May 31, 2017

Developing the Business Case for 

Outsourcing Care Management to a 

Community Based Organization (CBO)

Welcome to TIM Talks:

Welcome to TIM Talks!
Care Management Recap from 

Previous TIM TALKS

• Impact of Expanded Care Management on CBOs – December 

21, 2016 

– The 2017 Physician Fee Schedule 

• Significant expansion in care management reimbursement

• Services can be outsourced to a third-party care management company – The CBO

– Medicare Access and CHIP Reauthorization Act (MACRA)

• Physicians and other healthcare providers are mandated to shift towards a 

value-based payment model

• Reimbursement will begin to adjust based on outcomes for the population

• Physicians have an opportunity to expand care management to achieve 

improved health outcomes and receive compensation for providing the care 

management resources

– Recording link here. 
Care Management Recap from 

Previous TIM TALKS

• Chronic Care Management Contracting Steps with Physician 

Practices– March 30, 2017 

– The shift towards financial incentives that align with preventing 

costs has created new business opportunities

• MACRA

– Merit Incentive Payment System (MIPS)

– Alternative Payment Models (APMS)

– Population Health

• Identification of populations that are most at-risk for increasing costs

• Stratification of the highest risk population

• Need for programs and services that can address the factors that will 

lead to increased costs
Business Model for 

Care Management 

Services

Timothy P. McNeill, RN, MPH
Care Management Business Plan

Sample Financial Model

Market Opportunity

Questions

4

3

2

1
Elements of a Care Management Program 

Business Plan

• Executive Summary

• Business Description

• Market Analysis

• Organizational Management

• Sales Strategies

• Funding Requirements

• Financial Projections
EXECUTIVE SUMMARY

Business Plan Section:
Why Create an Executive Summary

• Generally written last

• Serves as a one to two page document that summarizes 

the entire business model

• Introduces the reader to the business model

• Includes goals, objectives and approach

• Outlines the market opportunity and revenue potential
Sample Elements of an Executive Summary

• Our comprehensive care management program will 

provide the following:

– Evidence-based disease self-management programs

– Targeted care coordination

– Navigation services to assist with maximizing access to eligible 

social service programs, disease self-management programs, 

and applicable medical support programs

• The program will enroll 400 participants per year

• Revenue over expenses per 400 participants = $137 K / 

yr

• New service with large potential for growth beyond Yr 1 

Projections
BUSINESS DESCRIPTION

Business Plan Section:
Comprehensive Chronic Care Management 

Program

• Suite of evidence-based programs and interventions 

targeting older adults and persons with disabilities.

• Community-based programs and intensive direct care 

coordination supporting community-dwelling persons to 

address medical and social needs.

• Program Goals

– Increased compliance with disease self-management

– Improved health outcomes

– Reduced expenditures

– Improved physician value-based payment

– Improved patient satisfaction
Care Management Services

• An extensive range of services intended to support a 

person to improve clinical outcomes and reduce 

exacerbation of disease

– Managing Transitions

– Care Management Services

– Coordinating community and social support services

– Coordinating with external agencies supporting the consumer

– Disease self-management support

– Health Education

– Symptom management

– Medication management
Eligibility

• Chronic Care Management services can be provided to 

any Medicare FFS beneficiary that meets the following 

criteria:

– Must have Medicare Part B benefits

– Co-Insurance requirements apply

– Must have two or more chronic conditions that are expected to last at 

least 12 months

– Chronic conditions could lead to worse health outcomes or death is not 

properly managed

• Eligibility for CCM and Complex CCM are the same

– Intensity of services defines which code to use
Alignment with CMS 

. HHS Multiple Chronic Conditions. A Strategic 

Framework

. https://www.hhs.gov/sites/default/files/ash/initiatives/mcc/m

cc_framework.pdf

. Goal 2: Maximize the use of proven self-care 

management and other services by individuals with 

multiple chronic conditions. 

– Facilitate Self-care management

– Strategy 2.A.1. Continually improve and bring to scale 

evidence‐based, self‐care management activities and programs, 

and develop systems to promote models that address common 

risk factors and challenges that are associated with many 

chronic conditions. 

– Strategy 2.A.2. Enhance sustainability of evidence‐based, 

self‐management activities and programs. 
MARKET ANALYSIS

Business Plan Section:
Market Opportunity Analysis

• Hospitals in your market

– Readmissions / Admissions

– ER Utilization

– Post-Acute Care Provider Network

• Physician market

– Hospital-Owned Practices

– Independent Practices

– Specialists vs Primary Care

• Accountable Care Organizations

• Bundled Payment programs

• Medicare FFS Beneficiaries in your market
CMS Medicare Chartbook: 

https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-andReports/Chronic-Conditions/Downloads/2012Chartbook.pdf
Distribution of Fee-For-Service Medicare 

Beneficiaries
Nearly 70% of FFS Medicare has 2 or more 

chronic conditions
Per Capita Expenditures increase as the 

conditions increase
Which Population has the most chronic 

disease?

21

• Most chronic conditions were more prevalent for dual-eligible 

beneficiaries

– 72% of dual-eligible beneficiaries had two or more conditions

– Dual eligible beneficiaries were 1.7 times as likely to have 6 or 

more chronic conditions

• 98% of readmissions, in 2010, were for Medicare beneficiaries 

with two or more chronic conditions

– CMS Chronic Conditions Among Medicare Beneficiaries, Chartbook – 2012 Edition. Available Online: 

https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/chronicconditions/downloads/2012chartbook.pdf
What are the characteristics of Duals?

