Will Medicare’s chronic care management program cut healthcare costs?

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On January 1, 2015, the Centers for Medicare & Medicaid Services (CMS) unveiled a payment program, known as chronic care management (CCM). This program is designed to be a comprehensive care plan for all health issues. It provides primary care physicians with larger financial reimbursements. These physicians are reimbursed about $40 monthly for a variety of services, such as medication management. Physicians treating patients with two or more chronic medical conditions are also paid more for communication with other providers.

Under CCM, medical practices would see substantial increases in annual revenue. As for patients, the main benefit would more personalized, monthly care. And, there is a greater chance that poorly controlled chronic conditions would be better controlled.

What are CCM services?

Care management is considered a critical component of primary care. According to the CMS, it contributes to better health and care for individuals. And, it reduces healthcare spending. Generally, people with multiple, complex medical problems visit multiple providers in different organizations. Unfortunately, these patients and their families may face multiple and potentially conflicting decisions. But with CCM, the process is better coordinated and streamlined, under one provider. And, the physicians’ reimbursement process improves, as well.

CCM ensures that both healthcare providers and patients have 24/7 access to care management services. And, urgent chronic care needs are met. CCM also provides additional chances for patients and physicians to discuss the course of action, as well. Any communication complies with the Health Insurance Portability and Accountability Act (HIPAA).

Medicare defines CCM as the management and coordination for non-face-to-face care coordination services furnished to those beneficiaries with multiple (two or more) chronic conditions. Primary care physician or other qualified healthcare providers must devote at least 20 minutes of their clinical staff time, per calendar month. These conditions must be expected to last at least 12 months or until the patient’s death.

Chronic conditions are those that place patients at significant risk of: death, acute exacerbation (worsening) or decompensation (organ failure) or functional decline. They include:

Alzheimer’s disease and related dementia

  • Arthritis (osteoarthritis and rheumatoid)
  • Asthma
  • Atrial fibrillation
  • Autism spectrum disorders
  • Cancer
  • Chronic obstructive pulmonary disease (COPD)
  • Depression
  • Diabetes
  • Heart failure
  • Hypertension
  • Ischemic heart disease
  • Osteoporosis

Benefits for physicians and patients

CCM’s biggest benefit may be that each patient is directly involved in their own personal healthcare and medical decisions. Known as “Patient-Centered Care Plans“, all care is routinely and systematically solicited, recorded and communicated.

Under CCM, physicians’ reimbursements increase if specific staff is involved. For instance, practices’ annual revenue amounts increase if registered nurses (RNs) or licensed practical nurses (LPNs) conduct required annual wellness visits. Studies show that in the first year alone, these revenues would increase by $69,665-77,295.

However, the more services that physicians perform on their own, the lower their annual revenues. For instance, if a physician did the annual wellness visit, with their staff managing the monthly care, annual revenue increases may decrease by 15-40 percent. And, if the physician handled annual visits and month-to-month management, net revenue would be even lower. This is because CCM services value face-to-face healthcare. As such, it makes financial sense for physicians to hire RNs or LPNs.

Under the CMS guidelines, the CCM program requires certain patient enrollment levels. A study published in the Annals of Internal Medicine found at least 131 Medicare patients per RN or 76 Medicare patients per LPN must enroll. Once enrolled, these patients would have a 20 percent copayment. But the actual costs for patients would depend, as they’re based on specific Medicare plans.

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