Featured on CQ.com: Telehealth Advocates Remain Optimistic After Recent Setbacks
CQ.com | June 12, 2015
Excerpt:
Last week, Medicare officials rebuffed requests to expand use of telemedicine in the highly watched accountable care organization, or ACO, program. And bids to expand use of telemedicine through the House Energy and Commerce’s 21rst Century Cures bill have so far fallen short.
But Krista Drobac, executive director of the Alliance for Connected Care, said she is pleased that discussion of federal payments for telemedicine has expanded beyond the currently approved uses in Medicare, that often serve people who live in areas where health care can be scarce.
“It takes a while,” Drobac said. “We are just pleased that policymakers are looking at this as more than a rural issue.”
Virtual Care Identified as “Deflator” of Health Care Costs
PwC’s Health Research Institute (HRI) issued its annual projection of the coming year’s health care cost growth. Unfortunately, 2016 is no different than previous years. HRI projects a rise of 6.5 percent in medical cost trend, which continues a leveling of the increases we’ve seen since 2007, but it is still an increase.
HRI analyzed PwC’s 2015 “Health and Well-being Touchstone survey” of more than 1,100 employers from 36 industries and a national consumer survey of more than 1,000 US adults. HRI “interviewed industry executives, health policy experts and health plan actuaries whose companies cover more than 100 million employer based members.” Their main findings were that innovation in pharmaceuticals and cyber security investments were increasing costs, but “new efficiencies in the health system should prevent a return to double-digit run-away inflation.”
Remote patient monitoring and telehealth made the report’s short list of cost deflators, which is no surprise to those of us who follow the evidence of virtual care. The report states that “although virtual care is not new, its use will ramp up significantly in 2016. Costs will fall as care transitions from capital intensive “brick and mortar” to remote monitoring and visits.” HRI cited a PwC analysis of diabetes management showing a 10% decrease or $62 million savings for inpatient hospital days and a 10% decrease or $7 million in savings for ER visits.
HRI declared that “remote monitoring is saving billions of dollars across the healthcare system.” The report went on to note that “health systems and insurers should consider partnering with tech-smart companies that can offer a different type of network, clinical skillset and equipment. Retail health and outpatient clinics can also use virtual care to improve primary care access.” No argument here.
The Role of Policy in Hindering Telemedicine’s Progress
The Los Angeles Convention Center is abuzz this week with discussions about the future of patient care as the American Telemedicine Association brings together entrepreneurs, technology and device companies, health systems, and others for their annual meeting. Treating patients is no longer restricted to regular office hours and judging by the exhibit hall at the conference, we are ready to make teleheath and remote monitoring a mainstream part of patient care today. So what’s the hold up? The Alliance for Connected Care has focused on the barriers of reimbursement, licensure, and definition, which we believe are the main barriers.
The centrist think tank, Third Way, just released a report nicely outlining the policy issues holding up telehealth progress, and the solutions. The paper is called Make Telehealth an Easy Way for Patients to Get Care. It’s worth a read, and hopefully policy makers will take a look at it.
The report is one in a series that Third Way will be releasing throughout 2015, all of which focus on removing obstacles to quality patient care and directly improving the patient experience. Their guiding concept is simple: getting people back on their feet quicker and keeping them healthier for longer means they need less care.
The report discusses what telehealth is and the growing consumer demand for it, however the core of the report examines how policy has failed to keep pace with the technology, and how policy should change. No two states define or regulate telehealth in the same way, and inconsistencies often exist within states. Medicaid policies defining and paying for telehealth differ across states, and Medicare limits the coverage of telehealth services to specific sites and geographic regions. Finally, private plans, although showing improvement in telehealth coverage, do not consistently reimburse for telehealth across state lines.
The Third Way report highlights the important roles federal policymakers, state governments, and private health plans play in increasing access to telehealth services and helping ensure it delivers on its promise. Their recommendations include eliminating restrictive state policies, updating Medicare and Medicaid payment policies for telehealth, and authorizing the use of telehealth for populations served under value-based payment models, such as ACOs. In addition, the report presents the growing body of evidence demonstrating the value proposition of telehealth and highlights innovative efforts being piloted by red and blue states that have successfully improved patient outcomes while saving billions.
Third Way recognizes that finding methods to bring care to patients in new ways, to support positive behavioral change, and to engage individuals in their health can be a more cost-effective strategy than simply providing more health care services. Telehealth has proven to be an effective and critical tool for patients and providers in meeting those objectives. It’s time for policy to change to allow more access for consumers.
