How Telemedicine Can Improve Quality & Lower Costs in an ACO. October 8, 2015 NaEonal AssociaEon of ACOs Krista Drobac

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1 How Telemedicine Can Improve Quality & Lower Costs in an ACO October 8, 2015 NaEonal AssociaEon of ACOs Krista Drobac

2 Agenda Market Landscape and Outlook Legisla4ve and Regulatory Barriers Evidence of Cost Savings & Quality Care The Alliance Prescrip4on: Reimbursement Framework

3 Alliance for Connected Care

4 Alliance Advisory Board Alliance for Aging Research Mental Health America Alzheimer s Founda4on of America American Academy of Family Physicians American Academy of Physician Assistants Na4onal Alliance on Mental Illness American Heart Associa4on Na4onal Associa4on of ACOs American Language- Speech- Hearing Associa4on Na4onal Associa4on of Chain Drug Stores American Osteopathic Associa4on Na4onal Associa4on of Homecare & Hospice Associa4on for Behavioral Health and Wellness Na4onal Council for Behavioral Health Children s Mercy Hospitals and Clinics Na4onal Council of State Boards of Nursing? Diges4ve Disease Na4onal Coali4on Na4onal Health IT Collabora4ve for the Underserved Evangelical Lutheran Good Samaritan Society Na4onal Mul4ple Sclerosis Society Family Voices Na4onal Organiza4on for Rare Disorders HealthCare Chaplaincy Network Parkinson s Ac4on Network Indiana University Health? Popula4on Health Alliance Stanford Health Care United Spinal Associa4on Visi4ng Nurse Associa4ons of America

5 What is Telemedicine? Asynchronous CommunicaEon Virtual CommunicaEon Live + Virtual CommunicaEon Store & Forward E- mail communica4on Phone consult or online video in real 4me Kiosk or retail clinic model with pa4ents connect to NP via online video in real- 4me Allows for the electronic transmission of medical informa4on Passive, remote monitoring through in- home sensors Devices: Computer; SmartPhone; or Tablet Differen4a4on is that the LPN/LVN acts as the hands of the remote NP Examples: Digital images; Documents; and Pre- recorded videos through secure transmission Real- 4me: Access to LPN, RN or MD Vaccina4ons; Blood tests; and Other basic services

6 Telemedicine Goes Mainstream Medicaid Employer Health Plans Medicare Advantage Rural paeents

7 Marketplace Outlook Various market research organiza4ons peg the telehealth market growth rate between 18-30% per year. Telehealth market generated annual revenue of $9.6 billion in 2013 (+60% increase from 2012 when it was $6 billion) Telehealth market is expected to grow to $38.5 billion in revenue by 2018 (a compound annual growth rate of 32% from )

8 Consumer Interest Aitudes toward telemedicine technologies in the U.S. have also undergone a significant shik in recent years. According to a recent survey by Cisco: 74% of American consumers would use telehealth services 76% of pa4ents priori4ze access to health care services over the need for human interac4ons with health care providers 70% of pa4ents are comfortable communica4ng with their health care providers via text, or videos, in lieu of seeing them in person

9 Telemedicine Increasing Among Health Plans 23 states and DC have Full Reimbursement Parity Laws Source: American Telemedicine Associa4on

10 Telemedicine Increasing in Medicaid 48 Medicaid Programs Have Some Type of Coverage for Telemedicine Source: American Telemedicine Associa4on

11 Current Medicare Reimbursement for Telehealth Sec4on 1834(m) of Social Security Act limits telehealth reimbursement to rural areas, and can only be conducted from approved origina4ng sites to distant sites with a physician present. Origina4ng site construct is very limi4ng. CMS approves code modifiers for telehealth services every year, but the services are always subject to the statutory restric4ons.

12

13 Current Medicare Reimbursement Remote PaEent Monitoring CMS has broad authority to reimburse for remote pa4ent monitoring. Codes exist already for some remote monitoring, including remote cardiac services, remote re4nal imaging, remote re4nal imaging. Codes are very limited and difficult to obtain.

14 Regulatory Roadblocks & LegislaEve Barriers Reimbursement Licensure Lack of clarity on defini4ons Standards of Care Creden4aling Concerns about fraud and abuse

15 Current HHS Authority The Secretary has the authority to grant a waiver, under the 1899(f) of the ACA, to waive as may be necessary to carry out the accountable care organiza4on program. Secretary can use waiver authority to waive 1834(m) restric4ons for ACOs. CMS has authority to approve codes for remote pa4ent monitoring.

