Reimbursing TeleHealth

Telemedicine is presenting new challenges for health care, as it continues to redefine it.

Mayo Clinic is one of the pioneers in telemedicine. Its electronic intensive care unit, also known as eICU, is a key breakthrough. The setup here is different and rather cutting edge.  Forty patients are monitored on any given day, though they are not even at the clinic.  Nurses watch over them through cameras and screens, as well as telephone devices, where they get to have a back and forth with them in real time.

None of them are covered by their health insurance, though. This goes for both government (i.e. Medicaid, Medicare ) as well as private ones.

One reason is that their health care policies aren’t updated yet. They still have not accounted for telemedicine. Partly, this is because some of them aren’t in a hurry to. Especially Medicare. Medicare gives health insurance to Americans over 65 years old, to whom ‘ 21st-century modes’ aren’t as urgent or as relevant, so it isn’t really under any pressure to adapt. And private insurance tends to follow its lead.

So in this case, Mayo clinic absorbs all of the costs. “Medicare reimbursement for telehealth is kind of stuck in the 1990s”, Mayo’s public policy manager, Randy Schubring adds.

According to Mayo Clinic’s chief of critical care, Dr. Daniel Brown, “ Medicare pays me if I’m at the bedside. They will not pay for telemedicine”.

Legislation has already been filed to make sure that telehealth is covered but its movement has been quite slow.

It hasn’t affected the bottom line, though. Mayo Clinic has posted earnings of $834.3 million in 2013, which is a 36 % jump from that of the previous year.

Still, this is a sad reality; since health care needs to move towards telehealth to reduce and stabilize its costs in the future. For one, it is going to reduce the need for hospital visits and stays, where patients need to pay physicians for every procedure; not to mention the boarding fees.  This will help lead to a reduction of all costs across the system of up to 20%, as it moves health care away from the current ‘fee for service’ model.

There are signs of hope, though.  United Healthcare, a private insurer, has started covering telemedicine procedures.  Likewise, the Centers for Medicare and Medicaid Services have included provisions in its fee schedule for 2015 that boosts reimbursement for telehealth.

Using the CPT or Current Procedural Terminology Code 99490, remote chronic care management can be reimbursed for a monthly, unadjusted fee of $42.60. Likewise, Medicare can now reimburse remote patient monitoring of chronic conditions, as well.

Before, according to the American Telemedicine Association, Medicare doesn’t pay for these services, making its providers foot the bill through the ‘evaluation and management code’, instead.

These problems are catastrophic, not only for the government and insurers but the physicians and patients.  They are the sucking the lifeblood from an already broken healthcare system.  It is apparent that we need companies who can help take these groups into the 21st century with the technologies and systems available.  One such company is HExL.com, whose founder and CEO, Richard Kimball, is positioning his company right in the forefront of these challenging issues.  HExL believes that healthcare in the U.S. currently has incentives which encourage fragmentation, a lack of integration and, ultimately, overutilization.  HExL plans to reframe the existing care and reimbursement environment with an entirely new value-based system.  Through these programs, physician groups will be incentivized to use population health principles to improve outcomes and lower costs, i.e. to drive for value.

Many healthcare visionaries like Richard (Rick) Kimball Jr. see that Telehealth is the future.  With a needed push via Obamacare which helped expedite this issue into the limelight, we will soon see solid results in the form of valued based care becoming more of a reality than a fantasy.