NEW YORK (Reuters Health)—Medicare’s new chronic care management (CCM) payments could boost revenues for primary care practices, but many could experience net losses due to opportunity costs of face-to-face visit time, according to results from a modeling study.
“The loss of revenue when MD’s did all the work themselves was somewhat surprising,” Dr. Sanjay Basu, from Stanford University School of Medicine, Stanford, California, told Reuters Health by email. “It highlighted for me just how cautious physicians need to be to remain sustainable in primary care practice when extending their work to new forms of chronic care that are not based on traditional fee-for-service visits; that time is really opportunity cost for struggling practices.”
The new program would reimburse primary care practices about $40 per month for non-visit-based care of traditional Medicare fee-for-service beneficiaries with multiple chronic conditions. Patients would be billed a 20% copayment.
Requirements for reimbursement include the development of a care management plan, followed by provision of at least 20 minutes of non-visit-based care services per month (medication management or communication with specialists, for example) by a physician or other practice staff, for Medicare patients with at least two chronic conditions.
Dr. Basu’s team used microsimulation modeling to estimate the financial implications of CCM payments under various scenarios.
In most delivery scenarios, net revenue would improve by participation in the CCM program. In the first year, the typical practice would see estimated revenue increases of $69,665 if an RN delivered the service and $77,295 if an LPN delivered the service.
If the physician conducted the annual wellness visit, practices would realize 15% to 40% less revenue increases than if these visits were delivered by an RN or LPN, according to the Sept. 22 Annals of Internal Medicine online report.
If the physician conducted both the annual visit and the ongoing CCM, sustained revenue decreases could result from the opportunity costs of billable visit time being used for the CCM activities. Under this scenario, an estimated 25% of practices nationwide would have net revenue decreases.
Net revenue changes would vary across states, practice sizes, capacity levels, and the number of Medicare patients participating in CCM.
“This really reflects a major change in the way financing of primary care is done in the U.S., and likely is the start of many more non-visit-based financing and reimbursement strategies to move primary care more toward a comprehensive chronic disease management model,” Dr. Basu said. “To make effective use of new and upcoming chronic care reimbursements, team-based care may be the most financially viable strategy.”