Performance Improvement 2004. Phase II Evaluation of CNO Demonstration


The Community Nursing Organization (CNO) Demonstration is an innovative approach to the provision of community nursing and ambulatory care services for Medicare beneficiaries. Structured around the two fundamental concepts of nurse case management and capitated payment, CNOs attempted to promote the timely and appropriate use of community health services and to reduce the use of costly acute-care services. This evaluation employed two complimentary approaches: (1) the comparison of average utilization and expenditures exclusively for randomized beneficiaries and (2) the analysis of all treatment group beneficiaries, compared to a reference group drawn from the Medicare population living in the same geographic area. Both analytic approaches found that capitation rates for CNO-covered services resulted in payments for the treatment group that were higher than payments for the control or population reference groups. The analysis of randomized beneficiaries indicated that this was the only source of elevated expenditures for the treatment group, implying that a reduction in capitation rates might make the CNO budget neutral. By contrast, comparison of the treatment group to the population reference group suggested that expenditures for non-CNO services, particularly inpatient hospitalization, were also higher for the treatment group, implying that CNO participation induced higher utilization of non-CNO services.

PIC ID: 6306.1
Agency Sponsor: CMS, Office of Research, Development & Information
Federal Contact: McVicker, Victor, 410-786-6681
Performer: Abt Associates Inc., Cambridge, MA

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