Oct 04, 2021
Telehealth reimbursement after COVID-19: The elephant in the room
Over the last few years, we’ve talked a lot about telehealth – both on the appetite for telehealth solutions in general and, more recently, the acceleration of telehealth adoption during the COVID-19 pandemic. The dialogues have focused on the many benefits of telehealth for patients and providers, how healthcare providers are innovating in telehealth today, and how telehealth factors into our long-term vision for value-based care. Clearly, on many fronts, from powerful new innovations to increased patient satisfaction and health outcomes, the outlook for telehealth is extremely promising. But here’s the thing – speak to healthcare decision makers today who are interested in implementing telehealth, or in maximizing the ROI of existing telehealth investments, and they’ll tell you that the burning question on their minds isn’t so much whether telehealth has potential these days, but rather: What will telehealth reimbursement look like after COVID-19? In our latest Future Health Index (FHI) report for 2021, we revealed that although 64% of global healthcare leaders are currently investing heavily in telehealth, reimbursement model limitations remain a key cause of concern for as many as 24%, which is causing reluctance to adopt. So why is reimbursement such a significant barrier to telehealth adoption, and what needs to happen to make telehealth reimbursement a lasting success?
Of course, the degree to which reimbursement is a concern for aspiring telehealth adopters (compared with other things like infrastructural challenges) varies across markets – but even in developed countries where telehealth has existed for years, the number of leaders citing reimbursement as a barrier to adoption is still as high as 20%.
Why recent triumphs for telehealth reimbursement come with a catch
The outbreak of COVID-19 and subsequent overwhelming of hospitals, coupled with physical distancing mandates and other measures to prevent further spread of the virus, have led many governments around the world to finally recognize the potential of virtual care, rapidly expediting the amendment of laws and regulations to enable providers to deploy telehealth services at scale. Many governments have adopted telehealth reforms in a matter of weeks – reforms that would otherwise most likely have taken years to be considered, let alone introduced [1]. There are four significant changes that have been made across multiple markets (particularly the US), that have transformed telehealth reimbursement completely. Namely: All these changes represent progress that healthcare leaders and providers have been hoping for since long before the pandemic. However, they come with a catch: they’re tied to the existence of the COVID-19 pandemic – which means, technically, they have an expiry date. For aspiring telehealth providers, this raises the question of whether these developments will all fall away as soon as the COVID-19 crisis subsides. Add to this the fact that concrete regulations for telehealth have yet to be established in most countries, and it’s easy to see why healthcare leaders are reluctant to place bets on reliable telehealth reimbursement pathways forming – at least in the short term.
The road ahead: achieving lasting success for telehealth reimbursement
The case for permanent telehealth reimbursement is being made in many countries right now, but it’s still very much early days. For example, in the US, there are more than a thousand federal and state bills pending that would finally allow telehealth in the home as the originating site for all use cases and services [4]. And out of more than 100 new telehealth services and codes that the federal Centers for Medicare & Medicaid Services (CMS) waived following COVID-19, eight have already been made a permanent part of the 2021 physician fee schedule. These apply across multiple areas, including psychotherapy – the first tangible recognition of mental health and telehealth permanence [5]. For 2022, CMS proposes to keep almost 50 other telehealth codes in the fee schedule through the end of 2023, at which point the codes will be evaluated for utilization, cost and efficacy, to later be considered for permanence. To take another example, in Belgium, while there’s no direct reimbursement for telehealth services at present, the National Institute for Health and Disability Insurance (INAMI) is developing a framework for the reimbursement of telemedicine and health apps [6]. Australia has also made significant commitments to virtual care since the outbreak of COVID-19, expanding public reimbursement of telehealth services in March 2020 for all Medicare-covered population beyond COVID-related care [7].
