Transitional care management improves patient outcomes, reduces healthcare costs and meets the Quadruple Aim

Abstract

Transitional care management (TCM) services, introduced by the Centers for Medicare & Medicaid Services (CMS) in 2013, aim to improve care coordination, reduce hospital readmissions and lower healthcare costs. These services involve communication with patients, face-to-face visits, and medication reconciliation, among other appropriate services, for 30 days after discharge from the inpatient setting.

TCM services have been shown to confer significant benefits in reducing mortality rates, hospital readmission rates, and healthcare expenditures, all while offering primary care practices an additional source of revenue. Further adoption and refinement of TCM services may help to bridge the gap towards a value-based care model and help improve patient outcomes and reduce overall healthcare costs. This paper introduces the benefits of TCM, its adoption by practices, the billing and reimbursement of TCM services, and the challenges and solutions in implementing a TCM program.

Transitional care management (TCM)

In 2013, CMS introduced bundled payments for TCM visits.¹

TCM services are provided for 30 days after a patient is discharged from inpatient or partial hospitalization settings such as a hospital or a skilled nursing facility to a community setting.² TCM service involves initial communication with the patient or the caregiver within the first two business days after discharge.² An office visit, or an eligible telehealth service, is to be provided within 7 days or 14 days after discharge for patients with moderately or highly complex medical conditions, respectively.³ Medication reconciliation must be performed before or during said visit.² In addition, the TCM service must include 30 days of non-face-to-face services that are medically reasonable and necessary, such as discharge information review, patient education, and patient communication.^2,3

The initial face-to-face visit, whether in the office or via telehealth, must be provided by a physician or advanced practice providers (APPs), including certified nurse-midwives (CNWs), clinical nurse specialists (CNSs), nurse practitioners (NPs), or physician assistants (PAs), if authorized to provide such service by specific states.² Auxiliary personnel or APPs may provide non-face-to-face services under general supervision.²

Benefits

CMS introduced the bundled payment for TCM to improve quality and reduce costs by lowering hospital readmission rates. Another goal is to use programs like TCM to promote better care coordination and support primary care.¹

Hospital readmission significantly contributes to healthcare costs, placing financial burdens on the patients, institutions and society. In 2016, the mean 30-day all-cause readmission rate stood at 13.9%, representing 4.3 million instances, with each readmission carrying an estimated financial burden of $14,400.⁴

A cohort study in 2018 analyzed all eligible Medicare discharges between 2013 and 2015 and found that between 31 and 60 days after discharge, TCM services reduced the mortality rate from 1.6% to 1% and decreased healthcare spending by 11%.³ Researchers at Kaiser Permanente also found that Medicare Advantage patients who saw a primary care clinician within seven days after discharge were 12% to 24% less likely to be admitted within 30 days of discharge.⁵ Similarly, Camden Coalition of Healthcare Providers found 30- and 90-day readmission rates to be significantly lower for patients who connected with primary care within seven days of discharge.⁶ A study at the University of Kentucky tracing 1884 patients found an 86.6% drop in readmission odds among patients receiving TCM services.⁷ Decreasing readmission rates benefits not only the patient and Medicare but also health systems considering the Hospital Readmissions Reduction Program introduced by the Affordable Care Act that penalizes health systems for high 30-day-readmission rates.⁸

In addition to decreasing post-discharge health care costs and improving clinical outcomes such as mortality and readmission rate, TCM services can bring more revenue to the clinicians and practices providing the service as it is reimbursed at a higher rate than regular office visits by CMS.

Adoption of TCM services and missed opportunities

Since its inception in 2013, the number of people who received TCM services after discharge slowly increased, from 3.7% of eligible patients in 2013, to 9.3% in 2016.⁹ In 2019, 17.7% of potentially eligible patients used TCM services; despite a progressive enhancement in the adoption rate, approximately 5 million instances occurred in 2019 wherein patients might have been eligible for TCM services but did not receive them.¹⁰ From the viewpoint of patients, there appears to be a deficiency in the provision of services that facilitate optimal health management post-discharge. Consequently, the advantages of coordinated care, including reduced readmission and mortality rates, may not be fully realized. From a societal perspective, the lack of TCM services resulted in increased healthcare costs as readmissions can be quite expensive, costing even more than the original hospitalization on average.⁴

Additionally, data between 2013 and 2015 showed that 52.2% of discharges that did not bill for TCM visits had an associated office visit within 14 days, suggesting many missed opportunities.3 Should healthcare practices successfully identify and deliver TCM services to these patients, both patient outcomes and practice reimbursements could be enhanced with minimal additional expenses as they already would have been seen within the 14-day period. Moreover, in 2018, the overall acceptance rate for TCM services reimbursement by Medicare was 95.1%; the number was even higher in 2016-2017 at 96% and 96.3%.¹¹

Billing codes and reimbursement

Two CPT® codes, 99495 and 99496, are utilized for documenting TCM services.² The primary distinction lies in the medical decision-making complexity and the time frame of the post-discharge visit. Code 99495 pertains to patients requiring moderate complexity decision-making, with visits scheduled within 14 calendar days of discharge.² Conversely, code 99496 is designated for patients necessitating high-complexity decision-making, who must be seen within seven calendar days post-discharge.² The visit must be with a physician or an NPP but can be conducted over a telecommunications system utilizing both audio and video.2,12 Within the 30-day period after each patient-discharge, only one clinician may bill for TCM services; additional TCM services may be billed for future discharge as long as it does not overlap with the 30-day period of the previous TCM service.²

