CMS continues to encourage and financially incentivize providers to implement Medicare chronic care management (CCM) programs. A few big-picture numbers help explain why.
- Over two-thirds of Medicare beneficiaries have two or more chronic conditions—about 1 in 7 (14%) have 6 or more.1
- As recently as 2014, seven of the top 10 causes of death were chronic diseases.2
- Up to 86% of annual health care spending in the US is for people with chronic and mental health conditions 3.
A patient with two or more chronic conditions could participate in a standalone disease management program for each condition. But in CMS’ eyes, a single comprehensive program is preferable. They see it as a better form of care that also encourages more efficient health-system utilization and helps contain costs overall.
Needless to say, the more comprehensive CCM model requires enhanced coordination and patient-facing communication on the part of providers. That’s why CMS defines CCM as “care coordination services that occur outside of the regular office visit for patients.” These services are also the basis for Medicare chronic care management reimbursement.
Medicare chronic care management reimbursement
Medicare provides a monthly payment of $42.71 for the CCM services provided to each eligible patient enrolled in a compliant CCM program. (Note: Like all Medicare fee-for-service reimbursement, this amount may vary based on MAC and geographic location.)
Let’s say a provider organization serves 5,000 patients, 10% of whom are covered by Medicare.
|For example purposes only:|
|Annual # of unique patients||5,000|
|% covered by Medicare||10%|
|Annual # of unique Medicare patients||500|
|Medicare patients with 2 or more chronic conditions (approx. two-thirds of all Medicare patients)||333 unique CCM patients|
| 333 CCM patients
x $42.71 CCM monthly payment
x 12 months
$170,669.16 estimated annual gross revenue
$170K is nothing to sneeze at—especially for an organization that operates on an already tight budget. But it’s an amount that could easily be eaten up by project overhead or operating costs, especially if the organization builds and manages all aspects of the CCM program in-house.
Launching and running a CCM program—in-house vs. with a vendor
Building a CCM program from scratch is challenging—and when you do it on your own, there’s no guarantee of compliance or financial viability. With the right partner, however, providers can implement a high-performing Medicare chronic care management program on a contingency-based model.
What should providers consider when assessing CCM vendors?
- Does the vendor handle patient enrollment and outreach? This is key to ensuring CCM doesn't become a cost-center or a burden on your existing staff.
- Does the vendor’s contingency-based model include patient-friendly outreach, communications tools, and educational resources? CCM only works when patients are truly engaged and informed.
- Does the vendor have a staff of healthcare professionals to conduct and bill for CCM activities on your behalf? This is the backbone of a 100% contingency-based CCM model.
Standalone technology or consulting services might enable providers to build out an effective CCM program…but only if they have the budget for IT development and can add or reassign staff to conduct day-to-day CCM activities. One detail to remember is that Medicare chronic care management requires documenting CCM activities down to the minute, because the billing code(s) involved are time-based. Not every EHR system has this functionality, and even when they do it’s often cumbersome—another reason to consider a turn-key solution with built-in time-tracking and seamless EHR integration.
The takeaway? Most providers would be best served by a turn-key solution that includes a services aspect—namely, the day-to-day outreach activities needed to accomplish the heavy lifting of CCM. When it comes to pricing, contingency-based is preferable because it protects the provider from financial risk. It also puts the onus of a sustainable, high-performing CCM program squarely on the vendor.