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Matria Announces Interim Results of Medicare Coordinated Care Demonstration

Posted on: Tuesday, 7 August 2007, 12:22 CDT

Matria Healthcare, Inc. (NASDAQ: MATR) announced interim results of two Medicare Coordinated Care Demonstration (MCCD) programs run by Matria. Through these programs, Matria is working with the Centers for Medicare and Medicaid Services (CMS) to demonstrate that Matria's health enhancement and care coordination services can lower healthcare-related costs, and improve the quality of healthcare, for Medicare beneficiaries. The preliminary program findings support the value of Matria's services for the Medicare population.

The MCCD programs are randomized, controlled, four-year trials testing the effectiveness of disease management services for the chronically ill, fee-for-service Medicare population, with a goal of improving the quality of care, enhancing coordination of services, and reducing costs. The interim results are found in the "Second Report to Congress on the Evaluation of the Medicare Coordinated Care Demonstration" (Report) recently submitted to Congress by Department of Health and Human Services Secretary Michael Levitt(a), which evaluates the first two-year operating period of the 15 MCCD programs, which started in 2002. Two of these programs are operated by Matria through acquired businesses (formerly known as CorSolutions and Quality Oncology).

For the MCCD programs to be considered successful, CMS expects them to be cost neutral while improving clinical quality of care. The Matria CorSolutions and Quality Oncology programs had lower medical costs of 8% and 2%, respectively (not including care coordination fees). According to the interim report the results were not statistically significant and longer follow-up and more observations are needed for definitive findings. The Report states that the programs run by Matria companies had favorable results, although not statistically significant, overall for the population served during the first two years of the demonstration. Quality Oncology's program generated a high reduction in hospitalizations. CorSolutions' program demonstrated solid performance in quality measures and also showed a decrease in hospitalizations. These results were achieved despite having enrolled patients with some of the highest Medicare expenditures in the year prior to the start of the program.

The report also gave high marks to CorSolutions on patient education and improving provider practices, while Quality Oncology received high marks on staffing, use of information technology, ongoing monitoring and quality management and measurement.

"Matria has a proven track record in the commercial and government markets," noted Richard Hassett, MD, President of Matria Healthcare. "Although the results in this Report are preliminary, and more work needs to be done to evaluate all four years of the program, we are very encouraged by the improved clinical quality, patient and provider satisfaction, and by the reduced medical cost expenditures. We look forward to working with CMS as we build on these early successes and re-engineer to improve the programs."

Currently, CorSolutions serves 1,000 Medicare fee-for-service beneficiaries with congestive heart failure residing in Houston, Texas. Quality Oncology ended its participation in the demonstration in mid-2006.

(a)The Report is based on a study by an independent third party, Mathematica Policy Research, for CMS in response to Public Law 105-33, Section 4016(c) of the Balanced Budget Act of 1997.

ABOUT MEDICARE COORDINATED CARE DEMONSTRATION

Section 4016 of the Balanced Budget Act of 1997 required the Secretary of Health and Human Services to conduct a Medicare Coordinated Care Demonstration to determine whether case management and disease management programs can lower costs and improve patient outcomes and well-being in the Medicare fee-for-service population. In January 2002, the Centers for Medicare and Medicaid Services selected 15 demonstration programs in a competitive awards process, under which each program was allowed to define its own intervention and target population within broad parameters. Each program began enrolling patients between April and September 2002, and was authorized to operate for four years. Medicare beneficiaries who agreed to participate were randomly assigned to either the treatment group, which received the intervention, or the control group, which did not. During the four-year operating period of the MCCD programs, members of both the treatment group and the control group continued to obtain their traditional Medicare-covered services from fee-for-service providers in the usual manner. The four-year projects have been extended for an additional two years, allowing continued operations while they are being evaluated.

ABOUT MATRIA HEALTHCARE

Matria Healthcare is a leading provider of comprehensive health enhancement programs to health plans, employers and government agencies. Matria is dedicated to developing better educated, motivated and self-enabled healthcare consumers and supporting clinicians in managing the care of their patients. The Company manages major to chronic diseases and episodic conditions including diabetes, congestive heart failure, coronary artery disease, asthma, chronic obstructive pulmonary disease, high-risk obstetrics, cancer, musculoskeletal and chronic pain, depression, obesity, and other conditions. Matria delivers programs that address wellness, healthy living, productivity improvement and patient advocacy, and provides case management of acute and catastrophic conditions. Headquartered in Marietta, Georgia, Matria operates through nearly 50 offices around the United States. More information about Matria can be found online at www.matria.com.

Source: Business Wire

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