Disease management for chronically ill beneficiaries in traditional Medicare.

We summarize the Centers for Medicare and Medicaid Services' (CMS's) experience with disease management (DM) in fee-for-service Medicare. Since 1999, the CMS has conducted seven DM demonstrations involving some 300,000 beneficiaries in thirty-five programs. Programs include provider-based, third-party, and hybrid models. Reducing costs sufficient to cover program fees has proved particularly challenging. Final evaluations on twenty programs found three with evidence of quality improvement at or near budget-neutrality, net of fees. Interim monitoring covering at least twenty-one months on the remaining fifteen programs suggests that four are close to covering their fees. Characteristics of the traditional Medicare program present a challenge to these DM models.