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Payment & Cost-Effectiveness Data for Diabetes Education & Services


One-on-one professional/patient services

Most health care plans pay for physician services provided for the management of diabetes. Medicare and many private insurance companies and managed care organizations pay for

  • diabetes self-management education provided by an educator who is part of an accredited diabetes education program
  • diabetes medical nutrition therapy (MNT) provided by a registered dietitian

Medicaid coverage for these services varies from state to state.

To receive payment for MNT services provided to a Medicare beneficiary with diabetes, a registered dietitian must be a Medicare provider and follow specific MNT payment rules written by the Centers for Medicare and Medicaid Services (CMS) (see Resources under CMS).

Self-management diabetes education program services

To receive Medicare payment for diabetes self-management education services, outpatient diabetes education programs must meet defined standards. There are currently two organizations that have the authority to accredit, or recognize, diabetes education programs:

  • American Diabetes Association (ADA)
  • American Association of Diabetes Educators (AADE)

(See Resources under ADA and AADE.)

Recognized diabetes education programs exist in a variety of settings, including hospital out-patient clinics, physician’s offices, home care agencies, pharmacies, and community facilities.

Recognized programs need to meet all requirements developed by CMS for Medicare payment. Diabetes self-management education requires a G billing code for either individual or group education. (See Resources under CMS, AADE, and Academy of Nutrition and Dietetics for information about Medicare diabetes self-management education and MNT payment provided in a variety of practice settings.)

Medicare-covered items

Medicare covers numerous tests, equipment, supplies, medications, and services for enrolled people with diabetes and those at risk of diabetes (see Appendix 4). To date, most states have passed legislation ensuring varying degrees of coverage for the above items for persons whose insurance plans are regulated by state law.

Billing practices and CPT codes

To maximize insurance coverage of team member contributions to the patients’ care, it is important to know the billing practices in a local area and allowable fees and to use the correct CPT codes (see Resources under AACE, AADE and AAFP).

"Incident to" billing

"Incident to" billing can be applied to patients billed under Medicare’s traditional fee-for-service system for services that are integral although incidental to the physician’s personal professional services. Commercial payers and some private payers may use a similar billing procedure. The “incident to” rules (listed in the Medicare Carriers Manual) cover services rendered by other health care professionals when the services are

  • supervised by the physician who is on site at the clinic or office at the time of service and who is actively involved in the patient’s course of treatment
  • furnished by a person who is an employee of the physician (there may be exemptions)
  • documented clearly in the medical record

This billing procedure does not apply to MNT or to diabetes education services.

Cost-effectiveness evidence for diabetes education

Systematic reviews

Summaries of six systematic reviews of diabetes education and related costs emphasize that many studies did not include full economic analyses.[54, 55, 56, 57, 58, 59] Education was provided in a variety of settings and included individual and group education by a variety of health care professionals. Although most of the studies indicated that diabetes education was likely to be cost-effective, a common conclusion of the reviews was that further research is needed, including full economic analyses and use of well-defined education programs that are reproducible.

Observational studies

Two more recent observational studies have concluded that diabetes education does result in reduced health care costs. One study of 18,404 patients with diabetes concluded that any type of diabetes educational visit (as opposed to none) was associated with 9.18 fewer hospitalizations per 100 person-years and $11,571 less in hospital charges per person.[60] Each visit to a nutritionist was associated with 4.7 fewer hospitalizations per 100 person-years and $6,503 less in hospital charges per person. Patients were included in the database if they had a diagnosis of diabetes recorded between March 1, 1993 and December 3, 2001 and at least a one-month follow-up period. The mean follow-up period was 4.7 years. Encounter-form data, including several types of education visits from a variety of health care professionals, were linked with hospital discharge data for the same period. Some diabetes educators were certified while others had either a relevant degree or relevant training and experience.

The second observational study reviewed 482,500 commercial and 152,000 Medicare claims in payer-derived complete three-year data sets for 2005 through 2007 that were linked with several codes for diabetes education services.[61] Commercially insured members and Medicare members who participated in diabetes education cost on average 5.7 percent and 14 percent less, respectively, than members with diabetes who did not participate in diabetes education. Diabetes education in the commercial group was associated with higher use of primary and preventive services and lower use of acute, inpatient hospital services. The gap in costs for the commercial population between the diabetes education and the non-education groups increased over time so that by year three, the non-education group average cost was 12 percent higher. A similar but smaller gap developed in the Medicare population’s costs. Claims for Healthcare Effectiveness Data and Information Set (HEDIS) diabetes process measures were positively correlated with the prevalence of diabetes education at the provider practice level. Physician referral rates for diabetes education varied considerably.

The findings of both of these observational studies imply that participating in diabetes education is associated with improved clinical outcomes that, in these cases, related to fewer hospitalizations or lower overall health care costs.

Guide to develop a business case

A handbook produced by the Diabetes Initiative of the National Program Office at Washington University School of Medicine provides a guide for diabetes education programs to develop a business case for the cost-effectiveness of programs, which can be used with administrators and payers.[62]

February 2013