Value-Based Reimbursement for Cardiologists and Electrophysiologists

Even though we have been transitioning to a value-based reimbursement system for years, patient visits and other professional services continue to be paid under the fee-for-service reimbursement methodology. By 2024, physicians who do the best job of facilitating high-quality and low-cost care will receive a bonus equivalent to 9% of their annual fee-for-service reimbursement. The poorest performing physicians will be penalized by 9% of their annual reimbursement. This will be a zero-sum game, so every dollar awarded to good performers will be obtained by collecting penalties from poor performers. 

The first variable in the equation, the quality of care, will be quantified by performance measurements like the Physician Quality Reporting System (PQRS), Meaningful Use, and the Value-Based Payment Modifier. These individual initiatives will stop being administered separately by the end of 2018, and will be incorporated into the Merit-Based Incentive Payment System beginning in 2019. The quality measures will continue to evolve and can largely be satisfied during patient visits.

The second variable in the equation, the cost of care, includes all of the costs attributed to each patient. Under the new reimbursement system, physician compensation will be directly impacted by the cost of: facility expenses, medical devices, diagnostic tests, and medications. In order to secure the biggest bonuses, physicians will need to weigh the costs and benefits of every decision.  

Physicians are effectively becoming personal shoppers for Medicare. There will be a large incentive for physicians to reduce the total cost of care for each patient. Money can be saved with diligent ordering of diagnostic tests, by insisting that procedures be performed in the most cost-effective place of service, and by prescribing generic medications. 

Physicians can most dramatically increase personal compensation by actively managing patients and effectively leveraging cardiac rhythm management devices.  

In regards to active patient management, physicians will continue to be incentivized to provide high volumes of Evaluation and Management Services. Every dollar spent on these services directly increases the fee-for-service reimbursement pool. These visits are also the playing field on which quality standards are fulfilled and reported to payers. Saturating care plans with patient visits simultaneously improves both components of the bonus calculation. The physician will receive a larger percentage of a larger pool of money. 

Routine Visits

The frequency and scope of patient visits should be sufficient to provide high-quality care. Early detection and response to disease exacerbation, facilitation of medication compliance, and patient education are among the many benefits of routine office visits. They are a great way to improve patient care in a cost-effective manner. 

The most successful physicians might schedule eight follow-up visits a year with a typical device patient. Two of the visits might be personally provided and focused on general medical management. The remaining six visits would be with a mid-level provider dedicated to heart failure management. This approach will flood the fee-for-service reimbursement pool with substantially more money than a competing physician who only sees the patient once or twice a year. Huge benefits will be achieved when these frequent visits facilitate a higher quality of care. Also, the physician will again receive a larger percentage of a larger pool of money.

The fee-for-service reimbursement for a patient visit increases considerably as the level of service increases. Physicians who routinely report a 99213 only get paid $73 for a visit. An additional $35 is received by reporting a 99214, and an additional $73 for reporting a 99215. Each additional dollar received for patient visits increases the fee-for-service reimbursement pool. This means that the physician will receive more compensation now and a bigger bonus at the end of the year.

The selection of service levels is probably the most aggressively regulated activity physicians perform. Medicare and other payers constantly audit these services. They also extrapolate audit findings to a provider’s entire claim database. Overcoding just two or three patient visits can quickly snowball into a six-figure penalty. 

Because of the substantial rewards and penalties associated with evaluation and management service coding, it is critical for physicians to master the task. With effective training, cardiologists and electrophysiologists can efficiently generate notes that support the two highest levels of service for a super-majority of patient visits. The highest possible level of service will be justified more frequently for electrophysiologists than for any other specialty. This is because EPs manage antiarrhythmic medications, order EP studies, and perform device procedures more commonly than anybody else. Each of these factors helps to support the highest level of service.

Mastery of service level selection requires effective education and periodic constructive auditing. Training gives physicians a functional understanding of the rules. There are several cardiology- and electrophysiology-specific nuances that must be considered while documenting virtually every patient visit. Constructive auditing gives physicians critical feedback regarding what they are doing right, what they are doing wrong, and how future coding and documentation can be improved. 

Transitional Care Management 

Many patients are readmitted shortly after a facility discharge because they fail to adjust to a new treatment regimen. These readmissions add substantial healthcare costs and are largely preventable. Because of this, Transitional Care Management will inflate physician bonuses.

Medicare currently pays between $165 and $233 for physicians to facilitate the transition from a facility to the home environment. To earn this compensation, someone from the physician’s office must communicate with the patient within two days of discharge. This initial communication may be in-person, over the telephone, or by some other electronic medium. Within one to two weeks of discharge, the physician must also have a face-to-face visit with the patient. 