16 MSSP Final Rule CMS has the authority to waive 1834(m) restric4ons for telehealth. In the final rule, CMS said: We believe that providing ACOs that par4cipate in the Shared Savings Program under two- sided performance based risk arrangements with addi4onal flexibility to expand appropriate use of telehealth services has significant poten4al to improve pa4ent care, improve communica4on between pa4ents and their families and health care providers, support more 4mely treatment, and help to address barriers to access to care for some beneficiaries...

17 MSSP Final Rule Commenters on the final rule overwhelmingly agreed that telehealth should be reimbursed in ACOs and cited evidence of how telehealth helps achieve the goals of the ACO program. But CMS did nothing. They will wait for data back from the Next Gen ACOs to do a waiver for Track 3 ACOs in MSSP.

18 Congress Considering LegislaEon Senate Bill House Bill CBO & MedPAC

19 Evidence is Key Data shows the importance of Connected Care to the borom line issues of quality, pa4ent sa4sfac4on and cost. Investment in telehealth and remote pa4ent 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 subs4tu4on rates. Looked at disease incidence, cost of disease, review of how telemedicine is typically applied to the disease.

20 Primary Care: SubsEtuEon Virtual visits are not simply a supplement to in- person visits. Data shows that 83% of the 4me pa4ent issue is resolved by telehealth. The average number of telehealth visits per pa4ent 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 es4mated $45/visit.

21 Actuarial Analysis Medicare will realize savings as long as the average cost for the alterna4ve site of care is greater than the es4mated $83 Medicare- reimbursed office cost. Under the above scenario, the average savings to Medicare will be approximately $45 ($128 - $83) for each telehealth visit. AlternaEve Site of Care UElizaEon Commercial Medicare Emergency room 5.6 % $ 1,595 $ 943 Urgent care 45.8 % Physician office visit 30.9 % Other clinics 5.4 % Do nothing 12.3 % 0 0 Average cost % $ 176 $ 128

22 Actuarial Analysis Concerns regarding induced u4liza4on unfounded. Will only happen if the percentage of Medicare pa4ents u4lizing telehealth who would have otherwise have done nothing increases to more than 32.8 percent. Unlikely given that telehealth vendors currently report that this pa4ent segment is approximately 13 percent within the commercial market.

23 Health System Evidence In 2012, Geisingser found that telehealth reduced their re- admission rate by 44%. They also saved 11% per pa4ent per month on telemonitoring for heart pa4ents. In less than two years, St. Vincent Hospital in Indiana in partnership with Care Innova4ons reduced hospital readmissions to 5%, which represents a 75% reduc4on from the control group (20%) and the na4onal average (20%). A partnership between Banner Health and Philips produced a 27% decrease in costs in reduc4ons in hospitaliza4ons and length of stay. UPMC reduced readmission rates for heart failure pa4ents from 29% to 5%.

24 Other Examples of Evidence 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 pa4ents without prior connec4on to a provider (Rand Study) Health Affairs (2014) HealthPartners Online Clinic for Simple Condi4ons delivers savings of $88 per - episode and high pa4ent approval Journal of Telemedicine and Ehealth (2015) Showed telemedicine use for diabetes to be an "effec4ve mode" of care, increases pa4ent adherence and reduced cardiovascular risk factors.

25 5 NaEonal Policy Developments that Advance Telemedicine Network Adequacy Established by the Na4onal Associa4on of Insurance Commissioners (NAIC) Drak Network Adequacy Plan Released September 1 Comment Period closed on September 22 The NAIC proposed health plans use telemedicine as a factor in determining adequate access Medicare Access and CHIP ReauthorizaEon Act (MACRA) Signed into law in April 2015 to replace the SGR Beginning in 2019, payments will depend on performance Two Payment Paths Merit- based Incen4ve Payments (MIPS) Alterna4ve Payment Models (APM) Providers will be incen4vized to expand prac4ce access and care coordina4on Medicare Physician Fee Schedule (MPFS) CMS released proposed rule in July 2015 Posi4ve step toward telemedicine in home seing For the first 4me CMS proposed reimbursement for telemedicine services provided in the home seing Added ESRD counseling in pa4ent s home Comprehensive Care for Joint Replacement Payment Model (CCJR) Announced by CMS/ CMMI in July 2015 Bundled payments for lower- joint replacements in 2016 CMS is liking Medicare restric4ons on telehealth CMS states telehealth services enhance care coordina4on and improve the efficiency of care Senate Finance Chronic Care Working Group Bipar4san effort seeking policy solu4ons for Medicare April 2015 RFI Disease management Streamline care coordina4on Building comprehensive legisla4on for end of 2015 or early 2016

26 QuesEons Krista Drobac Execu4ve Director Alliance for Connected Care

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