The following is a guest article by Rebecca E. Gwilt, Esq., Partner at Nixon Law Group.
Many consumers are starting to accept telehealth as a standard of healthcare delivery in their everyday lives, whether through direct to consumer wearables like FitBit or Oura or professional telemedicine consults offered by their healthcare providers, employers, or insurance companies. Telehealth is entering public consciousness, and its use is being further fueled by the fallout from the COVID-19 pandemic. Hospitals were early adopters, and clinic-based providers are slowly catching up, with some specialties (e.g., behavioral health) outpacing the rest.
Strikingly, however, post-acute providers (PACs) like nursing homes, home health agencies, and hospices have not yet embraced the use of remote care technologies. According to the Advisory Board, as of 2018 only 10% of the country’s 15,000 nursing homes had a telemedicine program in place, and home health and hospice programs are likely even farther behind. Paradoxically, as compared to the general population, patients and residents receiving care from these post-acute providers (PACs) would likely benefit the most from the use of telemedicine. These providers and the patients they serve have unique and more acute needs that telehealth is built to address, including barriers to access (e.g., transportation, mobility, availability of clinicians), a need for continuous monitoring outside the hospital, and the risk of preventable spikes in acuity. Telehealth also offers the opportunity for these providers, who are generally paid at a bundled or per diem rate, the tools to reduce the overall cost of care, which means retaining more revenue to fuel growth.
Growing Opportunities in Post-Acute Telehealth
In 2020, large telemedicine companies that provide both hospital, physician practice, and direct-to-consumer (DTC) telemedicine services are seeing explosive growth, due in no small part to the COVID-19 crisis. In today’s environment, telehealth has been touted at the highest levels of government and industry as a key mitigation for infection control. In no healthcare sector is this more needed than post-acute care, as nursing homes account for at least 1/3 of all of the nation’s COVID-19 fatalities and more than half the total fatalities in 14 states, according to the Kaiser Family Foundation. According to CMS Administrator Seema Verma, “nursing homes have been ground zero for COVID-19.” Based on these trends, it is likely there will be a surge in telehealth innovation and adoption across PACs, triggering more investment, innovation, and growth. In this environment, there is tremendous opportunity for growth in PAC telehealth, spurred by the changes I highlight in this article.
Massive Expansion in Eligible Patient Population
Prior to the public health emergency (PHE), Medicare telehealth reimbursement was limited to care provided to patients located in a rural or medically underserved area, and telehealth visits had to take place in a clinical setting rather than in a patient’s home. Given the increase in needs for remote care triggered by the pandemic, and based in part upon new legislation passed by Congress, CMS now permits reimbursement for telehealth services delivered to Medicare beneficiaries in any setting, including, but not limited to, a person’s home. This policy pivot, which many predict will become permanent law, significantly expands the number of Medicare beneficiaries to whom providers can deliver remote care. Providers can deliver telehealth services to any homebound home health or hospice patient, regardless of geographic location. It will also allow residents of nursing homes and assisted living facilities to access a broader and less restricted set of services without needing to leave the facility.
In addition, CMS added more than 80 new telehealth codes to its list of “approved” telehealth services, including audio-only codes. Reimbursement for more services to more beneficiaries creates a massive opportunity for providers delivering fee-for-service telehealth services to PAC providers. In addition, for purchasers of telehealth services in the PAC sector, availability of reimbursement from other payors means a likely reduction in the cost they’re currently paying to in-source both the technology and clinical services. Here are some service-specific opportunities:
Home Health Agencies (HHAs) are paid based on a 60-day episode of care, so the key to financial sustainability is providing high quality care without overutilization of resources. HHAs are now permitted to provide services to their patients via remote technologies as long as the service is part of the patient’s plan of care, and that care plan does not require an in person visit. Services can be delivered any number of ways—telehealth (which generally means live, interactive audio and video), remote patient monitoring, audio only or TTY telephone calls. While these services would not be directly reimbursable (only in-person visits can be reported on the home health claim), the ability to monitor and check in on patients remotely could help deter escalation in acuity, the need for hospital admission, and other preventable resource consumption.
