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Medicare Now Reimburses Physicians for Chronic Care Management

Care coordination is a cornerstone of value-based healthcare. It is especially important for patients with chronic diseases, who require complex health services and careful tracking.

Under healthcare reform, physicians have increasingly been expected to provide better care coordination. The problem is that they have received no payment for coordination services not delivered face-to-face. That is now changing thanks to a recent Centers for Medicare and Medicaid ("CMS") decision.

As of January 1, 2015, Medicare pays physicians separately for chronic care management ("CCM") services. This is a potential game-changer for provider organizations transitioning to value-based care. The new policy will help medical practices fund the resources needed to provide care coordination. It can also let organizations leverage quality to strengthen bottom-line income.

Implementing Care Management

In the 2015 Medicare Physician Fee Schedule, CCM services are billable under CPT code 99490. Reimbursement is approximately $43 per patient per month. To be eligible for the payment, services must meet several conditions:

  • Patients: Patients eligible for CCM services must have 2 or more chronic conditions expected to last at least 12 months. These conditions must place the patient at “significant risk of death, acute exacerbation/decompensation, or functional decline.” Patients must provide written consent for CCM services.
  • Parameters: Patient CCM services must take at least 20 minutes of clinical staff time per calendar month. Staff must establish, implement, revise, and monitor a comprehensive care plan. Patients must have 24/7 access to care management staff.
  • Providers: CCM services must be performed by a physician, a non-physician practitioner, or another clinical staff member supervised by a qualified health care professional (under Medicare’s “incident to” rules).

Significant Revenue Opportunity

According to the Centers for Disease Control, two-thirds of Medicare beneficiaries have two or more chronic conditions. As a result, healthcare organizations of every size stand to benefit from the new payment policy.

Consider a solo physician with 500 Medicare patients. Statistically, about 333 of these patients will have multiple chronic diseases. Depending on how many patients qualify for CCM and agree to receive these services, the physician could generate $100,000 or more in additional annual reimbursement.

To realize the full potential reimbursement, providers must meet several requirements. Patients must first agree in writing to receive CCM services. In addition, the practice must meet all documentation requirements, including documentation of staff time.

Care management can create additional costs, including staffing and IT costs and other general expenses. That is why this new payment policy is a great opportunity for organizations that have already built a care management program, such as many acountable care organizations, integrated delivery networks and even some larger medical groups.

For example, consider a health system that already provides care management services for select patient populations. The system has 100 employed physicians who manage patients with chronic conditions. With modest changes to comply with service and documentation requirements, the system could be eligible for several million dollars in new reimbursement for CCM services.

The opportunity for all healthcare organizations is to strengthen the bottom line while providing better care. CCM services can help lower complication and readmission rates, which will ultimately lower the cost of care for patients and payers. 

Careful Planning Needed

To successfully implement CCM, provider organizations need to focus on three priorities:

  • Hiring and organizing clinical staff to orchestrate patient care and manage patient populations.
  • Implementing technology that enables the sharing of patient data among providers, tracking clinical quality measures, and maintaining electronic care plans.
  • Developing effective processes for coordinating care, reconciling medications, managing care transitions, and attaining other CCM goals.

Achieving these goals requires careful planning. But qualifying for CCM reimbursement can help many healthcare organizations transition successfully to value-based care.

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