2015: Another Unstoppable Year for Telehealth
Offering telehealth1 to employees or health plan beneficiaries used to be a differentiator in benefits – an added perk for employees or health care consumers increasingly demanding convenience and accessibility. Today, it is rapidly becoming a necessary addition to benefit packages. Not only do employees and prospective health plan enrollees want it, but it’s also good for containing health care costs.
Various market research organizations peg the telehealth market growth rate between 18-30 percent per year. According to Ken Research, in 2013 the market for telehealth generated annual revenue of $9.6 billion, which is 60 percent growth from 2012 when overall revenue was $6 billion. Their research shows that the telehealth market is expected to grow to $38.5 billion in revenue by 2018, a compound annual growth rate of 32 percent from 2013-2018.2
There are several factors contributing to this rapid growth: 1) telehealth is delivering results for patients and saving money; 2) patient satisfaction with telehealth is very high; 3) consumers are demanding more convenient high-quality care, which today’s telehealth providers are delivering.
In the employer market, according to Towers Watson, a global benefits advisor, 37 percent percent of employers surveyed in 2014 said that by this benefit year (2015) they expect to offer their employees a telemedicine benefit “as a low-cost alternative to emergency room or physician office visits for nonemergency health issues.” That is a 68 percent increase from 2014 when 22 percent of employers offered the benefit. Another 34 percent are considering offering telemedicine for 2016 or 2017.”3
Telehealth is showing real results for employers’ resource utilization and medical spending. A recent analysis conducted by Niteesh K. Choudhry, MD, PhD of Harvard University on two employers – Home Depot and Rent-a-Center – found that utilization of telehealth showed significant health care savings. The study compared employees who used Teladoc (the telehealth provider) to carefully matched users of traditional medical services over an episode of care, as well as monthly utilization and total spending before and after the introduction of telehealth to employees. Teladoc was the telehealth provider. The episodic analysis examined roughly 5,900 consults for Home Depot members and 3,400 consults for Rent-a-Center members. The resolution rate was 92 percent for both populations. In other words, employees did not need follow-up care from an office visit or emergency room after a telehealth visit. An estimated average claim savings of $673 for Home Depot resulted in a 12-month total savings of $5.9 million, and a $460 per-claim savings for Rent-a-Center for an annual total savings of $1.2 million.
In the Medicare market, a recent actuarial study commissioned by the Alliance for Connected Care and conducted by Dale Yamamoto, a distinguished actuary with more than 30 years of experience, looked at how much savings could be achieved if Medicare had a telehealth benefit without rural or facility restrictions. It found that replacing in-person acute care services with a telehealth visit reimbursed at the same rate as a doctor’s office visit could save the Medicare program an estimated $45/visit.
While Medicare fee-for-service has significant restrictions on the use of telehealth, Medicare Advantage can offer the service. This year, Anthem has led the way by providing seniors in 12 states access to LiveHealthOnline, their 24-hour online physician access service. All seniors need is web access and a web camera. According to a recent study by the Pew Research Center, six out of 10 people age 65 and over go online and 47 percent have a high-speed broadband connection at home4, which means that more and more seniors will now have access to virtual care in their homes.
Besides cost savings, patient satisfaction is another driver of employer and health plan interest in offering telehealth. According to a recent Intel survey, 72 percent of consumers said they’re willing to see a doctor via telehealth video conferencing for non-urgent appointments.5 Three Alliance for Connected Care members, Anthem, MD Live and Teladoc all report patient satisfaction rates of more than 95 percent. Health care consumers are demanding convenient high- quality care, and telehealth offers it.
The main challenges to telehealth in 2015 are regulatory and legislative. While more than 20 states require coverage of telehealth in the commercial marketplace, forty-five states cover telehealth in Medicaid, and Medicare Advantage allows telehealth, Medicare fee for service is lagging behind and telehealth faces threats from state legislatures and medical boards across the country.
The reimbursement structure for Medicare was created nearly 15 years ago when smartphones didn’t even exist. The policy limits the coverage of telehealth services to specific sites and geographic regions. Generally, covered telehealth services must be provided in rural areas as determined by the Department of Health and Human Services , which change every year. As a result, Medicare beneficiaries living outside of rural areas or who are not in a designated facility in a rural area have limited access to providers via telehealth and are unable to benefit from telehealth services. This needs to change and the Alliance for Connected Care is working to support legislation being developed by the U.S. House Energy and Commerce Committee this year.
Among states, there is a patchwork of regulation that often inhibits the kind of telehealth offerings that employers and patients want. The American Telemedicine Association said it best, “for telemedicine adoption. Patients and health care providers may encounter a patchwork of arbitrary insurance requirements and disparate payment streams that do not allow them to fully take advantage of telemedicine.” 6 We need updated policies at the state level that makes sense for the technology and innovation we have today so consumers are not denied access to quality and convenience.
