Achieving the Promise of Connected Care

Connected Care Delivers:Telemedicine s Value Proposition

June 8, 2015 | National Council of Behavioral Health AgendaIntroduction U.S. Market Landscape and OutlookEvidence of Cost Savings & Quality CareLegislative and Regulatory Barriers The Alliance Prescription: Reimbursement Framework

Alliance for Connected Care

Alliance Advisory BoardAlliance for Aging ResearchAlzheimers Foundation of AmericaAmerican Academy of Family PhysiciansAmerican Academy of Physician AssistantsAmerican Heart AssociationAmerican Language-Speech-Hearing AssociationAmerican Osteopathic AssociationAssociation for Behavioral Health and WellnessChildrens Mercy Hospitals and Clinics Digestive Disease National CoalitionEvangelical Lutheran Good Samaritan SocietyFamily VoicesHealthCare Chaplaincy NetworkMental Health AmericaNational Alliance for Caregiving

National Association of ACOsNational Association of Chain Drug StoresNational Association of Homecare & HospiceNational Council for Behavioral HealthNational Alliance on Mental IllnessNational Health IT Collaborative for the UnderservedNational Multiple Sclerosis SocietyNational Organization for Rare DisordersParkinsons Action NetworkPopulation Health AllianceStanford Hospitals & ClinicsUnited Spinal AssociationVisiting Nurse Associations of America

4What is Telemedicine?E-mail communicationPassive, remote monitoring through in-home sensorsKiosk 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.Asynchronous communicationLive + Virtual communicationVirtual CommunicationPhone consult or on-line video in real timeComputer, SmartPhone, TabletAccess to LPN, RN or MDStore and ForwardStore and forward technologies allow for the electronic transmission of medical information, such as digital images, documents, and pre-recorded videos through secure email transmission5Telemedicine Goes MainstreamEmployers &Health Plans

Telemedicine Offerings Increasing Among Employers*Source: http://www.towerswatson.com/en-US/Press/2014/08/current-telemedicine-technology-could-mean-big-savings22%201437%201571%Projected for 20177Telemedicine Increasing in Medicaid

48 Medicaid Programs Have Some Type of Coverage for Telemedicine. Source: American Telemedicine AssociationTelemedicine Increasing Among Health PlansSource: American Telemedicine Association

23 states and DC have Full Reimbursement Parity LawsBehavioral HealthAfter 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, WecounselLegal and regulator barriers in public programs

Why the Explosive Growth?

11Consumer InterestAttitudes 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 personSource: http://www.law360.com/articles/629785/paging-employers-have-you-considered-telemedicine12Why Continued Growth?

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 PostAcute 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

17State Level IssuesState by state diversityStandards of CareLicensureFSMB Model Telemedicine GuidelinesFSMB Licensure CompactFederal-level Issues

DefinitionsSection 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 EffortCBO 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, CMSs 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 CTelNew Reimbursement StructureConventional 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: SubstitutionVirtual 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 doctors office visit could save the Medicare program an estimated $45/visit.

Actuarial AnalysisAlternative Site of CareUtilizationCommercialMedicareEmergency room5.6%$ 1,595$ 943Urgent care45.8%11698Physician office visit30.9%9883Other clinics5.4%5783Do nothing12.3%00Average cost100.0%$ 176$ 128Table 6: Estimated Costs Best Estimate

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 Medicare-reimbursed office cost. Under the above scenario, the average savings to Medicare will be approximately $45 ($128 - $83) for each telehealth visit.Actuarial AnalysisConcerns 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.

QuestionsPlease contact Krista Drobac with questions.

Krista DrobacExecutive Director, Alliance for Connected Care kdrobac@sironastrategies.com202-415-3260