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The American Journal of Managed Care October 2018
Putting the Pieces Together: EHR Communication and Diabetes Patient Outcomes
Marlon P. Mundt, PhD, and Larissa I. Zakletskaia, MA
Primary Care Physician Resource Use Changes Associated With Feedback Reports
Eva Chang, PhD, MPH; Diana S.M. Buist, PhD, MPH; Matt Handley, MD; Eric Johnson, MS; Sharon Fuller, BA; Roy Pardee, JD, MA; Gabrielle Gundersen, MPH; and Robert J. Reid, MD, PhD
From the Editorial Board: Bruce W. Sherman, MD
Bruce W. Sherman, MD
Recent Study on Site of Care Has Severe Limitations
Lucio N. Gordan, MD, and Debra Patt, MD
The Authors Respond and Stand Behind Their Findings
Yamini Kalidindi, MHA; Jeah Jung, PhD; and Roger Feldman, PhD
The Characteristics of Physician Practices Joining the Early ACOs: Looking Back to Look Forward
Stephen M. Shortell, PhD, MPH, MBA; Patricia P. Ramsay, MPH; Laurence C. Baker, PhD; Michael F. Pesko, PhD; and Lawrence P. Casalino, MD, PhD
Nudging Physicians and Patients With Autopend Clinical Decision Support to Improve Diabetes Management
Laura Panattoni, PhD; Albert Chan, MD, MS; Yan Yang, PhD; Cliff Olson, MBA; and Ming Tai-Seale, PhD, MPH
Currently Reading
Medicare Underpayment for Diabetes Prevention Program: Implications for DPP Suppliers
Amanda S. Parsons, MD; Varna Raman, MBA; Bronwyn Starr, MPH; Mark Zezza, PhD; and Colin D. Rehm, PhD
Medicare Savings From Conservative Management of Low Back Pain
Alan M. Garber, MD, PhD; Tej D. Azad, BA; Anjali Dixit, MD; Monica Farid, BS; Edward Sung, BS, BSE; Daniel Vail, BA; and Jay Bhattacharya, MD, PhD
CMS HCC Risk Scores and Home Health Patient Experience Measures
Hsueh-Fen Chen, PhD; J. Mick Tilford, PhD; Fei Wan, PhD; and Robert Schuldt, MA
An Early Warning Tool for Predicting at Admission the Discharge Disposition of a Hospitalized Patient
Nicholas Ballester, PhD; Pratik J. Parikh, PhD; Michael Donlin, MSN, ACNP-BC, FHM; Elizabeth K. May, MS; and Steven R. Simon, MD, MPH
Gatekeeping and Patterns of Outpatient Care Post Healthcare Reform
Michael L. Barnett, MD, MS; Zirui Song, MD, PhD; Asaf Bitton, MD, MPH; Sherri Rose, PhD; and Bruce E. Landon, MD, MBA, MSc

Medicare Underpayment for Diabetes Prevention Program: Implications for DPP Suppliers

Amanda S. Parsons, MD; Varna Raman, MBA; Bronwyn Starr, MPH; Mark Zezza, PhD; and Colin D. Rehm, PhD
The actual costs of implementing the evidence-based Diabetes Prevention Program (DPP) were compared with the latest reimbursement rates provided by CMS.

Objectives: To examine if Medicare reimbursements for the Diabetes Prevention Program (DPP) cover program costs.

Study Design: A retrospective modeling study.

Methods: A microcosting approach was used to calculate the costs of delivering DPP in 2016 to more than 300 patients from Montefiore Health System (MHS), a large healthcare system headquartered in Bronx, New York. Attendance and weight loss outcomes were used to estimate Medicare reimbursement. We also modeled revenue assuming that our program outcomes had been similar to those observed in national data.

Results: The 1-year cost of delivering DPP to 322 participants in 2016 was $177,976, or $553 per participant. The costliest components of delivery were direct instruction (28% of total cost) and patient outreach, enrollment, and eligibility confirmation (24%). Based on our program outcomes (14.3% lost ≥5% of their initial weight and 50% attended ≥4 sessions), MHS would be reimbursed $34,625 ($108/patient). If outcomes were in line with national CDC reports (eg, better attendance and weight loss outcomes), MHS would have been reimbursed $61,270 ($190/patient).

Conclusions: In a large urban health system serving a diverse population, the costs of delivering DPP far outweighed Medicare reimbursement amounts. Analyzing and documenting the costs associated with delivering the evidence-based DPP may inform prospective suppliers and payers and aid in advocacy for adequate reimbursement.

