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Innovative Care Models for High-Cost Medicare Beneficiaries: Delivery System and Payment Reform to Accelerate Adoption

medicare doctor elderly


For high-need, high-cost Medicare beneficiaries there are many innovative care models that have been shown to reduce hospital admissions, readmissions, and long-term nursing home placements, as well as to lower costs. Their development and spread, however, have been impeded by lack of alignment in financial incentives and by our fragmented payment system. The authors of this Commonwealth Fund–supported study describe nine promising care models and make recommendations for accelerating the adoption of these and similar programs.

New Approaches for High-Risk Medicare Populations

  • Several of the programs studied—Advanced Primary Care, Home-Based Primary Care, Hospital at Home, Transitional Care, and INTERACT—have the potential to reduce hospitalizations or readmissions for at-risk beneficiaries. These may be most easily implemented by accountable care organizations and private Medicare Advantage plans that assume risk for the cost of inpatient care.
  • Three other programs—CAPABLE, MIND at Home, and PACE—show promise in reducing or delaying nursing home placements, which will produce savings for Medicaid programs. These may appeal to Medicaid managed care plans that care for patients who are dually eligible for Medicare and Medicaid.
  • Changes in Medicare payment policy will be needed to help other health care providers and health systems adopt innovative models. The Centers for Medicare and Medicaid Services could offer care management fees to cover services provided by nurses and social workers to targeted groups of high-risk patients in home and community-based settings. Allowing health care providers and Medicare Advantage plans to share in the savings that accrue to Medicaid when nursing home placements are reduced also would help.


A variety of financial incentives may accelerate the adoption of innovative models that improve outcomes and reduce fragmentation of care for vulnerable elderly patients.

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Publication Details



Mary Mahon, Former Vice President, Public Information, The Commonwealth Fund

[email protected]


K. Davis, C. Buttorff, B. Leff et al., “Innovative Care Models for High-Cost Medicare Beneficiaries: Delivery System and Payment Reform to Accelerate Adoption,” American Journal of Medical Care, published online June 5, 2015.