In general, TCM codes cannot be billed concurrently with other visit codes, except for a few services involving end-stage renal disease, anticoagulant monitoring, prolonged evaluation and management, and care coordination, among others.² It is best to refer to the most recent Medicare Payment Policies and Physician Fee Schedule (PFS) before concurrently coding TCM services and other codes.2 It is essential to mention that TCM services cannot be billed by a practitioner who has already billed a procedure code with a global surgery period that overlaps the TCM service period.² Additionally, while federally qualified health centers (FQHCs) may provide TCM services, the reimbursement is based on the FQHC Prospective Payment System rate.¹³

Table 1 shows the 2023 National Payment Amount set by CMS, at $205.36 and $278.21 for codes 99495 and 99496, respectively; the reimbursement rate is significantly higher than regular office visit codes, the most complex of which, 99215, has the non-facility price of $179.94.¹⁴ For every 1,000 encounters where patients are enrolled in TCM services, even if all are of moderate complexity, a practice can still generate over $195,000 of revenue, extrapolating based on the 95.1% reimbursement rate in 2018.¹¹ Additionally, as stated earlier, over half of the discharges not billed for TCM are already associated with an office visit within 14 days.³ For every 1,000 such patients, assuming on average a code 99214 was billed and only considering code 99495, there is $76,930 left on the table for not enrolling them in the TCM program.

In addition to the direct revenue generated by the TCM services codes, there is potential for generating extra income as these services are rendered. For instance, many non-face-to-face TCM services after the initial visit may coincide with chronic care management (CCM) services. Medicare allows for concurrent billing of these programs, and the practice could utilize existing personnel and protocols from the CCM program to efficiently implement its TCM services.² This synergistic relationship streamlines operations and further benefits both patients and providers.

Additionally, practices that are part of accountable care organizations (ACOs) may receive additional payments for improving patient clinical outcomes.¹⁵

Challenges and solutions

The components of TCM services align with the scope of primary care practices, indicating that only minor modifications are required to establish an effective TCM workflow. Nonetheless, implementing a successful TCM program presents its own challenges. The Department of Family and Community Medicine at the University of Texas Health Science Center in San Antonio identified their top two obstacles in TCM program implementation as:

1. Patients not attending the scheduled face-to-face visits, and
2. Difficulties accessing hospital records.¹⁶

The clinic in San Antonio addressed these challenges by emphasizing patient education and collaborating with health systems to enhance interoperability.¹⁶ Furthermore, they discovered that implementing a workflow and protocol involving a designated TCM patient coordinator proved beneficial.¹⁶

Additionally, the development of TCM templates within the electronic health record system was found to be advantageous.¹⁶ Although still with limitations, this process of capturing patient discharge can be improved by using better health information exchange systems.¹⁷ Establishing initial patient contact within two business days post-discharge is essential. Therefore, a dedicated staff member or team may be required to systematically engage with and document interactions for each discharged patient upon acquiring the pertinent discharge data.

Discussion

CMS introduced TCM services in 2013 to improve care coordination, reduce hospital readmission rates and lower healthcare costs. TCM has demonstrated many benefits, including reduced mortality rates, hospital readmission rates and healthcare expenditures. Moreover, integrating TCM services could offer primary care practices an additional source of revenue. While still in its early stages and using a fee-for-service model, many see services such as TCM as a bridge toward true value-based care.¹⁸ 

Notes:

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2. CMS. “Transitional Care Management Services.” 2023. Available from: bit.ly/42zvYXx.
3. Bindman AB, Cox DF. “Changes in Health Care Costs and Mortality Associated With Transitional Care Management Services After a Discharge Among Medicare Beneficiaries.” JAMA Intern Med. September 1, 2018. 178(9):1165–71.
4. Bailey MK, Weiss AJ, Barrett ML, Jiang HJ. “Statistical Brief# 248: Characteristics of 30-Day All-Cause Hospital Readmissions, 2010-2016.” Healthcare Cost and Utilization Project. 2019.
5. Shen E, Koyama SY, Huynh DN, Watson HL, Mittman B, Kanter MH, et al. “Association of a Dedicated Post–Hospital Discharge Follow-up Visit and 30-Day Readmission Risk in a Medicare Advantage Population.” JAMA Intern Med. January 1, 2017. 177(1):132–5.
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11. Marcotte LM, Reddy A, Zhou L, Miller SC, Hudelson C, Liao JM. “Trends in Utilization of Transitional Care Management in the United States.” JAMA Netw Open. January 22, 2020.  3(1):e1919571–e1919571.
12. CMS. “List of Telehealth Services.” Available from: bit.ly/3M7l9GY.
13. House of Representatives C. 42 U.S.C. 1395m - “Special payment rules for particular items and services [Internet].” govinfo.gov. U.S. Government Publishing Office. 2015. Available from: bit.ly/3sBG25T.
14. CMS. “Search the Physician Fee Schedule.” Available from: bit.ly/3HQbhPi.
15. Affairs (ASPA) AS for P. “Medicare Shared Savings Program Saves Medicare More Than $1.6 Billion in 2021 and Continues to Deliver High-quality Care [Internet].” HHS.gov. 2022. Available from:  bit.ly/3VKDMnc.
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17. Williams KS, Grannis SJ. “Patient-Centered Data Home: A Path Towards National Interoperability. Front Digit Health. 2022. Available from: bit.ly/42CIfug.
18. Hwang CS, Reddy A, Liao JM. “Bridging to value with codes that promote care management.” Am J Manag Care. 2020. 26(11):e344–6.