Am J Manag Care. 2018;24(10):475-478
Takeaway Points

The evidence-based Diabetes Prevention Program (DPP) is among the most widely implemented efforts to reduce the burden of type 2 diabetes in the United States.
  • Within a large and diverse integrated healthcare system, we estimated that it costs an average of $553 to deliver the program to each participating patient.
  • Based on final CMS reimbursements, our healthcare system would have received $108 per patient.
  • To encourage implementation of DPP, it is crucial that reimbursements be aligned with costs of program delivery.
To date, one of the most successful and scalable interventions to reduce diabetes among high-risk individuals is the Diabetes Prevention Program (DPP). In a randomized controlled trial, the DPP lifestyle intervention, which emphasizes modest weight loss and increased physical activity, significantly reduced the risk of diabetes.1

In its original form, DPP could not be sustainably scaled by community organizations.2 The trial included 1-on-1 coaching with a healthcare professional, supervised exercise classes, and substantial monetary study incentives and tools (eg, grocery vouchers). To reduce program costs, estimated at approximately $1400 per participant at the time, several changes were made. Group sessions replaced 1-on-1 sessions and the community became the primary place of delivery.3 Additionally, incentives were removed and physical activity shifted from private/coach-led to memberships at local fitness facilities or simply by encouraging physical activity. These changes reduced the intensity of the intervention while slightly affecting efficacy and became the basis for the CDC’s National DPP (NDPP). A recent study found that among more than 10,000 participants in NDPP, the median weight loss was 4.2%, less than the 6% from the original trial.4 To date, more than 1750 organizations are seeking or have received recognition as an NDPP supplier.5

In 2016, CMS announced that Medicare would offer reimbursement for DPP beginning in 2018. In November 2017, a final rule detailing the payment structure was released.6 Because little is known about the actual costs of DPP, CMS considered a number of factors in its payment methodology, including looking at similar covered services. CMS referenced Medicare reimbursement of $10 per patient for 30 minutes of group education and training for patient self-management by a nonphysician health professional for 5 to 8 patients (Current Procedural Terminology code 98962).6

Although strides have been made to make DPP sustainable and scalable, implementing the program may be cost-prohibitive if reimbursement levels are insufficient. Therefore, it is important to understand the cost inputs of DPP to create adequate reimbursement and to help prospective suppliers understand the implementation costs. This study aims to describe the various cost inputs in a real-world large-scale DPP implementation and compare them with the CMS reimbursement rates using the experience of Montefiore Health System (MHS), a large healthcare system in Bronx, New York. MHS implemented DPP in partnership with the YMCA of Greater New York from 2011 to 2015 and on its own since 2015.7 To date, the Montefiore DPP has served more than 1350 patients.7,8


To estimate the costs of implementing the DPP in a single year (2016), we used a microcosting strategy. Key informant interviews, program data, and supply orders were used to estimate the costs of delivering DPP. First, we identified fixed costs associated with DPP delivery. These fixed costs included the annual salary of a full-time DPP coordinator. The coordinator is responsible for conducting outreach, confirming patient eligibility by briefly reviewing the electronic health record (EHR), providing administrative and clerical support to the program, and teaching some classes. Additional fixed costs were staff salaries, including 25% of the salary of a manager, 5% of that of a project manager, and 5% of a data analyst to manage data and CDC reporting.

Semivariable expenses included DPP class instruction, which depended on the job classification of the lifestyle coach (eg, health educator or community health worker) and whether the class was taught during normal working hours or not. For classes taught on weekends or evenings, coaches were given “session pay” (ie, overtime). Based on key informant interviews, each hour of classroom instruction required an additional 1.75 hours to remind patients about classes, travel to the class, set up the classroom, conduct make-up sessions, and document attendance, weight, and physical activity. For health educators, who taught a majority of classes, the cost for teaching plus the additional time was $94.48 per session.

Additional variable expenses included the printed materials for the core and maintenance curriculum guides ($22.34/unit and $19.92/unit, respectively). We accounted for the costs associated with facilitator guides, training DPP instructors, and the costs of clinical quality scales. The costs of becoming a DPP master trainer, which is required to train certified instructors, were also included. Lastly, the costs of incentives, such as pedometers, water bottles, and salad bowls, were calculated by reviewing previous orders.

For program revenue, we used data from the 2016 program year, when 322 patients began attending 1 of 22 class cycles. Attendance at each class was measured and average weight loss was calculated to estimate revenue per the CMS rules.7 The final revenue thresholds provided by CMS are described in Figure 1A. Although about one-third of MHS’ DPP patients receive Medicare, we purposely calculated program revenue as if all patients were being reimbursed at the proposed CMS rates, in order to assess the programmatic implications of those rates. Up-front costs and cross-subsidies across the health system were not estimated; therefore, cost estimates should be interpreted as underestimates. Because reimbursement is dependent on outcomes, we conducted secondary analyses by calculating revenues assuming that our outcomes had been in line with those of average NDPP suppliers.4

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