The use of remote patient monitoring technology could be of significant value to a HHA by ensuring continuous monitoring of at risk patients. Monitoring can pick up gradual changes in symptoms or sudden acute needs in real time, which affords a HHA the opportunity to intervene and to address preventable increases in acuity. This, in turn, can decrease the overall cost of care for the patient. In addition, telehealth technology can increase provider capacity to support access to care in the event of a spike in demand for services in areas hard hit by the virus. During the PHE, if a physician determines a Medicare beneficiary should not leave home because of a medical contraindication or due to suspected or confirmed COVID-19, and the beneficiary needs skilled services, he or she will be considered “homebound” and therefore qualify for the Medicare home health benefit. This could increase the need for home health services, which creates an even broader opportunity for telehealth providers.
Further, pursuant to the CARES Act, Nurse Practitioners, Clinical Nurse Specialists, and Physician Assistants can now (1) order home health services; (2) establish and periodically review a plan of care for home health patients; and (3) certify and re-certify that the patient is eligible for home health services. In addition, Occupational Therapists (OTs), Physical Therapists (PTs), and Speech Language Pathologists (SLPs) can now perform the Initial and Comprehensive Assessments for all patients as long as therapy services are part of the plan of care. HHAs and telehealth providers can use this new staffing flexibility to reduce the cost of care delivery.
Hospice providers are paid on a daily rate, and that rate is static regardless of how many services they provide. This means that, similar to a HHA, a hospice provider’s path to financial sustainability depends on their ability to provide quality services at the least cost. If “feasible and appropriate,” hospice providers can now deliver services to Medicare patients receiving routine home care via remote technologies (telehealth, remote patient monitoring, audio only or TTY telephone calls). These providers can also conduct patient recertification visits via telehealth. Telehealth and remote patient monitoring technology can increase quality of life for hospice patients by offering the benefit of closely monitoring the needs and symptoms of the patient and decreasing the need to travel, especially in rural areas. In addition, there is a critical shortage in hospice nurses across the country. Telehealth providers who can build a nurse network to provide high quality care at the point of need will be well positioned to enhance access (and quality of care). for this especially vulnerable population.
In recent years, there has been a push to recognize the benefits of telemedicine for hospice patients, and it’s likely we’ll see policy leaning toward greater incentives for adoption.
Nursing Homes (SNF, NF)
Medicare pays skilled nursing facilities (SNF) based on a per diem prospective payment system (PPS) under Medicare Part A that is case mix adjusted. However, clinical professionals are able to bill directly for some Part B Medicare services delivered to residents at the facility—including a limited list of telehealth services. Prior to the PHE, CMS reimbursed for a very limited list of Medicare-approved telehealth codes for services provided to SNF residents. Therefore, SNFs often pay “out of pocket” for additional telehealth services for their residents when the appropriate clinical staff is not available. Because SNFs are paid a per diem, many can’t justify the added costs, even though the investment can (a) improve access to quality care for their residents when a Medical Director isn’t available and (b) help avoid preventable hospital readmissions.
As a result of the recent CMS waivers and policy changes, the cost of these services for SNFs can be significantly reduced, creating potential savings for SNFs and revenue opportunities for telehealth providers. Medicare providers can now bill Medicare Part B for a wider range of services (based on the new Medicare telehealth services list). In addition, CMS has relaxed some of the existing SNF requirements that require in-person visits. These visits can now be conducted via telehealth, where appropriate, including via audio-only methods. CMS now allows physicians to delegate previously non-delegable tasks to a physician assistant, nurse practitioner, or clinical nurse specialist, as long as the physician is available for (remote) supervision. This means that telemedicine providers can more readily utilize non-physician clinical staff, which can create additional cost savings.
SNFs are still required to provide or arrange for the provision of physician services 24 hours a day, in case of an emergency. Retention of a telemedicine provider for this “on demand” service is likely much more cost effective than paying a local provider to be on call to travel on site at a moment’s notice. Also, in an environment in which physicians and other practitioners are reluctant to enter a nursing home, for fear of becoming infected, telemedicine providers are key to ensuring access to services. Last, Skilled Nursing Facilities (SNFs) can bill Medicare for the “originating site facility fee”, HCPCS Q3014, for each telehealth visit, which is a modest, though not insignificant revenue opportunity.
While many of these changes are in effect only during the course of the PHE, it is unlikely we will be returning to the status quo. Federal and state government are demonstrating a new appreciation for the need to implement smart technology solutions to prevent the spread of infection in nursing homes and among the medically at-risk population. As Administrator Seema Verma stated, “the genie is out of the bottle on this one.” We are likely to see both agency-level and legislative changes that create incentives for adoption of telemedicine by providers of all types. Now is the time for companies to start thinking creatively about how they can get ahead of the coming curve, and post-acute telemedicine is a largely untapped market with tremendous future potential.