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Rural Health Information Hub

Payment and Reimbursement Models for Rural Chronic Disease Management Programs

There are several strategies rural chronic disease management programs are using to ensure sustainability of programs. The Rural Community Health Toolkit provides information about general Sustainability Strategies. Two major components of successful and sustainable programs are working within their communities to develop programs that meet common goals and addressing specific community needs.

Sustainable Funding Models and Reimbursement for Chronic Disease Management Services

Time-limited grants may provide funding for initial investments in resources and staff and for ongoing support of program operations. However, many successful chronic disease management programs also leverage payment and reimbursement from insurers to sustain program services.

Chronic disease management programs that, for example, focus on improving the quality of life for people with chronic obstructive pulmonary disease (COPD) or diabetes, may rely on reimbursements from Medicare, Medicaid, and private insurers to finance program operations. For example, Medicare Part B covers several COPD-related services such as pulmonary rehabilitation, smoking cessation, and oxygen therapy or oxygen equipment and accessories.

Some states have passed legislation that expands the definition of “healthcare providers.” For example, in January 2019, Ohio passed Senate Bill 265 allowing for the designation of pharmacists as healthcare providers. Pharmacist services that may now be covered include drug therapy management and vaccine administration. This designation will allow pharmacists new billing and reimbursement options which will help chronic disease management programs expand access to care for many patients. Pharmacists may be able to provide sustainable medication management services and other chronic disease interventions in rural areas.

Other Payment and Reimbursement Considerations

One of the most common goals of many chronic disease management programs is to reduce hospital readmission rates. In 2015, Medicare added COPD as well as heart attack (acute myocardial infarction) and heart failure, as conditions for the Hospital Readmissions Reduction Program, a value-based purchasing program that measures hospital performance using excess readmissions within a 30-day period. Additionally, the Merit-Based Incentive Payment System (MIPS) also includes chronic disease-related quality measures, such as COPD.

Many private and public insurers cover services related to chronic disease management education, case management, and treatment. However, eligibility criteria for coverage differ across payers and states. It may be important for rural program planners to investigate and understand local, state, and national policies for covering chronic disease management activities, to ensure a clear understanding of the options for billing and reimbursement. Assessing the health insurance coverage among the community or patient population may help rural communities understand potential options for payment and reimbursement:

  • Medicaid – While coverage varies from state to state, Medicaid programs typically offer coverage for medications to manage chronic diseases, medical equipment, education (such as nutritional therapy), and self-management services. States are also exploring a range of other strategies to address diseases such as diabetes, for example using Section 1115 Medicaid Demonstration Waivers to test new and innovative approaches to better serve Medicaid enrollees with diabetes. For instance, the Brazos Valley Care Coordination Program offers home visiting services to rural patients with diabetes and is funded by a Section 1115 Medicaid Waiver.
  • Medicare – Medicare covers a range of services related to the care and control of chronic conditions such as diabetes, COPD, and chronic kidney disease. For example, Medicare can cover the cost of insulin pumps, blood sugar testing equipment and other diabetes-related medical supplies. Medicare also covers some of the costs associated with chronic kidney disease and dialysis services.
  • Commercial/private insurers – Many commercial or private insurers offer coverage for services related to chronic disease prevention and management. For example, private insurance companies in 42 states are required to cover diabetes self-management education and training for enrollees. The National Conference of State Legislatures provides state-by-state information about policies and coverage for diabetes prevention and management services.

Many private and public payers are testing alternative payment models, in which providers receive incentives to decrease healthcare costs, increase healthcare quality, and improve health outcomes. Requirements for receiving incentives may involve chronic disease prevention and management, such as demonstrating a decrease in disease-related hospitalization rates for the patient population.

Some examples of these alternative payment models related to diabetes care include:

  • Arkansas Medicaid, the Arkansas Department of Human Services, Arkansas Blue Cross and Blue Shield, and QualChoice of Arkansas are participating in the Arkansas Health Care Payment Improvement Initiative. As part of the initiative, Arkansas is implementing a Patient-Centered Medical Home (PCMH) Program, which rewards providers for offering comprehensive and coordinated care. For example, SAMA HealthCare Services in rural Union County, Arkansas has increased its patient population and improved diabetes-related outcomes through participation in the PCMH program.
  • Rural communities may also fund diabetes services through Medicare Accountable Care Organizations and Medicaid ACOs, which refer to groups of hospitals and providers who work together to provide coordinated care.

Working with Policymakers and Payers

To achieve sustainable funding for chronic disease management services, rural communities may need to work with policymakers and payers to implement changes in program coverage. The National Diabetes Prevention Program (National DPP) Coverage Toolkit provides strategies for increasing reimbursement for National DPP activities, including approaching commercial health plans as well as engaging state legislatures to advocate for Medicaid coverage.

Resources to Learn More

Engaging Health Care Providers to Scale and Sustain the National Diabetes Prevention Program
Describes the efforts of PartnerSHIP 4 Health, a coalition of three rural counties in west central Minnesota that engaged healthcare providers and community partners in the development of a sustainable National Diabetes Prevention Program within their communities.
Organization(s): National Association of County and City Health Officials

Reimbursement and Sustainability for DSMES
A section from the Diabetes Self-Management Education and Support (DSMES) Toolkit identifying resources on reimbursement and sustainability strategies supporting diabetes self-management programs. Includes benefit policies and coverage guidelines for Federally Qualified Health Centers billing and reimbursement procedures.
Organization(s): Centers for Disease Control and Prevention