Generating Revenue and Improving Patient Care With Transitional Care Management

When physicians perform transitional care management (TCM) in their offices or via telehealth, they may be able to generate significant additional revenue annually, thanks to MACRA.  

2017 Medicare Payment for Transitional Care Management

HCPCS Code Medicare Payment Range for Non-Facility Services*

99495: transitional care management within 14 calendar days of discharge

$172.16 - $199.03
99496: transitional care management within 7 calendar days of discharge $243.26 - $280.62


*Medicare payment varies based on your specific Medicare Administrative Contractor (MAC) locality. Source: CMS Physician Fee Schedule



However, there’s another advantage of performing TCM—it’s simply good for patient care. And what’s good for patient care also tends to be advantageous for quality-based reimbursement under Medicare payment reform.


“If you look at TCM and MACRA, the intent is basically the same—in essence, creating valuable delivery of healthcare in order to lower costs and improve quality,” says Stephen Canon, MD, pediatric urologist and co-founder of Phyzit, Inc.

Why should physicians be cognizant of costs?

In 2018, the Centers for Medicare & Medicaid Services (CMS) will use a physician’s costs (as captured via claims data) to determine his or her payment adjustment under the Merit-based Incentive Payment Program (MIPS), an initiative that seeks to reduce costs while improving outcomes. In 2018, cost accounts for 10% of a physician’s MIPS composite score, and in 2019, it increases to 30%.

In addition, TCM helps physicians meet the following two 2017 MIPS Quality measures to boost their payments:

  • All-cause hospital readmission
  • Unplanned hospital readmission within 30 days of principal procedure

Cost containment is also important for physicians who are part of an advanced alternative payment model (APM) under MACRA. Like those participating in MIPS, physicians who join an advanced APM receive financial incentives when they render high-quality, cost-efficient care. Providing TCM to reduce readmissions is one of the many ways in which hospitals and physicians can collaborate to reduce costs and improve outcomes.

“At its core, TCM promotes better quality care for patients at discharge,” says Canon. “It helps keep patients healthy and out of the hospital which saves money on the back end.”

TCM and Quality Measures

When physicians perform TCM, they may also favorably affect the following five Healthcare Effectiveness Data and Information Set (HEDIS) quality measures:

  • Follow-up after hospitalization for mental illness (HEDIS, 2018)
  • Medication reconciliation post-discharge (HEDIS, 2018)
  • Persistence of beta-blocker treatment after a heart attack (HEDIS, 2018)
  • Plan all-cause readmissions (HEDIS, 2017 and 2018)
  • Transitions of care (HEDIS, 2018)

TCM can also help physicians meet HEDIS measures related to management of asthma and diabetes, both of which often require significant post-discharge care, says Canon.

Coordinating Care for TCM

Still, there are many challenges associated with billing TCM, most notably the inability for independent practices to gather information about hospital admissions and discharges, says Canon. Practices providing TCM need this information because they’re essentially ‘on the hook’ for 30 days’ of care coordination post-discharge, including patient contact within two business days of discharge among other requirements. 

Canon provides the following three strategies to address this challenge:

1. Consider participating in an accountable care organization (ACO)

Practices that are part of an ACO may have an easier time coordinating care with hospitals because there is a common goal to reduce costs.

2. Hire a care coordinator

This individual can focus on opening the lines of communication with hospitals to obtain necessary admission and discharge data daily. Care coordinators may also be able to tap into health information exchanges (HIE) for this information though many HIEs are limited in terms of the type of TCM-related data they provide, and they don’t usually provide discharge notifications to practices.

One pitfall of this strategy is that hiring a care coordinator may not be feasible for small practices. Practices participating in the Comprehensive Primary Care Plus (CPC+) program may find it easier to fund this type of position because they receive prospective incentive payments to redesign care delivery. Otherwise, practices may need to pursue additional revenue-generating opportunities such as chronic care management and annual wellness examinations with the goal of eventually hiring someone to perform care coordination.

3. Think more strategically about hospital referrals

When all else fails, practices may want to consider referring patients only to hospitals that are committed to care coordination that supports TCM.

Addressing Other TCM Challenges

Another challenge associated with TCM is not having the flexibility to schedule a face-to-face visit within seven or 14 business days, depending on the patient’s complexity. Hiring a non-physician practitioner may be able to help ease the scheduling burden, says Canon. According to CMS, the following providers may furnish TCM services:

  • Certified nurse midwives
  • Clinical nurse specialists
  • Nurse practitioners
  • Physician assistants

Meeting all TCM requirements can also be a barrier for some practices. Not only does TCM impose strict deadlines, but it also requires numerous documentation elements that, when omitted, could trigger payment recoupments during an audit.

“If you don’t have some kind of electronic process for this, then it’s really cumbersome,” says Canon whose company has developed technology that helps practices track patients throughout the 30-day post-discharge TCM timeframe.

Looking Ahead

The good news is that billing for TCM may become streamlined and simplified as care coordination begins to align more closely with value-based payment models, says Canon. “TCM should get easier over time because the implementation of MACRA enables much of the infrastructure for improvement in good care transitions,” he says. “Patients will be the real beneficiaries of this improvement.


About the Author

Lisa A. Eramo, BA, MA is a freelance writer specializing in health information management, medical coding, and regulatory topics. She began her healthcare career as a...

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