Return on Investment Comparison of Three Payment Models for Chronic Care Management Under Medicare in a Northwestern Physician Hospital Organization

Chronic disease is the most prevalent and costly health condition. The coordination of care provided to those with multiple chronic conditions (MCCs) is suboptimal and fragmented. This population is among the highest utilizers of healthcare, and accounts for the majority of Medicare expenditures annually. Chronic care management (CCM) programs represent evidence-based initiatives shown to improve outcomes, reduce hospital and emergency department utilization, and reduce healthcare costs. Centers for Medicare and Medicaid Services (CMS) have provided various payment models for reimbursement of CCM services. Primary care practices have stated that inadequate reimbursement and confusing payment models are barriers to CCM implementation. This project was a return-on-investment (ROI) comparison of three different payment models for CCM services under Medicare for a northwest Michigan physician hospital organization. The Agency for Healthcare Research and Quality (AHRQ) ROI toolkit served as the implementation framework for the project. An estimation of the cost of the ongoing operation of the CCM program and projected revenue for 2017 was conducted. The results of the ROI analysis demonstrated a ROI of $1.39 for CPC+ track one practice participating in the comprehensive primary care plus (CPC+) initiative; $1.55 as a practice participating in CPC+ as a member of an accountable care organization having met the minimum savings rate, $1.34 if the minimum savings rate was not met; and $0.44 as a practice utilizing current procedural terminology billing for every dollar spent. This analysis provides the necessary knowledge on the cost-effectiveness of CCM management and reimbursement models under CMS at the practice level. This report discusses the background of MCCs, CCM, and the implementation, evaluation, outcomes, and limitations of the ROI analysis