Home Health Care Policy System Reform Medicare ReformSection IV & V

Section IV & V

IV. Reforming Medicare

A. Background

Under the current Medicare program, nearly all elderly Americans automatically receive Part A coverage, which pays hospital fees. There is no cost to beneficiaries to enroll in Part A; costs incurred are paid by the Hospital Insurance Trust Fund, which is funded wholly from the employer and employee dedicated payroll tax (currently 2.9 percent, split evenly between employer and employee). The Part A deductible is set at the average cost of one day of hospital care (currently $764), and beneficiaries pay one deductible per inpatient spell of illness and limited co-payments. /MainMenuCategories/HealthcareandPolicyIssues/HSR/MedicareReform/AppendixA.aspx ⁽¹³⁾

Approximately 96 percent of Medicare beneficiaries purchase Part B (coverage for doctors' costs) by paying an annual premium (currently $528). This premium covers about 25 percent of the Medicare program's cost of Part B services, with the remaining 75 percent coming from general revenues. The Part B deductible is $100, and beneficiaries pay a 20 percent co-payment for most Medicare Part B services.⁽¹⁴⁾ To help pay for their out-of-pocket costs, nearly 90 percent of Medicare beneficiaries supplement their Medicare coverage through one of the following mechanisms:

Medigap (commercial insurance policies purchased directly by beneficiaries)
employer-sponsored retiree coverage
Medicaid (a Federal-state means-tested supplement available to low-income beneficiaries)
Medicare+Choice (a managed care option available as a result of the Balanced Budget Act of 1997 (P.L.105-33), which replaces traditional Medicare with a managed care plan that also contains more comprehensive benefits)⁽¹⁵⁾

The consideration of this secondary coverage is important for several reasons. First, it is important to remember that considerable spending takes place outside of Medicare program outlays. Second, any reform of Medicare, including the expansion of benefits, may well duplicate coverage that some beneficiaries already have. (For example, about half of prescription drug costs are already covered by various forms of secondary insurance.⁽¹⁶⁾) However, because the extent of this "supplemental" coverage varies substantially and because the near-poor are the least likely beneficiaries to have such coverage, ANA recommends reforming the Medicare program to include those "benefits" which cause many beneficiaries to need secondary insurance.

B. Recommended Major Structural Changes

ANA recommends that the Medicare program be restructured as follows:

Combine Parts A and B

Currently, at age 65 (or upon determination of disability), nearly all Americans automatically receive Part A coverage. Within a specified period after reaching age 65, beneficiaries must enroll for Part B coverage. Combining Parts A and B would simplify this process for beneficiaries and facilitate the adoption of a new, simpler deductible and co-payment system.

The co-payment and deductible structure of the Medicare program has been revised relatively little since the inception of the program. The Part A deductible is set at the average cost of one day of hospital care (currently $764), and beneficiaries pay one deductible per inpatient spell of illness. (There are also Part A co-payment requirements, but these have little impact on determining beneficiaries' liabilities.) The Part B deductible is $100, and beneficiaries pay a 20 percent co-payment for most Medicare Part B services (See footnote 14).

Under a revised Medicare program that combines Part A and B, ANA recommends a combined deductible amount of $500, with existing co-payment rules applying beyond the deductible (except for mental health, and preventive and screening services, as described below).⁽¹⁷⁾ This deductible and these co-payments would be applied to the "stop-loss" protection described in #2, below.
Add a "Stop-loss" Provision (A Cap on Annual Out-of-pocket Payments by Beneficiaries)

Currently, there is no "stop-loss" protection (cap on annual out-of-pocket expenses) in the Medicare program, leaving beneficiaries to face potentially unlimited out-of-pocket liabilities (including the cost of deductibles, co-payments, and prescription drugs) each year. To protect against these possible costs, about 30 percent of Medicare beneficiaries purchase Medigap policies at an average cost of $1,500 annually. Despite the high premium, Medigap insurance still leaves beneficiaries open to high out-of-pocket costs for prescription drugs.⁽¹⁸⁾ ANA recommends the adoption of "stop-loss" coverage of $3,000, which would offer beneficiaries a simpler way to obtain needed financial protection and reassurance.
Eliminate Medigap

If Medicare included reasonable "stop-loss" protection and the key benefits offered by Medigap plans, beneficiaries would not need to purchase and would not benefit from additional supplemental coverage. Currently, approximately one-quarter of the average $1,500 Medigap annual premium, or $375, is consumed by the administrative costs and profit of the Medigap insurer. To protect consumers from the continued marketing of supplemental insurance that would be costly but duplicative, ANA recommends that Medigap plans be eliminated.⁽¹⁹⁾

