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The Independence at Home Demonstration Project Completes its First Year and Saves over $25 Million

The Centers for Medicaid and Medicare Services (CMS) implemented the Independence at Home Demonstration program in January 2012.  The Demonstration is testing whether home-based care can reduce the need for hospitalization, improve patient and caregiver satisfaction, and lead to better health and lower costs to Medicare.  The Demonstration is part of the new framework established by the Affordable Care Act, which moves away from a fee-for-service payment model towards one that rewards doctors based on the quality, not the quantity, of care they give patients.  CMS aims to use alternative payment models to tie 30 percent of Medicare payments to quality and value by 2016, and to so tie 50 percent of payments by 2018.

Accordingly, the Demonstration focuses on one of the costliest areas of Medicare spending:  the chronically ill.  According to Bruce Kinosian, an associate professor of geriatric medicine at the Leonard Davis Institute of Health Economics, chronically ill patients represent only “5 percent of [all] Medicare beneficiaries” but “drive nearly 50 percent of Medicare spending.”  The Demonstration hopes to build on the benefits that home-based primary health care already provides for Medicare beneficiaries.  Participating providers conduct in-home visits that allows them to assess the needs of, and tailor care for, chronically ill patients – a task that often cannot be completed in a traditional “15 minute” office check-up. University of Pennsylvania News Release,Independence at Home Program at Penn Medicine Part of National Demonstration that Saved More than $25 Million, June 22, 2015.

The Demonstration also allows providers to assess the patient’s home environment and identify problems as they begin to develop.  For example, health care providers can conduct spot checks for tripping hazards, ensure that the patient’s refrigerator is stocked with healthy food, or check the patient’s medicine bottles to make sure that the pills are being taken correctly.  House visits can also include high-tech equipment so that practitioners can check for on-the-spot health problems.  Lauran Neergaard,  Doctor House Calls Can Save Money, Study Says, The Boston Globe, June 19, 2015.

To determine whether beneficiaries are receiving a higher quality of care through the Demonstration, CMS tracks the beneficiary’s care experience through six quality measures, including:

  • the number of inpatient submissions for ambulatory-care sensitive conditions per 100 patient enrollment months;
  • the number of readmissions within 30 days per 100 patient discharges;
  • the number of emergency department visits for ambulatory-care sensitive conditions per 100 patient enrollment months;
  • whether the provider contacted their beneficiaries for a follow-up within 48 hours upon admission to the hospital and discharge from the hospital and/or emergency department;
  • whether the provider identified the beneficiary’s medications after discharge from the hospital; and
  • whether patient preferences were documented.

The Demonstration provides incentive payments to practices that meet these six quality measures while still generating a minimum amount of Medicare savings.  CMS also sets other quality measures to monitor the planning, implementation and performance of the Demonstration activities.  Those quality measures are not tied to the incentive payments. Further details about the program can be found on CMS’s website or in the Independence at Home Demonstration solicitation.

Last month, CMS announced the results from the first performance year of the Demonstration.  CMS found that the project saved over $25 million in the first Demonstration year, and that $11.7 million in incentive payments would be paid to nine participating practices.  This translates to an average of $3,070 per beneficiary.  All 17 participating practices improved quality in at least three of the six quality measures, and four practices met all six quality measures.

The Senate has passed a two-year extension of this Demonstration, and the House of Representatives is currently considering a similar bill.

This post was written by Shruti Barker.

© 2020 Covington & Burling LLPNational Law Review, Volume V, Number 182


About this Author

Covington advises and represents pharmaceutical manufacturers, device manufacturers, hospitals, health plans, and other health care providers on issues involving reimbursement in the Medicare and Medicaid programs and issues of health information privacy.  Our broad practice and deep-rooted understanding of the structure and operations of federal and state reimbursement programs enable us to develop workable solutions to complex problems and to assist our clients in developing strategies that provide a competitive advantage, minimize risk, and optimize opportunities.  ...