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Ambulatory Care Management Programs: New incentives for exploring this opportunity

Ambulatory care management programs are generally viewed as services offered by primary care providers.  However, specialists caring for patients with chronic conditions – oncologists, urologists, rheumatologists, cardiologists and pulmonologists to name a few – should evaluate this opportunity.

By providing patient education and support, performing medication reconciliation, and arranging for support services, clinical staff bring care outside the four walls of the clinic or hospital into patients’ daily lives. Not surprisingly, research shows formal care management programs – with dedicated clinical staff regularly interacting with patients to manage their established care plans – improve patient outcomes and lower total costs of care. 

The Centers for Medicare & Medicaid Services (CMS) recognizes the value of care management services for patients under the care of a specialist in its Oncology Care Model (OCM) Program. CMS pays oncologists participating in that program a $160 PBPM enhanced care management fee through the course of chemotherapy administration. In exchange for this fee, an oncologist must meet six specific practice requirements, including 24/7 patient access to an appropriate clinician, development of a care plan and provision of patient navigation services.

Without such funding to support the establishment and maintenance of an ambulatory care management program, there has been little financial incentive for specialists to pursue these programs. However, there are new incentives that merit a closer look, including new Medicare reimbursement for care management services and the positive impact of care management programs on a physician’s composite performance score under the new Merit-Based Incentive Payment System (MIPS), which now provide that incentive.

Medicare Reimbursement

Beginning in 2013, CMS has been expanding fee-for-service reimbursement for care management and related services. In the 2017 Medicare Physician Fee Schedule (MPFS) proposed rule, CMS looks to both simplify the rules for billing under existing care management codes and add reimbursement under several new codes: 

CPT Code



2017 MPFS Proposed Payment



Transitional Care Management

(moderate complexity; face-to-face visit with practitioner within 14 days of discharge;  non-face-to-face services performed by clinical staff)




Transitional Care Management

(high complexity; face-to-face visit with practitioner within 7 days of discharge; non-face-to-face services performed by clinical staff)




Chronic Care Management

(20 minutes/month non-face-to-face services performed by clinical staff)




Chronic Care Management

(beneficiary with behavioral health condition)




Complex Chronic Care Management

(60 minutes/month non-face-to-face services performed by clinical staff)




Complex Chronic Care Management

(each additional 30 minutes/month non-face-to-face services performed by clinical staff)




Prolonged E/M Service Before and/or After Direct Patient Care

(performed by practitioner - first 60 minutes)




Prolonged E/M Service Before and/or After Direct Patient Care

(performed by practitioner - each additional 30 minutes)




Initial Psychiatric Collaborative Care Management

(with 70 minutes of behavioral health care manager time)




Subsequent Psychiatric Collaborative Care Management

(with 60 minutes of behavioral health care manager time)




Additional 30 Minutes of Behavioral Health Care Manager Activities



In addition to Medicare reimbursement, more commercial payers are beginning to pay for care management services. While some payers provide fee-for-service reimbursement, others offer a PBPM care management fee based on the number of beneficiaries under the physician’s care.

MIPS Composite Performance Score

Under MIPS, a physician’s payment under the MPFS will be adjusted based on his or her composite performance score (CPS) beginning in 2019. CMS will calculate a physician’s CPS, expressed as a number from 1 to 100, based on his or her performance on four categories of metrics:  quality, resource use, advancing clinical information (meaningful use) and clinical practice improvement activities. 

A care management program can improve a physician’s score in two categories, resource use and clinical practice improvement activities. The resource use component (representing 10 percent of the CPS in 2019, increasing to 30 percent by 2021) measures a physician’s efficiency in providing care for typically high-cost patients. Tables 4 and 5 of the MIPS proposed rule list 41 episode-based resource use measures, each relating to a procedure performed by or ongoing treatment of a chronic condition provided by a specialist. 

Using Medicare claims data, CMS will compare the total cost of care for one specialist’s patients against other specialists’ patients on a risk-adjusted basis. The physician whose patients have a lower total cost of care will receive a higher score for the MIPS resource use component.     

To reduce total costs of care – and thus improve his or her CPS – a specialist should consider providing formal care management throughout the defined episode of care. By regularly interacting with the patient and monitoring his or her condition, a care manager can prevent duplication of services and ensure the patient is following instructions and receiving appropriate follow-up care. 

The clinical practice improvement activities component – representing 15 percent of the CPS – incentivizes physicians to pursue practice transformation initiatives. CMS has identified approximately 90 activities in Table H in the appendices to the MIPS proposed rule for which a physician may receive credit, each worth 10 or 20 points.  A physician must accumulate 60 points to receive full credit under this component of the CPS.   

Several of the activities in Table H relate to infrastructure to provide care management services. Thus, as a specialist implements a care management program, they are earning fee-for-service reimbursement, improving his or her scores on the resource use measures and accumulating points to receive full credit on clinical practice improvement activities component of the CPS. 

Exploring the Opportunity

A specialist interested in establishing an ambulatory care management program should follow the following steps when exploring this opportunity.

1. Gain a working knowledge of the Medicare billing rules for care management services.
Among other things, these rules address care plan development, use of an electronic health record, patient access to care, staff qualifications and physician supervision requirements. As noted above, CMS proposes to simplify these rules, making it less costly and time-consuming to provide these services.   

2. Project the potential revenue to be generated from an ambulatory care management program.
This calculation involves quantifying the number of eligible patients, accounting for those eligible patients who may refuse the service and estimating the level of service required by participating patients.

3. Explore the most efficient manner for providing care management services.
Some practices hire or reassign staff (usually nurses or medical assistants) to perform the services and identify and implement a technology solution.  Others contract with third-party “call centers” to provide non-face-to-face care management services for their patients. In either case, a specialist can estimate the costs associated with an ambulatory care management program, and thus calculate potential net revenue.

4. Design the work flow
Assuming there’s a meaningful net revenue opportunity, the last step in the planning phase is to design the work flow. This includes a process for identifying eligible patients, educating these patients about the benefits of care management services, developing individual care plans, initiating the services, generating appropriate documentation and billing for the services. 

While designing and implementing an ambulatory care management program can be time-consuming and disruptive, the long-term benefits can be significant.  In addition to additional reimbursement and improved performance scores, practices with robust care management programs report higher patient and provider satisfaction. And, as more payers transition to value-based payments, having well-established care management capabilities will be a key ingredient for success.  

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