Some beneficiaries would save the full cost of premiums for supplemental coverage (approximately $1,500 annually), while others would save some portion of those costs. Under ANA's plan, any additional out-of-pocket costs for Medicare-covered services, including deductibles and co-payments, would be applied to the $3,000 "stop-loss" provision. ANA's revised Medicare program provides a fiscally responsible way to improve beneficiaries' coverage and provide an absolute cap on beneficiaries' out-of-pocket payments, including prescription drug costs, while achieving system-wide savings from elimination of Medigap inefficiencies.
Reduce the Age of Eligibility

ANA supports reducing the age of eligibility for Medicare by implementing a voluntary buy-in option for persons aged 62-64, with a similar option for displaced workers at age 55.⁽²⁰⁾

ANA believes that allowing those who wish to join the Medicare program will enable more older people to obtain health insurance coverage and receive earlier care.

Redirect Graduate Medical Education (GME) Funding to Ensure a Qualified Health Workforce

ANA recommends redirecting graduate medical education (GME) funds, which support the education of health care providers, to ensure that future beneficiaries receive quality care from an appropriate provider in an appropriate setting.

ANA has long advocated the establishment of an all-payer trust fund to provide broad-based and stable funding for clinical training of post-graduate nurses and physicians. In the absence of such a trust fund, ANA recommends redirecting existing GME funds to ensure that needed education funds are allocated fairly to reflect the broader use of an array of health professionals most appropriate to meeting our nation's future health care needs (See Appendix C).

C. Additional Benefits

ANA believes that enhancing the benefits package available under Medicare would enable beneficiaries to receive earlier, better, and more comprehensive care. In addition, ANA believes that such care would result in considerable savings over time, due to the improved health of and outcomes for its beneficiaries.⁽²¹⁾ ANA therefore recommends that the Medicare program be revised and expanded to include the following benefits:⁽²²⁾

Prescription Drug Coverage

Currently, beneficiaries pay out-of-pocket for about 50 percent of their prescription drug costs. The remaining 50 percent is paid by secondary insurers.⁽²³⁾ Those who purchase Medigap plans primarily for help with the cost of prescription drugs find that they receive little or inadequate coverage.⁽²⁴⁾

ANA believes that prescription drug coverage is a needed health benefit and recommends the inclusion of comprehensive prescription drug coverage with a $250 deductible and a 20 percent co-payment. Under ANA's proposal, the deductible and co-payments could be applied to the $3,000 "stop-loss" protection.⁽²⁵⁾

Mental Health Parity

Medicare's inpatient lifetime limit of 190 inpatient days applies only to inpatient mental health care provided in psychiatric hospitals and is rarely exceeded. However, outpatient mental health care, by contrast, requires a 50 percent co-payment, versus 20 percent for the remainder of Part B. ANA believes that mental and physical health should be treated equally and that there should be no disparity in payment for care. Therefore, ANA recommends removing both the additional 30 percent co-payment for outpatient mental health services and the limit on inpatient mental health care.
Expand Home Health Coverage to Avoid Institutionalization

ANA supports expansion of the home health benefit aimed at avoiding institutionalization of at-risk beneficiaries throughout traditional Medicare. ANA continues to advocate the restoration of pre-"Balanced Budget Act of 1997" home health benefits to ensure that the availability of home health care is an affordable and accessible benefit. ANA also supports retaining those measures which help avoid excess service delivery and ensure appropriate use of home care through the development of standards.

Several existing Health Care Financing Administration (HCFA) models would help to reduce the need for institutionalization of the frail elderly: Community Nursing Organizations (CNOs) (see pages 13-14), which ANA believes should be expanded; the program of all-inclusive care for the elderly (PACE) demonstration (see pages16-17) and the social health maintenance organization (SHMO) demonstration (see pages 16-17).
Add Preventive/Screening Services with No Co-payment or Deductible

ANA has long advocated for increased preventive/screening services as part of accessible services for all Medicare beneficiaries. While the Medicare program was created to pay only for acute and chronic health care needs, it has recently been expanded to include a number of important preventive and screening services. These include:

screening mammography, initially covered once every two years for women over age 65, but currently covered annually for Medicare-covered women over age 40;
pap smear and pelvic exam once every three years, with more frequent exams and smears covered for women at high risk for cervical cancer;
colorectal screening exam;
diabetes self-management training;
bone mass measurement for high-risk persons;
prostate cancer screening (beginning 1/1/2000); and
flu shots, pneumococcal pneumonia vaccine, and hepatitis B vaccine for those at risk.

