Connected Care Delivers:
Telemedicine’ s Value Proposition
June 8, 2015 | National Council of Behavioral Health
Agenda
 Introduction
 U.S. Market Landscape and Outlook
 Evidence of Cost Savings & Quality Care
 Legislative and Regulatory Barriers
 The Alliance Prescription: Reimbursement Framework
Alliance for Connected Care
Alliance Advisory Board
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Alliance for Aging Research
Alzheimer’s Foundation of America
American Academy of Family Physicians
American Academy of Physician Assistants
American Heart Association
American Language-Speech-Hearing Association
American Osteopathic Association
Association for Behavioral Health and Wellness
Children’s Mercy Hospitals and Clinics
Digestive Disease National Coalition
Evangelical Lutheran Good Samaritan Society
Family Voices
HealthCare Chaplaincy Network
Mental Health America
National Alliance for Caregiving
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National Association of ACOs
National Association of Chain Drug Stores
National Association of Homecare & Hospice
National Council for Behavioral Health
National Alliance on Mental Illness
National Health IT Collaborative for the Underserved
National Multiple Sclerosis Society
National Organization for Rare Disorders
Parkinson’s Action Network
Population Health Alliance
Stanford Hospitals & Clinics
United Spinal Association
Visiting Nurse Associations of America
What is Telemedicine?
Asynchronous
communication
• E-mail communication
• Passive, remote monitoring through in-home sensors
Virtual
Communication
• Phone consult or on-line video in real time
• Computer, SmartPhone, Tablet
• Access to LPN, RN or MD
Live + Virtual
communication
• Kiosk or retail clinic model of patient connecting to NP via on-line video
in real time differentiation is that the LPN/LVN acts as the “hands” of the
remote NP allowing real time vaccinations, blood tests, etc.
Store and
Forward
• Store and forward technologies allow for the electronic transmission of
medical information, such as digital images, documents, and prerecorded videos through secure email transmission
Telemedicine Goes Mainstream
Medicaid
Rural
patients
Employers &
Health Plans
Medicare
Advantage
Telemedicine Offerings Increasing Among
Employers
71%
37%
22%
Projected for 2017
2015
2014
*Source: http://www.towerswatson.com/en-US/Press/2014/08/current-telemedicine-technology-could-mean-big-savings
Telemedicine Increasing in Medicaid
48 Medicaid Programs Have Some Type of Coverage for Telemedicine
.
Source: American Telemedicine Association
Telemedicine Increasing Among
Health Plans
23 states and DC have Full Reimbursement Parity Laws
Source: American Telemedicine Association
Behavioral Health
 After primary care, behavioral health and dermatology are
targets for growth.
 Large platforms like Teladoc and MD Live now offering
behavioral health services.
 Increase in digital solutions: Ginger.io, Wecounsel
 Legal and regulator barriers in public programs
Why the Explosive Growth?
Consumers are demanding more convenient care.
Employers & plans looking for new ways to reduce costs
Telehealth offerings are more sophisticated
User satisfaction with telehealth is very high.
Consumer Interest
 Attitudes toward telemedicine technologies in the U.S. have also
undergone a significant shift in recent years:
 According to a recent survey by Cisco:
 30% of patients already use computers or mobile devices to check for
medical or diagnostic information ;
 76% of patients prioritize access to health care services over the need for
human interactions with health care providers ;
 70% of patients are comfortable communicating with their health care
providers via text, email or videos, in lieu of seeing them in person
Why Continued Growth?
Mounting evidence
of quality, access,
cost-reduction
“Tipping point” in
the commercial
marketplace.
(Major investment)
Improves
consumer
engagement and
satisfaction
Bipartisan interest
in Congress & state
legislatures
Movement toward
value-based care in
public programs.
Broadband
deployment
helping make it
possible
Evidence is Key
Data shows the importance of Connected Care to the bottom line issues of quality,
patient satisfaction and cost.
Investment in telehealth and remote patient monitoring will yield results.
Commissioned literature review from two professors: Dr. Rashid Bashshur of
University of Michigan and Dr. Gary Shannon of University of Kentucky.
Looked at actuarial analysis of substitution rates.
Looked at disease incidence, cost of disease, review of how telemedicine is
typically applied to the disease.