The codes and reimbursement amounts for Transitional Care Management follow:

99495: “Transitional Care Management Services with the following required elements: Communication (direct contact, telephone, electronic) with the patient and/or caregiver within 2 business days of discharge Medical decision making of at least moderate complexity during the service period Face-to-face visit, within 14 calendar days of discharge” ($165)

99496: “Transitional Care Management Services with the following required elements: Communication (direct contact, telephone, electronic) with the patient and/or caregiver within 2 business days of discharge Medical decision making of high complexity during the service period Face-to-face visit, within 7 calendar days of discharge” ($233)

Chronic Care Management

Many physicians are currently providing chronic care management for free. By formalizing and billing for the service, physicians can earn $41 per month for many patients. Similar to Transitional Care Management, Chronic Care Management can significantly reduce total healthcare costs.

Code 99490 is used to report this service. The code’s definition is presented below. It describes the service and illustrates what patients qualify:

“Chronic care management services, at least 20 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month, with the following required elements:

• Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient,
• Chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline,
• Comprehensive care plan established, implemented, revised, or monitored.”

Cardiac Rhythm Management Devices

Device programming can have a substantial impact on performance. Shortly after biventricular devices were introduced, the process of echocardiographic optimization gained a lot of attention. Optimal programming transitioned many patients to a lower classification of heart failure and prevented a ton of healthcare costs.

Unfortunately, the optimization process can require a half hour of effort from a physician, an echo tech, and a device tech. The fee-for-service compensation for this process is closer to minimum wage than it is to fair market value. 

Since physicians are now on the hook for all healthcare expenses, they would advance their interests by thoughtfully managing every device. Under a value-based reimbursement system, the value of optimization would lie in the costs it can prevent rather than the fee-for-service reimbursement it generates. Additionally, by weighing the benefits created by each feature against the drain it has on the battery, providers can extend the life of the device. A lot of healthcare costs will be avoided when a device outlives the patient.

Finally, physicians need to consider the costs and benefits of remote monitoring. Many clinical benefits and cost savings can be facilitated by remotely monitoring devices. Remote monitoring of physiologic data (thoracic impedance, weight, or blood pressure) can also generate considerable benefits. But is remote monitoring a good investment for every patient? 

National reimbursement for remotely monitoring a defibrillator is about $380 a year. Reimbursement for remotely monitoring physiologic data varies between $325 and $2,800 a year based on geography. Depending on who performs remote monitoring, these expenses may or may not directly contribute to the physician’s fee-for-service reimbursement pool. 

Executive Summary

Implanting the right device for a patient and managing it effectively can reduce healthcare costs significantly over the course of the next ten years. By serving as an effective personal shopper for everything from medications to inpatient stays, physicians can substantially eliminate more costs. 

A large portion of physician compensation is about to be determined by how effective they are at reducing total healthcare expenses for each patient. The costs eliminated by diligent personal shoppers are the best types to eliminate; this is because they are monumental in size and because eliminating them does not deplete the physician’s fee-for-service reimbursement pool. 

Building a large fee-for-service reimbursement pool is very important. The provider who saves the healthcare system a fair amount of money but has only a modest fee-for-service reimbursement pool will receive a big percentage of a small pool of money. The bonus for a physician with a large fee-for-service pool who produces comparable savings will enjoy a bonus that is much bigger.

Mastery of documenting patient visits and assigning the appropriate level of service is essential to creating a reliable and sizable fee-for-service reimbursement pool. Keep in mind that physicians are legally required to report the accurate level of service for each patient visit. Big fines will be levied if payers find out you are not accurately assigning service levels. On the brighter side, doing an effective job at this can realistically add $40,000 or more to a physician’s annual fee-for-service reimbursement pool based on the current volume of visits. An effective one-hour physician training program and periodic constructive auditing can make any physician a master at documenting and coding evaluation and management services.   

The reimbursement system Medicare created has the potential of drastically reducing healthcare expenses and meaningfully improving the quality of care. Physicians who quickly adapt will receive colossal bonuses at the expense of those who do not.

Jim Collins, CPC, CCC is the President of CardiologyCoder.Com, Inc. 
He provides effective physician training and chart auditing services. He has over 20 years of experience, and wrote the exam for the American Academy of Professional Coder’s specialty coding certification entitled “Certified Cardiology Coder.” 
He can be reached at 518.320.4376 or jim@cardiologycoder.com.