Reimbursement for Chronic Care Management

A patient with a chronic disease such as Type 2 Diabetes typically receives regular specialized care from up to 7 different providers each year. Emergency Room visits for this type of patient are more than 100% higher than baseline, while utilization rates for the 1 in 4 adults in the US with more than one chronic disease are even higher.

Needless to say, care coordination can be a nightmare for both patient and provider as even primary care providers lack the proper financial incentives for helping a patient manage their personal network of providers they see. While the Centers for Medicare and Medicaid Services (CMS) established the chronic care management billing code 99490 in January of 2015 to support reimbursement of previously unpaid services, the development of programs to take advantage of this new revenue stream by hospitals has been slow and uneven.

The central issue lies in the four C’s of healthcare finance – rising costs, constrained capital/cash, and tightening controls. In an environment where systemic changes are needed in both healthcare finance and how chronic conditions are managed, the lack of clear direction on how to make change beyond increasing the financial risk borne by providers. As a result, providers are on their own in figuring out how to make the necessary changes to comply with quality measures set by CMS to ensure better cost-control.

Opportunities For Change

Most of the transition towards value-based care has been push-based, relying on sweeping pieces of legislation that alters the financial landscape. The intent of CPT code 99490 is to provide opportunity for more pull-based opportunities for change. It requires Providers to spend at least 20 minutes per month with Medicare patients who have at least two chronic conditions that are expected to last at least one year or that put the patient as risk of death or decline. Reimbursement runs at $43 per patient per month.

The new CPT code is meant to provide a pull-based incentive for providers to build new business models that incorporate more involved care coordination for high-risk patients beyond just throwing a patient file over a wall to the next provider in the referral network. Unfortunately, widespread adoption of these models has been slowed due to a range of concerns from providers, primarily around concerns over increased liability and time management challenges.

It is important to view this hesitance within the context of an industry that is generally slow to innovate or adopt advances that have benefitted other industries. The arguments around the lack of ROI in exploring revenue opportunities through CPT 99490 often assume the use of existing technologies prevalent within healthcare, rather than creatively imagine the use of technologies that other industries (such as retail or sales/marketing) have successfully used to manage one-on-one interactions with customers at scale.

Keys for Moving Forward

The real key to not only driving compelling ROI, but halting the out-of-control growth rate of chronic condition prevalence ultimately lies in providers leveraging modern technology to act as air traffic controller in coordinating care for high-risk patients.

This will require a re-envisioning of the relationship between provider and the patient. And will require a re-imagining of the types of roles that support the operating model of care coordination. We have already seen increasing responsibility handed to mid and lower-level clinicians as cost-saving measures – those same clinical positions can be baked into more longitudinal patient support roles.

Real Innovation

Healthcare can take inspiration from a myriad of forward-thinking industries in implementing customer relationship management technologies alongside artificial intelligence and machine learning in order to manage relationship for patients at scale. These technologies can help make significant reductions in the amount of cash and capital required to meet the heightened level of financial and outcomes control demanded by value-based care reimbursement schemes.

Furthermore, we also need to re-imagine the role of the provider within the broader social and economic environment that shapes health outcomes. The non-clinical support (housing, legal services, healthy food, fitness) that high-risk patients need is currently beyond the scope of the modern day provider. However, the utilization rates and costs faced by providers are heavily influenced by non-clinical risk factors.

Again, here is an opportunity to think creatively about how technology can be leveraged to support the revenue opportunities presented by CPT 99490. While coordinating non-clinical resources may not directly be reimbursable, providers can place themselves at the center of resource networks and leverage network effects to more effectively keep high-risk patients engaged in preventive care programs that do drive hospital revenue.

The objection of providers to change is understandable. The legal landscape of healthcare is very uncertain, and yet they find themselves bearing an increasing level of financial risk. Making a wrong investment might not just be costly, but can lead to insolvency. But this is a reason to aggressively look to other industries – particularly retail-oriented ones – to find lessons in the use of technology to manage patient-provider relationships. CPT 99490 presents a strong opportunity to do this from the chronic condition management perspective.

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