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CBO Report on Medicare Demos Draws Mixed Response

Margaret Dick Tocknell, for HealthLeaders Media, January 23, 2012

A Congressional Budget Office report critical of the Medicare fee-for-service demonstration projects in disease management, care coordination, and value-based payments has received mixed reviews from stakeholders who acknowledge the report's significance while contending that it contains no surprises for the healthcare industry.

Meanwhile, officials at the Centers for Medicare & Medicaid Services, which oversees the demonstration projects, have remained almost silent. CMS provided only a short e-mail statement to HealthLeaders Media on Friday night.

The 30-page CBO report, released last week, reviews the independent evaluations of 10 major demonstration projects—six in disease management and care coordination, and four in value-based payments. According to the CBO, "the evaluations show that most programs have not reduced Medicare spending."

Among the mixed bag of findings:

  • Disease management and care coordination programs where physicians had direct interaction with care managers, as well as their patients, were more likely to reduce Medicare spending.
  • On average the programs did not produce enough savings to offset their fees.
  • The programs had little or no effect on hospital admissions.
  • Three of the four value-based payment (VBP) demonstrations produced almost no savings for Medicare.
  • A heart bypass VBP demo that bundled Medicare payments to cover hospital and physician services reduced Medicare spending for those services by about 10%.
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