New Codes Bridge Hospitals' Post-Discharge Billing Gap


This concession enables hospitalists to fill a vital role for those patients who have inadequate access to immediate primary care post-hospitalization. It also provides a necessary bridge to appropriate primary care for those patients.

In November 2012, the Center for Medicare & Medicaid Services (CMS) finalized its 2013 physician fee schedule with two new transitional-care-management (TCM) codes, 99495 and 99496. These codes provide reimbursement for transitional-care services to patients for 30 days after hospital discharge. CMS estimates that two-thirds of the 10 million Medicare patients discharged annually from hospitals will have TCM services provided by an outpatient doctor. Why might hospitalists be interested in these outpatient codes? Read on.

As a post-discharge provider in a primary-care-based discharge clinic, I can say the new Medicare transitional codes read like our job description. Because I’ve worked in a post-discharge clinic for the past three years, I have learned that post-discharge care requires time and resource allocation beyond routine outpatient care. Because of the unique population we see, on average we bill at a higher level than the rest of the practice. Yet we, like all outpatient providers, remain constrained by the existing billing structure, which is intimately connected to physician face-to-face visits.

Here’s an illustration of a typical afternoon in the post-discharge clinic: A schizophrenic patient presents with renal failure, hypoglycemia, and confusion. Her home visiting nurse (VNA) administers her medications; the patient cannot tell you any of them. While you are calling the VNA to clarify her medications, trying to identify her healthcare proxy, and stopping her ACE inhibitor because her potassium is 5.6, the next patient arrives. She has end-stage liver disease and was recently in the hospital for liver failure, and now has worsening recurrent ascites. After clinic, you call interventional radiology to coordinate a therapeutic paracentesis and change diuretic doses after her labs return. Two weeks later, you arrange a repeat paracentesis, and subsequently a transition to comfort care in a hospice house. For this work, right now, you can at most bill a high-complexity office visit (99215), and the rest of the care coordination—by you, your nurse, or your administrative staff—is not compensated.

How Do the New Codes Work?

CMS created the new TCM codes to begin to change the outpatient fee schedule to emphasize primary care and care coordination for beneficiaries, particularly in the post-hospitalization period. The new TCM codes are a first step toward reimbursement for non-face-to-face activities, which are increasingly important in the evolving healthcare system.

The investment is estimated at more than $1 billion in 2013. The new codes are available to physicians, physician assistants, nurse practitioners, and other advanced-practice nurses only once within the 30 days after hospital discharge. During the 30 days after discharge, the two codes, 99495 and 99496, require a single face-to-face visit within seven days of discharge for the highest-risk patients and within 14 days of discharge for moderate-risk patients. The face-to-face visit is not billed separately. The codes also mandate telephone communication with the patient or caregiver within two business days of hospital discharge; the medical decision-making must be of either moderate or high complexity.

The average reimbursement for the codes will be $132.96 for 99495 and $231.11 for 99496, reflecting a higher wRVU than either hospital discharge day management or high-acuity outpatient visits. The code is billed at the end of the 30 days. The TCM code cannot be billed a second time if a patient is readmitted within the 30 days. Other E/M codes can be billed during the same time period for additional visits as necessary.

What’s the Impact on Hospitalists?

The new codes affect hospitalists in two ways. First, the hospitalists in the growing group of “transitionalists,” many of whom practice in outpatient clinics seeing patients after discharge, will be able to use these codes. As the codes require no pre-existing relationship with the patient, non-primary-care providers will be able to bill these codes, assuming that they fulfill the designated requirements. This concession enables hospitalists to fill a vital role for those patients who have inadequate access to immediate primary care post-hospitalization. It also provides a necessary bridge to appropriate primary care for those patients. This group of patients might be particularly vulnerable to adverse events, including hospital readmission, given their suboptimal connection with their primary-care providers.

Hospitalists who practice entirely as inpatient physicians will not be able to bill these new codes, but they will provide a valuable service to patients by helping identify the physicians who will provide their TCM and documenting this in the discharge documentation, already seen as a key element of discharge day management services.

Do These Codes Change the Business Case for Discharge Clinics?

Discharge clinics, either hospitalist-staffed or otherwise, have been actively discussed in the media in recent years.1 Even without these transitional codes, discharge clinics have arisen where primary-care access is limited and as a potential, but as yet unproven, solution to high readmission rates. Despite this proliferation, discharge clinics have not yet proven to be cost-effective.

Implementation of these codes could change the calculus for organizations considering dedicating resources to a discharge clinic. The new codes could make discharge clinics more financially viable by increasing the reimbursement for care that often requires more than 30 minutes. However, based on the experience in our clinic, the increased revenue accurately reflects the intensity of service necessary to coordinate care in the post-discharge period.

The time intensity of care already is obvious from the structure of established discharge clinics. Examples include the comprehensive care centers at HealthCare Partners in Southern California, where multidisciplinary visits average 90 minutes, or at our clinic at Beth Israel Deaconess Medical Center in Boston.2 While the visits in our clinic are less than half as long as those at HealthCare Partners, we are not including the time spent reviewing the discharge documentation, outstanding tests, and medication changes in advance of the visit, and the time spent after the visit, coordinating the patient’s care with visiting nurses and elder service agencies.3

What’s Next?

Whether these codes lead to an increased interest in hospitalist-staffed discharge clinics or to primary-care development of robust transitional-care structures, these new codes will help focus resources and attention on increasing services, with the goal of improving patient care during a period of extreme vulnerability. This alone is something to be grateful for, whether you are a transitionalist, hospitalist, primary-care doctor, caregiver, or patient.

Dr. Doctoroff is a hospitalist at Beth Israel Deaconess Medical Center in Boston and an instructor in medicine at Harvard Medical School. She is medical director of BIDMC’s Health Care Associates Post Discharge Clinic.


  1. Andrews M. Post-discharge clinics try to cut hospital readmissions by helping patients. Washington Post website. Available at: http://articles.washingtonpost.com/2011-12-19/national/35288219_1_readmissions-discharge-vulnerable-patients. Accessed Jan. 7, 2013.
  2. Feder JL. Predictive modeling and team care for high-need patients at HealthCare Partners. Health Aff (Millwood). 2011;30(3):416-418.
  3. Doctoroff L. Interval examination: establishment of a hospitalist-staffed discharge clinic. J Gen Intern Med. 2012;27(10):1377-1382.

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