the physician group providing care, such as the size of its patient population and the degree to which information technology is present in the practice to support care coordination. Finally, the extent to which case management payment should be placed at risk would have to be addressed. Otherwise, Medicare would need to define the specific set of care coordination activities to be reimbursed, how they could be delivered, and who would be eligible for payment (MEDPAC, 2006).

Capitated payment is a more flexible mode of reimbursement than FFS that may better promote planning, linking, coordination, and follow-up activities (Berenson and Horvath, 2003; Bodenheimer et al., 2004; MEDPAC, 2006). This is because payment is made not for an isolated visit or procedure, but for the care of each health plan member for the entire period in which he or she is enrolled in the plan. Although payment is made for the provision of a defined benefit package, capitated health plans frequently offer extra services and benefits (often tailored to members’ level of risk) to better manage the care of their enrollees and improve health outcomes, which also may result in cost savings. Although there is no database that comprehensively documents the prevalence of these practices, America’s Health Insurance Plans (AHIP) reports that health plans are increasingly using administrative data and predictive modeling to identify individuals most in need of additional support services, and then planning, linking to, coordinating, and following up on services through such mechanisms as health advocacy, social work, case management, and disease management services. Some of these services specifically target individuals with cancer (AHIP, 2007).

Public- and private-sector group purchasers and insurers are continuing to implement and test better ways to plan, link, coordinate, and follow up on needed care (although attention to psychosocial care is not always as evident in these initiatives as is the coordination of biomedical care delivered by different clinicians) (see, e.g., MEDPAC, 2006; AHIP, 2007). In 2006, for example, 26 percent of U.S. employers with three or more employees who offered health benefits to their workers included one or more disease management programs in their health plan with the largest enrollment (Claxton et al., 2006). A 2002 survey of the nation’s managed care plans found that nearly all health plans offered some type of disease management program for some members (AHIP, 2004). The voluntary sector is also implementing programs to help fill this gap, such as the patient