy of the
previously timely submitted letter of intent.
This notice is not covered by the Paperwork Reduction Act of 1995
and accordingly will not be reviewed by the Office of Management and
Budget.
Authority: Sections 402(a)(1) and 402(a)(1)(B) of the Social
Security Amendments of 1967, as amended (42 U.S.C. 1395b-1).
(Catalog of Federal Domestic Assistance Program No. 93.779; Health
Financing, Demonstrations, and Experiments)
Dated: May 13, 1998.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.
[FR Doc. 98-15509 Filed 6-10-98; 8:45 am]
BILLING CODE 4120-01-P
