The value-based reimbursement transformation is underway, but how does that affect reimbursements for chronic care services?

As the Centers for Medicare & Medicaid Services (CMS) shifts its payments toward a model driven by improving the delivery of care, it is critical that medical providers apply it effectively to their chronic care services. From a medical perspective, better management of chronic illnesses can improve patient quality of life, reduce emergency room visits and strengthen patient interactions.

From a business perspective, chronic care management offers a low-risk opportunity for medical providers to prepare for the future. Jeb Dunkelberger, executive director, Accountable Care Services & Corporate Partnerships at McKesson Business Performance Services, identified some areas where chronic care management can have an immediate effect.

“Embracing chronic care management is the right thing to do because it can improve quality of care and patient quality of life, and it can also help rein in the enormous cost of chronic illness,” Dunkelberger said. 

Chronic care management prepares your organization to be successful with value-based care in the following ways:

1. Reining in enormous chronic care costs.

Chronic care costs are massive right now, with 86% of all healthcare expenditures involving chronic medical treatment. In 2012, just 1% of the patient population1 with chronic disease conditions accounted for 22.7% of healthcare spending, while 5% accounted for 50% of total spending. 

Chronic care management aims to manage these costs through proactive patient interventions and more effective patient engagement. Such patient-partnered disease management programs are grounded in evidence-based care and focus on prevention and early intervention. The patient’s involvement is crucial in this model, as it is the foundation for successful early treatments (and fewer unnecessary hospitalizations). 

2. Growing awareness of the transition by CMS to alternate payment models.

In early 2015, CMS announced a goal of converting at least 50% of Medicare payments to alternative payment models by the end of 2018. Private insurers have already started to follow this direction, leaving providers with an immediate need to align with new reimbursement goals. 

The new code for chronic care management, CPT® 99490, represents Medicare’s first Physician Fee Schedule payment for non-face-to-face care coordination and management services. The McKesson Chronic Care Management Services™ offering is designed to streamline reimbursements from this new code, giving providers more insight into patient behaviors and increasing practice revenues. 

Dunkelberger noted that this low-risk transition period is the best time for providers to boost their knowledge of chronic care management while preparing to transition to the value-based care delivery goals set by CMS.

“This opportunity to gain confidence and competence with value-based reimbursement is the real value proposition of the new code,” Dunkelberger said. “Those who become familiar with value-based reimbursement in a low-risk environment will be able to adapt more quickly as the system continues to evolve.”

With over two-thirds2 of Medicare beneficiaries having two or more chronic conditions, it becomes crucial to apply chronic care management programs as a way to improve value-based care delivery. 

3. Gain competitive advantages and additional reimbursements. 

The need to deliver value-based care and improve the management of chronic conditions is fundamentally changing how medicine is practiced and compensated. New incentives for preventive care, early intervention and care continuity are driving this industry-wide evolution. Dunkelberger noted that there are additional financial benefits beyond overall cost savings when pursuing chronic care management. 

“Chronic care management also represents a way for providers to get paid for learning about value-based reimbursement and population management,” Dunkelberger said. “In the years ahead, as new features, requirements and incentives are added to the chronic care code and value-based reimbursement in general, those that are already participating will have a major competitive advantage over those that are not.”

CPT is a registered trademark of the American Medical Association.




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About the author

McKesson Business Performance Services offers services and consulting to help hospitals, health systems, and physician practices improve business performance, boost margins and transition successfully to value-based care.