As required under the Balanced Budget Act of 1997, the U.S. Secretary of Health and Human Services commissioned the Medicare Coordinated Care Demonstration to pilot and evaluate care coordination programs in the Medicare fee-for-service setting. The Centers for Medicare & Medicaid Services (CMS) contracted with Mathematica to evaluate the Medicare Coordinated Care Demonstration, which tested whether care coordination and disease management programs: (a) lower Medicare expenditures, or (b) increase the quality of health care services and beneficiary and provider satisfaction without increasing expenditures for beneficiaries with chronic illnesses.

The programs were operated by a range of organizations, targeted different types of beneficiaries with chronic illnesses, and used different approaches. Only one of them embedded care managers in the primary care practices of the beneficiaries, though some of the others located the care managers in the same hospitals or health systems where beneficiaries received care and/or provided incentives for their usual care providers to interact with the care manager. The final report provided the most rigorous estimates ever presented on the effectiveness of care coordination interventions in a Medicare fee-for-service setting. Mathematica was subsequently awarded a grant from the Robert Wood Johnson’s Health Care Financing Organization to conduct additional research.

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