Footnotes
- Given that the definition of telehealth is often confusing, telehealth in this context is real-time communication that allows patients and providers to interact directly through a communication device such as a telephone or videoconferencing. While store-and-forward and remote patient monitoring technologies are increasing in popularity and can greatly contribute to patient care and lowering costs, I am specifically referencing the former in this article.
- Ken Research, “The US Telemedicine Market Outlook to 2018, Rising Penetration of Telehome Care and mHealth” June 2014
- “Current Telemedicine Technology Could Mean Big Savings, Towers Watson expects a 68 percent increase in the number of employers offering telemedicine in 2015.” http://www.towerswatson.com/en-US/Press/2014/08/current-telemedicine-technology-could-mean-big-savings August 11, 2014
- http://www.pewinternet.org/2014/04/03/older-adults-and-technology-use/
- http://www.intel.com/content/dam/www/public/us/en/documents/promotions/healthcare-innovation-barometer-infographic.pdf
- Latoya Thomas and Gary Capistrant, “50 State Telemedicine Gaps Analysis Coverage & Reimbursement” American Telemedicine Association, September 2014
By Krista Drobac
Executive Director, Alliance for Connected Care
This article is featured on theihcc.com
Is Ohio about to be a model for federal telemedicine reimbursement?
The time for telemedicine reimbursement in our country is now.
Telemedicine has gone beyond just being a solution for rural consumers who cannot access medical care. It has continually been shown to improve access to care in urban, suburban and rural areas. It also reduces emergency department and urgent care visits, and gives consumers a convenient alternative during business hours and after.
More and more health care systems are adopting telemedicine as part of their spectrum of care. Employers are offering telemedicine as a benefit to their employees. Consumers are even seeking telemedicine directly through the plethora of new apps.
While the case is clear for providing access to telemedicine for more consumers, laws and regulations have lagged behind the evolving technology and consumer demand.
Thankfully, Ohio is on the vanguard of reform and moving forward providing Medicaid reimbursement for telemedicine. Thanks to legislation sponsored by former State Representative Lynn Wachtmann (R-District 81) and State Representative Anne Gonzales (R-District 19), as of Jan. 2, 2015 and a new state Medicaid rule, there is Medicaid reimbursement for telemedicine in certain circumstances.
With approximately 450,000 new Medicaid recipients enrolled in Ohio after passage of Medicaid expansion, the new Medicaid rule effective January 2nd will not only benefit the State of Ohio and its Medicaid recipients, it also will help the residents in Ohio living in both rural and urban underserved counties in the state.
Currently, 45 states provide some sort of Medicaid reimbursement for telemedicine, and 22 states require commercial reimbursement of telemedicine. However, the federal government continues to miss the mark and fails to pass progressive legislation allowing for Medicare reimbursement of telemedicine services.
While Medicare does provide reimbursement in some cases, those circumstances are limited to care that is provided in rural areas. The federal government needs to look at the progress of the states like Ohio, which have served as the models for reform, by embracing today’s technology to connect individuals to care.
By Christine Dodd and Krista Drobac
Christine Dodd is a Director of Public Affairs with the law firm of Ice Miller. Krista Drobac is the Executive Director with the Alliance for Connected Care.
This article is featured on medcitynews.com
Telehealth: An Important Tool in Achieving the Goals of the ACO Program and Why Restrictions Should Be Lifted in Final ACO Rule
Congress adopted the ACO concept as part of an effort to optimize healthcare delivery by incentivizing Medicare providers to furnish more integrated, better quality, and cost-effective care. Specifically, its stated purpose is to: “promote accountability for a patient population and coordinate items and services under parts A and B, and encourage investment in infrastructure and redesigned care processes for high quality and efficient service delivery.”2 As part of the program, ACOs are required to: “…define processes to promote evidence-based medicine and patient engagement…and coordinate care, such as through the use of telehealth, remote patient monitoring, and other such enabling technologies.”3
In the proposed rule, CMS acknowledged that telehealth “could allow ACOs to realize cost savings and improve care coordination.” They also acknowledged that Congress explicitly cited telehealth as an enabling technology that can assist in the coordination of care.
