Paying for Physician -- Patient
Online Communication
Robert A. Berenson, M.D.
Senior Fellow, The Urban Institute
AcademyHealth, 26 June 2005
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E-Communication vs. the Phone
• The new focus is on email/structured web
visits, but phone calls raise similar payment
issues
• Ideally, the two are complementary but for
cultural, socio-economic, and other reasons,
they may be viewed as alternatives, e.g.,
with a poor or elderly population
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Non-visit Communication (NVC)
Also Includes the Phone
• Phones require parties to be on together
“synchronous” – making contact is not easy
• There is some data suggesting that email is
more time efficient
• But clearly, a phone conversation is better
for a conversation, which many clinical
situations require
• AND, not everyone is online
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Current Payment Policies for
NVC
• Phone time, explicitly, and e-communication time,
implicitly, are already are part of pre and post
work in Medicare’s RBRVS-based payments
• However, the marginal incentive is another visit,
not NVC (at least, when practices are not full)
• Despite theoretical differences, productivity
measures under both FFS and capitation tend to
use patients seen or RVUs, as defined by
Medicare, thus penalizing substitution of NVC
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Theoretical Concerns with Third
Party Reimbursement for NVC
• Relatively high transaction costs associated with
high frequency, low dollar services
• Potential for abuse – pt. cost sharing might
protect, but administrative and inducement (if copayment waived) issues present
• Moral hazard – NVC may become add-on, not the
substitute currently envisioned by some
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Possible Role for First Party
Payment
• Patient’s time costs may make out of pocket
payment for NVC 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, as with “concierge care”
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Potential Uses for Online or Ecommunication
• Administrative – Rx refills, appointments, normal
test results, referral requests, 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 – an “e-consultation” or
webvisit (RelayHealth’s term)
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“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 last year provided a
reimbursement code for “online medical
consultation”
• Insurers still have to decide whether to pay
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Increasing Recognition By
Private Payers
• Prominent insurers which pay for an econsultation include: BS of Cal., BC/BS of Mass,
Horizon BC/BS of N.J., BC/BS of Tenn., BC/BS
of Fla., Empire BC/BS, Fallon HP, Providence HP
of Portland, a few others
• Typically, reimburse $20-$35 for a formal,
platform-based electronic encounter, perhaps with
a $5 co-payment
• In FFS reimbursement, however, expansion
beyond a structured consultation or visit not easy
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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 potential applications should
apply to non-physicians, e.g., disease
management (phone as well), but no easy
way to reimburse these in any FFS approach
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Payment Options for NVC
• Voluntary subscription for online
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
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Voluntary Subscription
• Payment lies outside of insurance – could be FFS,
but more likely put dollars on account that then is
drawn down by the practice
• Market-based solution, without need to
standardize and regulate
• Some patients and payers may view this as
“double payments”
• Concern about tiering, equity of access
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Pay FFS for Defined NVCs
• As noted, some insurers are now paying for
a defined online consultation
• But applies to relatively small portion of
potential NVCs, and not to phone
• Doesn’t require major change
• Can try to assure that new payments are
only for substitute services, not add-ons
• Amenable to incremental expansion
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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 as in a substitute visit
• Concern about payment policy driving behavior to
certain forms of online communication
• Equity concerns, by age and class, but less than
with a separate subscription
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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)
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Increasing Value of E&M (cont.)
• BUT, THE MARGINAL INCENTIVE IS
TO DO ANOTHER OFFICE VISIT AND
NOT THE COMMUNICATION
• No way to assure that the value of NVCs
built into the rates are being provided
• Modifying RVUs to incentivize desired
M.D. behavior change would be new
departure in basis for setting RVUs
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Capitation
• Decision to use NVC -- when and how -resides 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 often use productivity
measures that actually penalize NVC
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Condition or Patient-Specific
Care Management Fee
• Modified form of capitation – essentially a
monthly management fee that could require
adherence to a set of processes
• Might be targeted initially to care for patients with
multiple chronic conditions
• As with capitation, no preference for the form of
NVC adopted and used
• And NVC only one part of the package, e.g. see
Wagner chronic care model
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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?)
• But applies only to some patients – assumes
internal cross subsidies, but they might not happen
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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 P4P for physicians
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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 P4P, concern about tiering, i.e.,
the “rich get richer”
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