It’s unclear whether the decline in savings was an anomaly or a program design issue that increases the savings challenge each year.


Aug. 10—Less money was saved and less shared with providers in the second year of a recently extended program to encourage provider home visits.

In its second year, Medicare’s Independence at Home (IAH) demonstration generated savings of more than $10 million overall and $1,010 per beneficiary, according to a fact sheet from the Centers for Medicare & Medicaid Services (CMS). That was a drop relative to first-year savings, as reported in an earlier fact sheet, of more than $25 million and $3,070 per beneficiary.

The program incentivizes practices to provide chronically ill patients with physician- or nurse practitioner-led primary care services in home-based settings.

Providers’ incentive payments for meeting cost-reduction and quality-improvement goals also fell. In the second year, among the 15 participating practices, seven practices garnered a total of $5.7 million. Those numbers were down from nine practices and $11.7 million in the first year.

The politically popular three-year demonstration began in 2012 and was extended by two years, through September 2017, under bipartisan legislation enacted in 2015.

Savings Concern

Some healthcare researchers said the reduced savings could stem from the challenge that participating providers face in obtaining ongoing savings against the program’s benchmarks. The benchmarks could make it harder to find additional savings each year.

A CMS spokesman said multiple factors likely contributed to the decline in savings. The most important factor was that CMS modified the patient sample used to determine savings. An expansion of the sample improved the comparability between the treatment group (i.e., the IAH beneficiaries) and a comparison group.

Despite the lower savings, CMS highlighted that all 15 participating practices improved their quality results from the first performance year in at least two of six categories. Four practices—the same number as in the first year—met the performance standard for all six quality measures. Detailed data on reduced hospitalizations, improved patient and caregiver satisfaction, and health improvements for beneficiaries will be included in an evaluation report to Congress due in 2017, a CMS spokesman said.

“These results continue to support what most patients already want—the ability to have high-quality care in the home setting,” Patrick Conway, MD, acting deputy administrator and chief medical officer of CMS, said in a release.

The challenge of finding cost savings in successive years was not insurmountable for Housecall Providers of Portland, Ore., which garnered shared savings of $1.2 million in the first year and $1.1 million in the second.

“I’m skeptical to think that [available savings are] really going to go down that much,” Terri Hobbs, executive director of Housecall Providers, said in an interview. “These are not people you are seeing in the grocery store; these are people who are not otherwise getting primary care access.”

If some practices continue to struggle to achieve shared savings or meet quality benchmarks, they “may choose to go in a different direction,” Eric De Jonge, MD, president-elect of the American Academy of Home Care Medicine (AAHCM), said in an interview. Conversely, the more successful practices may expand their efforts.

“Part of it is that practices need to feel that there is some return on their start-up costs and on their investment in these teams,” De Jonge said.

Investments that practices have made to participate in the program have been large, such as the $300,000 spent by a participating consortium to pay for a data analyst and weekend staff, as identified in a Commonwealth Fund report. A CMS spokesman said operating costs were not collected nor included in the shared savings calculations.

From De Jonge’s perspective, the lower savings in the second year may have stemmed from a reduction in the expected cost of care at some sites in the second year of the program, thus requiring greater reductions in annual costs to garner the shared savings. Alternatively, he said, the reduction could just be a random fluctuation.

“What we have seen taking care of these patients, just on the ground, is that these teams continue to keep people at home, continue to keep them out of the hospital, and continue to prevent high-cost events,” De Jonge said.

Projections by AAHCM estimate that up to 2 million chronically ill Medicare beneficiaries could benefit from a nationwide expansion of such a program. If even 1 million beneficiaries were enrolled for 10 years, according to the projections, Medicare could save up to $15 billion.

Legislation to enact such an expansion was introduced in the Senate in July, and De Jonge was optimistic Congress would pass it early next year.   

What Works

Housecall Providers, a not-for-profit, met all six of the program’s quality goals in both years, while generating savings of 26 percent in the second year compared to a control group that did not receive home-based primary care. The second-year savings were $830 per patient per month.

Hobbs credited her organization’s savings to “transition teams” of nurses and social workers that tracked patients’ progress both in the hospital and after discharge.

“These are outpatients and we know them well, and they can oftentimes have things like dementia or Alzheimer’s, where they really can’t think for themselves—so we’re the operative and holding their hand as they go through this process,” Hobbs said.

At home, the teams can help patients and caregivers understand the discharge summary, ensure caregivers are clear on the orders, and check that prescriptions are filled and administered correctly and that unneeded medications are discontinued.

Tracking patients across care locations—and not just at home—was a commonly effective approach across the 15 participating practices, according to De Jonge.

Other effective steps included the provision of around-the-clock, phone-based clinical support and the willingness of practices to provide urgent house calls within 24 hours of a request.

“That helps prevent 911 phone calls,” De Jonge said. In fact, he added, preventing unnecessary 911 calls was “the key to the Independence at Home’s success.”

Housecall Providers had low hospitalization rates before joining the Medicare demonstration, but the resources funded by the program helped further cut those rates, according to Hobbs. Among the program’s six quality measures was a requirement that participating practices cut rates of both emergency department visits and hospital admissions resulting from ambulatory care-sensitive conditions, such as chronic obstructive pulmonary disease, congestive heart failure, and diabetes.

“You can intervene, provide urgent care in the home, keep that patient from landing in the ER, where they often then will be automatically admitted for a $10,000 hospital stay,” De Jonge said. “Whereas you might intervene with a $100 house call or $500 in house calls over the course of a week. That’s how the programs that save money do it.”


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C. office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Wednesday, August 10, 2016