Person:

Landon, Bruce

Background: Physicians have traditionally been reimbursed for face-to-face visits. A new non–visit-based payment for chronic care management (CCM) of Medicare patients took effect in January 2015.

Objective: To estimate financial implications of CCM payment for primary care practices.

Design: Microsimulation model incorporating national data on primary care use, staffing, expenditures, and reimbursements.

Data Sources: National Ambulatory Medical Care Survey and other published sources.

Target Population: Medicare patients.

Time Horizon: 10 years.

Perspective: Practice-level.

Intervention: Comparison of CCM delivery approaches by staff and physicians.

Outcome Measures: Net revenue per full-time equivalent (FTE) physician; time spent delivering CCM services.

Results of Base-Case Analysis: If nonphysician staff were to deliver CCM services, net revenue to practices would increase despite opportunity and staffing costs. Practices could expect approximately $332 per enrolled patient per year (95% CI, $234 to $429) if CCM services were delivered by registered nurses (RNs), approximately $372 (CI, $276 to $468) if services were delivered by licensed practical nurses, and approximately $385 (CI, $286 to $485) if services were delivered by medical assistants. For a typical practice, this equates to more than $75 000 of net annual revenue per FTE physician and 12 hours of nursing service time per week if 50% of eligible patients enroll. At a minimum, 131 Medicare patients (CI, 115 to 140 patients) must enroll for practices to recoup the salary and overhead costs of hiring a full-time RN to provide CCM services.

Results of Sensitivity Analysis: If physicians were to deliver all CCM services, approximately 25% of practices nationwide could expect net revenue losses due to opportunity costs of face-to-face visit time.

Limitation: The CCM program may alter long-term primary care use, which is difficult to predict.

Conclusion: Practices that rely on nonphysician team members to deliver CCM services will probably experience substantial net revenue gains but must enroll a sufficient number of eligible patients to recoup costs.

Primary Funding Source: None.

Patient-centered medical home initiatives are central to many efforts to reform the US health care delivery system. To better understand the extent and nature of these initiatives, in 2013 we performed a nationwide cross-sectional survey of initiatives that included payment reform incentives in their models, and we compared the results to those of a similar survey we conducted in 2009. We found that the number of initiatives featuring payment reform incentives had increased from 26 in 2009 to 114 in 2013. The number of patients covered by these initiatives had increased from nearly five million to almost twenty-one million. We also found that the proportion of time-limited initiatives—those with a planned end date—was 20 percent in 2013, a decrease from 77 percent in 2009. Finally, we found that the dominant payment model for patient-centered medical homes remained fee-for-service payments augmented by per member per month payments and pay-for-performance bonuses. However, those payments and bonuses were higher in 2013 than they were in 2009, and the use of shared-savings models was greater. The patient-centered medical home model is likely to continue both to become more common and to play an important role in delivery system reform.