Sunday, January 29, 2012

CBO Discusses CMS Demos

The Congressional Budget Office (CBO) released an issue brief on January 18th reviewing the outcomes on 10 major CMS demonstrations. The evaluations by independent researchers show that most programs have not reduced Medicare spending.

The report explained that the programs where care managers had substantial direct interaction with physicians and significant in-person interaction with patients were more likely to reduce Medicare spending than other programs, but on average, even these programs did not achieve enough savings to offset their fees.

Results from demonstrations of value-based payment systems were mixed. In one of the four demonstrations examined, Medicare made bundled payments that covered all hospital and physician services for heart bypass surgeries. In those cases, Medicare’s spending for those services was reduced by about ten percent under the demonstration. Other demonstrations of value-based payment appear to have produced little or no savings for Medicare.

The report recommends that future efforts focus on collecting better data, targeting resources at patients really in need, and encouraging care providers to work together.

According to Rick Gilfillan, Acting Director of the CMS Innovation Center, reports that today the Innovation Center is engaging doctors, hospitals, and other providers to try new approaches. This can be achieved by keeping patients healthy and out of the hospital by having:

• Health systems participate in the Pioneer ACO and ACO Shared Savings models
• The Community-Based Care Transition Program invest up to $500 million in organizations such as Area Agencies on Aging to help seniors as they leave the hospital, and include home visits
• The Demonstration to Reduce Hospitalizations of Nursing Facility Residents invest $134 million to provide additional care and supports to help reduce preventable hospitalizations among nursing home residents
• The Comprehensive Primary Care Initiative provide new support from both Medicare and private health insurers to make sure that participating primary care practices have robust care teams
• The Medicare-Medicaid Coordination Office and the Innovation Center is empower states to invest in new models targeted towards beneficiaries that are eligible for both Medicare and Medicaid
• The Innovation Center is testing several new payment models, such as the Pioneer ACO Model and the Bundled Payments for Care Improvement with no upfront payments to participating doctors and hospitals. These groups will be rewarded once their innovative approach is proven to have reduced costs and keep patients healthier

To view the entire document, go to