Voluntary Partial Capitation

The Community Nursing Organization Medicare Demonstration

Published In: Health Care Financing Review, v. 26, no. 4, Summer 2005, p. 21-37

Posted on RAND.org on January 01, 2005

by Austin B. Frakt, Steven D. Pizer, Robert J. Schmitz, Soeren Mattke

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This article was published outside of RAND. The full text of the article can be found at the link above.

In a recently concluded Medicare demonstration, Community Nursing Organizations (CNOs) received capitated payment to provide a subset of Medicare services through a nursing case management delivery system. Demonstration participation was voluntary, both for CNOs and recruited beneficiaries, raising several challenging issues associated with selection. We investigate provider and beneficiary selection, as well as Medicare costs, using multiple evaluation methodologies. We find that CNO enrollment is associated with increased payment by Medicare for CNO-covered services. Results showing CNO enrollees to be more costly to Medicare for non-CNO services are consistent with cost shifting, but could also be accounted for by biased provider selection into the demonstration.

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