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CMS Solicits Proposals for Disease Management Demo Projects With Prescription Coverage

Gary C. Stein

The Centers for Medicare & Medicaid Services (CMS) is inviting providers of disease management services to apply to participate in Medicare's Disease Management Demonstration. This three-year demonstration project is mandated by the Medicare, Medicaid, and State Child Health Insurance Program Benefits Improvement and Protection Act of 2000 (BIPA).

The Medicare Disease Management Demonstration project has three objectives:

  1. To improve the quality of services furnished to certain Medicare beneficiaries in the fee-for-service program,  
  2. To introduce full coverage of prescription drugs to encourage compliance with medical instructions and requirements,  
  3. To manage expenditures under Parts A and B of the Medicare program.

The project is targeted at Medicare beneficiaries with one or more of the following high-cost chronic conditions: congestive heart failure, diabetes mellitus, or coronary heart disease. Up to three existing disease management organizations will be selected to participate in the demonstration through a competitive application process.

CMS notes that there are patient-, provider-, and coverage-related problems that impede the provision of adequate care to chronically ill Medicare beneficiaries. Patient-related problems include poor compliance with medication regimens. Provider-related problems include failure to prescribe the most effective medication and poor coordination of care across providers and settings. Coverage-related issues include the fact that Medicare does not pay for most outpatient prescription drugs. Yet, CMS recognizes that "appropriate, effective pharmaceuticals are a key part of a comprehensive treatment program, and effective disease management must include access to appropriate medications."

A major difference between the new demonstration project and previous disease-management projects is the stipulation in BIPA that the demonstration must cover all of a beneficiary’s prescription medications, not just the drugs related to the targeted condition. Medicare beneficiaries who participate in the demonstration project can be required to provide "a modest cost-sharing arrangement" for their prescription drug coverage.

More information is available in the Federal Register and from CMS. The CMS contact person for further information is Tamara Jackson-Douglas, at 410-786-9417 or