Community Health Workers: Understanding the Return on Investment

 

Introduction

Last month, we discussed how Community Health Workers (CHWs) create value across multiple payers, including Medicare, Medicaid, and commercial insurance and through programs such as Provider Delivered Care Management (PDCM), Transitional Care Management (TCM), and other value-based initiatives. A question frequently asked by physician leaders is, “Can a CHW generate enough financial return to justify the investment?”  Increasingly, the answer is yes, but not for the reasons many practices expect. 

The Wrong Question

Many practices or organizations begin by asking, “How much can a CHW bill?”  This is an understandable question, but it is the wrong place to start. 

As discussed last month, the financial value of a CHW should not be measured by a limited number of billing codes.  Instead, physician leaders should evaluate CHWs based on their contribution to direct reimbursement, care management, quality performance, operational efficiency, and value-based payment opportunities.   

Table: Examples of Community Health Worker Financial Opportunities

This table demonstrates that the financial value of a CHW extends well beyond direct reimbursement. It is recommended to check with the payer to determine payment policies and approval rules.  A single patient interaction may simultaneously support billable services, quality performance, care management objectives, care coordination, education, reduced avoidable utilization, and improved patient experience.  Viewed together, these contributions create a cumulative financial impact that often exceeds the value of any individual billing code.  

For physician leaders, the important question is how to maximize the financial and clinical value created by CHWs across multiple payer programs.  

Michigan’s Leadership in Team-Based Care

Michigan has long been a leader in developing and implementing innovative models that support coordinated, team-based care. Programs such as Patient-Centered Medical Homes (PCMH), BCBSM Provider-Delivered Care Management (PDCM), and value-based payment initiatives have established a strong foundation for integrating CHWs into primary care.

Emerging direct reimbursement opportunities and value-based payment models now provide the financial foundation to support that integration, enabling physician practice to align improved patient outcomes, with sustainable practice performance. 

Executive Takeaway

CHWs should not be evaluated solely by direct reimbursement. Their greatest financial value comes from simultaneously supporting multiple payer programs, strengthening care management, improving quality performance, reducing avoidable utilization, contributing to value-based payment opportunities across the practice, and addressing the social drives of health.

In Part Three, we will examine the financial math behind CHW integration.  We will review reimbursement by program, calculate break-even points, and illustrate how physician practices can estimate return on investment (ROI) for small, medium, and large practice settings. 

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Practice Transformation Institute (PTI) is an accredited provider of educational programs meeting requirements for Michigan State Medical Society (MSMS) Continuing Medical Education and the International Accreditors for Continuing Education and Training (IACET).  PTI offers experiential learning programs for Patient Centered Medical Homes (PCMH) and other primary care transformation initiatives.

Contact PTI at  (248) 475-4736 info@transformcoach.org www.transformcoach.org 4986 N. Adams Rd, Suite D Rochester, MI 48306 to discuss our ongoing and customized training programs.  PTI's goal is to offer practical, evidence-based training to meet the needs of physician practices and organizations delivering healthcare in their communities and beyond.