Population Health Insights

The Two Canoes: Fee-for-Service Reimbursement for Remote Patient Monitoring

two-canoes-fee-for-service-reimbursement-for-remote-patient-monitoring

Imagine that you are a tightly knit health system executive team. As with any team, you're constantly working to balance — in this case: care delivery, quality, financial sustainability, staffing and stature in your market, among other items. In any “normal” organization, this is challenging ... for a health system, it’s even more challenging.

Put yourself in the CFO’s position. If you ask the CFO of a manufacturing company:

“What happens if we reduce the manufacturing time by 25% for our product?”

The answer you'll get is likely to be something like:

“Costs go down by 12%, and margin goes up by 15%. Revenue can also grow 25%, if we can sell it all."

Ask a health system CFO what the financial impact is of reducing hospital admissions by 25% for chronic disease patients ... and they'll have to use some combination of advanced calculus, Excel wizardry and the old eight-ball to figure out the answer.

But it’s not their fault: Each patient who walks in the door has a different payment model. Not just a different RATE, but a different MODEL — and that model is negotiated by a third-party payer that isn’t even in the room. Sometimes the providers lose money; sometimes they make more money.

Add to this the idea that it’s not right to give different people different care based on their insurer. And — even if it isn’t about making money — they have to choose where to invest to ensure they keep the doors open, or they don’t care for ANYONE.

How Remote Care Reimbursement Is Helping to Bridge the Gap

Why does this matter for Remote Patient Monitoring? All health systems are somewhere between 0% and 100% at financial risk for the cost of their patients. In reality, most systems carry a mix of fee-for-service and value-based care payment models. They have “one foot in each canoe.” As they work to deliver more value-based care, they're partially compromising their fee-for-service–based revenue streams, and vice versa.

On top of this, they're also collaborating with a host of physicians and their various payment models, too. This makes it extremely difficult to fully optimize for the transition to value-based care. It’s very risky to jump from one canoe to the other — but a slow transition between canoes isn’t great, either.

Expanded fee-for-service reimbursement, such as the addition of CPT 99091 in 2018 and several additional codes that are currently in the proposed physician fee schedule for 2019 (specifically 990X0, 990X1 and 994X9), help bridge that gap. In essence, they help tie the canoes closer together (think bungee cords).

These codes help align incentives DURING the transition to value-based care. Many of our customers use our remote monitoring solutions to reduce hospitalization. For value-based care patients, the financial model is based on cost savings and similar incentives, which, in the past, had to cover the costs to deliver the same model to fee-for-service patients.

Now, with CPT 99091 and the additional codes for 2019, these health systems can keep more patients out of the hospital by delivering remote monitoring programs to a much larger population, and ensuring that they are made whole on all their patients. This has already started with CPT 99091, and will accelerate into 2019. The leading remote care delivery organizations will be well prepared for this service addition.

Thank you to the Alliance for Connected Care, The Center for Connected Health Policy, Krista Drobac, Nathaniel Lacktman, David Ryan, the Center for Medicare and Medicaid Service and many others for your persistence in driving change and moving American healthcare forward.

If we want health systems to switch canoes while they're paddling — we have to bring those canoes closer together. The new CPT codes do exactly that!

Look for an upcoming post here at the Care Innovations blog for details on the new codes and how to use them.

About Marcus Grindstaff
Chief Operations Officer, Care Innovations

About Marcus Grindstaff, COO of Care InnovationsA business strategy and product technology leader with more than 20 years of experience in the high-tech industry, Marcus Grindstaff is the Chief Operating Officer for Care Innovations®, where he holds responsibility for sales and operations. Marcus joined Care Innovations at its formation in 2011, from the Intel Digital Health Group where he was a 17-year veteran.

Throughout his career, Marcus has focused on growing exceptional teams chartered with delivering strategy, technology, marketing and product execution throughout the U.S., Asia and Europe. He is also a passionate spokesperson for reforming the healthcare delivery system, and serves on the board of the National Alliance for Caregiving.