How Will Managed Care Implement the New $40 CMS Coordination Fee?

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Authors in the New England Journal of Medicine discuss the prospects and pitfalls of implementing a new CMS fee for physicians who coordinate care for Medicare patients with multiple chronic conditions.

For years, proponents of value-based care have decried the lack of incentives for doctors to spend time on patients who most need their attention. Indeed, researchers who shadowed 15 family physicians this month published a study in The American Journal of Managed Care; they found that the average appointment lasted 20 minutes, and the average fee collected was just $101.40, including patient copays.

That’s hardly a system that drives doctors to take a full history or discuss proper dietary habits with a diabetic. Entities like the Patient-Centered Medical Home (PCMH) were created to address these problems, by creating care teams that included non-physicians who can handle some of these tasks.

This fall, CMS took an additional step, when the agency unveiled plans for a non-visit based payment of $40 per patient, per month for “chronic care management,” or CCM. For the first time, practices could be compensated outside of a PCMH initiative for providing extra support for patients who have at least 2 chronic conditions. The change, approved November 7, 2014, will come with several strings, however. These are explained in a perspective piece published today by Samuel T. Edwards, MD, MPH, and Bruce E. Landon, MD, MBA, in the New England Journal of Medicine.


As Drs Edwards and Landon outline, the new CMS fee offers a good start. A practice that already sees 200 Medicare patients who meet the criteria could gain $100,000 in revenue a year. But to bill for the fee, there are requirements:

  • the practice must use a certified electronic health record (EHR)
  • the practice must offer 24-hour access to staff, who must have EHR access
  • each patient must have an assigned practitioner
  • care must be coordinated during transitions to and from hospitals and specialists
  • practices must create a comprehensive care plan that features medication management and outside social services, as needed. A staff person must spend 20 minutes on this each month.

All this would be a lot on its own, but it requires the patient’s involvement, consent, and in some cases, payment. That’s because those who get coordination services will face 20% coinsurance under Medicare Part B. If a patient lacks supplemental coverage, the authors estimate the cost will be $100 out of pocket per year, and some patients will balk or refuse to take part, especially if the practice has been doing some of these services for free.

The authors speculate that some busy practices may decline to take Medicare patients who would qualify for CCM but won’t consent to participate or pay the coinsurance. They also wonder if the EHR demands and other requirements could render some smaller practices ineligible, even though they are treating very ill patients who have nowhere else to go. “Practices without such advanced capabilities—and their patients—may be the ones that could benefit most from these additional payments,” the authors write.

Finally, the authors question how CMS and practices will manage the technological challenges of adding the CCM function to existing EHRs, and how audits will handle inevitable competition between practices for a given patient’s allotted $40. It is up to the patient to designate which provider is the coordinator (and fee collector), and some may unwittingly transfer this designation among providers more than once, or be pressed to do so to see a desired specialist who seeks to add to enrich the practice by also being a “coordinator.”

The authors anticipate that the process that starts in January will not be the last word. “The CCM payment will probably evolve over time,” the write. “Future iterations could provide incentives for adopting additional PCMH capabilities, incorporate incentives for cost reduction, or target practices participating in broader payment-reform experiments, such as accountable care organization programs.” How this first step affects the poorest patients and practices, however, remains to be seen.