Here's a question for Medicare: When will the Centers for Medicare and Medicaid Services (CMS) throw away the old hammer and chisel of fee for service and exchange them for some of the modern tools that most Medicare Advantage (MA) plans have been using for years to improve the health of the chronically ill?

Those include nurse case managers and medication therapy management (not exactly rocket science). But original Medicare seems stuck in the Stone Age when it comes to managing care.

A new study released by Health Affairs highlights these differences and provides further evidence that managed care is more effective than original Medicare for the chronically ill. The study analyzed 36,000 MA enrollees on an XLHealth Corporation chronic special needs plan in 2010. The enrollees had at least one diabetic diagnosis code on a hospital or physician claim, had been on the plan for at least 12 months, and were residents of Arkansas, Georgia, Missouri, Texas or South Carolina.

The study compared XLHealth member data with 2009 fee-for-service (FFS) Medicare member data (2010 FFS data wasn't available). It determined that diabetic XLHealth Chronic Condition Special Needs Plans members had 19 percent less inpatient hospitalization and 7 percent more primary-care visits compared to FFS Medicare patients.

The results are not surprising since most MA carriers have used disease management programs, medication therapy management programs, and case managers for years. These tools can target and track the patients that need the most attention. Targeted member interventions by plans can result in better drug adherence, fewer adverse drug interactions and more primary care, which in turn results in fewer emergency room or hospital visits. Original Medicare, on the other hand, generally does not have any type of intervention programs in place for chronically ill members except for several demonstration projects that are limited in size and scope.

MA plans have an added incentive to improve healthcare quality among members because of the Star Ratings system, which provides reimbursement bonuses to plans that receive good overall quality ratings. It may be that innovative payment model arrangements such as bundled payments and accountable care organizations can help inject much needed reform in the outdated FFS Medicare system.

Perhaps the best thing for CMS to do, in the light of more demand for better healthcare quality and lower cost, is to study how MA plans like XLHealth have helped improve the health of chronically ill members and reduced the number of expensive medical claims. Then maybe original Medicare can finally emerge from the Stone Age.


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