Nov 152012

New Medicare Codes: I Want to Believe

From the Hartford Foundation’s Chris Langston comes a post about the final rule for 2013 Medicare Physician Fee Schedule–including codes for post-hospital discharge care. Originally appeared November 13 at

I’ve been hearing rumors that something big was coming but it sounded too incredible, too wonderful, and too good to be true, so I figured it wasn’t. Seems like I was wrong.

In the past few weeks, the Centers for Medicare and Medicaid Services (CMS) has issued its final rule for the 2013 Medicare Physician Fee Schedule. Nestled between pages 279 and 335 of this document are two new Current Procedural Terminology (CPT) codes (99495 and 99496) which are intended to pay physicians (and qualified non-physician providers like NPs and PAs) for post-hospital discharge care coordination provided to their Medicare beneficiary patients.

Sounds pretty good, as does the list of services that are supposed to be provided to Medicare beneficiaries under these codes:

  • Communication with the patient and/or caregiver within two business days of discharge (phone, e-mail, whatever
  • Non-face-to-face services provided by practice staff may include:
    • communication with home health or other community services used by patients
    • patient/family caregiver education to support self-management
    • assessment and support for treatment adherence and medication management
    • identification and facilitating access to available community and health resources
  • Non-face-to-face services provided by physician or other qualified provider may include:
    • review of discharge information
    • review and follow-up on diagnostic tests and treatments
    • interacting with other health professionals (specialists?) assuming or resuming care of “system specific problems”
    • education of patient/caregiver
    • referrals and arranging for needed community services
    • assistance in scheduling any required follow-up with providers or services
  • Medical decision making (equivalent to a usual evaluation and management visit)
  • A face-to-face visit (office or home) within 14 or 7 calendar days of discharge (while the visit may be done anywhere, people discharged to nursing facilities are not eligible for this benefit :-(  )


For these services, a provider stands to get paid $163.88 or $230.86, depending on the complexity of the medical decision making (E&M 3 or 4) and how quickly there is a face-to-face visit (less than 14 days or less than 7 days). That’s good money considering a regular Medicare office visit is around $45, but there is certainly a lot of work involved.

CMS is expecting 2.17 million claims under these codes for total payments of $600 million. Unfortunately, I am reminded of the Annual Wellness Visit (see new for 2011) which also looked like a great new benefit to Medicare patients (and even had no co-pay), but does not seem to be taken up by providers or patients, such that only 7 percent of those eligible had one in 2011. We shall see.

A couple of features of the fee schedule and discussion I thought were very notable: It is clear that CMS expects much of this work will be done by non-physician practice staff. The practice expense component of the work is big and meant to support 70 minutes of RN/LPN time for non-face-to-face activities (see page 324). And the beneficiary co-pay is quite substantial.

Despite some comments suggesting that CMS call these services “preventative” and therefore not subject to co-pays or deductibles, CMS balked. In fact, one reason that the face-to-face encounter with the physician provider was baked into the service package was the hope that it would make the co-pay fee less of a surprise to patients. And finally, the rumors were wrong about one thing—any physician can make use of this benefit; it is not limited to primary care providers (see page 309). The first provider to see the patient and submit a bill will “win” the payment.

So what does it mean? Will we see a reduction in readmissions? Will primary care become a more attractive career? I have to admit that I really don’t know. Despite more than 50 pages of discussion of this new benefit in the final rule and many, many comments, I haven’t seen any comparison between this benefit and the cooperative agreement for post-discharge care coordination offered under ACA section 3026, the Community-Based Care Transitions Program. That program requires community agencies in formal partnership with hospitals to propose an evidence-based model of care such as Eric Coleman’s Care Transition Intervention and negotiates fees with agencies between $250 and $500 per eligible discharge (or so I hear, these “cooperative agreements” are not as public as the physician fee schedule).

Will primary care offices know what to do to coordinate care? Will this payment provide sufficient incentive for practices to do the extra work it takes to prevent hospitalizations? Hire the extra staff? The AAFP, AMA, AGS, and others who advocated for this new benefit think so, but I have my doubts.

For one thing, the primary care stakeholders are quite vehement that they ALREADY provide these services and have just been cheated out of their rightful pay. If so, we shouldn’t expect any different outcomes for patients, just financial ones for providers—not a bad thing, but not enough in my opinion.

In accepting these new CPT codes, CMS has clarified at least three issues in the care of older Americans. First, it plants another giant flag on the issue of readmissions and throws the ball back into the provider court. Medicare beneficiaries have high rates of 30-day rehospitalization, much of which seems preventable with more vigorous efforts at discharge follow-up and coordination of care. As Eric Coleman and others have shown, some fairly simple interventions can reduce 30-day readmissions and improve outcomes for older adults. So one could say that CMS wagering this $600 million against a potential reduction in the $17 billion spent on hospital readmissions is a pretty good bet, even if the odds aren’t that good.

Second, primary care providers have long argued that conventional fee-for-service payment rates do not cover their real expenditures of time and effort to coordinate care for their complex patients. After many years of repeating that payments for evaluation and management do include substantial support for non-face to face services, CMS has reversed itself, and in a big way. These new codes and payments are a powerful precedent and will have more consequences down the line.

And last, but not least, CMS continues to find ways to bring additional revenue to primary care providers, perhaps to encourage them to provide more or better services, but for sure to increase their practice revenue and make primary care a more viable enterprise. This new payment comes on top of innovations such as medical homes with per person/per month fees, the 10 percent bonus primary care incentive payments, and “shared savings” vehicles such as Accountable Care Organizations. Assuming that a primary care physician has 3,000 patients in reasonably regular care, 20 percent (n=600) of whom are Medicare beneficiaries of whom 20 percent might have a hospitalization in a given year, the revenue from 99495 and 99496 (given the 70-30 split in usage CMS expects) would be $21,972. A lot of that income will go directly out in new staff costs (in my view), but I’m sure some will stick.

I want to believe.


key words: public policy, Medicare, physician fee schedule

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