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Medicare Bolsters Population Health Focus with Payment Changes

CMS is hoping to entice providers to embrace population health management by offering increased reimbursements for care coordination and mental healthcare integration.

By Jennifer Bresnick

- Medicare will be making additional funding opportunities available for physicians who engage in care coordination and population health management strategies that improve the delivery of primary and mental healthcare, CMS announced this week.

Population health management, diabetes care, and mental healthcare

In a blog post penned by CMS Acting Principle Deputy Administrator and CMO Patrick Conway, MD, MSc, the agency offered an estimated $140 million in additional funding for PCPs who successfully integrate mental healthcare into the primary care ecosystem, and tantalized providers with the prospect of up to $4 billion in support for care coordination and patient-centered care.

“We’ve discussed a number of times how our country’s health care system historically invested far more in treating sickness than maintaining health. This imbalance contributes to more spending on institutions, hospitals, and nursing homes, rather than keeping people healthy at home and in their communities,” wrote Conway.

“By better valuing primary care, care coordination and prevention, we help people access the services they need to stay well. That’s why Medicare and Medicaid, with invaluable support from the CMS Innovation Center, have implemented policies to sharpen their focuses on individuals and their care.”

Diabetes spending is a particular area of concern for Medicare, Conway said, since more than a quarter of the over-65 population have diabetes – and even more may not know that they are prediabetic or already living with the disease.

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Not only do diabetics face a significant higher risk of negative long-term outcomes, including blindness, amputations, heart disease, and kidney failure, but they also incur much higher spending rates than other groups.

“In total, we estimate that Medicare will spend $42 billion more in the single year of 2016 on fee-for-service, non-dual eligible, over age 65 beneficiaries with diabetes than it would spend if those beneficiaries did not have diabetes — $20 billion more for Part A, $17 billion more for Part B, and $5 billion more for Part D,” said Conway.

That averages out to around $7300 per diabetic beneficiary, he added, or 86 percent more per beneficiary per year than those without the condition.

Reducing these costs is one of Medicare’s main goals, and CMS is employing several different strategies to achieve results.

One of the most promising is the Medicare Diabetes Prevention Program (MDPP), a patient-centered chronic disease management initiative designed to help high-risk patients decrease their chances of developing Type 2 diabetes. 

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Over a 15-month test period, participants in the model reduced their weight by an average of 5 percent and saved Medicare approximately $2650.  Conway points out that the savings more than cover the cost of the program.

The MDPP is the first strategy of its kind to be eligible for Medicare reimbursement, and all Medicare patients will be eligible to join the model in 2018.

“We know that fewer people with diabetes saves patients and Medicare money because they use fewer expensive prescription drugs and have fewer hospital visits,” said Conway. “And most importantly, by preventing diabetes, patients and families across the country can avoid suffering from a debilitating disease. That’s why we are expanding the model to make MDPP services available to all eligible Medicare beneficiaries.”

The MDPP is only one way that patient-centered care can save money for Medicare while improving outcomes, the blog post continued.  Patients also benefit when they have easier access to primary care and mental healthcare services.

Medicare is incentivizing providers to deliver more personalized, integrated care by adjusting payment programs to reimburse for the time spent on these activities.

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“These changes will result in an estimated $140 million in additional funding in 2017 to physicians and practitioners providing these services,” said Conway. “Over time, if the clinicians qualified to provide these services were to fully provide these services to all eligible beneficiaries, the increase could be as much as $4 billion or more in additional support for care coordination and patient-centered care.”

Geriatricians, internists, and family physicians are anticipated to benefit the most from these reimbursement changes, and may see payment increases of up to 37 percent over time.

Participants in the Psychiatric Collaborative Care Model, a team-based care coordination strategy that integrates behavioral health experts into the primary care system, will also be able to take advantage of changes to the model’s coding and payment structures.

“This care model has been shown to improve behavioral health outcomes for patients and save money,” Conway wrote.  “Payment for care using this model will help address one of the health system’s major challenges — access for behavioral and mental health care.  For anyone who has struggled to gain access to behavioral health care for themselves or a loved one, the importance of these services cannot be overestimated.”

All of these changes are designed to strengthen the primary care ecosystem for Medicare and non-Medicare patients, Conway concluded, while preparing healthcare providers to succeed under value-based care arrangements and the newly finalized Quality Payment Program

“We know that effective primary care, care coordination and planning, mental health care, substance use disorder treatment, and care for patients with cognitive and functional impairments can improve outcomes and result in smarter spending, he said. “We expect to see the impact of these policies far beyond Medicare beneficiaries and hope that they will help strengthen the fabric of primary care throughout the country.”

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