But while these developments are promising, “permanence” and “lasting success” are two very different things. At Philips, we believe that the key to lasting success in virtual care isn’t just the establishment of permanent payment pathways, but pathways that are connected to the ultimate value that telehealth can deliver (read our position paper on value-based care here.) To facilitate this, we’re working to secure alignment and cooperation between all parties in the wider healthcare ecosystem – healthcare professionals, the general population, payers, regulators, and the private sector – so we can collectively seek out and experiment with innovative payment approaches, sharing the risk together. In fact, we’re already heavily engaged with these parties in shaping the conversation around how telehealth reimbursement rates are being set, and how we can create a sustainable clinical pathway for telehealth payment that meets the Quadruple Aim. For example, last summer, we joined more than 340 other leaders in healthcare to lobby the U.S. Congress to maintain the steps the government has taken to make delivery of telehealth services easier during the COVID-19 pandemic [8]. And we have ongoing comment letters to CMS around the annual physician fee schedule, inpatient hospital payment and other payment policies. In tandem, we’re working closely with providers to help them optimize their data collections, so they can clearly demonstrate the value that their telehealth services deliver. For example, using our open cloud platform HealthSuite, we’re helping them measure: Whether telehealth visits are translating into better management of complex chronic conditions; Whether they’re having a preventive effect, and thereby decreasing unnecessary utilization; Whether patients and staff are providing good feedback on their telehealth experiences, and so on. Eventually, this data will provide valid insights into variance, allowing for differentiated telehealth reimbursement according to quality.
Let’s keep up momentum
Going forward, though it’s early days for telehealth reimbursement, we’re committed to uniting the industry and stakeholder community behind a common roadmap, facilitating a path to delivering more patient-centered, outcome-based telehealth. Of course, reimbursement is just one of the enablers of this telehealth vision. There are many others, such as health system interoperability and scalability, which we’re also actively driving at Philips, to set telehealth providers up for long-term success. But we can’t do it alone. So, if you share our vision for the future of telehealth, let’s work together, and transform the value-based vision from pilot projects into an operational model that can scale. [1] Telehealth around the world: A global guide, DLA Piper, November 2020
[2] List of Telehealth Services, Centers for Medicare and Medicaid Services, August 2021
[3] Reimbursement of telemedicine and digital care in the Netherlands, MedTech Reimbursement Consulting, August 2020
[4] Policy Halftime Report As State Legislators Head Into Summer Recess, American Telemedicine Association, June 2021
[5] CMS Permanently Expands Telehealth As Far As Congress Has Allowed, JD Supra, December 2020
[6] Telehealth around the world: A global guide, DLA Piper, November 2020
[7] COVID-19: Whole of population telehealth for patients, general practice, primary care and other medical services, Australian Department of Health, March 2020
[8] Post-COVID Telehealth Priorities Letter to Congress, American Telemedicine Association, June 2020
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Authors
Jan Kimpen
Chief Medical Officer, Royal Philips Before joining Philips in 2016, Jan Kimpen, Professor of Pediatrics, was CEO of the University Medical Center in Utrecht. He leads the global clinical team of Philips, focusing on advocacy, customer partnerships, clinical research and medical consulting, and is responsible for the annual publication of the Philips Future Health Index. He is a strategic advisor for commercial and clinical strategy, market reimbursement, R&D roadmaps and partnerships and M&A, and provides thought leadership on relevant clinical and medical topics. Jan participates in the WEF Global Future Council on Healthcare, the American Heart Association alliance and the Board of Sanara Ventures in Israel. Jan is president of COCIR, the European trade union for imaging, healthcare informatics and radiotherapy.
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Bodo Wiegand
Global Head of Market Access and Reimbursement CoE Royal Philips Bodo studied Health Economics, Hospital Management and Clinical Controlling at the Hochschule Niederrhein, Germany and has a Global MBA from the IE Business School, Spain. The combination of his studies, as well as the experience he gained throughout his career, made him an expert in the Healthcare field. He has been working for the sector for more than 15 years along with cross-cultural teams in Germany, The Netherlands, Australia, USA and Brazil, leading health-related projects and always focused on Innovation in Healthcare. In 2011, he entered the entrepreneurial health-tech eco-system and founded companies with a focus on patient satisfaction, teleradiology as well as personal health in Australia and Brazil. In 2015, he joined Philips in Latam and since then has been working in different departments within the company, all of them related to the healthcare ecosystem, currently heading Global Health Economics, Market Access and Reimbursement within the Chief Medical Office based out of Amsterdam, The Netherlands.
