Medicare Chronic Care Management Payments and Financial Returns to Primary Care Practices

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