Fiscal Fitness: How States Cope

Disease management pilot project seeks to reduce complications, save Medicare money

A Medicare disease management pilot project is producing information that may be helpful in expanding disease management to the Medicaid population.

The Centers for Medicare & Medicaid Services is funding four disease management pilots. Baltimore-based XL Health chairman and CEO Patrick Hervy, whose company is operating one of the Medicare pilots involving 10,000 patients in Texas, says disease management can have a significant and positive effect on Medicaid patients’ lives and on the national health care system. But he adds that disease management only will be successful if physicians are an integral part of the process, participants are educated and actively involved, and technology is used effectively.

XL Health is predicting that the patients enrolled in its Medicare demonstration will see, over three years, an aggregate 50% reduction in amputations and other serious diabetes foot complications and a 50% decrease in repeat heart failure events. Though never measured before, the company also plans to delay progression of renal failure in diabetic patients by 25%.

Burcham Fuqua, the XL Health project’s medical director, tells State Health Watch the project is for patients with advanced congestive heart failure or those with diabetes complicated by heart disease and lower extremity disease. They have recruited 14,000 patients — 10,000 who will receive disease management intervention and 4,000 who will be in a control group and not have any further contact with XL Health, but whose Medicare claims will be tracked.

The treatment group members, Mr. Fuqua says, receive a comprehensive, unlimited drug benefit, plus disease management interventions based on the specific problems the patients have.

Home health nurses evaluate each patient recruited for the test and complete a comprehensive medical profile. Data from the profile go to Omnicare, XL Health’s pharmaceutical partner, whose software suggests interventions that are recommended to the patient’s attending physician. "We expect to find contraindicated or duplicated drugs and other problems," he adds, "and will ask the patient’s doctor to make changes. We’ll identify the patients who are not receiving the classes of drugs that have been shown to be useful."

Congestive heart failure patients receive a smart scale that can transmit their weight to a call center daily. The scale also can be remotely programmed to ask the patient yes/no questions and send the answers to the call center. The responses trigger interventions as needed, with nurses calling the patient or the call center alerting the patient’s doctor.

For diabetics, the emphasis is on prevention of complications of the lower extremities. Mr. Fuqua says XL Health tries to obtain an in-person evaluation, including an intensive evaluation of the lower extremities.

Patients seen as being at risk for complications are referred to an associated podiatrist who has special training and interest in diabetic foot care. The program also provides special protective shoes. He explains that when a similar program was run with Humana, leg amputations were reduced by half.

Docs play important role

Potential enrollees are identified based on Medicare claims data. XL Health also approaches doctors about participating in the project and asks them to identify patients who might be eligible.

Participating doctors are asked to collect limited data sets on study patients quarterly and are compensated for this effort. "The amount we pay is modest and not the strongest factor in physician recruitment. The strongest factor is doctors’ enthusiasm for the unlimited prescription drug benefit."

XL Health’s philosophy, he says, is to remove the obstacles that interfere with patient compliance with a treatment program and encourage physicians to prescribe what have been identified as best practices.

He says the company expects to spend a lot of money on its unlimited drug benefit and has budgeted 19% of its total budget for drugs. "We expect that by getting patients the drugs they need, we can keep them from being hospitalized as much. The savings on hospital days and surgical procedures will more than offset the cost of the drugs."

A different drug formulary

XL Health has created a very different drug formulary from the typical insurance company model. For insurance companies, tier one usually is low-cost generic drugs, tier two is the preferred branded products based on their price, and tier three is the nonpreferred branded drugs.

Under the XL Health model, tier one contains all drugs that are crucial for a good health outcome, regardless of their price. Likewise, drugs known to worsen outcomes are in the highest tier, regardless of their pricing. "We try to spend our money where it will have the most impact to keep people out of the hospital," Mr. Fuqua says. "Lifestyle drugs have a high copay. We’re focused on global outcomes and global costs rather than on how much money is going to the prescription drug category."

XL Health is at financial risk for its Medicare demonstration project. If the cost of the program ends up being greater than the savings on Medicare claims, the company is at full risk for the difference. If the company ends up saving money, the savings are shared with Medicare.

XL Health executive vice president Paul Serini tells SHW physicians are responsive to XL Health because of the way the program is put together and XL Health was founded by and is currently run by physicians and other health professionals. "We try to function as an extension of the doctor’s office."

"Chronically ill patients usually should be seen by the doctor weekly or monthly, but often it’s quarterly at best. Between office visits, there are a lot of data that can and should be collected and some of the data should trigger action by the physician between office visits," he says.

"Sending data between visits makes the office visits briefer and more organized and comprehensive," Serini adds. "Often, patients are not organized when they come in. We offer the ability to organize their chronically ill patients for the doctors. We alleviate their administrative and financial burden. Most doctors view what we do as a positive for their patients."

The program succeeds, according to Mr. Serini, because it makes life easier for patients. The demonstration project includes some of the neediest, sickest patients that can be encountered, according to XL Health. Many of them have comorbid conditions and a poor support network. "People need someone who can ask questions because they don’t want to bother the doctor,’" he says. He also says that while the robust drug benefit is important, there are a fair number of patients joining who already have a drug benefit or say that they are joining because of the nurse contact rather than the drug benefit.

Credibility is a tough issue with consumers, Mr. Serini says. Con-vincing skeptical patients that this is truly a free program is the most difficult challenge. Once patients believe it is real, 70% to 75% of them sign up. He says they have been more successful than they had anticipated in signing up patients.

While it’s early in the three-year demonstration, Mr. Serini says XL Health feels very good about the financial risk the company is assuming. "It’s too early for a claims analysis but preliminary indications make us feel cautiously optimistic that we can save money."

[Contact Mr. Fuqua and Mr. Serini at (888) 284-0001. Web: www.xlhealth.com.]