Transitional Care Management Billing: 5 Things You Need to Know

Wanda Pell, Director with Novia Strategies, shares 5 things you need to know about transitional care management billing – a financial remedy for physicians and hospitals to offset the expense of following patients after discharge to ensure a smooth transition and reduce readmissions. Download the full white paper at the bottom of this screen to read more detail about implementing this transitional care management billing in your organization.

Care Management Billing

In the past five years, beginning in 2012, hospitals have seen an increasing emphasis from The Centers for Medicare and Medicaid Services (CMS) on readmissions to hospitals. Currently, the penalty is up to 3% of Medicare reimbursement from hospitals having greater than expected readmissions within 30 days of discharge. While starting with three conditions, there are now six applicable conditions measured:

         1. Chronic obstructive pulmonary disease (COPD)
         2. Coronary artery bypass graft surgery(CABG)
         3. Acute myocardial infarction (AMI)
         4. Heart failure
         5. Hip and knee replacements
         6. Pneumonia

The period of measurement for this year’s penalties is from July 1, 2012 to June 30, 2015. Tying current year penalties to prior years’ performance is a methodology that CMS has used for many value-based measures. According to an article in Modern Healthcare, Medicare will reduce approximately $500 million in reimbursement for 2,597 hospitals due to readmission penalties in fiscal year 2017. While the number of hospitals has decreased from 2,665 in 2016, the amount withheld has increased by $108 million. The dollar increase is due to a change in the measurement of pneumonia and addition of CABG surgery to the list.

All of this has led hospitals to concentrate on how they transition patients from the acute care, to post-acute care, and ultimately to the community setting. It has created a need to re-examine how we discharge patients and the way we communicate discharge instructions to prepare patients and caregivers for self-care. Many programs have evolved to help hospitals and clinicians better serve their patients and reduce their readmissions.

Hospitals have struggled with a money/mission dilemma. While wanting to do the best for patients, they have been reluctant to expend too many resources on elaborate readmission prevention programs. The only financial gain has been a reduction in penalty, and outside of the specified diseases, admissions drive revenue. CMS has created a solution to at least part of this problem. In January 2013, they rolled out a mechanism to pay for Transitional Care Management (TCM). As discussed below, TCM provides physicians and/or hospitals a financial remedy to offset the expense of following patients after discharge to ensure a smooth transition and reduce readmissions. CMS has indicated that two-thirds of Medicare patients would qualify for TCM and plans to spend $1 billion annually. Many providers have been slow to adopt this payment mechanism. With the increased focus on outcomes and readmissions, this is a good time to revisit this option and assess its feasibility for your organization.

White paper: 5 tips when implementing transitional care management billing

The full white paper, available for download at the bottom of this screen, provides five things that you need to know if you are thinking of pursuing this service:

         1. The TCM Concept
         2. Settings for TCM
         3. Components of TCM
         4. CPT Codes for Billings
         5. Billing and Documentation Requirements

With any of these options, there is the opportunity to smooth the patient’s transition of care, provide better coordination of care, reduce readmissions, and achieve better outcomes. TCM also provides a feedback mechanism to the hospital for process improvement to make discharges more seamless, and provides a revenue option to cover expenses while improving a patient’s overall health status.

By Wanda Pell, Director, Novia Strategies

To learn more keys to transitional care management billing, download the full white paper

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