The challenge for ACOs in adopting telehealth has been section 1834(m) of the Social Security Act, which restricts Medicare reimbursement to a limited number of Medicare Part B services furnished through particular telecommunications systems to only those beneficiaries able to reach an “originating site” located in a rural Health Professional Shortage area or a county outside of a Metropolitan Statistical Area (MSA). Specifically, “originating sites” only include physician offices, hospitals, critical access hospitals, skilled nursing facilities, and Federally Qualified Health Centers (FQHCs).4,5
Telehealth can only be used in facilities in rural areas, which limits the ability of medical providers to reach patients in their homes and communities. As a result, the number of Medicare beneficiaries accessing telehealth is miniscule. According to CMS data analyzed by the Center for Telehealth and eHealth Law, in 2011, CMS spent less than $5 million on telehealth services for seniors.6 This is out of an overall budget of more than $500 billion.
The 1834(m) restrictions create a disincentive for the vast majority of ACO providers—many of whom are located in urban and suburban areas—to use this type of technology, and exclude a broad swath of Medicare beneficiaries from being able to access the benefits of telehealth. ACOs that do not receive reimbursement for telehealth services are faced with the difficult decision of assuming financial risk by providing the care for free. For many physician-led and smaller ACOs, assuming that risk is not financially feasible.
Data shows the consequences of these restrictions. A recent survey of ACOs conducted by Premier, Inc and the eHealth Initiative reports that more than 90% of ACOs have concluded that the cost and return on investment for health IT is a “crippling concern.” This is consistent with additional findings showing that ACOs have low technological capabilities and lack the necessary infrastructure to support connected care. Few respondents reported being able to use secure messaging (38%), phone-based telemedicine (34%), or video-based telemedicine (26%).7
The Affordable Care Act granted the secretary of the department of HHS the authority to waive Medicare requirements as necessary to carry out the implementation of the ACO program. With the proposed rule, CMS opened the door to use of that waiver authority. In fact, they acknowledged they have the authority to waive the restrictions: “A waiver of certain Medicare telehealth requirements could be supported by section 1899(b) (2)(G) of the Act in that is gives the use of enabling technologies, such as telehealth, as an example of a process to coordinate care.”1
The comment period for the proposed rule is 60 days, and we should all respond to CMS’s request for “information from ACOs and other stakeholders about the use of such technologies to coordinate care for assigned beneficiaries.”
The body of evidence demonstrating that telehealth contributes to the achievement of all of the goals set forth by Congress and CMS is extensive. In addition to evidence collected by individual ACOs using telehealth, there is much published literature on the benefits of telehealth in a system of accountability and coordinated care. The Journal of the American Medical Association has published 7 articles just this year on telemedicine, while Health Affairs dedicated its entire February 2014 edition to telemedicine evidence. The Journal for E-Health and Telemedicine is continually publishing studies, including a collection of randomized controlled studies of COPD, CHF, and stroke, 3 conditions very prominent in the Medicare population.
Most of the evidence published to date focuses on cost, quality, and access, exactly what Congress and CMS are trying to impact. The American Telemedicine Association has an excellent synopsis of data demonstrating the positive impact of telehealth on cost and quality.8 Overall, the findings demonstrate that telehealth enables providers to reduce unnecessary in-person care (emergency care and preventable inpatient admissions), while increasing patient access to timely primary care. Telehealth also allows providers to connect patients with appropriate specialists and coordinate care across clinical settings.
Telehealth can and will help ACOs achieve the cost, quality, access, and patient engagement goals they are striving for. It is time to lift the section 1834(m) restrictions on the coverage and reimbursement of telehealth services so ACO providers can have another important tool in realizing the new care delivery models envisioned.
1. CMS, HHS. Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations. Proposed Rule. 42 CFR Part 425. Page 231. http://www.ofr.gov/OFRUpload/OFRData/2014-28388_PI.pdf.
2. The Public Health and Welfare. 42 USC. Page 3260, SEC. 1395jjj(a)(1), Shared savings program. http://www.gpo.gov/fdsys/pkg/USCODE-2010-title42/pdf/USCODE-2010-title42-chap7-subchapXVIII-partE-sec1395jjj.pdf.
3. The Public Health and Welfare. 42 USC. Page 3261, SEC. 1395jjj(b)(2)(G), Shared savings program. http://www.gpo.gov/fdsys/pkg/USCODE-2010-title42/pdf/USCODE-2010-title42-chap7-subchapXVIII-partE-sec1395jjj.pdf.
4. The Public Health and Welfare. 42 USC. Page 2550, SEC. 1395m(m)(4)(C), Shared savings program. http://www.gpo.gov/fdsys/pkg/USCODE-2010-title42/pdf/USCODE-2010-title42-chap7-subchapXVIII-partB-sec1395m.pdf.
5. Centers for Medicare & Medicaid Services, HHS. Page 409, SEC. 410.78(b)(4), Telehealth services. 42 CFR. http://www.gpo.gov/fdsys/pkg/USCODE-2010-title42/pdf/USCODE-2010-title42-chap7-subchapXVIII-partB-sec1395m.pdf.
