WASHINGTON -- Rep. Benjamin L. Cardin announced today that the Health Care Financing Administration (HCFA), the federal agency that runs Medicare, has selected two Baltimore-area health care providers to conduct new four-year demonstration projects designed to improve the care of chronically ill patients.

Erickson Retirement Communities and the University of Maryland are two of 15 sites chosen from 58 applications submitted in the fall of 2000. Authorized by the 1997 Balanced Budget Act, these demonstration projects are designed to determine whether providing coordinated care services is a cost-effective method of improving the health of Medicare enrollees with chronic diseases. Erickson's program will target several chronic conditions, while the University of Baltimore's program will focus on congestive heart failure.

In establishing this demonstration, Congress noted that beneficiaries with chronic illnesses, such as diabetes, heart disease, and hypertension, account for a disproportionate share of Medicare fee-for-service spending. Unlike managed care plans, the fee-for-service Medicare program contains no mechanism to provide patients with coordinated treatment plans, which have been shown to reduce hospital admissions and other costly medical interventions in the under-65 population.

Despite the 1997 introduction of the Medicare+Choice program, which was intended to increase the number of seniors in managed care plans, more than 80% of beneficiaries remain in fee-for-service Medicare due to the withdrawal of HMOs from the program. Maryland was one of the states most severely affected by private health plan withdrawals over the past three years.

"Efforts to enroll seniors in private sector health plans have failed America's elderly and disabled patients," said Rep. Cardin, the author of legislation guaranteeing Medicare prescription drug benefits to treat chronic diseases. "These demonstration programs will allow seniors in traditional Medicare to reap the benefits of case management and disease management. Now, two quality Maryland institutions will be at the center of this effort to promote evidence-based medical practices for Medicare beneficiaries."