The Phase I Medicare Health Support Programs test a range of program models serving diverse populations in urban and rural areas.

• The awardees and the regions they serve are:
  • Green Ribbon Health - Central Florida
  • XLHealth Corporation- Tennessee
  • Aetna Health Management, LLC - Chicago, Illinois
  • LifeMasters Support SelfCare, Inc. - Oklahoma
  • McKesson Health Solutions, LLC - Mississippi
  • CIGNA HealthCare - Northwest Georgia
  • Health Dialog Services Corporation - Western Pennsylvania
  • American Healthways, Inc. - Washington, D.C. and Maryland
• The Phase I pilot programs began rolling out in during 2005, will operate for 3 years and are being tested through randomized controlled trials.

These awards mark a major milestone in the shift toward prevention and quality improvement for chronically ill beneficiaries under Medicare Fee-For-Service (FFS). This initiative is an important component of modernizing and strengthening Medicare.

• The Phase I programs are large-scale, collectively serving approximately 160,000 chronically ill beneficiaries.
• The Secretary may begin Phase II expansion within 2 to 3 and 1/2 years after Phase I. In Phase II, the Secretary will expand Phase I programs or program components that prove to be successful to additional regions, possibly nationally.
• The programs are intended to help increase adherence to evidence-based care, reduce unnecessary hospital stays and emergency room visits, and help participants avoid costly and debilitating complications and co-morbidities.
• The programs offer self-care guidance and support to chronically ill beneficiaries to help them manage their health, adhere to their physicians’ plans of care, and assure that they obtain medical care that they need to reduce their health risks.
• The programs include collaboration with participants’ providers to enhance communication of relevant clinical information.
• Participation is entirely voluntary. Eligible beneficiaries do not have to change plans or providers or to participate. Beneficiaries can stop participating at any time. These programs do not restrict access to care and they are provided at no charge to participants.
• The new programs are NOT single-disease focused. They are designed to help participants manage all their health problems.

Failings in chronic care quality are widespread nationally. The new Medicare Health Support programs represent one way that the Federal government is addressing this serious problem.

• Fragmentation of care is a serious problem, especially for Medicare beneficiaries. On average, they see seven different physicians and have 20 prescriptions each year.
• Recent research has shown that quality failings are common, serious and widespread. (Jencks, et al., JAMA January 2003; McGlynn, et al., NEJM June 2003; Casalino, JAMA January 2003)
• In Crossing the Quality Chasm, a landmark report from the Institute of Medicine, physician leaders emphasized that the current fragmented healthcare system is not well organized to help chronically ill people get guidance and support to manage their self-care well in their daily lives. This program helps address that major gap in care.

Performance-based contracting is one of the most important features of the Medicare Health Support program design. The regional programs are paid based on achieving measurable improvements in clinical and financial outcomes and satisfaction levels across their assigned populations, not based on services provided.

• In the new pay-for-performance approach, Medicare Health Support organizations are paid monthly fees, but their fees are at risk. The organizations are required to refund some or all of their fees to the Federal government if they do not meet agreed-upon standards for quality improvement, savings to Medicare, and increased satisfaction levels in their assigned beneficiary populations.
• Savings guarantees assure that the programs focus on finding cost-effective ways to reduce beneficiary health risks. Awardees are required to place their fees fully at risk guaranteeing net savings to Medicare.
• This new contracting approach allows substantial new Federal investment in chronic care improvement, while assuring that the new programs do not add to Medicare net costs.
• This is a flexible business model. The programs being tested vary in types of interventions to be used to improve outcomes. Across all programs, payments are based on performance results.

Where is this initiative leading?

• It leads toward a stronger focus on improving health outcomes for prospectively identified target populations who are not well served by the fragmented FFS health care delivery system.
• It creates a new focus on setting measurable performance goals and tracking improvements in clinical quality, cost-effectiveness, and provider and beneficiary satisfaction in a regional, population-based framework.
• It develops and tests the concept of tying contractor payment to results in achieving quality and cost targets and satisfaction levels.
• It helps modernize Medicare by creating incentives for the private sector to harness advances in information technology and innovation in care management on behalf of FFS Medicare beneficiaries.
• It addresses quality failings without changing beneficiary’s benefits, providers, or access to care.
• It is an approach that is regional, yet potentially replicable nationally