6. Sprang R. How much does Medicare reimburse for telehealth? the real story. CTeL website. http://ctel.org/2012/09/how-much-does-medicare-reimburse-fortelehealth-%E2%80%94-the-real-story/. Published September 7, 2012.
7. eHealth Initiative (eHI) and Premier, Inc. The landscape of accountable care and connected health: results from 2014 national survey of accountable care organizations. http://www.ehidc.org/resource-center/surveys/doc_download/451-survey-the-landscape-of-accountable-care-and-connected-health-results-fromthe-2014-national-survey-of-accountable-care-organizations. Published September 2014.
8. Examples of research outcomes: telemedicine’s impact on healthcare cost and quality. American Telemedicine Association website. http://www.americantelemed.org/docs/default-source/policy/examples-of-research-outcomes—telemedicine'simpact-on-healthcare-cost-and-quality.pdf. Published April 2013.
This article is featured on www.ajmc.com.
Commentary: Time for Congress to make payments for telehealth happen
December 12, 2014 | Krista Drobac, Executive director of the Alliance for Connected Care
The reason that telehealth usage among seniors in Medicare is almost non-existent is because the rules were written at a time when telehealth was used primarily to provide access to care for rural patients. To access a physician remotely, Medicare beneficiaries have to be in a rural area and in an “originating site” defined as a hospital, doctor’s office or clinic. This defeats the purpose of today’s telehealth offerings, which are providing access to primary care in the home, office, retail clinic, or wherever.
The telehealth market is growing by double-digits with people in urban and suburban areas accessing care through technology as part of their employer or health plan offerings. Starting in 2015, some Medicare Advantage beneficiaries will even have access to medical providers using telehealth because it is a supplemental benefit in Medicare Advantage. Most seniors enrolled in Medicare fee for service will not have that option.
It’s time to update the payment rules for telehealth and give all seniors access to technology that is increasing access to high-quality primary care. One policy challenge is that the conventional wisdom among policy makers has been that telehealth will increase costs to Medicare. It is said that lifting the rural and originating site restrictions so Medicare beneficiaries can experience telehealth like commercially-insured patients will cause a huge increase in utilization, and therefore costs.
Today, we know that conventional wisdom is wrong. Data from the commercial market shows that access to telehealth does not create excessive use among beneficiaries, particularly those who would otherwise have done nothing. And, if structured as a substitute to in-person care, telehealth can even save money.
The Alliance for Connected Care commissioned a study from Dale Yamamoto, an actuary with 30 years of experience and stellar credentials. He aggregated data from five companies using telehealth in the commercial market — Teladoc, Doctor on Demand, Anthem, American Well and Optum. What he found demonstrates that if we reimburse for telehealth in Medicare when the telehealth visit substitutes for an in-person visit, we may actually save money by averting ER and urgent care visits.
Furthermore, the study dispels concerns that the convenience and accessibility of telemedicine will lead to overutilization and addresses questions about quality of care, finding that:
- Despite their convenience, commercial telehealth services are not used excessively. The average number of telehealth visits across vendors was 1.3 visits per patient per year.
- Telehealth visits are used to treat fairly routine, non-emergent conditions. This study found that the most common diagnoses during a telehealth visit are sinusitis, followed by cold/flu/pertussis and urinary tract infections.
- Medicare could realize savings by replacing in-person acute care services with a telehealth visit reimbursed at the same rate as a doctor’s visit. The study found that replacing in-person acute care services with a telehealth visit reimbursed at the same rate as a doctor’s office visit could save the Medicare program an estimated $45/visit.
- “Induced utilization” by those people who use telehealth services instead of forgoing care altogether is unlikely to result in increased total costs to the Medicare program. Medicare will only realize losses as a result of making telehealth services available if the percentage of Medicare patients utilizing telehealth who would have otherwise “done nothing” increases to more than 32.8 percent. This study found that this is unlikely given that this population is currently approximately 13 percent in the commercial market.
Telehealth is increasingly becoming part of the spectrum of care patients are receiving in the commercial marketplace. Medical providers are using telemedicine to treat primary care conditions, coordinate care and monitor patients. Studies, including one commissioned by the Alliance for Connected Care in the spring, show that telehealth is important to the bottom line issues of quality, patient satisfaction and cost. All Medicare beneficiaries should have access to it.
This study shows that if structured as a substitute for in-person care, telehealth could even save money.
Now it’s time for Congress to make it happen.
This article is featured on www.govhealthit.com