22

• Nationally, there were 9.6 million dual-eligible 

beneficiaries

• 3.9 million were under age 65

• 5.7 million were aged 65 and older

Data book: Beneficiaries dually eligible for Medicare and Medicaid 

— January 2015 MedPAC

• As of Nov 2016, the total population receiving care 

management services = 517,000

– 72% of 9.6 million = 6,912,000

– 1 hour per year delivered to Duals = $647 Million
ORGANIZATIONAL 

MANAGEMENT

Business Plan Section:
Medicare Part B

• Part B: Care Management Services are a Part B benefit

– Part B services have a co-insurance requirement of 20%

– Organization must attempt to collect co-insurance

• Co-Insurance: Part B covers 80% of charges and the 

beneficiary is responsible for the co-insurance amount 

(20%)

• Medigap policies cover the 20% co-insurance

– Medicaid is the Medigap for Duals

– Tricare for Life is the Medigap for Military Retirees

– State Employee retirees often have their State insurance as their 

Medigap

– Retired workers have their company revert to Medigap
Medigap Market

• Medicare Part B beneficiaries can purchase a 

Medigap or supplemental policy to cover the 

20% coinsurance requirements

• A Medigap policy defined

• Health insurance sold by private insurance 

companies to fill gaps in Original Medicare coverage

• Coinsurance, copayments, deductibles

• If a beneficiary elects Medicare Advantage, they 

cannot be sold or use a Medigap policy

• Beneficiaries with Medicaid (Duals) generally 

cannot buy a Medigap policy
When Medicare Isn’t Enough....Supplement
Creating a Care Plan

• Support the completion of a person-centered plan

• Services that can be included as part of the Care 

Management Person-Centered Plan

– Education and outreach 

– Disease Self-Management Support Services / Classes

– Care Coordination 

– Communication with all providers

– Support to address Psycho-Social Barriers impacting health

– Medication Reconciliation

– Health Coaching services
Role of the Clinician

• Obtain Beneficiary Consent

• Review and authorization of the Person-Centered Plan

• Provide General Supervision for the services rendered in 

accordance with the Person-Centered Plan

• Submit reimbursement claims based on the totality of 

services rendered during each calendar month
Role of the CBO

• Support the development of a Person-Centered Plan

• Provide services in accordance with the Person-Centered 

Plan

• Provide face-to-face AND/OR non-face-to-face services 

to each identified beneficiary each calendar month

• Document services to include start and stop times

• Submit documentation and time totals to the provider 

each calendar month
SALES STRATEGIES

Business Plan Section:
Alignment with Value-Based Payment Models

• Medicare FFS beneficiaries have a profound impact on 

physician performance in value-based payment models

– Quality and Cost measures are directly correlated with the 

number of persons with two or more chronic conditions

• MACRA 

– Merit Incentive Payment System (MIPS)

– Alternative Payment Models (APMs)

• ACOs

• Bundled Payment

• Costs

– Admissions/Readmissions

– Post-Acute Care Utilization (Rehab, SNF, etc.)
Medicare Beneficiary Data: State/County 

Penetration

• https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-andReports/MCRAdvPartDEnrolData/MA-State-County-Penetration.html
Provider Merit Incentive Payment System

33
Provider MIPS Categories applicable to 

CBOs

34

• Quality

– Diabetes outcomes

– Depression screening 

– Fall risk

• Advancing Care Information

– Referrals to community programs

– Send a summary of care

• Improvement Activities

– Care transitions documentation

– Engagement of community for health status improvement

– Evidence-based interventions to promote self-management

– Chronic care and preventive care management
Is there a Bundled Payment Program Near You?
FINANCIAL PROJECTIONS

Business Plan Section:
Rate and Duration of Services

CPT Code Rate Duration

99490 - CCM $42.71 Billed each calendar 

month

99487 - Complex

CCM

$93.67 Billed each calendar 

month

*only one CCM 

code can be billed 

per month

99489 – Add on per 

30 min

$47.01 Billed for each 30 

min of additional 

services beyond the 

99487 - 60 min 

encounter
Projected Labor Expenses

38

• A full-time Health Coach works 40 hrs per 

week / 160 hrs per month / 2,080 hrs per 

year

• Complex CCM requires 1 hour per 

month/beneficiary

• 80 beneficiaries will require 80 hours of 

complex CCM time
Projected Labor Expenses

39

• Provide care management to up to 80 

beneficiaries

• Support the delivery of monthly evidencebased programs

• Organize and implement monthly disease 

self-management support groups

• Provide individual care coordination 

services as needed
Projected Labor Expenses

Labor Category FTE Rate Hours Subtotal Total + Fringe

Health 

Coach/Lay 

Leader

1.0 $25.00 2,080 $52,000.00 $62,400

Monthly Total $4,333.33 $5,200.00
Projected Revenue

• Complex CCM Rate = $93.67

• Beneficiaries = 80

• Monthly Collection = $7,493.60

• Annual Collection = $89,923.20

• Revenue Over Expenses: $89,923.20 - $62,400.00 = 

+$27,523.20 / 80 participants

• 5 Health Coaches supporting 400 participants:

– +$137,616.00

– Target the top 5 providers in each market