HHS sees $3.4m savings from Medicaid disease management

The state Department of Health and Human Services has proposed to the federal government that New Hampshire spend some $2.7 million on a three-year disease management program in the hopes of saving money treating the chronically ill.

The state hopes to cut Medicaid spending by $6.1 million during the pilot program, resulting in a net savings of $3.4 million.

The figures were released on a federal Center for Medicare and Medicaid Services’ Web site – put there despite HHS officials’ written request that CMS “not post the following tables and financial data on the Web or any public access site.”

Commissioner John Stephen has previously refused to comment on how much the state planned to spend and save on the program, particularly while it is hammering out the final details with McKesson Health Solutions, a subsidiary of McKesson Inc.

McKesson won a bid for such a program in July 2003, and it was supposed to have been launched at the beginning of this year, but a final contract has not been presented to the governor and Executive Council as of deadline.

Follow-up calls to HHS were not returned by deadline, but sources within the department said that negotiations were continuing.

Disease management programs attempt to cut costs by emphasizing preventative care for those with the most costly diseases, thereby steering people away from emergency rooms.

Few disagree with the concept, but thus far the financial benefits have been dubious, since the contractor — whose pay is often tied to the savings generated – usually documents the savings.

In this case, according to a proposal to a waiver submitted to CMS in October 2003, the program would have an impact on 70,000 Medicaid residents (more than 80 percent of those enrolled in Medicaid) with — or at risk for — congestive heart failure, coronary artery disease, diabetes, asthma and chronic obstructive pulmonary disease, among others.

Under McKesson’s proposal, registered nurses, working from their home, would call some 90 percent of the recipients on the telephone, urging them to take their medicine and answering any questions they might have. Others would visit recipients when they get care or at their homes. Each nurse would have a caseload of 250 recipients via the telephone, or 80 to 125 if they are doing face-to-face contact.

According to the proposal, recipients would automatically be assigned to a nurse. They could change nurses but only if alternatives were available in that geographical area. They also have a chance to opt out of the program altogether.

But in its proposal, the state is asking that the federal government waive its requirement that recipients must be able to choose a managed care plan, prompting CMS to ask “Is the program voluntary?”.

Furthermore, the federal agency asked how participating nurses would serve those who don’t have telephones.

An independent firm – Milliman USA – would conduct a study to see if such a program is financially sound before it is actually implemented. Another firm – yet to be named – would conduct an annual assessment of the program.