Telehealth and other virtual healthcare includes any type of care provided remotely — or, care in which the patient is not face-to-face, in-person with the provider. This can mean online responses to inquiries, phone consults, video-facilitated visits and more. Virtual healthcare first came into the mainstream a dozen or so years ago. Then, it became clear that certain kinds of care could be more readily provided remotely. Recently, telehealth adoption and use have accelerated rapidly.
When we think of the evolution of telehealth, we may originally think of something like teleradiology, where it is much less expensive for health systems to staff physicians remotely than try to have radiologists located at every hospital at all times. We also may consider remote rural areas, where virtual care has started to pick up steam. Another area includes the intraoperative monitoring of procedures, which is increasingly done remotely. Clearly, telehealth has now jumped from certain specific niches into almost every area of care.
This article describes some of that growth and some of the challenges with the further acceleration of growth.
Editor's Note: This content originally appeared in Zotec's multi-specialty newsletter.
1. Urgent Care as a Precursor to Telehealth Growth. The number of urgent care facilities in this nation grew from about 3,000 to 12, 000 over the last 7 to 10 years. This happened in large part because patients demanded it and reimbursement grew to pay for it. The ability to quickly go to an urgent care clinic, minute clinic or something similar became clearly so much more attractive to patients than the challenge of scheduling and finding an available appointment. It became care “when and where you want it" that was also much less expensive than emergency room visits.
Virtual care provides the same advantages — care when and where you want it, but at a lower cost.
2. Kaiser as a Bell Weather. In 2016, Oakland, Calif.-based Kaiser Permanente had its first year ever in which more than 50 percent of visits were done virtually. This was driven by several factors. First, Kaiser is largely “at-risk” for care costs. Thus, it is highly incentivized to test less expensive models of care. Telehealth, due to its efficiency of facilities and scheduling flexibility, is incredibly cheaper to provide. Second, like urgent care, patients really prefer it in a great percentage of visits and cases.
The Kaiser example is important because it’s one of the largest health systems and it’s very highly regarded overall.
In a mHealthIntelligence article titled “Kaiser CEO: Telehealth Outpaced In-Person Visits Last Year,” author Eric Wicklund stated: “Kaiser Permanente is seeing more patients online than in person, according to its CEO ... 52 percent of last year’s patients transactions at Kaiser Permanente were conducted online, by virtual visits or through the health system’s apps, CEO Bernard Tyson says."
“My model is based on a capitation basis so I get a set amount of money to take care of 11 million people,” Mr. Tyson told the publication. “I get to invest in this type of infrastructure to allow me to have a big return back to my customers because I am a not-for-profit organization.”
3. Services Expanding. Of those health systems that have adopted telehealth, many are now looking to optimize it. Telehealth can benefit nearly 80-plus specialties — including neurology, radiology, dermatology, pediatrics, psychiatry and chronic disease management — nearly revolutionizing the way care is delivered and improving health outcomes for all types of patients. And, hospitals are taking note; many are beginning to include more and more specialty-focused telehealth as part of their strategies. Fewer hospitals are wanting an episodic, transactional telehealth program, and instead, they are opting to integrate telehealth services across the entire continuum of care. For example, stroke treatment provides ample opportunity for telehealth. This could mean connecting its physicians to neurologists at larger, academic medical centers or equipping ambulances with CT machines and video conferencing capabilities to inform earlier stroke treatments. Another application is in teleradiology, where images can be shared amongst physician-peers to gain deeper insights and inform better treatments.
4. Employer and Patient Savings can be Substantial. Now, nearly 60 percent of employers offer some kind of virtual care. Employers are finding that costs per visit are often 60 to 70 percent less than in person visits. This is driving great interest in the growth of virtual care.
In a survey undertaken by Red Quill Consulting, researchers found that telehealth visits have the potential to save around $100 per visit when compared to traditional office visits. Virtual consults are priced at $40 to $50, while office visits check in at $136 to $176. Employee Benefit News reports a a telemedicine visit typically costs $40 versus $125 for an in-office one.
5. Medicare and Medicaid Reimbursement is Coming, Albeit Slowly. Nearly 40 states have some kind of telehealth reimbursement available. Often, that reimbursement is too low to be attractive to providers. Medicare offers some telehealth reimbursement with proper modifiers.
