How PCM and TCM Increase Provider ROI

Principal Care Management (PCM) and Transitional Care Management (TCM) are two Medicare programs that focus on enhancing patient care while simultaneously presenting an opportunity for providers to maximize their return on investment (ROI). Funds are disbursed to practices that enhance patient engagement and care efficiency while simultaneously minimizing costs and utilizing PCM for managing chronic conditions and TCM for care transitions post discharge. This article reflects on ROI steering reasons alongside an illustrative example with hypothetical figures to aid providers on using these programs to their maximum potential. 

PCM and TCM Overview

PCM is applicable and best suited for patients with one chronic condition with a severe form of a single chronic health condition (e.g., advanced hypertension) for a duration of three months. The condition must be debilitating and requires substantial management. It also requires careful and continuous monitoring. -Remote patient monitoring- is charged under CPT codes 99424 and 99426, paying ~$83 and $63 for physicians and clinical staff respectively for 30 minutes. 

TCM covers patients for a duration of 30 days post discharge for a working acute care facility. Care that needs to be done in the acute care is done and an in-person follow up is done 7-14 days post discharge. The care is billed with CPT codes 99495 for face to face with moderate complexity (~$200) and 99496 for high complexity (~$250).

Both programs utilize care coordination software, optimize workflows, and lessen the administrative load, which improves ROI in terms of savings and income.  

How PCM and TCM Improve ROI  

1. Revenue Generation  

Both PCM and TCM provide reliable reimbursement streams. PCM supports chronic care management, with monthly billing for sustained engagement. TCM also supports sustained engagement with post-discharge care, resulting in higher reimbursement per capita. These payments supplement traditional fee-for-service income and also stabilize cash flow.  

2. Reduced Hospital Readmissions  

Providers also mitigate the Managing High Risk PCM overused and smooth transitions TCM overused for expensive hospital readmissions. According to the Agency for Healthcare Research and Quality, readmissions cost Medicare $26 billion every year, with $17 billion of that amount being preventable. The risk of incurring these costs PCM and TCM interventions is lower, preserving savings and value-based care.  

3. Improved Practice Efficiency  

Coordination software, HealthArc, automates care plan and time tracking for billing. Automation of these workflows shifts the burden of tracking to the software. Adding more patients without hiring more staff lowers operational costs and makes the business run more smoothly.  

4. Enhanced Patient Retention  

HealthArc streamline care for PCM and TCM by automating care plan generation, time tracking, and billing. Reduced administrative workload and increased efficiency enable providers to handle a greater patient volume without additional staff, thereby improving operational costs.

5. Synergy with Other Programs

With careful billing, both PCM and TCM can be billed at the same time as Remote Patient Monitoring (RPM), increasing revenue. For instance, patients on PCM for heart failure can also be on RPM devices, which allow for billing CPT 99453–99458 ($19–$207 monthly).

ROI Example

Imagine a practice with a mid-sized primary care practice with 1,000 patients on Medicare. PCM and TCM is implemented for 100 eligible patients each (10% of the patient population). Let’s explore ROI using invented numbers:  

PCM Implementation:  

Patient Enrollment: 100 patients enrolled with only one severe chronic condition, such as diabetes.  

Reimbursement: Capturing CPT 99424 ($83/month/patient) billing expands 30 minutes of physician labor to $8,300/month ($83 × 100).  

Costs: Care coordinator at 0.5 FTE ($3,000/month) plus software (HealthArc, $1,000/month) totals to $4,000/month.  

Net Revenue: $8,300 – $4,000 = $4,300/month or $51,600/year.  

ROI Calculation: Initial setup cost (software integration, training) = $10,000. Annual net revenue ($51,600) ÷ setup cost ($10,000) = PCM ROI of 516%.  

TCM Implementation:  

Patient Enrollment: 100 patients enrolled post discharge a year (after procedures like heart surgery or pneumonia).  

Reimbursement: CPT 99495 billed at $200 per patient for 100 patients results in $20,000/year.

Costs: Staff and software ($1000/month × 12 = 12000). Total software: 12000, and 0.2 FTE staff ($1200 × 12 = 14400). Total software and staff: $26400/year.  

Net revenue: $20000 – $14400 = $5600/year.  

ROI calculation: Setup cost $5000 for training. Annual net revenue $5600 ÷ setup cost $5000 = 112% roi for TCM.  

Combined ROI 

Total net revenue: 51600 (PCM) + 5600 (TCM)= 57200/year.  

Total Setup cost: 10000 (PCM) + 5000 (TCM) = 15000.  

Combined ROI : (57200 ÷ 15000) × 100 = 381% annually.  

This example does not consider the impact of lower readmission rates and RPM synergies on ROI, and assumes lower patient enrollment, making the ROI more conservative.  

Maximizing PCM and TCM ROI To optimize ROI, providers should:  

  

Identify Eligible Patients: Eligible patients can be captured during annual wellness visits or follow-up visits after discharge.  

Leverage Software: Make use of automating software such as ThoroughCare ($500-$1000 a month) or HealthArc ($10-$15 a patient).  

Staff Training: Ensure accurate CPT coding and time tracking to receive the maximum reimbursement on claims filed.  

Integrate with RPM: Combine with RPM for expanded revenue streams.

Conclusion

By boosting reimbursements, cutting down readmissions, and improving overall efficiency, PCM and TCM enhance the provider ROI. The fictitious practice above accomplished a whopping 381% combined ROI, which demonstrates PCM’s and TCM’s potential. Providers stand to gain even more through the adoption of care coordination software and integration with other Medicare programs. For more details, visit CMS or other vendors like Healtharc.