Existing Medicare preventive benefits are well within the traditional medical disease model and are targeted at specific diseases or conditions where the ultimate treatment of disease is covered by the Medicare program. Guidelines from the Agency for Health Care Policy and Research point to a few additional disease-specific screening tests that expert panels have recommended for the elderly population, including blood glucose screening for diabetes, blood cholesterol screening for heart disease, and tests for thyroid dysfunction. These are all tests that physicians may routinely order if disease is suspected, but which may not be ordered merely for screening purposes.⁽²⁶⁾

ANA believes that Medicare should move away from a traditional medical disease model which targets specific disease, and toward a broader model of health and health care which supports the health and wellness of the elderly population. Preventive and/or screening benefits that should be part of a revised Medicare program include the following:⁽²⁷⁾

annual check up
telenursing (telephone advice nurses)
smoking cessation
obesity screening
nutrition counseling
preventive dental care
exercise counseling
domestic violence screening
counseling regarding home safety and fall prevention
screening for polypharmacy problems and cognitive impairment
mental health screening
blood glucose screening for diabetes
blood cholesterol screening for heart disease
tests for thyroid dysfunction

The inclusion of a general-purpose annual checkup would be an important addition to the Medicare benefits package. Currently, more than 85 percent of all Medicare beneficiaries have at least one office visit annually, and more than 95 percent of beneficiaries with chronic conditions have at least one annual visit. These visits focus on specific problems. A checkup visit, by contrast, would include the routine screening tests mentioned above, screening for lifestyle and environmental factors, counseling on nutrition and other factors, and assessment of health care needs.

The involvement of telephone advice nurse services, or "telenursing", in the traditional Medicare program would provide a complementary way to deliver services. Through telenursing, professional nurses can provide advice on a wide range of health and medical problems, serving as a critically important link between patients and appropriate care and providing valuable information and reassurance to both the sick and the "worried well".⁽²⁸⁾ Anecdotal evidence suggests that many seniors seek unnecessary health care services out of loneliness, fear, or depression. Telenurses can direct patients to appropriate care sources, thereby providing improved utilization of physicians and advanced practice registered nurses. Nurses have long followed-up on patients by telephone after discharge from hospital and community care settings. Kaiser Permanente pioneered the formal introduction of telephone advice nurses in the managed care setting in the 1960s; this approach is now available to millions of Americans⁽²⁹⁾ and has been adopted nationwide under Great Britain's National Health Service.

Under ANA's plan, there would be no deductibles or co-payments for any service under this package, and therefore use of these services would not cause any additional contribution toward the beneficiary's $3,000 "stop-loss" cap.

V. Beneficiary-Focused Coordinated Models of Care

A. Overview

Beneficiary-focused coordinated models of care for Medicare provide a focus on primary health care, prevention, wellness, and early intervention for beneficiaries and include primary health care services provided by advanced practice registered nurses (APRNs).⁽³⁰⁾ Such an approach would change the emphasis of the traditional fee-for-service Medicare program (medical model), which is oriented more around treatment for disease than prevention and in which there is little coordination of care among providers. The beneficiary-focused coordinated models of care incorporate a number of service delivery mechanisms, many of which utilize nursing case management to provide high quality care while also managing costs.

ANA recognizes that any single part of these models may not achieve significant cost savings on their own. However, the synergistic impact of multiple nursing-managed approaches would provide overall cost containment while also ensuring high quality care for beneficiaries. A primary and preventive care focus would provide savings for the Medicare program by reducing high cost hospitalizations and admissions to skilled nursing facilities (SNFs) and nursing homes. Payment for Medicare services would be structured to encourage the provision of high-quality, cost-effective care at each stage of a beneficiary's treatment. Nursing's emphasis on primary health care, prevention, wellness, and early intervention, primarily through case management approaches, would:

decrease volume growth in services provided per beneficiary;
provide for appropriate, cost-effective use of high-cost/high-tech interventions;
decrease hospitalizations by managing care and encouraging use of preventive and self- care measures and disease management programs;
provide appropriate and compassionate care for the dying, including pain management; and
provide for high-quality, cost-effective alternatives to long-term care that has been traditionally provided in institutional settings.

