Independence at Home Saves Medicare 10 Times More than ACOs

Home-based primary care is a huge money saver for Medicare, and its advocates are pushing for the Independence at Home (IAH) program to become permanent, with a few changes.

IAH is a demonstration project from the Center for Medicare & Medicaid Innovation (CMMI) that is testing the delivery of primary care services at home. Selected Medicare beneficiaries who have multiple chronic conditions may participate in the program, which has had a cap of 10,000 beneficiaries for the first few years.

The IAH program was extended for another two years in February 2018 under the continuing resolution to fund the federal government. Congress also increased the cap on participating beneficiaries from 10,000 to 15,000.


Year 2 results

So far, only the results of the first two years of the program—2012 and 2013—are public, with year three results expected later in 2018. However, the results show significant savings that are roughly 10 times as high as those achieved by pioneer accountable care organizations (ACOs).

“IAH has been one of the Centers for Medicare & Medicaid Services (CMS) most successful chronic care demonstrations, according to their own preliminary analysis, saving an average of $2,700 per beneficiary per year in the first 2 years,” reads an analysis of the Year 2 savings published in Journal of the American Geriatrics Society in January.


There may be a simpler reason that IAH is beating out ACOs: the patient population.

“IAH targets a very high risk group of people, [so] you have higher savings,” Bruce Kinosian, MD, associate professor of medicine, division of general internal medicine at Penn Medicine and an author of the analysis, told HHCN. “ACOs are a broader population. IAH takes the concentrated approach and focuses on the very high-cost patients where the savings are the greatest.”

Total 10-year system-wide savings, before excluding cost-share savings, are anticipated to reach between $2.6 billion to $27.8 billion, depending on how many beneficiaries the program reaches over time, according to the analysis.

One of the leading advocates for pushing the program to become permanent is Thomas Cornwell, MD, a physician and founder of the HomeCare Physicians at Northwestern Medicine and CEO of the Home Centered Care Institute (HCCI), a national non-profit organization focused on advancing home-based primary care.

Making the program a permanent would make it the first new Medicare benefit in roughly a decade; the program is also unique because it has cost savings, rather than recent new benefits such as Medicare Part D, which costs billions of dollars.

“Here we are talking about getting a new patient-centered house-call benefit,” Cornwell said. “It’s quite remarkable to get this new benefit and also save Medicare money, versus costing money.”

Still, even with the recent minor expansion to 15,000 beneficiaries, the longevity of the program beyond its original five-year target is significant, according to Cornwell.

“The extension is huge,” Cornwell told HHCN. “Most demonstrations, after they are done, are done. The fact that this still is continuing is a good sign for us. There is support at CMS and on Capitol Hill to consider this to become a permanent new program.”

In 2017, the bipartisan Independence at Home Act was introduced to convert the demonstration to permanence. However, it was never voted on and has since been extended for another two years.

Hopeful changes

One of the biggest questions that remains about the viability of the program—if it were to expand to all eligible Medicare beneficiaries or simply have a higher cap for participants—is if there are enough physicians and care teams to provide house calls.

The ability of the primary care workforce to meet this demand is “the greatest unknown,” according to Cornwell.

The issue is similarly seen in the home health care space, with not enough care staff available to meet the increasing demand.

“There are not enough providers,” Kinosian said. “There is a broad workforce that is needed.”

Increasing the incentives for physician practices to jump into the model would also help boost the availability of the workforce.

“We do know that it’s not going to happen if we don’t increase revenue into the space,” Cornwell said of having enough medical teams to meet an expanded model.

In addition, adjusting the payment structure could benefit more practices, particularly those that are creating cost savings, but not necessarily enough to gain shared savings. The program is currently structured so that the first 5% of cost savings are absorbed by CMS, according to Kinosian.

“The biggest design change for IAH would be taking some of those five percentage points that CMS can now bank and reinvesting them back in the program so practices that are generating saying for the system, but not high enough for shared savings, can have some of their practice costs offset,” Kinosian said.

Written by Amy Baxter

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