Increasing Specialty Physician Practice Income with Care Coordination: The Math is Compelling

Posted by Cam McClellan Teems

September 1, 2016 at 1:49 PM



Way back in 2013, the Centers for Medicare & Medicaid Services (CMS) began paying for transitional care management (TCM). TCM includes services rendered for certain patients during their transition from an inpatient hospital setting to a community setting, such as their home. Those services are care coordination, basically.

In 2015, CMS further recognized the importance of care coordination by starting to pay for chronic care management (CCM). CCM includes non-face-to-face services provided to Medicare beneficiaries who have two or more significant chronic conditions. As oncology practices add care coordinators and/or navigators to support the Oncology Medical Home or Oncology Care Model, they may want to consider how the care coordinators can support their partner-providers by billing for these services. Other specialty practices offering care management for complex diseases should seriously consider this revenue stream.

To date, many physicians and strategic planners for hospital-owned practices have decided that the financial payoff isn’t worth the extra effort to complete documentation and other requirements. However, about 68% of Medicare beneficiaries meet the criteria for CCM services, according to 2010 data from the Centers for Disease Control and Prevention (CDC).

The math can be compelling. An Annals of Internal Medicine practice-modeling study published online in September 2015 ran the numbers. If non-physician staff were to deliver CCM services, net revenue to practices would increase despite opportunity and staffing costs. The study results found that specialty practices could expect approximately:

  • $332 per enrolled patient per year (95% CI, $234 to $429) if CCM services are delivered by registered nurses (RNs),
  • $372 per enrolled patient per year (CI, $276 to $468) if services are delivered by licensed practical nurses,
  • $385 per enrolled patient per year (CI, $286 to $485) if services are delivered by medical assistants.

For a typical practice, this equates to more than $75,000 of net annual revenue per FTE physician and 12 hours of nursing service time per week if only 50% of eligible patients enroll. At a minimum, 131 Medicare patients (CI, 115 to 140 patients) must enroll for practices to recoup the salary and overhead costs of hiring a full-time RN to provide CCM services. 

If you add a specialty care coordination platform like Cordata to support these activities, the required number of patients goes up to about 275. However, you also gain the improved efficiencies and increased workflow of the RNs, better management of side effects, distress monitoring and the ability to provide TCM, just to name a few benefits.

Complaints about the chronic-care management reimbursement program vary from lengthy documentation to having to have difficult conversations with patients who now are responsible for a 20% copayment for previously free services. But the value proposition and business case look promising, especially if you leverage a specialty care coordination platform to further boost your ROI. And remember; the value of care coordination programs must be measured in terms of both improved clinical and business outcomes.

The business case for TCM and CCM

Topics: reimbursement, Navigation & Care Coordination, Chronic Care, CMS

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