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Coordinating Care in the Fee-for-Service System for Medicaid Beneficiaries with Chronic Conditions

Publication Date
Apr 30, 2005


U.S. Department of Health and Human Services

Coordinating Care in the Fee-for-Service System for Medicaid Beneficiaries with Chronic Conditions

Executive Summary

Jennifer Gillespie, Robert Mollica, Jane Horvath andClaudia Williams

National Academy for State Health Policy

May 2005

This report was prepared under contract #HHS-100-03-0025 between the U.S. Department of Health and Human Services (HHS), Office of Disability, Aging and Long-Term Care Policy (DALTCP) and the Research Triangle Institute. For additional information about this subject, you can visit the DALTCP home page at or contact the ASPE Project Officer, Hunter McKay, at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, S.W., Washington, D.C. 20201. His e-mail address is:

The opinions and views expressed in this report are those of the authors. They do not necessarily reflect the views of the Department of Health and Human Services, the Research Triangle Institute or any other funding organization.



The authors wish to thank Hunter McKay, project officer, Office of the Assistant Secretary for Planning and Evaluation within the U.S. Department of Health and Human Services for his guidance and support of this project. We are also grateful to Edith Walsh and Janet O'Keeffe from RTI International for their valuable input, and to Helen Pelletier, of NASHP's staff for her editorial assistance. This report would not have been possible without the assistance of the following individuals.


  • Pat Albritton, co-site coordinator, Diversified Resources, Inc.-SOURCE
  • Karen Bacheller, RN, section manager, Community Care Services Program, Division of Aging Services, Georgia Department of Human Resources
  • Peter Basler, chief operating officer, Wesley Woods, Emory HealthCare
  • Cathie Berger, coordinator of planning, Aging Services Division, Atlanta Regional Commission
  • Penny Blackford, care coordination specialist, Community Care Services Program, Division of Aging Services, Georgia Department of Human Resources
  • Betsy Boykin, team leader for program development, Georgia Infirmary-SOURCE, St. Joseph/Candler Health System
  • Cathy Conrad, case manager supervisor, The Legacy Link, Inc.
  • James Cooney, PhD, professor, Institute of Health Administration and Center for Health Services Research, J. Mack Robinson College of Business, Georgia State University
  • Dianne Currans, RN, health programs manager, The Legacy Link, Inc.
  • Rich Devine, senior planner, Office of Planning and Budget, Georgia Department of Human Resources
  • Pat Freeman, executive director, The Legacy Link, Inc.
  • Lisa Futrell, RN, site coordinator, Columbus Regional Healthcare System-SOURCE
  • Jean Ginn, RN, vice president, SOURCE Care Management
  • Virginia Griffin, RN, Albany ARC-SOURCE
  • Barbara Hooper, CCSP care coordinator, The Legacy Link, Inc.
  • Carrie Hulsey, SOURCE case manager, The Legacy Link, Inc.
  • Hunter Hurst, executive director, Georgia Infirmary-SOURCE, St. Joseph/ Candler Health System
  • Catherine Ivy, LCSW, director, Care Management Unit, Visiting Nurse Health System
  • Doris Jones, LPN, NHA, site coordinator, Blue Ridge SOURCE
  • Lauren Jones, RN, Columbus Regional Healthcare System-SOURCE
  • Arthur J. Lesesne, Jr., MD, medical director, Wesley Woods Atlanta SOURCE
  • Glen Landers, MBA, MHA, senior research associate, Georgia Health Policy Center, Andrew Young School of Policy Studies, Georgia State University
  • Norma Jean Morgan, director of aging and community services, Division of Medical Assistance, Georgia Department of Community Health
  • Jennifer Schuck, LMSW, director of SOURCE Project, Wesley Woods Center, Emory HealthCare
  • Jean Sumner, MD, medical director, SOURCE Care Management, Butler, GA
  • Debbie Vansant, site coordinator, Albany ARC-SOURCE
  • Sherry Watts, RN, case manager supervisor, SOURCE, Wesley Woods, Emory HealthCare
  • Mary Eleanor Wickersham, vice president of corporate development, Home Community Services, Inc.
  • Kay Yarbrough, co-site coordinator, Diversified Resources, Inc.-SOURCE


  • John Barth, director of managed care, Indiana Family and Social Services Administration
  • Melanie Bella, assistant secretary, Indiana Family and Social Services Administration
  • Pat Casanova, director of waiver services, Indiana Family and Social Services Administration
  • Mike Fowler, Medicaid data director, Indiana Family and Social Services Administration
  • Mary Jo Golubski, consultant
  • Sherry Gray, director of aging and in-home services, Indiana Family and Social Services Administration
  • Emily Hancock, director of long term care, Indiana Family and Social Services Administration
  • Pat Miller, senator, Indiana State Senate
  • Kathy Moses, director of chronic disease, Indiana Family and Social Services Administration
  • Sharon Reynolds, Americhoice (Call Center)
  • Marc Rosenman, Regenstrief Institute
  • Vi Simpson, senator, Indiana State Senate
  • Marcus Washington, Indiana Minority Health Coalition
  • Lisa Winternheimer, Indiana Primary Health Care Association



This report describes a range of approaches state Medicaid agencies use to coordinate health services and to coordinate long-term care services with health services for beneficiaries with chronic conditions. It then describes in detail two innovative programs.

Currently, 11 million people with chronic conditions rely on Medicaid for health and long-term care services and utilize a wide range of services from multiple providers in the health and long-term care delivery systems. A lack of service coordination can result in inefficient and unnecessarily costly care. This problem can be compounded when those needing services are dually eligible for Medicaid and Medicare, due to the different financing and reimbursement systems for these programs.

The number of individuals with chronic conditions is estimated to increase from 125 million in 2000 to 157 million by 2020. The projected increase in the number of Medicaid beneficiaries with multiple chronic conditions and complex medical needs has enormous implications for federal and state budgets, as states already devote more than three-quarters of their Medicaid budgets to this population.

In an effort to meet the growing demand for services--and to ensure their quality and improve outcomes while containing costs--states are implementing a range of service coordination approaches and are interested in finding the most effective models. Because the development and implementation of risk-based managed care programs is time consuming and costly, many states are attempting to coordinate services in the traditional fee-for-service setting. Several states have developed fee-for-service approaches to coordinate health care--and in some states both health care and long-term care--for persons with chronic conditions.

We selected two care coordination approaches to highlight in this report. Although many states support care coordination within the Medicaid fee-for-service health system, Georgia's SOURCE program was the only established program we identified that operates in the fee-for-service system, coordinates health and long-term care, and includes dually eligible beneficiaries. This report describes the SOURCE program in depth. We also describe the Indiana Chronic Disease Management Program, an innovative approach to coordinating health care for selected chronic conditions, which serves dually eligible beneficiaries.

Since most dually eligible beneficiaries receive Medicaid in a fee-for-service setting, these programs have the potential to serve a larger number of beneficiaries than risk-based managed care programs. Both programs have two important features that merit attention by other states: (1) they successfully involve primary care physicians in care coordination, and (2) they focus on outcomes.

Both programs have yet to be rigorously evaluated. However, preliminary results suggest that they can be successful in both improving outcomes and containing costs.

The Full Report is also available from the DALTCP website ( or directly at