CMS wants to take better care of older Americans with multiple chronic conditions, but providers aren’t taking the billion-dollar bait. Nearly a decade after billing codes for Chronic Care Management (CCM) were first introduced, fewer than 10% of primary care providers are offering the most basic level of service.
That’s bad for patients and for practices. Here’s why – and what you can do about it.
To encourage better care for patients with two or more chronic conditions, Medicare first introduced billing codes for Chronic Care Management in 2015. The foundational CPT code for CCM is 99490, which covers 20 minutes of care on a monthly basis. More than 60 conditions are covered, including arthritis, autism, cancer, and COPD.
Care must be “generally supervised” by a physician or APP, and “services typically aren’t face-to-face,” according to the latest guidance from CMS. In practical terms, that means most CCM programs are staffed by CNAs or LPNs who reach out to patients by phone every 30 days.
Healthcare costs have been rising across the board, but CMS has been particularly aggressive in raising reimbursements for chronic care management – up nearly 50% since 2021. CMS believes the hikes are justified because CCM can reduce future costs for acute care and “help reduce geographic and racial or ethnic health care disparities.”
Despite the generous reimbursement rates, CMS data from 2021 show that only 25,000 providers made even one billing for CPT 99490. AHRQ estimates there are 295,000 primary care providers in the U.S., which suggests that more than 90% of eligible providers are not doing intentional, regular Chronic Care Management.
The opportunity cost of underutilization is huge. Consider the actual, rounded numbers from 2021, when the average Medicare payout was $30.31 per service (excluding any deductible, coinsurance, or third-party payment).
Now consider the potential. About 35 million seniors have traditional Medicare, and two-thirds of seniors have multiple chronic conditions, so the addressable market for basic CCM is at least 23 million – not counting those with Medicare Advantage plans.
In 2021, Medicare counted around 4.4 million utilizations of CPT 44940 for 887,000 beneficiaries, which means the average beneficiary was treated roughly 5 times under a program designed for 12 touchpoints every year.
By my very conservative, back-of-the-envelope calculations, that means US medical practices are passing up more than $8 billion a year for CPT 99490 alone – and remember there are nine additional codes for Chronic Care Management reimbursement. For the calculation below, we’ll continue using the actual annual payment amount from 2021, even though rates are up about 50% since then.
Why have medical practices been so slow to implement Chronic Care Management despite all the financial incentives? Terry Carden, one of my co-founders at the Rural Healthcare Initiative, says smaller practices may be put off by administrative requirements such as individual care plans and 24-hour access for patients.
But, as Terry points out, nearly all those administrative requirements can be outsourced, leaving practices with a predictable revenue stream and minimal headaches. In fact, after more than 30 years’ experience in physician alignment and practice management, he sees CCM as a once-in-a-generation kind of opportunity.
“It’s literally incremental revenue with zero incremental cost,” he says. “Almost every Medicare participant qualifies – all they have to do is opt in.”
While many CCM contractors charge a six-figure setup fee, Terry can work with practices to launch a program with no up-front cost. About half the revenue from every patient will go to service the management contract, but the other 50% is immediately accretive to the practice.
I won’t get into revenue projections at the practice level because they tend to sound a little huckster-ish. (Just Google “chronic care management revenue” if you want to see for yourself.) What I will say is that the potential is there, and any healthcare organization would do well to research CCM as a part of its business planning. If you’d like to know more, please drop me a line; I’m happy to connect you with Terry.
Beyond the short-term dollars and cents, I believe CCM offers a long-term strategy play, as well. Think of CCM as a kind of “baby step” toward value-based reimbursement – a way to generate significant fee-for-service revenue while learning the ropes of population health management.
An opportunity that positions you for future success while strengthening your finances today? At the very least, I think it merits additional due diligence.
Research by Sneha Thirkannad, Ascendient strategy analyst