A GUIDE to CMS's New Dementia Model
By Dirk Soenksen
Long-Term Care News, December 2024
Informal caregiving is on the rise and so is the cost of this “free” care provided by adult children, spouses and other relatives and friends. According to one analysis of caregiving statistics, the annual cost of informal caregiving in 2020 was nearly $1.14 trillion,[1] equal to a quarter of the total cost of health care in the United States. Dementia is arguably the biggest challenge for families given the well-documented mental, physical, emotional and financial burdens on family caregivers.
The Centers for Medicare & Medicaid Services (CMS) Innovation Center took note and launched the Guiding an Improved Dementia Experience (GUIDE) Model. This new eight-year payment model provides a monthly care management payment to cover the cost of key supportive services for people living with dementia, including support for caregivers. Among the services specifically identified are caregiver education and assistance, as well as a Care Navigator to facilitate access to clinical and nonclinical services.
CMS selected 390 participants to provide evidence-based dementia care to hundreds of thousands of traditional Medicare beneficiaries nationwide. The GUIDE model delivers on a promise in the Biden Administration’s Executive Order on Increasing Access to High-Quality Care and Supporting Caregivers and aligns with the National Plan to Address Alzheimer’s Disease.
Understanding the Hidden Costs
At a time when Medicare Advantage is aggressively seeking cost savings opportunities to achieve growth and profitability targets,[2] it is important to understand that dementia is one of the key drivers of avoidable hospital utilization and health care costs.[3] Annual health care costs related to dementia total an estimated $200 billion,[4] due to high rates of avoidable hospitalizations, poor management of coexisting chronic conditions and fragmented care. The prevalence of dementia is significantly higher for Black and Hispanic populations who also experience underdiagnosis and delayed diagnosis.[5] These findings underscored the GUIDE model’s focus on improving equitable access to health care.
People diagnosed with dementia incur 27% of all Medicare hospitalizations, 37% of all readmissions and 32% of all inpatient days.[6] The underlying drivers of these costs is the inability of the person living with dementia to self-manage their chronic conditions and infections and to avoid falls. Behavioral and psychological episodes that often accompany dementia can mask underlying conditions and symptoms, contributing to the invisible costs of this condition. Given that more than 50% of people living with dementia remain undiagnosed,[7] the true costs of the condition are likely staggering.
In the 95% of dementia patients with multiple chronic conditions, dementia is a 2–3× multiplier of avoidable hospitalizations and costs.[8] This multiplier is attributable to the inability of the person living with dementia to self-manage their health; their inability to access the health care system independently; and the lack of knowledge, skills and confidence of their family caregivers. Scalable, tech-enabled, turn-key dementia care programs that include the family caregiver in the care team to improve care and lower medical costs, and hence reduce the multiplier, are available today from some GUIDE participants.
This is particularly important, as the problem is growing. In 2022, 10% of Medicare beneficiaries aged 65 and older had a diagnosis of Alzheimer’s disease, and that percentage is expected to rise to 14% by 2040.[9] Meanwhile, an estimated 50% of patients with dementia remain undiagnosed, meaning these numbers likely don’t adequately reflect the magnitude of the issue.
In the background of these rising cases of dementia and climbing costs lies a grim truth: accountable care organizations (ACOs), risk-based providers and health plans are ill-equipped to manage the care and health care costs of people with dementia.
Activating Caregivers to Break the Cycle of Deterioration
Those with deep expertise with dementia recognize that family caregivers are the most powerful frontline defense to improve care for people living with dementia. It is thus not surprising that the GUIDE model specifically requires the inclusion of the family caregiver in the care team. A spouse or adult child knows their loved one’s comorbidities and medications and can distinguish when their loved one’s health status is outside of the bounds of what is “normal,” often an indicator of a change in condition that might signify that something is wrong.
Detecting and acting upon a change in condition that is detected early avoids hospitalizations, the root cause of deterioration for dementia patients. No one is better positioned to make those early detections than a family caregiver. But family caregivers are not clinicians. Many of them have not been “activated,” meaning they lack the knowledge, skills and confidence necessary to detect and act when they notice a change in condition.
