New CMS pilot project shows faith in DSM

Wednesday, December 31, 2003

WASHINGTON - The recent CMS announcement of a disease management pilot project aimed at improving care for the chronically ill begs the question: Is CMS buying into claims that DSM keeps patients out of hospitals, thereby reducing health care costs?
“I think this [project] does mean we have a broader acceptance of disease management as a legitimate, proactive patient-care initiative,” said Roberta Domos, owner of Domos HME Consulting Group. “So, that’s very good news. It gives some cache to the idea of disease management.”

The demonstration project will include payment of all disease management services and prescription drug costs for up to 30,000 Medicare beneficiaries throughout California, Arizona, Louisiana and Texas. The participating organizations will begin recruiting beneficiaries with heart problems and complex diabetes starting next year.

The project also has the potential to benefit the traditional HME provider. Besides the creation of a new line of business, Domos said, a successful disease management demonstration could bring the industry closer to resolving one of its biggest issues with CMS.

“This is a slow evolution toward the recognition that services should be reimbursed,” she said. “Getting into disease management and proving its effectiveness certainly is a way for providers to highlight the fact that the service of our business is important.”

Although he agrees the project is a positive step, Bob Stone, executive vice president of American Healthways, a leading disease management provider, said the project needs to be looked at in the context of today’s market.

Participating organizations must provide beneficiaries a prescription drug benefit, and Stone said this does not reflect the reality of disease management services. As a result, many DSM providers declined participation in the project, according to Stone.