Chapter 18. Program Income Calculation Sample
In calculating projected program revenue, begin by calculating the level of revenue that can be secured by one person completing the DSMT. Using conservative estimates is critical to developing a realistic business model. For that reason, the business model should assume that the program will only receive the 80% CMS reimbursement. The coinsurance amount will vary based on the type of supplemental insurance and the ability of the participant to pay for his or her share of the costs. However, the Medicare reimbursement is a definite level of funding that will be provided as long as the beneficiary receives covered services.
In the case of DSMT, CMS will provide up to ten (10) hours of reimbursement. Included in the ten hours is one (1) hour of individual training, which is reimbursed at an incremental rate of $53.38 (2014) for each unit of 30 minutes, for a total of $106.76 ($53.38 x 2). There are an additional nine (9) hours of group training which are reimbursed at an incremental rate of $14.69 (2014) for each unit of 30 minutes, for a total of $264.42 ($14.69 x 18). The total is $371.18 ($106.76 + $264.42). That is the baseline level of reimbursement without consideration of an adjustment in the reimbursement based on location. These numbers are taken from the 2014 Physician Fee Schedule rates and may vary slightly, based on the location because of variances in payment based on the cost of living in different areas of the country. Therefore, for every beneficiary that completes ten (10) hours of DSMT, the program will potentially receive $371.18. This funding amount should be used in comparison to the program expenses, to develop an estimate of the number of participants who have to complete a program each year, in order to maintain program solvency.
If the program also provides medical nutrition therapy (MNT), then this level of program revenue should also be calculated. Some programs decide to combine the DSMT and MNT training by offering it as a complete package. However, remember that CMS will not reimburse DSMT and MNT if they are given on the same day. If both programs are given, the maximum billable amount for MNT will be added to the DSMT reimbursement. The MNT benefit provides for three hours of services per calendar year. Included in these three hours is one hour of individual training and two hours of group training. The reimbursement for individual training is $35.82 (2014) for each unit of 15 minutes for a total of $143.28 ($35.82 x 4). The reimbursement for group training is $16.12 (2014) for 30 minutes for a total of $64.48.
The grand total for the MNT benefit is $207.76 for 3 hours (1 hour individual and 2 hrs group). A program that offers both DSMT and MNT as a package service for participants will provide a total of thirteen (13) hours of training for a reimbursement from CMS of $578.94/ participant.
This figure should be used when assessing program solvency estimates and the program’s break-even point.
< previous | chapter list | next >