Examples of Evidence
 Journal of Telemedicine and Ehealth (2015): Showed telemedicine use for
diabetes to be an "effective mode" of care, increases patient adherence
and reduced cardiovascular risk factors.
 Journal of Telemedicine and Ehealth (2014): Improved care and lower
costs for CHF, Stroke and COPD.
 Health Affairs (2014): Analysis Of Teladoc Use Seems To Indicate
Expanded Access To Care For Patients Without Prior Connection to a
Provider (Rand Study)
 Health Affairs (2014): HealthPartners’ Online Clinic for Simple Conditions
Delivers Savings of $88 Per Episode and High Patient Approval
Other Examples of Evidence
 JAMA Internal Medicine (2013): A Comparison of Care at E-visits and
Physician Office Visits for Sinusitis and Urinary Tract Infection
 JAMA Dermatology (2014): Emergency Department Diagnosis and
Management of Skin Diseases with Real-Time Teledermatologic Expertise
 Telemedicine and e-Health (2014): Is Telemedicine an Answer to Reducing
30-Day Readmission Rates Post–Acute Myocardial Infarction?
 JAMA Ophthalmology (2014): Validity of a Telemedicine System for the
Evaluation of Acute-Phase Retinopathy of Prematurity
 Health Affairs (2014): Use of Telemedicine Can Reduce Hospitalizations of
Nursing Home Residents and Generate Savings for Medicare
Regulatory Roadblocks &
Legislative Barriers
Reimbursement
Licensure
Lack of clarity on definitions
Standards of Care
Credentialing
Concerns about fraud and abuse
State Level Issues
 State by state diversity
 Standards of Care
 Licensure
 FSMB Model Telemedicine Guidelines
 FSMB Licensure Compact
Federal-level Issues
 Definitions
 Section 1834(m) of Social Security Act limits telehealth reimbursement
to rural areas, and can only be conducted from approved “originating
sites” to “distant sites” with a physician present.
 Originating site construct is very limiting.
 CMS approves code modifiers for telehealth services every year, but the
services are always subject to the statutory restrictions.
 Ryan Haight Act
Legislative Effort
CBO Scoring
In 2001, the Congressional Budget Office estimated it would cost CMS
$150 million during the first 5 years, or $30 million a year to reimburse
for telehealth encounters.
According to data released by CTel, since 2001, CMS’s Medicare
reimbursement for distant site services totals $38.6 million and $5
million for originating site fees, for a total of $43.7 million TOTAL over 13
years.
Medicare Reimbursement for
Telehealth
*Information gathered and published by CTel
New Reimbursement Structure
 Conventional wisdom is move from
fee-for-service to accountable care
will give patients more access to
Connected Care.
 We all want movement away from
fee-for-service, but there is a
transition period.
 Today, most patients are still in fee-
for-service.
 We need a transition.
Primary Care: Substitution
Virtual visits are not simply a supplement to in-person visits.
Data shows that 83% of the time patient issue is resolved by telehealth.
The average number of telehealth visits per patient is 1.3 visits/year.
.
Replacing in-person acute care with telehealth reimbursed at the same rate as
a doctor’s office visit could save the Medicare program an estimated $45/visit.
Actuarial Analysis
Table 6: Estimated Costs – Best Estimate
Utilization
Alternative Site of Care
Commercial
Medicare
Emergency room
5.6%
$ 1,595
$ 943
Urgent care
45.8%
116
98
Physician office visit
30.9%
98
83
Other clinics
5.4%
57
83
Do nothing
12.3%
0
0
Average cost
100.0%
$ 176
$ 128
Using the above calculations, Medicare will realize savings as long as the average
cost for the alternative site of care is greater than the estimated $83 Medicarereimbursed office cost. Under the above scenario, the average savings to
Medicare will be approximately $45 ($128 - $83) for each telehealth visit.
Actuarial Analysis
 Concerns regarding “induced utilization” unfounded.
 Will only happen if the percentage of Medicare patients
utilizing telehealth who would have otherwise have “done
nothing” increases to more than 32.8 percent.
 Unlikely given that telehealth vendors currently report that
this patient segment is approximately 13 percent within the
commercial market.
Questions
 Please contact Krista Drobac with questions.
Krista Drobac
Executive Director, Alliance for Connected Care
kdrobac@sironastrategies.com
202-415-3260