This is the second of our four-part series on the 2013 Medicare Physician Fee Schedule final rule.

For years, the Medicare Physician Fee Schedule final rule has represented the Center for Medicare and Medicaid Services’ (“CMS”) annual attempt to reign in fee-for-service reimbursement by imposing more restrictive billing rules.  This year, however, CMS is taking a step in a different direction.  Beginning on January 1, 2013, Medicare will pay for transitional care management, to the tune of more than $1 billion.

Last year, in the 2012 Medicare Physician Fee Schedule proposed rule, CMS “initiated a public discussion regarding payments for post-discharge care management services” seeking to improve “a beneficiary’s transition from the hospital to the community setting within the existing statutory structure for physician payment and quality reporting.” 

In response, both the American Academy of Family Physicians and the American Medical Association (“AMA”) formed workgroups to consider new options.  Both organizations recommended CMS create new codes and pay separately for post-discharge care transition and care coordination activities. 

CMS has, for the most part, accepted the AMA’s specific recommendation to create two new transitional care management (“TCM”) codes, 99495 and 99496.  Beginning January 1, 2013, CMS will pay physicians and other qualified non-physician professionals for the work needed to successfully transition a patient out of institutional care back into the community setting.  The specific requirements for TCM billing are detailed in the chart below. 

CMS is investing an astonishing amount of money on the promise of TCM generating upstream savings from a reduction in repeated and prolonged hospitalizations.  Based on the 2012 conversion factor, the national average payment rates for TCM would be $142.96 (for 99495) and $231.11 (for 99496).  (Absent Congressional action, the 2013 conversion factor will be 25.5% lower due to the sustainable growth rate adjustment)

For 2013, CMS estimates two-thirds of all discharges will be eligible for TCM, representing approximately 6,667,000 claims.  Using CMS’ assumption that 75% of those claims will be submitted under 99495, the 2013 TCM price tag will be approximately $1.34 billion (again, based on the 2012 conversion factor).  With beneficiaries responsible for the 20% co-payment, CMS expects to pay $1.1 billion for TCM. 

CMS estimates TCM will generate a 4% increase in payments to family medicine physicians, 3% each for internal medicine and pediatrics, and 2% each for gerontologists, NPs, and PAs.  By contrast, CMS estimates several specialists will see a 1% decline in payments due to increased TCM, including cardiologists, oncologists, OB/GYNs, and urologists. 

The following summarizes the requirements for billing TCM services:

Who is eligible to receive TCM services? 

Beneficiaries discharged from inpatient acute care hospitals (inpatient, observation, and outpatient partial hospitalization); skilled nursing facilities; and community mental health center partial hospitalization programs.

What is the time period for TCM services?

30-day period beginning on discharge date.

Who is eligible to bill for TCM services?

Physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified nurse midwives (referred to as “qualified professionals”).  Rural health clinics and federally qualified health centers cannot bill for TCM.

Must the beneficiary be an established patient of the qualified professional ? 

Previously established relationship is not required. 

What are the required elements for TCM services?

(1) Communication with patient or caregiver within two business days of discharge (or two separate, unsuccessful attempts at communication).

(2) Face-to-face visit within fourteen days (99495) or seven days (99496)(cannot be performed on day of discharge; not separately billable; may be performed at any appropriate location; elements of visit not specified).

(3) Medication reconciliation and management performed no later than date of face-to-face visit.

(4) Non-face-to-face care management services (see next section for further explanation).

(5) Medical decision making of moderate complexity (99495) or high complexity (99496) (using E/M code definitions).

What non-face-to-face care management services are required?

The following services must be provided unless the qualified professional determines a particular service is not medically indicated or needed:

Performed by a qualified professional:  obtain and review discharge information; review need for, or follow-up on, pending diagnostic tests and treatments; interact with other providers involved in patient’s care; educate patient, family, guardian, and/or caregiver; arrange for needed community resources.

Performed by clinical staff or case manager under direction of qualified professional:   communicate with home health agencies and other community services utilized by patient; educate patient and/or family/caretaker regarding self-management, independent living, and activities of daily living; assess and support treatment regimen adherence and medication management; identify available community and health resources; facilitate access to necessary care and services.

When can claims for TCM services be submitted?

No sooner than 30 days following discharge.

Can multiple TCM claims be submitted for the same patient?

CMS will pay for only one TCM claim for the 30-day period following discharge.  .  The first claim to be filed will be paid.  CMS will not pay a second TCM claim in connection with a discharge that occurs within 30 days of the original discharge (i.e., if the patient is readmitted and discharged within the 30-day period. 

What are the limits on submitting claims for TCM services?

A qualified professional who reports a global procedure cannot bill for TCM services for the same time period. 

A qualified professional who bills for TCM services cannot bill for the following services during the 30-day period:                       

                Care plan oversight services (99339, 99340, 99374-99380

                Prolonged services without direct patient contact (99358, 99359)

                Anticoagulant management  (99363, 99364)

                Medical team conferences (99366-99368)

                Education and training   (98960-98962, 99071, 99078)

                Telephone services (98966-98968, 99441-99443)

                End stage renal disease services (90951 – 90970)

                Online medical evaluation services (98969, 99444)

                Preparation of special reports (99080)

                Analysis of data (99090, 99091)

                Complex chronic care coordination services (99481X, 99483X)

                Medication therapy management services (99605-99607)

With CMS set to begin paying for TCM in just over five weeks, now is the time for hospitals and physician groups to develop strategies and processes for delivering these critical services.  For example, developing an “extensivist” program to support TCM provides an excellent opportunity for collaboration between a hospital and its medical staff. 

PYA professionals are prepared to assist you in moving forward with your TCM program.  For more information, please contact Martie Ross, Denise Hall, or Rachel Harris.