Payment Issues in Non-Visit
Based Communication
Robert A. Berenson, M.D.
Senior Fellow, The Urban Institute
29 January 2004
E-Communication vs. the Phone
• Most of the new focus is on email, but some
of the issues pertain to phone calls
• We may not reward phone communication
appropriately either
• Ideally, the two are complementary but for
cultural, socio-economic, other reasons,
they may be alternatives, e.g., in Medicare
E-communication vs. Phones –
Some issues
• Phones require parties to be on together
“synchronous” – making contact is not easy
• There is some data that email is more time
efficient
• But clearly, phone conversation better for a
conversation, which many clinical situations
require
Current Payment Policies for
NVC
• Phone time, explicitly, and e-communication time,
implicitly, already are part of pre and post work in
RBRVS system
• Note -- the marginal incentive is another visit, not
NVC (at least, when the practices are not full)
• Despite theoretical differences, productivity
measures under both FFS and capitation tend to
use visits or RVUs, as defined by Medicare, thus
penalizing robust use of NVC
Theoretical Concerns with FFS
Reimbursement for NVC
• High relative transaction costs associated
with high frequency, low dollar services
• Potential for abuse – pt. cost sharing might
protect, but administrative and inducement
(where co-payment waived) issues present
• Moral hazard – NVC may become add-on,
not a substitute as currently envisioned
Possible Role for First Party
Payment
• Patient’s time costs may make out of pocket
payment desirable for some
• Mitigates moral hazard concern, depending
on how payments are structured
• Still, tricky design issues, what is the “unit”
of reimbursement
• And with 1st party payments, always equity
concerns
“E-consultation”
• Based on pilots some insurers have started
reimbursing for an alternative to an office
visit – use an intermediary platform, with
safeguards re privacy, clinical information,
documentation, etc.
• AMA CPT panel has recently provided a
reimbursement code for e-communication
• Insurers still have to decide whether to pay
Increasing Recognition By
Private Payers
• Prominent insurers which pay for an econsultation include: Blue Shield of Cal.,
BC/BS of Mass, Horizon BC/BS of N.J.
• Although still not widespread, anecdotally
in some places, e.g, Southern Cal., more
widespread than commonly appreciated
• In FFS reimbursement, expansion beyond a
structured “consultation” will be hard
Implications of Full Range of
Internet-based Applications
• Many of the potential uses are for
administrative purposes and should not
require additional payments – should be
cost-effective if any scale in practice
• Many of the applications should apply to
non-physicians, e.g., disease management
(phone as well), but no easy way to
reimburse in FFS
Potential Uses for Email
• Administrative – Rx refills, appointments,
test results, etc.
• Clinical –
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Q’s and A’s about a condition, treatment, etc.
Report self-care information
Monitoring chronic conditions
Provide educational resources
As a substitute for a visit
Payment Options for NVC
• Voluntary subscription for e-communication
(and associated services)
• Fee-for-service payment for defined NVCs
• Increase value of current E&M services
• Capitation for professional services
• Condition-specific care management fee
• Pay for performance
Voluntary Subscription
• Payment lies outside of insurance – could
be FFS but more likely monthly payment
for set of communication services
• Market-based solution, without need to
standardize and regulate
• Patients and payers may view this as
“double payments” –
• Concern about tiering, equity of access
Pay FFS for Defined NVCs
• Some insurers are now paying for a defined
“e-consultation”
• But applies to relatively small portion of
potential NVCs, and not phones
• Doesn’t require major change
• Can try to assure that new payment only for
substitute services, not add-ons
• Amenable to incremental expansion
Pay for Defined NVCs (cont.)
• There are difficult boundary issues
• Relatively high transaction costs
• Limiting NVC payments to substitute services
may limit potential, which may lie as much in
frequent interactions for patients with chronic
conditions
• Concern about driving behavior to certain forms
of e-communication
• Equity concerns, by age and socio-economic class
Increase Value of Current E&M
Services to Accommodate NVC
• Phone time already part of E&M RVUs
• Could resurvey either avg. practice or
practices that use more NVCs to recalibrate
RVU weights
• Could use alternative fee schedules for
practices that use more or less of NVC
• This is the most straightforward approach
(unless distinguishing among practices)
Increasing Value of E&M (cont.)
• BUT, THE MARGINAL INCENTIVE IS
TO DO ANOTHER REIMBURABLE
VISIT AND NOT THE NVC
• No way to assure that the value of NVCs
built into the rates are being provided
• Modifying RVUs to achieve desired M.D.
behavior change would be new departure
Capitation
• Decision to use NVC -- when and how –
lies with the practice
• Reduces unique FFS problems, incl. moral
hazard, transaction costs, F&A
• But capitation is declining
• Capitation is permissive but passive, i.e.,
medical groups still use productivity
measures that would penalize NVC
Condition-Specific Care
Management Fee
• Modified form of capitation – essentially a
monthly management fee that would require
adherence to a set of processes
• Could be targeted initially to care for
patients with multiple chronic conditions
• No preference for the form of NVC, as with
capitation
• And NVC only one part of the package
Care Management Fee (cont.)
• Would the care management fee actually be
used as intended? – gets us into a pay for
performance or practice oversight situation
• If properly applied, only subset of practices
could qualify (but could serves as a stimulus
to practice redesign?)
• Would only applies to part of a practice –
assumes some internal cross subsidies
Pay for Performance
• Could pay more for NVC structural
processes measures, i.e, distinguishing
among practices
• Could pay for outcomes that might be better
achieved with broader use of NVC
• Reserves extra payments for those practices
that earn the extra payments
• Little experience with pfp for physicians
Pay for Performance (cont.)
• Paying for NVC structure and process raises
program integrity/ accountability issues
• Paying for proximate outcomes, again, is a
very indirect way for promoting NVC –
would the payments be enough and would
the practices cross subsidize?
• As with all pfp, concern about tiering, i.e.,
the “rich get richer” at the poor’s expense