CMS Demonstration Projects Exhibit Limited Value in Reducing Federal Medicare Spending

January 25, 2012 | Strategic Insights for Health System


Most of the programs tested by the Centers for Medicare and Medicaid Services’ (CMS) demonstration projects on disease management, care coordination, and value-based payment have failed to reduce federal spending on Medicare, reports a January 18, 2012, Congressional Budget Office (CBO) brief. The disease management and care coordination demonstrations used nurses as care managers to educate Medicare beneficiaries about their chronic illnesses and encourage them to follow self-care regimens, monitor their health, and track whether they received recommended tests and treatments. According to the brief, these programs had little or no effect on hospital admissions, and in nearly every program, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program when the fees paid to the participating organizations were considered. CBO found that programs in which 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.

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