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Original Research |

Medicare Chronic Care Management Payments and Financial Returns to Primary Care Practices: A Modeling StudyMedicare CCM Payments and Financial Returns to Primary Care Practices

Sanjay Basu, MD, PhD; Russell S. Phillips, MD; Asaf Bitton, MD, MPH; Zirui Song, MD, PhD; and Bruce E. Landon, MD, MBA, MSc
[+] Article, Author, and Disclosure Information

This article was published online first at www.annals.org on 22 September 2015.


From Stanford University School of Medicine, Stanford, California, and Harvard Medical School, Brigham and Women's Hospital, Beth Israel Deaconess Medical Center, and Massachusetts General Hospital, Boston, Massachusetts.

Disclaimer: The content of this article was derived entirely from publicly available or purchasable data; is solely the responsibility of the authors; and does not in any way represent the official views of the National Institutes of Health, the Center for Medicare & Medicaid Innovation, or the U.S. Department of Health and Human Services.

Disclosures: Dr. Bitton reports that he received personal fees from the Center for Medicare & Medicaid Innovation for serving as a part-time senior advisor to the Comprehensive Primary Care initiative at the Center for Medicare & Medicaid Innovation and that he participated in a technical expert panel convened by Mathematica Policy Research that advised the Assistant Secretary for Planning and Evaluation of Health and Human Services on the chronic care management fee. Dr. Landon reports personal fees from United Biosource and Research Triangle Institute outside the submitted work. Authors not named here have disclosed no conflicts of interest. Disclosures can also be viewed at www.acponline.org/authors/icmje/ConflictOfInterestForms.do?msNum=M14-2677.

Editors' Disclosures: Christine Laine, MD, MPH, Editor in Chief, reports that she has no financial relationships or interests to disclose. Darren B. Taichman, MD, PhD, Executive Deputy Editor, reports that he has no financial relationships or interests to disclose. Cynthia D. Mulrow, MD, MSc, Senior Deputy Editor, reports that she has no relationships or interests to disclose. Deborah Cotton, MD, MPH, Deputy Editor, reports that she has no financial relationships or interest to disclose. Jaya K. Rao, MD, MHS, Deputy Editor, reports that she has stock holdings/options in Eli Lilly and Pfizer. Sankey V. Williams, MD, Deputy Editor, reports that he has no financial relationships or interests to disclose. Catharine B. Stack, PhD, MS, Deputy Editor for Statistics, reports that she has stock holdings in Pfizer.

Reproducible Research Statement:Study protocol: Available in the Appendix. Statistical code: Available at http://sdr.stanford.edu. Data set: Available at http://data.mgma.org, www.cdc.gov/nchs/ahcd.htm, www.cms.gov/Outreach-and-Education/Outreach/NPC/National-Provider-Calls-and-Events-Items/2015-02-18-Chronic-Care-Management-new.html, and www-03.ibm.com/software/products/en/ibm-kenexa-companalyst-market-data-for-us-on-cloud.

Requests for Single Reprints: Sanjay Basu, MD, PhD, Stanford University School of Medicine, Medical School Office Building, X322, 1265 Welch Road, Mail Code 5411, Stanford, CA 94305-5411.

Current Author Addresses: Dr. Basu: Stanford University School of Medicine, Medical School Office Building, X322, 1265 Welch Road, Mail Code 5411, Stanford, CA 94305-5411.

Dr. Phillips: Harvard Medical School, 635 Huntington Avenue, 2nd Floor, Boston, MA 02115.

Drs. Bitton and Landon: Harvard Medical School, Department of Health Care Policy, 180 Longwood Avenue, Boston, MA 02115-5899.

Dr. Song: Massachusetts General Hospital, Department of Medicine, 55 Fruit Street, Boston, MA 02114.

Author Contributions: Conception and design: S. Basu, R.S. Phillips, A. Bitton, B.E. Landon.

Analysis and interpretation of the data: S. Basu, R.S. Phillips, A. Bitton, Z. Song, B.E. Landon.

Drafting of the article: S. Basu, R.S. Phillips, A. Bitton.

Critical revision of the article for important intellectual content: R.S. Phillips, A. Bitton, Z. Song, B.E. Landon.

Final approval of the article: S. Basu, R.S. Phillips, A. Bitton, Z. Song, B.E. Landon.

Provision of study materials or patients: S. Basu.

Statistical expertise: S. Basu, A. Bitton.

Obtaining of funding: R.S. Phillips.

Administrative, technical, or logistic support: R.S. Phillips.

Collection and assembly of data: S. Basu, A. Bitton, B.E. Landon.


Ann Intern Med. 2015;163(8):580-588. doi:10.7326/M14-2677
Text Size: A A A

Background: Physicians have traditionally been reimbursed for face-to-face visits. A new non–visit-based payment for chronic care management (CCM) of Medicare patients took effect in January 2015.

Objective: To estimate financial implications of CCM payment for primary care practices.

Design: Microsimulation model incorporating national data on primary care use, staffing, expenditures, and reimbursements.

Data Sources: National Ambulatory Medical Care Survey and other published sources.

Target Population: Medicare patients.

Time Horizon: 10 years.

Perspective: Practice-level.

Intervention: Comparison of CCM delivery approaches by staff and physicians.

Outcome Measures: Net revenue per full-time equivalent (FTE) physician; time spent delivering CCM services.

Results of Base-Case Analysis: If nonphysician staff were to deliver CCM services, net revenue to practices would increase despite opportunity and staffing costs. Practices could expect approximately $332 per enrolled patient per year (95% CI, $234 to $429) if CCM services were delivered by registered nurses (RNs), approximately $372 (CI, $276 to $468) if services were delivered by licensed practical nurses, and approximately $385 (CI, $286 to $485) if services were 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 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.

Results of Sensitivity Analysis: If physicians were to deliver all CCM services, approximately 25% of practices nationwide could expect net revenue losses due to opportunity costs of face-to-face visit time.

Limitation: The CCM program may alter long-term primary care use, which is difficult to predict.

Conclusion: Practices that rely on nonphysician team members to deliver CCM services will probably experience substantial net revenue gains but must enroll a sufficient number of eligible patients to recoup costs.

Primary Funding Source: None.

Figures

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Figure 1.

Alternative CCM delivery strategies.

CCM = chronic care management; LPN = licensed practical nurse; RN = registered nurse.

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Appendix Figure 1.

Model validation: clinic-level cost and revenue per FTE physician.

Annual estimated practice revenue (top) and costs (bottom) per FTE physician across practice sizes are displayed. Revenue and costs were estimated by the model using input data from a survey of 2518 primary care practices across the country and are plotted against actual revenue and cost estimates derived from the clinics' self-reports (12). See Appendix Table 2 for validation of primary care use and revenue outcomes against alternative national data sets of primary care use. We also compared the model's estimates of primary care use with data from the National Center for Health Statistics (14) as part of its National Ambulatory Medical Care Survey (n = 31 229 patients), organized by age, sex, and race/ethnicity (as shown in Appendix Table 1). FTE = full-time equivalent.

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Figure 2.

Minimum number of eligible Medicare patients required to enroll in the CCM program to fund a full-time RN or LPN and pay for other CCM expenditures for a primary care clinic.

CCM = chronic care management; LPN = licensed practical nurse; RN = registered nurse.

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Appendix Figure 2.

Model diagram.

See Table 2 and Appendix Table 4 for data sources and references. AHRQ = Agency for Healthcare Research and Quality; ICD-9 = International Classification of Diseases, Ninth Revision; IT = information technology; MGMA = Medical Group Management Association.

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