Activating the family caregiver can keep a person living with dementia out of the hospital, breaking their cycle of deterioration. Activation transforms the caregiver’s ability to detect subtle and important changes in condition and enables them to effectively engage the health care system and improve health outcomes for a loved one. Activation is different and complementary to caregiver support, which is often more episodic and unidirectional, and often comprises providing access to resources, a helpline or respite care.
One model of dementia care that leverages technology, data, predictive analytics and artificial intelligence to activate family caregivers is having a meaningful effect on patient outcomes. In an independently validated study (propensity score matching–difference in differences), hospitalizations were reduced by more than 50%, and medical costs were reduced by more than 30% using this model.[10] These results were statistically significant.
Understanding GUIDE
As noted in a CMS announcement about the launch of the GUIDE Model: “Alzheimer’s disease and related dementias are devastating conditions for a person and their family and caregivers. The progressive course of dementia can threaten an individual’s autonomy, and families can be emotionally, physically, mentally and financially strained. Often, a family member finds themself in a new, unexpected role as a caregiver supporting the person living with dementia.”[11]
The eight-year GUIDE Model study will test whether a comprehensive package of care coordination and management, caregiver support and education, and respite services can improve quality of life for people with dementia and their caregivers while delaying avoidable long-term nursing home care and enabling more people to remain at home through the end of life.
People who align with a GUIDE participant receive care from an interdisciplinary team that will develop and implement a comprehensive, person-centered care plan for managing dementia and coexisting conditions. This includes providing ongoing monitoring and support. Central to that team is the family caregiver, who will receive skills training, dementia diagnosis education, support groups and access to a personal Care Navigator who can help with problem-solving and connect the caregiver to services and support.
GUIDE is intended for traditional Medicare beneficiaries, including those who are dual-eligible, provided they have a confirmed dementia diagnosis from a clinician with dementia expertise. People living in long-term nursing facilities, people who have elected Medicare hospice benefits or people enrolled in PACE are excluded from the GUIDE Model program. The program is also not available to people who are enrolled in Medicare Advantage plans. An eligible beneficiary with dementia can align with any GUIDE participant.
How Does GUIDE Payment Work?
The GUIDE Model pays participant organizations a monthly dementia care management payment (DCMP) per beneficiary. The GUIDE participant is not allowed to bill for certain Healthcare Common Procedure Coding System (HCPCS) care management codes that CMS defines as overlap with the DCMP. A noteworthy example of overlapping HCPCS codes are the ones for the annual wellness visit. The DCMP includes a modest PBA that is applied depending on how participants perform on the model’s quality metrics. In addition, a health equity adjustment (HEA) is applied to the DCMP based on beneficiaries’ health equity scores.
While GUIDE presents many potential upsides for persons living with dementia and their family caregivers, there are some implications when beneficiaries with dementia are attributed to accountable care organizations aligned with GUIDE. For example, ACOs in the Medicare Shared Savings Program (MSSP) will see their medical expenditures increase by an amount equal to the DCMP plus the $2,500 annual respite payment for eligible beneficiaries. For reasons that are not entirely clear, the DCMP and respite payment are not added to the medical expenditure of ACOs in the REACH program. Working with a GUIDE participant who can ensure that cost savings exceed the GUIDE payments that are added to medical expenditures would be beneficial for ACOs.
At its heart, GUIDE aims to address the significant driver of avoidable hospitalizations incurred by patients with dementia by elevating family caregivers’ critical role in the care team. Providing caregivers with the knowledge, skills and confidence to detect and act on subtle changes in condition will keep persons living with dementia out of the hospital and potentially delay their need for care in a facility. The GUIDE model also offers potential benefits beyond traditional Medicare, specifically for long-term care insurers and state Medicaid programs. While imperfect in this first iteration, CMS’s new model of care is demonstrating a significant way forward for dementia care nationwide.
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the editors, or the respective authors’ employers.
Dirk Soenksen, MBA, is cofounder and CEO of Ceresti Health. Dirk can be reached at dirk.soenksen@ceresti.com.