Inadequate Reimbursement for Care Management to Primary Care Offices

Background: Care management in primary care can be effective in helping patients with chronic disease improve their health; however, primary care practices are often challenged to identify revenue to pay for it. This study explored the impact of direct reimbursement on the provision of care management in a primary care physician organization. Methods: Using data on expenses and health plan reimbursement during the initial 16 months of care management implementation at 5 practices, we calculated the percentage of related costs that were covered by payments. Qualitative data from interviews with practice members were used to identify their perceived barriers to care management reimbursement and the impact of current reimbursement strategies on service delivery. Results: Direct reimbursement for care management covered only 21% of the costs. Reimbursement varied by care manager background, patient diagnoses, insurer, and indication for the visit. Barriers to gaining reimbursement included patient resistance to copay, clinician hesitation to bill for care management visits (for fear the patient may receive a bill), differential reimbursement policies of insurers, and general lack of reimbursement for care management in many cases. Although practice-level quality improvement incentives were an alternative means of supporting care management, because these incentives were not directly tied to the service of care management, they were used for other activities ultimately supporting patient care. Conclusions: This study highlights the need for sufficient reimbursement to initiate and maintain care management for patients in primary care as proposed for service reforms under the Affordable Care Act.