‘What is the set-up cost to start a chronic care management program, and what will be its return on investment?’
As a healthcare professional, if you are planning to start a chronic care management program, then the above question is what to constantly deal with. The benefits of chronic care management are lucrative in nature and for good reasons. It helps you in taking care of patients suffering from chronic conditions and allows them to reduce the overall cost of healthcare.
The rising healthcare costs and chronic patients have alarmed the healthcare system, and to deal with it, the Centers for Medicare and Medicaid Services (CMS) 2015 introduced the chronic care management program. Ever since its inception, it has harnessed technological advancements and successfully bridged the gap of accessibility between care providers and patients.
Being a healthcare provider, it is important to assess the return on investment for starting a chronic care management program. Though calculating chronic care management program ROI can be difficult, for your practice to move ahead and add another source of revenue to your practice, it can give you an idea about the investment and the expected outcomes.
So, let’s explore the ROI possibilities for starting a CCM program for your practice.
Cost to Implement Chronic Care Management Program
To calculate the return on investment, first, you need to understand the investment that is required to initiate a CCM program. Here is a simplified breakdown of the implementation cost that you require to start a CCM program, which includes the CCM software cost and the cost of CCM program implementation, care managers, etc.
1. Care Manager and Provider Expenses
CMS requires you to have a dedicated care team when starting a chronic care management program. The care team usually consists of a care manager who can either be a registered nurse, licensed practical nurse, certified medical assistant, or practitioner. The number of care managers will depend on the patient population you are serving through your CCM program.
Let’s say you have a patient population of 200; then one care manager will be enough to serve your patient population. Calculating the expense of hiring a care manager, their average salary will cost you somewhere around $47,500 annually.
2. Chronic Care Software Expenses
CCM program is about providing remote care to chronically ill patients for which you will require software for chronic care management. Being at the start of your CMS CCM program, a whole self-sufficient software care coordination software like eCareMD can meet all your needs and requirements. Along with that, the option of customization is also available for your convenience
Since most of the vendors follow the practice of charging per patient, which varies from $5 to $20. So, if you have finalized the price of $5 per patient with the vendor, then for 200 patients, the chronic care management software costs you around $12000 annually.
3. Additional Operational Costs
The additional cost of CCM program implementation for operating and managing may vary depending on the needs and requirements. To give you an idea of where you will need to invest, you will need remote patient monitoring devices, staff training, regulatory compliance, etc. Considering all these factors, your additional operational costs will add up to $1000 per month and will cost you $12000 annually.
In a nutshell, adding up all the cost of CCM program implementation, you will require an investment of $71,500, which can vary depending on the patient population, vendors, and other factors. But will this investment give you significant returns to further sustain and scale the program?
Well, let’s find that out below!
Reimbursement Rates
The Centers for Medicare and Medicaid Services has issued specific Current Procedural Terminology codes or CPT Codes for CCM reimbursements for the healthcare services that you are providing.
Here’s a brief understanding of the functionality of the CPT Codes and their national average reimbursement rates.
- CPT 99490: This code reimburses the first 20 minutes of CCM service by clinical staff guided by a physical. This can only be used once per month per patient, and the national average of this code is $62.69. So, all your 200 patients enrolled under the program can account for $12,538 per month and around $150,456 annually.
- CPT 99439: This code reimburses for the additional 20 minutes of CCM service by clinical staff. This code serves as an add-on code for CPT 99490, and the average reimbursement amounts to $47.44 per patient. This CPT code can be used twice per month per patient.
- CPT 99487: This CPT code is specifically for complex CCM service and requires at least 60 minutes. The national average reimbursement rate is $133 per month per patient.
- CPT 99489: This CPT code is used as an add-on code for CPT 99487 for every 30 additional minutes spent on providing CCM service. There is no limit to using this code, and the national average rate stands at $70.
- CPT 99491: This CPT code is used for 30 minutes of provider time to provide CCM services. The national average for these codes stands at $85 per patient per month.
