Readmission to the hospital after discharge is common among elderly patients, occurring among 1 in 5
Medicare beneficiaries at an estimated cost of $12 to 44 billion per year. The Centers for Medicare & Medicaid
Services has prioritized reducing readmissions with the Hospital Readmissions Reduction Program that
penalizes hospitals with high readmission rates by reducing their Medicare payments. Given hospitals’
incentives to reduce readmissions, many have implemented initiatives to coordinate care before and in the
period following inpatient discharges, called transitional care. However, the burden of transitional care is borne
by both inpatient and outpatient providers. To address this, in 2013 CMS created 2 new billing codes for
transitional care management (TCM) services provided by outpatient providers within 30 days of discharge
from an inpatient facility to the community. These codes reimburse for a comprehensive bundle of services to
manage post-discharge care, including both a visit and non-face-to-face coordination.
Preliminary analyses of these new billing codes have shown only modest use by providers. Providing the
services reimbursed by TCM codes involves more than the billing provider alone, requiring allocation of
resources from the medical group or provider organization. However, little is known about which provider
organizations are responding to this opportunity for enhanced reimbursement for transitional care and
providing TCM code services for their discharged Medicare patients. Further, it is unknown if when TCM codes
are used they are affecting Medicare beneficiaries’ care or outcomes after discharge. It is unclear whether
visits billed through TCM codes represent new post-discharge visits that would not have happened absent this
enhanced reimbursement for transitional care, or if they are merely replacing visits that would have been billed
via some other means absent the availability of TCM codes. Further, while intensive transitional care
interventions have been shown to reduce readmissions, it is unclear if Medicare reimbursement for a less
prescriptive bundle of services can have the same effect. We propose to address these gaps in our knowledge
regarding Medicare TCM code use by conducting the following analyses:
Aim 1. Describe predictors and patterns of use of TCM codes among provider organizations.
Aim 2. Assess the association of TCM services on post-discharge utilization, as follows:
Aim 2a. Assess whether for TCM code visits substitute for other visits, or are new utilization;
Aim 2b. Assess association between TCM code use and readmissions.
This research will advance knowledge on how physicians respond to reimbursement changes and how
resultant changes in care influence patient outcomes. The findings will inform Medicare reimbursement policy,
the role of outpatient physicians and their organizations in transitional care, and the impact of outpatient
physician-led coordination on patient outcomes.