July 12, 2005

CMS Updates

Proposed Rate Increase
The Center for Medicare & Medicaid Services (CMS) announced on Friday a 2.5% increase in Medicare payment rates for 2006. Mark McClellan, the administrator for CMS, believes that this increase will help to home health care agencies to provide the best care possible for beneficiaries. The increase is expected to increase payments by $330 million for 2006.

CMS is also proposing an adopted Core Based Statistical Area market definition that would adjust payments based on geographical area. These changes, if adopted, would bring an additional .7 percent increase in fees to rural homes. The net changes would have a 3.5% average increase for rural homes and a 2.3% increase to homes in urban areas.

CMS to Award Demonstration Projects to Improve Care for Patients with High Medical Costs
CMS awarded demonstration projects to six organizations to operate for a term of three years with the goal of increasing care to beneficiaries with complex medical problems. The focus will be on preventive care, and an effort will be made to improve on the continuity of medical services.

The Care Management for High Cost Beneficiaries (CMHCB) demonstration will test the ability of direct-care provider models to coordinate care for high-cost/high-risk beneficiaries by providing such beneficiaries with clinical support beyond traditional settings to manage their conditions and enjoy a better quality of life.

Two organizations will be working in Texas, Care Level Management (CLM) and Texas Senior Trails (TST). CLM will be working in select Texas counties as well as Florida and California while TST will be operating in 48 Texas counties in the panhandle.

The administrator of CMS believes that these changes will help reduce the fragmentation of care and lead to increases in overall quality of care that patients receive. The awardees of these demonstration projects will receive a monthly fee from Medicare to cover administrative and management expenses, but they will assume some financial risk for the increased quality of care.
Awardees will employ a variety of models including:
- support programs for healthcare coordination,
- physician and nurse home visits,
- use of in-home monitoring devices,
- provider office electronic medical records,
- self-care and caregiver support,
- education and outreach,
- tracking and reminders of individuals' preventive care needs,
- 24-hour nurse telephone lines,
- behavioral health care management, and
- transportation services.

In addition, awardees will have the flexibility to stratify targeted beneficiaries according to risk and need and to customize interventions to the meet individuals' personal needs.