- CPT 99437: This CPT code serves as an add-on code for CPT 99437 to provide an additional 30 minutes of CCM services. The national average rate for this code stands at $60.
Calculating the ROI of the CCM Program
Quantifying Tangible Financial Gains
Depending on the condition of patients and the time spent providing CCM services, the reimbursement value will vary. However, to give you an idea of the ROI you can generate through your program, the CPT 99490 will cover your initial investment. For example, CCM Reimbursement rate for 200 patients – initial cost (CCM software cost + care manager salary + additional expenses) = ROI, which will roughly account for $150, 45v6 – ($47,500 + $12,000 + $12,000) = $78,956.
Anything after this will account for your profits from the CCM reimbursement, which will likely be higher. However, you need to be thorough with the billing requirements to avoid any billing claims denials and other complications.
Apart from that, the most significant ROI for you as a healthcare provider is that your CCM program will reduce the number of hospital readmissions and emergency room visits. This will allow you to better manage your resources and allow you to focus on more important tasks, such as patient care.
Non-Financial Benefits
Non-financial benefits of starting your CCM program include improved patient outcomes. As the CCM software is designed to promote patient engagement, it empowers better care coordination and communication, which directly influences the efficiency of your practice.
All these factors mentioned above will have a positive impact on your reputation, which is crucial for any healthcare professional.
Key performance Indicators for ROI measurement
Being a healthcare provider, you need to keep a tab on the key performance indicators to measure ROI to ensure the practice is going well and as you planned. So here are some KPIs that you should look out for:
1. Patient Engagement and Adherence: Since you will be using chronic care management software, it will give you a brief overview and data for measuring patient engagement and adherence to your care plan. Ensure that the patient engagement meets the target and that patients are adhering to the medication and care plan.
2. Monitoring Healthcare Utilization Patterns: Monitoring how your healthcare resources are being utilized and studying the pattern to avoid any further pitfalls.
3. Analyzing Billing and Revenue Generation Metrics: Set some criteria for billing and metrics to calculate revenue generation. This will help you understand how much revenue you are generating on a monthly basis and what the possible pitfalls are that could have been easily avoided for maximum reimbursement.
Challenges in Calculating ROI for CCM Programs
Calculating chronic care management program ROI is challenging, and the main challenge lies in the collection of data. Apart from that, CMS has initiated some specific criteria for the usage of CPT Codes, as you cannot bill for some of the two codes in a month. For this, you need to be familiar with the CMS guidelines and exception cases.
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Being a healthcare provider, the 21st century requires you to be an entrepreneur as well. After all, financial gains are the way towards sustainability and scalability. And similar is the case for your CCM program.
But the healthcare industry is not just about financial gains; consider the non-financial gains such as improving patient health outcomes, reducing the overall healthcare costs for patients, and the impact your CCM program can have on reducing the pressure off the healthcare industry.
However, with the ongoing evolution of the healthcare industry with technological advancements, the CCM programs are also evolving. This can have a life-changing impact on the healthcare landscape, making it proactive in nature and instilling a holistic approach while receiving care.
Frequently Asked Question’s
Chronic care management program ROI can be calculated by measuring the financial benefits of the program against the total implementation cost.
Since RPM and CCM can be billed together, remote patient monitoring can surely be a contributing factor to the ROI of the chronic care management program.
The key metrics to track when measuring chronic care management ROI are:
- Clinical Outcomes
- Cost savings on medication, staff resources, administration, etc.
- Revenue enhancement
- operational efficiency
Typically, the chronic care management ROI can be observed over the course of one year.
Here are some of the biggest challenges in achieving a positive ROI with the chronic care management program:
- Data and attribution
- Program implementation and sustainability
- Financial and policy landscape
- Staff burnout and turnover
- Staff resistance
Chronic care management reduces the burden on your administrative staff and allows your staff to focus on healthcare practices. Along with that, it also enables you to streamline your practice resources and save time on hospital readmission and emergency visits; all of these contribute significantly to reducing total healthcare costs.
