Connected Care Delivers: Telemedicine s Value Proposition. June 8, 2015 National Council of Behavioral Health

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1 Connected Care Delivers: Telemedicine s Value Proposition June 8, 2015 National Council of Behavioral Health

2 Agenda Introduction U.S. Market Landscape and Outlook Evidence of Cost Savings & Quality Care Legislative and Regulatory Barriers The Alliance Prescription: Reimbursement Framework

3 Alliance for Connected Care

4 Alliance Advisory Board Alliance for Aging Research National Association of ACOs Alzheimer s Foundation of America National Association of Chain Drug Stores American Academy of Family Physicians National Association of Homecare & Hospice American Academy of Physician Assistants National Council for Behavioral Health American Heart Association National Alliance on Mental Illness American Language-Speech-Hearing Association National Health IT Collaborative for the Underserved American Osteopathic Association National Multiple Sclerosis Society Association for Behavioral Health and Wellness National Organization for Rare Disorders Children s Mercy Hospitals and Clinics Parkinson s Action Network Digestive Disease National Coalition Population Health Alliance Evangelical Lutheran Good Samaritan Society Stanford Hospitals & Clinics Family Voices United Spinal Association HealthCare Chaplaincy Network Visiting Nurse Associations of America Mental Health America National Alliance for Caregiving

5 What is Telemedicine? Asynchronous communication communication Passive, remote monitoring through in-home sensors Virtual Communication Live + Virtual communication Store and Forward Phone consult or on-line video in real time Computer, SmartPhone, Tablet Access to LPN, RN or MD 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 technologies allow for the electronic transmission of medical information, such as digital images, documents, and prerecorded videos through secure transmission

6 Telemedicine Goes Mainstream Medicaid Employers & Health Plans Medicare Advantage Rural patients

7 Telemedicine Offerings Increasing Among Employers 37% 71% 22% Projected for 2017 *Source:

8 Telemedicine Increasing in Medicaid 48 Medicaid Programs Have Some Type of Coverage for Telemedicine. Source: American Telemedicine Association

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

10 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

11 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.

12 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, or videos, in lieu of seeing them in person

13 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

14 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.

15 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

16 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

17 Regulatory Roadblocks & Legislative Barriers Reimbursement Licensure Lack of clarity on definitions Standards of Care Credentialing Concerns about fraud and abuse

18 State Level Issues State by state diversity Standards of Care Licensure FSMB Model Telemedicine Guidelines FSMB Licensure Compact

19 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

20 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.

21 Medicare Reimbursement for Telehealth *Information gathered and published by CTel

22 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 feefor-service. We need a transition.

23 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.

24 Actuarial Analysis Table 6: Estimated Costs Best Estimate Alternative Site of Care Utilization 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 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.

25 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.

26 Questions Please contact Krista Drobac with questions. Krista Drobac Executive Director, Alliance for Connected Care

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