Telemedicine advancements being aggressively pursued

November 13, 2014

Healthcare executives are optimistic about telemedicine and actively pursuing telemedicine advancements despite reimbursement and regulatory challenges, according to a new survey of senior healthcare executives released today by Foley & Lardner LLP.

Healthcare executives are optimistic about telemedicine and actively pursuing telemedicine advancements despite reimbursement and regulatory challenges, according to a new survey of senior healthcare executives released today by Foley & Lardner LLP.

“Reimbursement has been an obstacle to widespread telemedicine adoption, with commercial health plans rarely covering it unless required to do so,” says Nathaniel Lacktman, partner in Foley & Lardner’s Health Care Practice. 

According to the survey, 41% of respondents said they do not get reimbursed at all for telemedicine services; and 21% reported receiving lower rates from managed care companies for telemedicine than for in-person care.

“Managed care executives should recognize the tide is turning, driven by quality opportunities and patient demands, and currently 22 states plus D.C. have enacted laws requiring health insurers to cover telemedicine services in addition to traditional in-person services,” Lacktman says

He points that there is support for innovative health technology across party lines, and there are examples of telehealth-specific regulations in bipartisan legislation. One example is the Medicare Telehealth Parity Act of 2014 introduced late this past summer, which proposes a three-phase rollout of changes to the way telemedicine services are reimbursed by Medicare and expands coverage not only for residents of rural areas, but urban areas as well.

“Secondary obstacles include licensure and scope of practice barriers, and need for providers to better understand that there are models to utilize and approaches available to meaningfully build out their telemedicine programs,” Lacktman says. “They need not go it alone or re-invent the wheel.”

The opportunities are not lost on managed care executives, as a number of the largest health plans have created their own telemedicine provider offerings, looking to occupy this space and harness their payer networks, according to Lacktman.

Eighty-four percent of the survey respondents believe telemedicine is important to their organizations; nine out of 10 of them are pursuing telemedicine programs.

“Managed care executives should seek out ways to partner with providers under risk sharing or subcapitated arrangements to promote and incentivize telemedicine as a key tool to manage population health of their subscribers, reduce acute inpatient stays, and improve quality care,” he says.

As the Affordable Care Act (ACA) increases pressure to keep patients healthy, 50% of the survey respondents said that improving quality of care was their primary motivator for adopting telemedicine.

In the post-Obamacare paradigm, providers bear a much greater responsibility for the sustained wellness of their patients as healthcare providers move from a fee-for-service model to one that reimburses based on positive patient outcomes, according to the survey.

The survey results confirm our belief that telemedicine is the next monumental shift in the healthcare industry, according to Lacktman.

In light of the survey results, Lacktman offers these 4 take aways:

1/ As the reimbursement and regulatory landscape is continually changing, the best course of action for healthcare organizations is to move forward with developing telemedicine programs as the law will catch up.

2/ In the wake of the ACA, risk-bearing models such as capitation (in which a provider receives a monthly fee per patient to manage their care) and bundled payments (in which patients pay a one-time charge for a procedure), are moving out of the margins and into the mainstream. Healthcare executives are increasingly focused on keeping their patients healthy and telemedicine offers a valuable means to help this effort. 

3/ With its ability to multiply patient points of contact at a significantly reduced cost, telemedicine enables physicians to keep closer tabs on their patients, whether it is monitoring blood pressure from a distance or ensuring day-to-day medication adherence.

4/ The survey shows that healthcare organizations are already implementing telemedicine practices. More than half already offer remote patient monitoring services (64%), store and forward technology (54%) and real-time interaction capabilities (52%).

“Telemedicine can serve as the catalyst for hospital systems seeking broad-scale population management, vertical integration, and comprehensive care offerings,” Lacktman says. “Telemedicine’s many benefits include the potential to exponentially expand a provider’s geographic footprint, use doctors’ time more efficiently, keep patients healthier and dramatically reduce the barriers to patient interaction and continued care management.”  

Finally, he adds, telemedicine offers significant growth opportunities for healthcare organizations to position themselves for the new wave of patient demands and expectations.

“But as with any new technology, it also comes with business and legal risks that require careful navigation,” he says. “And yet, there are many viable options and business solutions to successfully harness telemedicine, and we see the regulatory and reimbursement landscape changing in response.”