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Knowledge Expansion

Chronic care management: Leveraging a significant new revenue stream and reducing costs

Insight Article

Reimbursement

Electronic Health Records

Sarath Degala
Approximately 71% of the total healthcare spend in the United States is associated with care for Americans with more than one chronic condition. Among Medicare fee-for-service beneficiaries, people with multiple chronic conditions account for 93% of total Medicare spending.1
 
A large proportion of these costs are for acute care hospital and emergency department (ED) visits that could be prevented by earlier intervention. Placing a greater focus on public health programs with an eye toward preventing chronic diseases is one way to address these costs, as are payer incentives for not smoking and other good health practices. But there is another way for physicians to address these costs.

Benefits of Medicare reimbursement for chronic care management

In 2015, Medicare began reimbursing for chronic care management (CCM) services using CPT Code 99490. The reimbursement covers non-face-to-face services for Medicare patients with multiple chronic conditions. Following the Centers for Medicare & Medicaid Services (CMS) move to reduce chronic care spending and improve outcomes with more attention paid to chronic care prevention at the primary care level, the reimbursement provides an incentive for physicians to try a new way to treat their sickest — and costliest — patients.
 
The program is working. The Center for Medicare & Medicaid Innovation (CMMI) recently released a report showing the program’s association with lower growth in Medicare costs, reduced hospital admissions and increased connections with community-based resources for patients. The CCM program reduced costs by $74 per beneficiary per month (PBPM) over the 18-month period studied.2
 
In addition, patients in the CCM program had lower hospital, ED and nursing home costs. CCM was also linked with a reduced likelihood of hospital admission for people with diabetes, chronic obstructive pulmonary disease (COPD), congestive heart failure, urinary tract infection, dehydration and pneumonia.3
 
The program is good for physician practices, too. A 2015 study published in the Annals of Internal Medicine estimated that healthcare practices that billed CPT code 99490 for CCM services provided by nonphysician healthcare practitioners (i.e., registered nurses, etc.) could expect an annual practice revenue increase of more than $75,000 if a minimum of 50% of eligible patients were enrolled in the program.4 That’s no small chunk of change.
 
Yet many physicians are leaving money on the table. A recent survey commissioned by Quest Diagnostics found that only 51% of primary care physicians knew about CCM, and only one in four had implemented the program into their practices.5
 
Why? Long-established acute care-focused treatment and reimbursement paradigms are one culprit. CCM requires a shift in mindset for many physicians who don’t routinely check in with patients between office visits. CCM is a bit like returning to the “olden days” of physicians making house calls, even though CCM allows virtual house calls via phone call, text or email.
 
Another reason is the lack of bandwidth of primary care physicians. Most practices don’t have the financial, technological and personnel resources to accomplish the process of enrolling Medicare-eligible members into a CCM program and facilitating a monthly consult, no matter how many nurse practitioners, health coaches and physician assistants are part of their team.
 
The good news is that there are business partners that make it easier for practices to implement CCM. The companies leverage technology to make the most of a growing trend: the sheer number of patients who are savvy with their digital and mobile devices and have few reservations about communicating with their physicians and clinical team members via those devices including but not limited to text, video calls and telephony.

Engaging with the digital patient

Companies that provide CCM services offer skilled communicators who can help patients avoid the loneliness that can contribute to poor health. Many of these patients are seniors, often isolated, who would appreciate the ongoing connection with someone they can talk to who will advocate for their health.

In addition to the human connection, the companies are using advanced technology to gather data about the conditions and risk factors of the CCM population, and to use digital messaging to inform patients about good health practices aimed at keeping those conditions under control, such as checking their blood pressure, dietary habits or blood sugar levels at home.
 
In short, these companies — adhering strictly to HIPAA guidelines — can perform follow-up services on behalf of practices. They can help practices tap into a significant new revenue stream, stay engaged with their patients between office visits, improve the overall health of their patients and reduce long-term costs.
 
For example, a Midwest group of five primary care physicians and five certified nurse practitioners caring for 2,000 Medicare-age patients with complex needs engaged a provider of technology solutions to help them stay connected with patients and providers by smartphone, as well as track and document their CCM activities. The practice realized $60,000 per month in additional revenue by the third month of the partnership.6 Another 10-provider practice documented clear patient benefits when it started working with an outsourced preventive care team. A case study reports that at the six-month mark, one patient who had struggled for years to manage his diabetes had reduced his A1c by almost three percentage points.7
 
New business partnerships are also making it easier for health systems and practices to participate in CCM reimbursement. EHR providers have partnered with other firms to integrate CCM information so that clinicians can view CCM care plans in a patient’s chart without having to leave the EHR.

It’s time to do something now

Today, one in four U.S. adults suffers from two or more chronic conditions, while more than half of older adults have three or more chronic conditions. And the likelihood of these types of conditions occurring goes up as we age. Given current demographics, in which 10,000 Americans will turn 65 each day from now through the end of 2029, we’ll likely see the overall number of patients with multiple chronic conditions greatly increase.8

Coupled with existing risk factors such as tobacco use and lack of physical activity, along with medical advances that extend longevity while not necessarily improving overall health, these problems will only become more prevalent if we don’t do something now.9

Given this fact, we predict that we’ll see dynamic growth in tech-enabled CCM companies over the coming years. Hundreds of them already exist. We’ll also see more physicians partnering with them to make CCM — and the significant new revenue stream it offers — a healthy new reality for their practices.

Notes:

1. Centers for Disease Control and Prevention. “Multiple chronic conditions.” Available from: bit.ly/2STbXYF.
2. Schurrer J, et al. “Evaluation of the diffusion and impact of the Chronic Care Management (CCM) services: Final report.” Mathematica Policy Research Report. November 2, 2017, xii. Available from: bit.ly/2AlFovc.
3. Ibid., 50-55.
4. Basu S, et al. Abstract for “Medicare Chronic Care Management payment and financial returns to primary care practices: A modeling study.” Ann of Intern Med. October 20, 2015. Available from: bit.ly/2UengPY.
5. LaPointe J. “Half of PCPs aware of Medicare reimbursement for Chronic Care Management.” RevCycle Intelligence. May 30, 2018. Available from: bit.ly/2kTQYW1.
6. “An internal medicine/geriatrics practice quickly earns new CCM/CPO revenue.” Chronic Care Management Inc. Available from: bit.ly/2Urdpp7.
7. De Hart G. “How chronic care management makes a difference for your patients — and your practice.” Mingle Health. Available from: bit.ly/2YNUrIv.
8. Raghupathi W and Raghupathi V. “An empirical study of chronic diseases in the United States: A visual analytics approach to public health.” Int J Environ Res Public Health. March 2018. Available from: bit.ly/2IgwUKL.
9. Ibid.
 

About the Author

Sarath Degala
Sarath Degala
VP BIP Capital Atlanta, Georgia

Email: sdegala@bipcapital.com

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