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Medicare Payment Should Promote Evidence-Based Care for Chronically Ill Patients

Headshot of Joann Donnellan
Joann Donnellan

Washington, D.C. – Traditional Medicare fee-for-service reimbursement does not promote evidence-based, patient-centered care for patients with multiple chronic conditions such as diabetes and heart disease. That’s the message of a new paper by the Bipartisan Policy Center that identifies federal laws and regulations that inhibit the integration of care, and seeks input from health care providers, policymakers, and other experts on solutions to address these problems.

“Even alternative payment models, such as managed care, which are designed to promote better outcomes at a lower cost, include barriers to integrating clinical health services with other services and supports,” said Katherine Hayes, BPC health policy director. “These services have proven to reduce emergency visits, lower hospital readmissions, and help keep frail elderly individuals at home.”

In 2010, seniors with six or more chronic conditions cost Medicare more than thirty thousand dollars per person on average.

Research shows that providing frail elderly patients with much needed health-related social supports, which are not covered under the traditional Medicare benefit, can improve care for patients and their caregivers, improve health outcomes, and in some cases, lower costs. In 2010, seniors with six or more chronic conditions cost Medicare more than thirty thousand dollars per person on average—roughly three times the overall average per person Medicare spending for the year. If these seniors also have functional or cognitive impairments, their Medicare costs are even greater

BPC’s paper, “Challenges and Opportunities in Caring for High-Need, High-Cost Medicare Patients,” explores the main barriers and policy issues that prevent health plans and providers from furnishing and financing health-related interventions and social supports. These services can include: in-home meal delivery, home modifications, transportation to doctor’s appointments, targeted care management, and personal care services or other home or community-based assistive services. A final report with recommendations will be released later this year.

Hayes added, “Medicare Advantage plans and alternative payment model providers, such as accountable care organizations, must be given greater flexibility to determine how best to manage care delivery. This flexibility should be balanced by strong quality measurement standards to ensure that optimal care is being delivered. Ensuring better integration of non-Medicare covered health-related supports and services must be a top priority as we create new care delivery approaches.”

BPC’s work is supported by a grant from The SCAN Foundation and The Commonwealth Fund.

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