B. Specific Approaches for Cost Savings Using Beneficiary-Focused Coordinated Models of Care

ANA believes that the following beneficiary-focused coordinated models of care can be implemented as part of the Medicare program to achieve better care and lower costs:

Expansion and Incorporation of Community Nursing Organizations (CNOs) into Delivery System
Designed as an innovative approach to providing community nursing and home health care services for Medicare beneficiaries, the CNO demonstration project, initiated through the 1987 Omnibus Budget Reconciliation Act, was implemented at four sites (including urban and rural areas in Arizona, Illinois, Minnesota, and New York) in 1992. The CNO model combines the most effective features of a nursing care delivery model with core components of managed care. The two fundamental elements of the CNO, nurse case management and partial capitation payments, are intended to promote timely and appropriate health services cost effectively and with strong emphasis on prevention and education activities. CNOs combine the benefits of individualized preventive and chronic care with the positive aspects of managed care financing.

Key features of the CNO model include:
- risk assessment of all members at enrollment and designated intervals;
- matching of nursing and clinical resources to member need and risk level;
- participation of members in development and selection of educational programs and clinical interventions;
- individual and group interventions; and
- community-based services.
Benefits of the CNO service package generally include: in-person nursing consultations at least every six months; part-time or intermittent nursing care and home health aide services; physical, occupational or speech therapy; and medical supplies and durable medical equipment. Services are accessible and emphasize prevention and self-care measures. Nurse case managers arrange, coordinate, and authorize health and/or social services. For each enrollee, the CNO receives a capitated amount set at 95 percent of the adjusted average per capita Medicare payment for community and ambulatory service in the CNOs geographic area. Rates are adjusted according to beneficiary age, gender, and prior Medicare home health use. An additional adjustment for functional status is also being tested at some CNOs.

The CNO demonstration is expected to demonstrate reduced use of costly acute care services by promoting timely and appropriate use of community and ambulatory care services and by focusing on primary prevention and educational activities. Final evaluation of the CNO demonstration is expected in 1999. The analysis of the CNO data will provide important information about refining existing CNO models to address current health policy trends. A proposal is under development for a modified CNO model which will incorporate the best practices of the four CNO sites to optimize outcomes. The experiences of the demonstration CNOs indicate that a stronger operational linkage to primary care professionals and modifications in the capitated payment structure to achieve budget neutrality could be incorporated into the refined CNO model.

ANA supports the expansion of the CNO sites and the changes required to transition from a demonstration project to a permanent Medicare option for an increased number of Medicare beneficiaries. The CNO model represents a way to transition a segment of the Medicare population out of fee-for-service and into managed care with the added protection of nursing case management and accountability for patient outcomes and makes new inroads into responsible population-based care.
Utilization of Nurse Case Managers to Manage/Coordinate Care for Medicare Beneficiaries⁽³¹⁾
Various case management approaches have been successfully implemented by private payers, state Medicaid programs, and the Medicare program to manage care and costs. Case managers have been utilized both to coordinate primary health care services for beneficiaries and for high-cost users of health care. Savings are achieved by preventing unnecessary or inappropriate inpatient hospitalizations, emergency room visits, and nursing facility admissions. Services provided by case managers generally include screening beneficiaries, assessment, care planning, implementation, monitoring, and reassessment. Written guidelines are also effective resources for case managers to provide for consistent care. Guidelines can provide indicators for admissions, appropriate levels of care, outcomes, descriptions of care, length of stay goals, discharge criteria, and primary and pharmaceutical care.
Use Comprehensive Discharge Planning and Home Follow-up
A recent study published in the Journal of the American Medical Association reports that "an APN-centered discharge planning and home care intervention for at-risk, hospitalized elders

reduced hospital readmissions, lengthened the time between discharge and readmission, and decreased the costs of providing health care." The study reports a mean per-patient savings of approximately $3,000.⁽³²⁾ The authors conclude that "[w]hen extrapolated to the number of older adults hospitalized each year with similar conditions, the potential patient benefits and savings to the Medicare system resulting from this intervention are substantial." ANA recommends replicating and expanding this study, and, if successful, implementing such comprehensive discharge planning and home follow-up for all eligible beneficiaries.
Expansion of Nurse-Managed Clinics
Nurses successfully and cost-effectively provide primary health care services in community settings via nurse-managed clinics. Nurses both manage and staff these clinics, which provide for accessible and affordable patient care, especially in economically disadvantaged and medically underserved urban and rural areas.⁽³³⁾ Clinics save money by utilizing APRNs, staff nurses, and often nursing students and faculty from local academic institutions to provide services in the community. Moreover, the model of primary health care utilized by nurse-managed clinics effectively provides for appropriate care, especially for treatment of the elderly, in an accessible community setting. Patients are enabled to easily access diagnosis and treatment of their common health problems as well as preventive services. These clinics commonly offer physical examinations, health counseling, women's health services, outreach activities, and referrals to physicians when appropriate. Because clinics are located in convenient community settings, home visits are possible for elderly, disabled, and terminally-ill patients.

