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


Medicare Chronic Care Improvement Program (CCIP): Update & Implications March 2005 Vince Kuraitis JD, MBA Better Health Technologies, LLC (208) 395 ... – PowerPoint PPT presentation

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

Medicare Chronic Care Improvement Program (CCIP)
Update Implications
  • March 2005

Vince Kuraitis JD, MBA Better Health
Technologies, LLC (208)
  • Capsulizing DM Today
  • The Event of the Decade for DM Medicares
    Chronic Care Improvement Program (CCIP)
  • DM Tomorrow Medicares CCIP Pilot Project Awards
    -- Observations/Implications

I. Capsulizing Disease Management (DM) Today
Over The Past Few Years A Number of Publications
Have Rigorously Examined DM....
Common Themes in Describing DM Today
  • DM penetration is increasing
  • Cost as a major driver
  • Data on ROI imperfect, controversial
  • Physician reactions skepticism to limited
  • 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

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)

II. The Event of the Decade for DM Medicares
Chronic Care Improvement Program (CCIP)
Medicares 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

Highlights From the CMS Website
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
  • 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

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.

DM Models Have Emphasized Specialization
DM 2004
DM 1996
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III. DM Tomorrow Medicares CCIP Pilot Project
Awards --Observations/Implications
  • While Medicares RFP Said We want local
    integration, All CCIP Awards Went to Specialized
  • Wall Street is Increasingly Impacting DM
  • Scale, Scale, Scale
  • One-Stop-Shopping (OSS) Beats Best-of-Breed (BOB)
  • Distinctions Between Care and Care Coordination
    Blur Even Further

While Medicares RFP Said We want local
integration, All CCIP Awards Went to Specialized
  • 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
  • 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

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 its 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

  • 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
  • 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
  • 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
  • Medicares awards suggest that company scale
    (size), IT systems, and experience in DM
    processes weighed heavily in Medicares
    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
  • 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
  • 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
  • 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 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.
  • McKessons 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? Its becoming increasingly hard
    to defend the traditional DM business/clinical
    model that works hard to draw this distinction.

  • 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 dont 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.

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

BHT Clients
  • Pre-IPO Companies
  • Cardiobeat
  • EZWeb
  • Sensitron
  • Life Navigator
  • Medical Peace
  • Stress Less
  • CogniMed
  • Caresoft
  • Benchmark Oncology
  • SOS Wireless
  • Click4Care
  • eCare Technologies
  • The Healan Group
  • Fitsense
  • Established organizations
  • Samsung 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

APPENDIX BDescribing Medicares 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
The Number of People with Chronic Conditions is
Medicare Beneficiaries With Chronic Conditions
Account for Disproportionate Expenditures
The CBO Sums Up Medicares ProblemA Sea of Red
Source The Congressional Budget Office, Social
Security and the Federal Budget The Necessity of
Maintaining a Comprehensive Long-Range
Perspective (August 1, 2002).
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.

  • 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

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
  • 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
  • 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

Dont 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

  • 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 ProgramHighlights From
the CMS Website
A Conceptual Model of the CCIP
Purpose/Design of the RFP (pp. 15-39)
  • Eligible Organizations DM organizations, health
    insurers, integrated delivery systems, physician
    groups, a consortium of entities, and anybody
    else that CMS deems appropriate
  • 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

  • Identification of Potential Geographic Areas.
    CMS is interested in applications that target
  • 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

  • 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.
  • Applicants 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

  • 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
  • Develop a clinical information database
  • CMS expects transparency of proprietary
    protocols and systems, but does not expect to
    transfer any intellectual property rights

  • 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.

  • 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)
  • 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)

  • Program Monitoring
  • CMS will conduct ongoing program monitoring
  • Awardees will be expected to provide ongoing
    program monitoring information
  • 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 applicants proposed geographic

  • Finalists will be allowed to propose adjustments
    in proposed payments or savings guarantees
  • The CMS administrator will make final decisions

Requirements for SubmissionApplication (pp.
  • Cover Letter
  • Application Form
  • Executive Summary
  • Rationale for Proposed Geographic Area and Target
  • 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

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

  • Payment Methodology Budget Neutrality
  • Implementation Plan
  • Supplemental Materials (Appendices)

Application Evaluation Process Criteria (pp.
  • 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
  • Performance Results Past Performance and
    Performance Projections (25 points)
  • Payment Methodology Budget Neutrality (20

  • 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

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