Objective. Current reimbursement policies serve as potent disincentives for physicians who provide evaluation and management services exclusively. Such policies threaten nationwide availability of care for personnel-intensive services such as pediatric diabetes. This report describes an approach to improving reimbursement for highly specialized, comprehensive pediatric diabetes management through prospective contracting for services. The objective of this study was to determine whether pediatric diabetes intensive case management services are cost-effective to the payer, the patient, and a pediatric diabetes program.

Methods. A contract with a third-party payer was created to reimburse for 3 key pediatric diabetes intensive case management components: specialty education, 24/7 telephone access to an educator (and board-certified pediatric endocrinologist as needed), and quarterly educator assessments of self-management skills. Data were collected and analyzed for 15 months after signing the contract. Within the first 15 months after the contract was signed, 22 hospital admissions for diabetic ketoacidosis (DKA) occurred in 16 different patients. After hospitalizations for DKA, all 16 patients were offered participation in the program. All were followed during the subsequent 1 to 15 months of observation. Ten patients elected to participate, and 6 refused participation. Frequency of rehospitalization, emergency department visits, and costs were compared between the 2 groups.

Results. Among the 10 participating patients, there was only 1 subsequent DKA admission, whereas among the 6 who refused participation, 5 were rehospitalized for DKA on at least 1 occasion. The 10 patients who participated in the program had greater telephone contact with the team compared with those who did not (16 crisis-management calls vs 0). Costs (education, hospitalization, and emergency department visits) per participating patient were approximately $1350 less than those for nonparticipating patients. Differences between participating and nonparticipating groups included age (participants were of younger age), double-parent households (participants were more likely to be from double parent households), and number of medical visits kept (participants kept more follow-up visits). No differences in duration of diabetes, months followed in the program, sex, or ethnicity were observed.

Conclusions. Contracting with third-party payers for pediatric diabetes intensive case management services reduces costs by reducing emergency department and inpatient hospital utilizations, likely a result of intensive education and immediate access to the diabetes health care team for crisis management. Such strategies may prove to be cost saving not only for diabetes management but also for managing other costly and personnel-intensive chronic diseases.

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