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News Release

HHS TO LAUNCH NEW DISEASE-MANAGEMENT DEMONSTRATION
TO IMPROVE CARE FOR PEOPLE WITH END-STAGE RENAL DISEASE

HHS Secretary Tommy G. Thompson today announced plans for a new demonstration program to develop new approaches to improve care for Medicare beneficiaries with end-stage renal disease (ESRD). The new disease-management program will allow organizations experienced with treating ESRD patients to develop financing and delivery approaches to better meet the needs of beneficiaries with this disease.

"Medicare can do a better job in meeting the needs of dialysis patients, and this demonstration will help us identify new approaches to improve their quality of care," Secretary Thompson said. "Effective disease management can increase beneficiaries' access to needed services and enhance their quality of life by avoiding the need for costly interventions. It's one of several new disease-management projects that we are undertaking to help beneficiaries."

HHS' Centers for Medicare & Medicaid Services (CMS) is inviting health care organizations to participate in the new ESRD demonstration program. During the four-year project, CMS will solicit a variety of types of organizations to coordinate care to patients with ESRD, encourage the provision of disease-management services for these patients, collect clinical performance data and provide incentives for more effective care.

Under the demonstration, organizations will be able to choose between alternative delivery models. Under the managed care model, the organization will be paid a capitated rate, and will provide all Medicare-covered services to the beneficiary, taking responsibility for dialysis and all other services. The managed care model will be paid on the basis of the Medicare comprehensive risk adjusted rates established for the demonstration.

Organizations opting to participate under the fee-for-service bundled payment option will be required to provide an expanded set of dialysis services under a bundled rate. The required bundle of services is more comprehensive than that currently reimbursed under the composite rate for outpatient dialysis, and will include nearly all routine drugs and lab tests provided during dialysis.

Disease management is intended to improve patient outcomes while containing health care costs. Disease management for ESRD emphasizes the central role of the nephrologist, management of the many comorbid conditions frequently associated with ESRD, and management teams with special knowledge of diet, medications, total health status and personal needs of ESRD patients.

"The doctor still remains in charge of the patient's care," CMS Administrator Tom Scully said. "With the assistance of qualified staff and appropriate incentives for quality, we can assist organizations in producing even better care for these patients."

The demonstration, conducted under CMS' waiver authority, follows and improves upon a Congressionally mandated demonstration to allow ESRD patients to enroll in managed care settings. In the earlier demonstration, two Medicare+Choice plans operated for a three-year period. The patients who were enrolled in the demonstration reported high satisfaction. As in the original demonstration, the current demonstration provides a new option for ESRD beneficiaries by allowing them to enroll in managed care plans.

Potentially qualified applicants are companies experienced with providing services to ESRD patients. The demonstration will be especially appropriate for dialysis providers and disease management organizations. It will also be open to Medicare+Choice organizations and integrated health care systems.

A notice soliciting applications from organizations interested in the new demonstration will be published in the June 4 Federal Register. Applications are due August 28. More information is available on CMS' Web site at http://www.cms.hhs.gov/healthplans/research.

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Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.

Last Revised: May 29, 2003