Two demonstrations comprised of a community-wide health information exchange in Indiana and a consortium of several community care physician networks in North Carolina are being implemented to encourage the delivery of improved quality care to an estimated 130,000 beneficiaries in those states, according to the Centers for Medicare & Medicaid Services (CMS).

The demonstrations are part of the national, five-year Medicare Health Care Quality (MHCQ) demonstration mandated by Congress in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). The Indiana and North Carolina demonstrations will make more effective use of best practice guidelines, encouraging shared decision making between providers and patients, and altering incentives for care delivery.

Each demonstration uses a different approach but each is intended to improve quality of care received by Medicare beneficiaries at less cost to Medicare.

The Indiana Health Information Exchange (IHIE) demonstration is the first large-scale Medicare study to examine the impact of a multi-payer, quality reporting and improvement, and pay-for-performance program.  It is unique among recent Medicare projects because Medicare data will be used by the IHIE, along with clinical and administrative data from other sources, to provide participating physicians with better information on the patients they are treating and to use common quality measures to create incentives to improve the quality and cost of care provided to patients covered by private insurers, employer-sponsored group health plans, Medicare, and Medicaid.  IHIE’s program will test whether quality improvement and pay-for-performance initiatives are more effective in a multi-payer environment.

The IHIE project is a community-wide effort involving a coalition of providers (roughly 800) treating the majority of Medicare fee-for-service patients in the Indianapolis area; regardless of the patient’s health status or affiliation with a specific physician group, health system, or insurance type.

“IHIE is uniquely suited to implement and capture health care activities for about 100,000 Indiana Medicare beneficiaries, largely due to a demonstrated proficiency as a regional health information exchange, with a coalition that includes regional employers, public and private payers and local physicians working together to treat patients with a more complete picture of common quality measures and the overall health care being provided, or not being provided, to people with Medicare benefits,” said J. Marc Overhage, IHIE president and chief executive officer.”

“Under the current health care system, patient data is often inconsistent and housed in different systems making it less useful to physicians,” said CMS Acting Administrator Charlene Frizzera.  “As quality measures and incentives vary across payment and delivery systems, IHIE and subsequent demonstrations will work to combine fragmented data and standardize quality reporting and payments for greater efficiency for health care providers to improve quality and cost of care for their patients.”

The North Carolina Community Care Networks (NC-CCN) demonstration will extend the ‘medical home’ concept to low-income Medicare beneficiaries, those eligible for both Medicaid and Medicare.  NC-CCN consisting of eight regional health care networks in several North Carolina counties combines community-based care coordination and health information technology to support more effective care management.

Care for Medicare and Medicaid dually eligible beneficiaries can be fragmented even when care for Medicaid eligibles is coordinated well.  Often states, which utilize effective care management programs in their Medicaid programs, do not extend them to those eligible for both Medicaid and Medicare.  In this demonstration the concepts which have worked well in the past will be extended to Medicare.  Eventually the NC-CCN intends to extend their program to those only eligible for Medicare.

The networks, consisting of community physicians, hospitals, health departments, and other community organizations will serve as the medical home or primary source of care for dual eligible beneficiaries.   Each network employs clinical care coordinators who work with practices to plan and coordinate care for all of the patients in the medical home.  The networks will also measure care performance through quality measurement and implement performance incentives for effective care.

Both CMS demonstrations allow the organizations to share in a portion of Medicare savings achieved once quality of care and cost objectives are met. The demonstrations are described at the following CMS Web site: