What’s My Reimbursement and Profits for CCM?

A chronic care management (CCM) or behavioral health integration (BHI) program has great potential benefits for patients, but requires considerable investment of resources and administration across a large number of staff. These hurdles have contributed to the 2-3% adoption rate of CCM in the 1st two years of the program*. On the BHI side, a brief from the Institute for Clinical and Economic Review (ICER) showed that BHI is more effective at promoting improved health outcomes than traditional care, but costs between $20 to $3,900 per patient depending on location and individual patient needs.

The good news is that the extra revenue that a practice receives from BHI/CCM programs, which is roughly $40-80 per patient per month, can offer significant profits and ROI, if managed properly. This is where the benefit of prior CCM/BHI experience comes in.

There’s also additional program value in terms of health, quality of life and savings to Medicare.  For example, a report by Mathematica from 2017 found that CCM services (for the sample studied vs. a control group) reduced net Medicare costs by over $30M.

So if it makes sense for your institution to offer a CCM / BHI program, should you run it yourself, or should it be outsourced? Today we’ll help you make this decision by walking you through the reimbursement and profitability of CCM and BHI programs.

Data on reimbursements

The reimbursement for CCM varies considerably between states, ranging from $39 to $57 per patient per month. The feasibility of administering a cost-effective CCM / BHI program therefore changes depending on the cost, effectiveness and efficiency of overheads. Wondering what your reimbursement is?  Drop us a line at joe@circlelinkhealth.com for access to our comprehensive region by region reimbursement data set.

Profitability drivers and example calculation

1. Staffing

Firstly (and most importantly, given high staffing costs associated with care) is the fixed overhead costs or vendor costs for staffing relative to the rate of reimbursement. CCM/BHI requires co-ordination and management of a team, including roles such as primary care physician and care manager.

When considering staffing costs, also take into account all of the staffing hours that are required on top of the 20-40+ minutes per patient per month of direct patient contact. This includes time for issues like determining patient eligibility, enrolling patients (and documenting enrollment), preparing care plans, tracking approval of those plans by a doctor, and presenting care plans to patients. There will also be considerable time for non-call time activities like scheduling calls, documenting calls, managing/training care coaches, and trying to contact unresponsive patients. Finally, there are also time costs in determining which patients can be billed for and preparing their billing information, as well as the usual staffing costs of vacation and sick days.

In terms of BHI programs specifically, behavioral health specialists are an important group to consider, as they may need to be hired from outside the usual streams of staff acquisition. Depending on patient needs, behavioral health specialists could come from a range of backgrounds with different associated levels of cost including social work, nursing, psychiatry, psychology, substance abuse support, or counseling. As with other programs, the costs for staffing will vary depending on region, and also on whether these staff are permanently employed or are agency workers.

2. Number of patients enrolled and their duration on program

A second key consideration in terms of profitability is the reimbursement, driven by i) duration of the program for each patient, ii) the number of patients enrolled and iii) the number of enrolled patients reached each month. As mentioned in the introduction, a CCM/BHI program can be expensive to set up without outside help. To offset this initial expense and the ongoing fixed costs of an in-house program, practices must soberly estimate if they have the HR and technology to efficiently execute on each of parts i), ii) and iii) above.

A typical CCM patient, as described in the Mathematica report, receives services for between four and ten months. In the case of practices using CircleLink to avoid such fixed cost risk, patients are typically on the CCM/BHI program for somewhere in the range of eight to twelve months and 90% of active, reachable patients may be billed each month, as they are given care by high level staff like registered nurses. CircleLink has found that using higher level registered nurses keeps patients on the program longer, vs. using medical assistants.

3. Total profitability

The total profitability of the program can be calculated relatively simply: consider the patient-months billed times the reimbursement rate, then subtract total costs such as staffing costs, employment taxes, real estate and facility management costs, and the overhead costs of the team doing care coaching.

For example, consider a Licensed Practical Nurse working on a CCM program operating in New York. The staffing costs of such a position are around $58,000 per year, or around $70,000 in total including overhead costs and taxes. With a NYC reimbursement rate of $49 per month, as shown in our reimbursement table, you can see that the nurse in question would need for bill for 120 patients per month just to break even.

When you consider all of the staff work required in addition to the care coaching call time, plus the LPN being pulled into non-coaching facility duties, this level of billing may not be feasible. Achieving a higher level of patient billing for a return on investment may be even further afield.

CircleLink can help

If you are looking for support in the management of your own CCM / BHI program, then CircleLink can help. Our services have zero upfront costs, can launch in 2-4 weeks and are always profitable (you only pay fees for billable patients). Care coaching is handled by our team of 100% registered nurses so you needn’t worry about hiring, training, or scheduling staff to follow up with patients between visits. And we offer a dedicated expert account manager to walk you through the process and answer any questions. Our service is trusted by both large health system practices and smaller clinics nationwide. Call us today at 917-999-6560 to request a demonstration and learn how we can help you offer the best care to your patients.

*for 2015-2016, according to CMS’s 2017 Physician Fee Schedule and assuming ~70% of Medicare beneficiaries have the 2+ chronic conditions needed for eligibility