Outsourced Chronic Care Management Services Can Help Physicians and Patients

A version of this post first appeared on the blog of a client, Flow Health Inc. I co-authored it with Robert Rowley, MD, Co-Founder and Chief Medical Officer of Flow Health.

Health care services are not uniformly delivered in a coordinated manner in this country. Most people do not have health care providers who are part of IDNs, do not have care coordination baked into their experience of the health care system. Even folks those who receive their care from providers within a closely coordinated system, where everyone is on a single EHR platform and can share chart notes, referrals and other information, some services are still obtained outside the IDN. Unfortunately, at this stage of the game, care coordination is not systematized in most care settings. This results in the provision of duplicative and unnecessary care, adding to the excess cost in our health care system.

An anecdote can help illustrate this. A patient sees her primary care physician for a worsening chronic condition. A number of tests for this have already been done. The PCP refers to a specialist for assistance in management of the case. The PCP, of course, is generally overwhelmed with volume, and only has the time or bandwidth to do what is immediately at hand. So the referral gets punted to administrative staff. The referral is made to the appropriate individual, and some (usually minimal) information is passed to the recipient office about the reason for the referral. Maybe, some of the results of tests already performed are also sent (usually by fax). The patient is often the one to call the specialist and make the appointment, and hand-carries whatever information she may have with her (beyond simply the referral form). The specialist, then, needs to rely on the patient to explain the reason for the visit, and often starts the workup from scratch. Communication back to the PCP is hit-or-miss.

The PCP may not really take note of the response, or may not even know if there has been a lapse and the patient never got to the specialist. When the patient returns to the PCP office, the whole episode may be news to the PCP. There may be staff time, after the fact, trying to chase down feedback from the specialist. This kind of scenario is likely very familiar to most people who receive care in community settings (outside of big institutions).

Is there a solution?
The dominant payment system for healthcare in the U.S. is fee-for-service, and it has ever been so. Doctors are paid based on bills sent for things they do, generally requiring face-to-face, one-at-a-time encounters. The system pays for interventions (sometime heroic interventions) performed on sick people to get them well. Procedures are rewarded far more than face-to-face cognitive services. As a result, PCPs tend to be on the bottom of the food chain in the fee-for-service world. Yet PCPs are in a position to direct a great deal of the spend in healthcare, even if they aren’t directly rewarded for managing the broader healthcare budget for their patients. As noted in a recent article in the New England Journal of Medicine, the current system is poorly designed to support the core of primary care, which involves substantial time outside office visits for tasks like care coordination, patient communication, medication refills, and care provided electronically or by telephone.

CMS recently announced a major initiative to move away from fee-for-service medicine. However, it will be years and years before value-based payments actually replace fee-for-service reimbursement. The next stage of development in this arena is focused on a series of adjustments around the margins: retrospective tweaks to reimbursement rather than a full-on shift to a quality-based prospective system.

One of the key changes to the system, which took effect in January 2015, is Medicare’s implementation of a new non-visit code for Chronic Care Management (CCM). CCM is a benefit for Medicare patients with two or more chronic conditions at risk for deterioration (which is over two-thirds of Medicare beneficiaries). It is a new Medicare benefit, billed like any other service (such as office visits), but does not require a face-to-face encounter – it is intended to be provided remotely, via telephone or other means of communication. The starting point is the development of a care plan, based on input from the patient. If patient preferences and priorities are built into the care plan, patient adherence to the plan is more likely. One feature of the CCM benefit is that Medicare members sign up for the CCM service – it is not automatic. It pays a little over $40/month for each beneficiary, and requires the PCP doing the care coordination to submit that bill each month. If a practice has, for example, 200 Medicare patients who have signed up for this service, that could result in an additional revenue to the practice of $100,000 annually. It also means creating documentation and generating 200 extra bills each month.

Is it worth it?
There are some challenges for PCPs in delivering this new service. To begin with, there needs to be a care coordinator who can reach out to the patient (once a month, at least) and make sure that the referrals are working smoothly, that all the doctors on the patient’s care team know what each other is doing and can share relevant clinical information, and that there is a clear care plan that is shared not only among the care team (distributed as it is), but also with the patient. Paying attention to the patient’s case must be of 20 minutes duration or more. Each such monthly contact is documented and then billed to Medicare.

This implies that the care coordinator will have a technology platform that can aggregate data from all the different sources (all the different doctors’ offices, and their different EHR systems), and can share that with everyone involved.

There is dire need for such care coordination, as noted in the example above. But, in order for this to work, the overhead added for such a service must cost less than $40 per member per month. Can this be accomplished by a clinical practice?

Much of the experience with care coordination and the hiring of care coordinators has come from group practices designated as Patient Centered Medical Homes (PCMHs), which are found here and there around the country. Even in group practices, though, absorbing the cost of a CCM program can be a challenge, especially if the technology platform used for CCM does not integrate well with physician EHRs. Often, traditional CCM tools are stand-alone products, creating another data silo, requiring CCM staff to manually enter or double-enter data from practice EHRs, relying on phones and faxes.

But what about smaller physician practices? Even to this day, where there has been a significant shift away from independently-owned and small practices to hospital-owned and larger practices, AMA survey data shows that a large proportion of physicians are still independent and in solo and small practices. Will they be able to take advantage of this new Medicare reimbursement approach to reward them for what they do? Can they implement a CCM program for under $40 per member per month?

Outsourcing CCM: a solution for the masses
A novel approach for helping practices manage their care coordination activities is emerging. A universal patient-centered health information exchange is needed in order for care coordination to work efficiently, as is a layer on top of this technology platform comprising a “full stack” service of chronic care management, including care coordinators, taking advantage of scale by aggregating the needs of many subscribing clinical practices.

Thanks to the economies of scale, such an outsourced CCM solution can deliver the service, and handle the related administrative work (documentation and billing), for less than the Medicare-budgeted fee. The net result is that a medical practice can provide CCM services to its eligible patients without incurring the costs associated with building the service from scratch. A practice can contract for coordinators to act as extensions of the practice, engaging patients on behalf of the practice, building the care team connections, making sure appointments happen and that data flows both ways, and netting positive income from Medicare for the service.

Such an outsourced CCM service, available to any practice (large or small) that wants to provide this new Medicare benefit to its patients, can, in essence, bring the care-delivery quality advances of PCMHs to the individual or small community practice level. Much of healthcare is delivered in this setting. And Medicare is betting that by incentivizing population management and care coordination, the overall total cost of care will be measurably reduced.

The future of care management
Inpatient hospital costs account for a full one-third of all healthcare spending in the U.S. and Medicare hospital utilization is an order-of-magnitude higher than commercial – hospital bed-day usage for commercial patients is in the range of 150 days-per-thousand; Medicare patients are in the range of 1,500 days-per-thousand. Thus, the Medicare population is a good place to start, though outsourced chronic care management, built on a foundation of patient-centered health information exchange would clearly be valuable to all health care payers – commercial insurers, self-insured employers and provider organizations paid on a global basis. Five percent of the U.S. population accounts for fifty percent of healthcare expenditures. These high consumers of resources are usually chronically ill or catastrophically ill patients whose care is not being actively or effectively coordinated. The care for these patients needs to be better managed, and we now have the tools to do so in a way that can reduce costs and improve quality of care and patient satisfaction, by developing a patient-centered care plan, and coordinating care using a patient-centered health information exchange and care coordination system.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

Photo credit: Vlc via Flickr CC