CMS Foregoes Direct Supervision Requirement to Encourage Use of Chronic Care Services

By Sumita Saxena, Senior Consultant, The Verden Group

Medicare will start paying physician practices for chronic care management beginning January 1st, and has carved out an exception to the direct supervision requirement for incident-to-billing, which is often considered difficult to comply with. This change is intended to encourage the effective use of the services according to the 2015 Medicare physician fee schedule regulation published on November 13th.  There are conditions surrounding this new move, including the documentation of a care plan for patients with two or more chronic conditions and the use of interoperable electronic health records.

The American Medical Association (AMA) created new CPT codes for chronic care management in 2013, but CMS instead proposed using HCPCS “G” code. CMS has reconsidered its initial position and will pay physicians for CPT 99490 (chronic care management services, at least 20 minutes of staff time directed by a physician or other qualified health professional, per calendar month). The code is billable for patients who have two or more chronic conditions expected to last at least 12 months or until the death of the patient, if the conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline, and “a comprehensive care plan is established, implemented, revised or monitored,” per the regulation.

The new code is both a revenue opportunity and a compliance risk for providers and CMS will be paying attention to how this develops. CMS declined to cover CPT 99487, another chronic care management code, because it doesn’t include face-to-face time with the patient.


To avoid imposing yet a new set of standards for billing management of chronic conditions, CMS stated “it decided to emphasize that certain requirements are inherent in the elements of the existing scope of service for CCM services, and clarify that these must be met in order to bill for CCM services.” They include:

  • Giving patients access to clinicians 24/7 if they have urgent chronic care needs.
  • Managing chronic conditions, including assessment of medical, psychosocial and functional needs, medication reconciliation and review of patient management of medication.
  • Ensuring continuity of care by having patients see the same clinician at successive appointments.
  • Satisfying various documentation requirements. For instance, patients must agree in writing to receive chronic care management services and authorize electronic communication of their medical information with other providers to facilitate care coordination.  Providers must give patients a copy of their care plan and document they received it, and inform patients they can quit receiving chronic care management services at any time.

CMS also eased a regulatory requirement that otherwise could be an obstacle to chronic care management. These services will often be provided by nonphysician practitioners incident-to a physician’s services, which means they can be billed to Medicare under the physician’s provider number at 100% of the fee schedule if they meet certain requirements. Typically, incident-to services have to be provided under the direct supervision of the physician. “Direct supervision” means the physician “must be present in the office suite and be immediately available to provide assistance and direction throughout the service (but does not mean that the supervising physician must be present in the room where the service is furnished),” according to CMS.

That is not always practical in the chronic care management context. With CMS requiring 24/7 patient access to the clinician, CMS recognizes that the physician may not always be available to supervise. CMS created an exception to the incident-to rule, and will require general supervision for chronic care management. General supervision means the services are performed under the physician’s overall control, but he or she doesn’t have to be in the office.


The supervision exception for incident-to billing should reduce noncompliance with the incident-to billing rule. CMS extended the supervision exception to incident-to billing for the non-face-to-face portion of transitional care management services which are hospital oriented. On January 1, 2014 Medicare began paying for two new CPT codes:

  • 99495: Transitional care management including 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; and face-to-face visit within 14 days of discharge.
  • 99496: Communication (direct contact, telephone, electronic) with the patient and/or caregiver within 2 business days of discharge; medical decision making of high complexity; and a face-to-face visit within 7 days of discharge.

The codes for transitional care management are designed to encourage primary care physicians to arrange a visit with patients almost immediately after discharge from the hospital with the intent of improving quality of care and reducing readmissions.

Although physicians can bill Medicare for chronic care management incident to the physician’s services, there are still constraints imposed by state scope-of-practice laws. State laws will preempt Medicare rules if it requires direct supervision.

Providers should not bill Medicare for chronic care management if the care plan is unchanged or requires only minimal change, for example medication adjustment. And while chronic care management can be reported on the same day as an evaluation and management service, clinical staff time cannot be attributed to both visits.

The coverage of chronic care management is also tied to meaningful use compliance. To get paid for chronic care management services in 2015, physicians and nonphysician practitioners must use “EHR technology certified to either the 2011 or 2014 edition(s) of certification criteria to meet the final core capabilities for CCM and to fulfill the CCM scope of service requirements whenever the requirements reference a health or medical record,” per the regulation.

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