Definition of Disease Management

Disease management is a strategy of delivery health care services using interdisciplinary clinical teams, continuous analysis of relevant data, and cost-effective technology to improve the health outcomes of patients with specific diseases.

Disease management programs enhance communication between practitioners and patients, facilitate feedback necessary for behavior modification (which may prevent or delay disease progression), and measure the effectiveness of interventions. When properly structured, disease management involves an integrated, comprehensive approach to patient care that extends beyond a focus on the drug line item.

Disease management:

• Improves health outcomes and better measures the "value" of provided services
• Takes a patient-centered approach to providing care by addressing psychological aspects, caregiver issues, and treatment of multiple diseases using nationally recognized standards of care
• May lower costs by reducing the use of unnecessary or redundant services or avoiding costs associated with poor outcomes

As mentioned earlier, patients may suffer from one or more chronic disease, making coordination of services essential; patient care should not be isolated in its own "silo" based upon the disease management focus area. Also, disease management programs should be reviewed annually and revised as necessary based upon new treatments and innovation in the standard of care.

In a letter dated February 25, 2004 from Dennis G. Smith, Director of the Center for Medicaid and State Operations, disease management was defined as either a medical service or an administration function.

As a Medical Service

Disease management programs that focus interventions on the beneficiary may qualify as medical services under Medicaid. In order to qualify as a medical service, disease management programs must include direct services, which require the use of licensed practitioners such as nurses, pharmacists, or physicians providing services directly to individual beneficiaries in order to improve or maintain their health. Examples include medical assessments, disease and dietary education, instruction in health self-management, and medical monitoring. These medical state plan services are eligible for Federal financial participation at the state’s regular Federal Medical Assistance Percentage rate. There are a number of disease management models that may qualify as medical services under Medicaid; three are outlined below.

Contracting With a Disease Management Organization - The disease management organization (DMO) manages the overall care of the beneficiary, but does not actually prior authorize or otherwise restrict access to other Medicaid services. In this model, the state often requires performance guarantees, including capitating the DMO for disease management services, as well as putting the DMO at risk for reducing overall expenditures. Capitated DMOs qualify as Prepaid Ambulatory Health Plans and are subject to a limited subset of the managed care regulations at 42 CFR Part 438.

Through an Enhanced Primary Care Case Management Program - In these programs, the state works with primary care case management (PCCM) providers to enhance the care delivered to its enrollees with certain chronic conditions. The state also may provide additional support in the form of case managers for complex cases and furnish ongoing monitoring reports on enrollee utilization. PCCM providers are often paid enhanced case management fees for providing disease management, in addition to the regular FFS reimbursement for other state plan services they provide.

Through Individual Providers - States can also offer disease management through individual FFS providers in the community (e.g., physicians, pharmacists, or dietitians). The providers often agree to undergo specified training and bill on an FFS basis for disease management services provided. States may offer this option to interested providers, or build a more comprehensive system that provides additional support, training, and oversight.

As an Administrative Function

A disease management program that is limited to administrative activities by the state and its contractors would not constitute "medical assistance," but could be eligible for Federal matching funds for administration of the State plan at the standard administrative matching rate of 50 percent. For example, states or their contractors (e.g., a Quality Improvement Organization, Pharmacy Benefits Manager, or other outside vendor) may work with providers to:

• promote adherence to evidence-based guidelines;
• improve provider-patient communication skills; and
• provide routine feedback on beneficiary utilization of services.

Contact with beneficiaries is indirect: the change in provider practice patterns enhances beneficiary care. In addition, there may be targeted mailings to beneficiaries, but no face-to-face contact.