Languishing Medicare diabetes program frustrates providers

In its November 2017 rule setting out the reimbursements and rules for the program, the agency projected widespread popularity for the benefit, estimating that between 50,000 and 110,000 people would annually take advantage of it from 2018 to 2027. The resulting weight loss and fewer cases of Type 2 diabetes would improve health and lower Medicare health care spending by $182 million during that period, the agency projected.

But the first year of the program appears to have fallen dramatically short of the agency’s estimates. CMS claims data from 2018 showed that only 202 beneficiaries used the program, according to an analysis conducted for POLITICO by open data startup CareJourney, which has access to the agency’s chronic care claims database. The pace has accelerated somewhat in the first quarter of 2019, with 396 accessing prevention services.

The statistics come with some caveats suggesting they may underestimate the true numbers of Medicare beneficiaries using the program. First, they don’t include Medicare Advantage beneficiaries; second, they don’t reflect lags in paid claims. Some providers have said CMS’s contractors have been slow to pay claims as they adjust to the new program. For example, the Y, which includes YMCAs nationwide, told POLITICO that claims submitted in 2018 still haven’t been paid.

CMS would neither confirm nor deny the figures, but cautioned that its data would not be complete until 2020.

But the paltry figures come as a disappointment to the diabetes prevention program’s most vocal advocates. The American Medical Association, for example, says half of all Medicare beneficiaries have prediabetes, and has argued that CMS action would be helpful in promoting the success of the new benefit.

The benefit “has added challenges as suppliers include community-based organizations that need training in applying and billing Medicare,” said the association’s president, Patrice Harris, in a release.

The timing of the new benefit — introduced at the end of the Obama administration — may have slowed its impact. “HHS had a huge amount of turnover from folks who understood the benefit, the rationale, the cost-saving and life-saving benefits,” said Matt Longjohn, the former chief medical officer of the Y, whose pilots established the benefits of the program for CMS actuaries.

Longjohn, who ran for the House of Representatives in Michigan as a Democrat in 2018, says he believes Trump administration officials appreciate the program, but “I think they got caught flatfooted. I think they had a couple bureaucratic false starts,” he said.

Longjohn attributed the slow growth of the program to a lack of providers and a lack of promotion that might have stoked demand for the services of the 600 DPP providers thus far authorized by CMS.

The 600 figure obscures significant holes in the network. Ten states have zero providers, said Brenda Schmidt, the CEO of Solera Health, a network of diabetes prevention and social providers. Many major metropolitan areas have few or no providers: Dallas has no providers within a 100-mile radius, according to CMS’s provider finder, to take one example. The closest providers for a Philadelphian might well be a thirty-mile schlep to Wilmington, Del.; a Washington resident might need to go to Baltimore.

The lack of providers can be traced back to a pair of CMS decisions restricting supply. The agency has not yet authorized digital providers, and imposes numerous regulations on bricks-and-mortar-based providers to prevent fraud. The latter have been “medicalized,” Schmidt said, saddled with regulations befitting medical doctors.

Providers have to run a gauntlet of requirements, including gathering the Social Security numbers of all board members, hiring a full-time privacy director, conducting penetration to test their organization’s cybersecurity and building IT infrastructure to handle billing, Schmidt and the Y’s Heather Hodge said. Complying with just one of those requirements — penetration testing — can cost $30,000, Schmidt said.

“Non-profits just throw up their hands,” said Longjohn, who’s been consulting with providers on CMS requirements. “The cost of keeping up with regulatory requirements leads them to leave the market.” Pharmacies and supermarkets showed interest at one point but have opted out of the program, Schmidt said.

Twenty Y locations are qualified to provide diabetes prevention program services to Medicare recipients, said Hodge, the Y’s lead on the program. But none, so far, have broken even, she said.

Researchers have come to similar conclusions about the program’s economics. In 2018, two studies examining programs based in Denver and the Bronx concluded that Medicare’s proposed reimbursements were hundreds of dollars per beneficiary lower than the costs of running the program.

Meanwhile, the agency has also shut out a class of startups seeking to offer a digital version of the program. Numerous companies — like Omada Health, Livongo, Canary Health, and Noom — offer virtual prevention programs that have won over private payers and employers. But Medicare hasn’t even agreed to a demonstration model to test their products.

“No progress,” Canary health co-founder Neal Kaufman said of Medicare’s interest.

Interest groups have tried to convince the agency: in May 2018, the AMA sent a letter to Adam Boehler, then director of CMS’s innovation center, arguing that a demonstration of virtual diabetes prevention, or DPP, would be helpful. That letter was followed by comments on two subsequent rules pushing virtual DPP in both traditional Medicare and Medicare Advantage. The main goal of allowing virtual DPP in traditional Medicare has proven elusive, however.

Schmidt said her Medicare Advantage clients collectively had hundreds of thousands of beneficiaries who qualify for the benefit, but are unable to use it.

The program’s lack of success so far has implications that extend beyond individuals at risk for developing Type 2 diabetes. Although CMS and the private health sector frequently declare their interest in addressing social determinants of health — and some state Medicaid programs have started such programs — CMS’s approach to DPP suggests it may have trouble reimbursing even simple things like pest abatement to lower asthma risks.

“If those services get reimbursed, I wouldn’t want to see them apply the same standards,” said Schmidt.