The Centers for Medicare and Medicaid services announced results from the second performance year of its Independence At Home demonstration. Evaluators found that participants saved over $10 million—on average, about $1,010 per beneficiary. CMS said all 17 participating practices improved quality in at least two of six quality measures and four practices improved quality on all six.

Seven providers received a total of $5.7 million in performance incentives.

“The Independence at Home Demonstration is a patient-centered model that supports providers in caring for chronically ill patients in their own homes,” said Dr. Patrick Conway, CMS acting deputy administrator and chief medical officer. “These results continue to support what most patients already want–the ability to have high quality care in the home setting.”

In this demonstration, providers must meet the performance measures for at least three of the six following areas:

  • Follow up contact within 48 hours of a hospital admissions, hospital discharge, and emergency department visit
  • Medication Reconciliation in the home within 48 hours of a hospital discharge and emergency department visit
  • Annual documentation of patient preferences
  • All-cause hospital readmissions within 30 days
  • Hospital admissions for Ambulatory Care Sensitive Conditions
  • Emergency department visits for Ambulatory Care Sensitive Conditions

The Independence At Home initiative serves about 10,000 Medicare beneficiaries. In order to be accepted into the program, participating practices are required to demonstrate experience in providing care in the home to high-cost, chronically ill beneficiaries. Selected providers include primary care and other multidisciplinary teams led by physicians or nurse practitioners, are organized for the purpose of providing physicians services, and serve at least 200 beneficiaries.

Our Take: Last year, when Dr. Conway announced first-year results from the demonstration at an ACO conference we attended, the crowd roared. The comparatively modest program saved $25 million, or about $3,000 per beneficiary per year. Everyone was impressed.

This year’s results appear to be more modest until you look deeper into the numbers. In 2014, the average target expenditure per beneficiary per year (PBPY) was $4,646. In 2015, the average PBPY target expenditure was $3,873—a 20 percent decline. Actual PBPY expenditures dropped 17 percent, from $4,290 in 2014 to $3,672 in 2015.

Looked at another way, CMS’ target was more than $400 less in 2015 than providers actually received in the first performance year. They set the bar higher and providers still managed to save money.

Unfortunately, isn’t possible to compare savings from both performance years because CMS changed the regression methodology used to calculate the control groups that allow it to determine savings.

But the takeaway is clear: this program has been wildly successful at controlling costs for the most expensive, chronically ill patients in the Medicare program. We wouldn’t be surprised if CMS pulls the plug on the demonstration and rolls out the program nationwide.

A more detailed comparison of the two performance years can be found here.

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