Since existing nurse-managed clinics serve a variety of clients in the community including children, pregnant women, other young adults, and the elderly, reimbursement has come from Medicare, state Medicaid programs, private insurers, and self-pay via a number of arrangements including capitation and sliding pay scales. Clinics have also received public or private grants to help fund their services and operations. The Balanced Budget Act of 1997 should facilitate the expansion of nurse-managed clinics, especially in urban areas, as it further enables nurse practitioners and clinical nurse specialists to receive direct payment for Medicare-eligible services.
Implementation of Disease Management Programs for Beneficiaries with Chronic Conditions

Disease management programs provide for coordination of the treatment process for patients with certain high-cost, high-volume conditions, such as diabetes, high cholesterol, asthma, hypertension, and coronary artery disease. Programs typically include services such as preventive medicine, patient counseling and education, and outpatient care with coordination by a case manager. Disease management is utilized increasingly by private payers and providers to control costs and improve outcomes. This is especially relevant as health expenditures for cardiovascular diseases, including stroke, hypertensive disease, and congestive heart failure totaled to $171.1 billion in 1998.⁽³⁴⁾ Additionally, 18.4 percent of persons age 65 or older have diabetes, a disease which resulted in $44.1 billion in health expenditures in 1992.⁽³⁵⁾ Americans with diabetes have two to five times higher per capita medical expenditures than people without diabetes. Targeted management programs for individuals with these diseases achieve cost savings by avoiding expensive inpatient and acute care services. Humana, Inc. reported saving $850 per member per month in implementing a disease management program for congestive heart failure, improving care and outcomes of 1,900 senior citizens, significantly reducing utilization, and saving millions of dollars.⁽³⁶⁾
Expansion of Home and Community-Based Services

Home and community-based interventions provide beneficiaries with cost-effective alternatives to long-term care settings. Managed care approaches have been successfully utilized to coordinate community care. For example, nurse case managers who managed post-acute care in the community for beneficiaries enrolled in one Medicare Risk plan reduced the use of hospital services. Enrollees exhibited significantly lower total (-$3,224) and inpatient (-$361) costs, and significantly fewer inpatient, outpatient, and emergency room visits.⁽³⁷⁾ The Health Care Financing Administration's (HCFA) Program of All-Inclusive Care for the Elderly (PACE) and Social HMOs (SHMO) demonstrations have also resulted in prevention of high cost hospitalization and other institutionalizations.

The PACE program integrates preventive, acute care, and long-term care services specifically targeted towards the frail elderly population who are dually eligible for Medicare and Medicaid. Most of these services are provided at community adult day health centers and coordinated by an interdisciplinary team of health professionals, including nurse case managers. Costs for PACE beneficiaries are 38 percent lower in the first six months of enrollment than for comparable fee-for-service beneficiaries and 16 percent less in months seven through twelve. Lower costs are due to reduced inpatient and nursing home days.

The SHMO demonstration also provides for community-based long-term care services for the frail elderly population. Services have been provided to approximately 35,000 Medicare beneficiaries, and it is estimated that 5 percent to 7 percent of beneficiaries would meet criteria for SHMOs. Beneficiaries are provided all Medicare Part A and B benefits, prescription drug coverage, benefits for eyeglasses and hearing aids, and up to $1,000 per month in home and community based service benefits. Studies have indicated that SHMOs have been effective in reducing nursing home utilization, reducing Medicaid spending on long-term care and reducing caregiver burden. Cost findings indicate that SHMOs spend less per service user than Medicaid in its home and community-based service programs ($378 per user per month versus $1,613 per month).