“In 2017, the American Medical Association added modifier 95, a new modifier for designating synchronous telemedicine services rendered via real-time interactive audio and video telecommunications systems. According to this CodingIntel resource, synchronous telemedicine services are those delivered as part of a 'real-time interaction between a physician or other qualified healthcare professional and a patient who is located at a distant site from the physician or other qualified healthcare professional.' Providers can only use modifier 95 in conjunction with a select subset of CPT codes, as noted in Appendix P of the CPT manual. These codes are also denoted with a star symbol in the body of the CPT code set.”
In February, President Donald Trump approved the Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act of 2017 as part of the budget deal. The CHRONIC Care Act — which has been praised by telehealth advocacy groups — expands telehealth access to Medicare beneficiaries suffering from chronic illness. Under the CHRONIC Care Act, beginning in 2020, ACOs will be able to reimburse a variety of telehealth services, and MA plans can include more telehealth options.
6. Growth in Large Telehealth Companies. Large companies — like Teladoc and American Well — have signed up hundreds to thousands of customers for telehealth. As a bigger industry develops, these groups are able to develop economies of scale for telehealth and improved governmental savvy at both state and federal levels, which in turn helps improve reimbursement options.
In the Kaiser Permanente Business article, “The Rise of Telemedicine & Lower Costs," it is stated: “A recent Forbes article reports that Teladoc, the first publicly-traded telehealth company, signed up more than 500 new accounts for 2016, including Starbucks, Dell, Merck, Marriott, and Mercedes Benz. Other telehealth companies including Doctor on Demand with services to more than 200 companies and American Well with services to 1,000 employers, including HUB International, Pitney Bowles, and Rite Aid. MDLive counts Microsoft and Walgreens among its clients, while Advanced Tele-Health Solutions has partnered with G.E.”
7. Telehealth Parity Laws. More than 50 percent of states have some kind of law that requires payment for virtual care. For example, some states mandate coverage of commercially-provided telehealth services, while others mandate commercial insurers pay for telehealth services at the same rate as in-person services. However, these laws are still evolving and still often lack teeth.
In an eVisit blog post titled “2017 Telemedicine Reimbursement – What you Need to Know” by Brooke Andrus, she stated: “According to the American Telemedicine Association, as of May 2017, 40 states had either approved or proposed legislation allowing for full or partial telemedicine parity. So, in theory, the vast majority of providers should be able to bill – and receive reimbursement – for at least some telemedicine services.”
In a FierceHealthcare article titled “Reimbursement Persists as Obstacle to Telehealth Adoption” by Susan Hall, she stated: “Twenty-three states and the District of Columbia require telehealth reimbursement comparable to that for in-person services. Other states place limits on the types of technology, patient locations, covered provider types and may require an in-person visit to establish a patient-provider relationship, according to the brief. Nevada is the only state to extend parity to workers’ compensation programs. In most states, reimbursement is limited to live videoconferencing. Under Medicaid, only nine states reimburse for store-and-forward services, while 16 states pay for remote patient monitoring. Pennsylvania and South Dakota cover remove patient monitoring through their departments of aging.”
8. Great Billing and Collecting is Critical. To succeed with telehealth, providers need a great billing and collections solution. Getting paid well is a huge challenge in many specialties and with many payers.
In a Modern Healthcare article “Limited Reimbursement Hinders Telehealth Adoption” by Rachel Arndt, she stated: “Limited reimbursement is getting in the way of providers adopting telehealth broadly, and most respondents to a new survey said fewer than half of their tele-visits were reimbursed. Reimbursement was far and away the most frequently cited barrier to expanding telehealth in a survey by the College of Healthcare Information Management Executives and KLAS. Fifty-nine percent of respondents said reimbursement was getting in the way.”
Commercial payers are leading agents of telehealth reimbursement — in some cases, payers have stopped reimbursing non-emergent emergency room visits for issues that could have been facilitated via telehealth. However, insurers are still figuring out how to integrate telemedicine billing codes into claims systems and deciding their level of coverage of specialty telehealth services, according to an American Well blog post.