State Medicaid programs have also utilized case management services to provide home and community based services to beneficiaries and prevent the use of nursing facility care. The General Accounting Office reports that Medicaid home and community services are considerably less expensive than nursing-facility care, which is partially attributed to case management interventions.⁽³⁸⁾
Improved End-of-life Care

ANA recommends:
- compassionate care at the end of life provided in familiar surroundings, if possible;
- acknowledging pain as the 5^th vital sign, and appropriate use of pain medications and palliative measures;
- when requested and appropriate, a reduced emphasis on high-tech/high cost interventions at the end of life; and
- easier access to hospice benefits, when desired.
Utilization of Preventive and Self-Care Measures

Utilization of preventive and self-care measures will result in decreased acute care services, institutionalizations, and use of high-tech interventions. Medically poor and cost-ineffective outcomes result, in part, from failures in self-management of illness or risk factors.⁽³⁹⁾ Patients benefit from appropriate and consistent assessment, education, motivation, and feedback from providers.

C. Incorporating the Beneficiary-Focused Coordinated Models of Care into the Medicare Program

While ANA advocates the use of nurse case managers to manage and coordinate care for Medicare beneficiaries, this new approach will require some significant changes in how program services are delivered. Substantial progress has already been made with the recent passage of legislation which provides Medicare reimbursement for nurse practitioners (NPs) and clinical nurse specialists (CNSs) regardless of geographic area or setting. ANA believes that these and other legislative achievements result in part from the enormous trust that patients place in nurses: a 1998 poll found that nurses were considered the most "Trustworthy" of the major health care professionals.⁽⁴⁰⁾

NPs and CNSs are advanced practice nurses who have the educational preparation to serve as primary care providers.⁽⁴¹⁾ They provide basic, initial health care services for patients, frequently in an ambulatory setting such as an office or clinic, and usually representing a patient's first contact with the health care system. Essential primary health care services include, but are not limited to:

performing physical exams and taking health histories;
assessing and evaluating common symptoms of acute illnesses like colds, infections, and asthma;
prescribing and managing medication regimens for common or acute conditions;
managing chronic health problems like diabetes, high blood pressure, and depression;
screening and preventive services (e.g., blood pressure screening, nutrition counseling, immunization, and smoking cessation);
prenatal care, family planning, and delivery of normal pregnancies; andidentifying health needs that require referral for more specialized care.

Historical studies have shown that 60 percent to 80 percent of the primary and preventive care traditionally done by physicians can be done by APRNs for less money.⁽⁴²⁾ A widely cited government report found that the quality of care provided by nurse practitioners was as good or better than care provided by physicians and was less expensive.⁽⁴³⁾ In spite of these reports, barriers to the accessibility of APRNs continue to exist. Advanced practice nurses are not routinely included in the panel of providers available to patients in a managed care setting and many APRNs have had a difficult time getting their names listed as available primary care providers at all.⁽⁴⁴⁾

While APRNs can effectively serve as primary care providers, registered nurses can serve as case managers, tracking the patient through the health care delivery system so that fragmentation is decreased, the quality of the patients' experience is maximized, and costs are reduced. Many beneficiaries would benefit from case management, specifically, beneficiaries who are at risk for high cost events, such as inpatient hospitalization, institutionalization in a nursing home, acute care crisis related to chronic disease, or death.

For the Medicare population, nurse case managers could use integrated, multi-disciplinary patient care plans so that key events -- and the patients' response to those events -- are monitored and desired outcomes are achieved. The registered nurse case manager could oversee patient care plans to ensure that patients progress through the desired events appropriately and satisfactorily. In some managed care organizations, a nurse case manager addresses the long-term needs of enrolled members, not just their current interaction within the system. This case management style should be adopted by the Medicare program.

Providers that serve Medicare beneficiaries should be encouraged to use registered nurse case management and disease management approaches where appropriate. A variety of reimbursement approaches have already been implemented in the Medicare program which could be effectively tailored when expanding the use of registered nurse case managers; they include full capitation, partial capitation, and separate payments provided for case management services only.

Medicare could also investigate the use of disease management firms to provide care to beneficiaries with certain chronic, high cost conditions, as private payers have already done. Mandatory case management services for beneficiaries who meet certain screening requirements would achieve the most cost savings to the Medicare program since the care of all high-cost users would be managed and directed by registered nurse case managers.

The CNO, PACE, and Social HMO models provide examples of how nursing case management can be incorporated into Medicare to provide cost-effective care under different capitated arrangements. Many beneficiaries have been successfully served by these models, including healthy individuals, dually eligible individuals, and the frail elderly. Providers that serve Medicare beneficiaries should be given financial incentives to encourage the use of advanced practice nurses, registered nurse case management, and disease management approaches. Beneficiaries should be educated about their options and allowed to choose to participate in plans which offer nursing-centered approaches to providing health care services.

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Section IV & V

IV. Reforming Medicare

V. Beneficiary-Focused Coordinated Models of Care