The New Reality in Virtual Health (Part 1): Payment, Privacy and Physician Participation

At our Executive Summit meetings this summer, we have been discussing how virtual health can extend your health system’s reach, create new access channels and respond to the growing demand for direct-to-consumer programs. Our presentation has generated some interesting discussion and thoughtful questions about virtual health’s current landscape, evolving care models, and the best way to roll out virtual health initiatives at your organizations.

In this 2-part series, we address the top 6 burning questions we’ve received from our members. Today we will cover changes to the reimbursement landscape, privacy and security, and tips to incentivize your physicians’ participation in your programs. Check back for part 2 of this series, in which we will review vendors’ evolving platforms, new and developing virtual health models, and metrics to measure success.

1. How is the reimbursement landscape changing?

National and local reimbursement are slowly improving. 2015 was a landmark year for virtual health legislation, with over 200 bills introduced. Medicare now offers virtual health reimbursement for a variety of Part B services, though geographic requirements that limit reimbursement (eg, a patient receiving virtual services must be located outside of a metropolitan statistical area) are still in play. Please review the Medicare Virtual Health Fact Sheet for a full list of Medicare reimbursement requirements. Additionally, the Medicare Telehealth Payment Eligibility Analyzer will help you determine if a given provider location is eligible for the Medicare telehealth originating site payment.

Medicaid reimbursement has soared, with every state offering some type of Medicaid virtual health reimbursement. Many states have waived geographic limitations on Medicaid reimbursement, thus allowing sites like schools and the patient’s home to be eligible originating sites for virtual health reimbursement. For an overview of Medicaid state policies, refer to the Center for Connected Health Policy’s State Laws and Reimbursement Policies webpage.

In addition, 31 states have enacted parity laws for private payers, meaning that private payers must reimburse virtual services at the same rate as in-person care. A full listing of private payer legislation by state can be found here:  State Telemedicine Legislation Tracking.

When working with your local payers, it is important to understand the difference between “coverage parity” and “payment parity.” Coverage parity requires that payers cover and reimburse virtual services but does not stipulate the rate of reimbursement. Coverage parity (without payment parity) was recently enacted in New York, which resulted in some commercial payers deciding to pay only a fraction of the traditional reimbursement rate (some as low as 50%), creating a disincentive for providers to offer virtual health services. Optimal legislation would include both coverage parity and payment parity, ensuring that virtual services are reimbursed at the same rate as in-person services.

2. How are programs ensuring patient privacy and security?

With health care data breaches becoming all too common, organizations that are venturing into the virtual space are placing security and patient privacy at the top of the “must-have” list. Some helpful tips:

  • Understand that security begins at the individual device level. During a virtual visit, the physician’s device may be secure, but is the patient’s? Understand that as the popularity of BYOD (bring your own device) programs grows, patients also must be aware of and compliant with current security and protection measures.
  • Enable advanced security options. To avoid unauthorized access of sensitive patient information, enable advanced security options, such as 2-factor authentication, on both the provider and the patient side. While this extra step may seem burdensome, it is highly successful in increasing the security of protected health information (PHI) and only adds a few seconds to the log-in process.
  • Understand your vendor partner’s security compliance protocols. Health Insurance Portability and Accountability Act (HIPAA) guidelines require that any software transmitting personal PHI meet a minimum of 128-bit level of encryption. Confirm that your vendor partner is up to date on current security certifications and protocols and will sign a business associate agreement (BAA), thus ensuring proper protection of PHI. Do not enter into a contract with any virtual health vendor or platform that has not yet signed a BAA with you. Have your internal IT team explore whether the storage and transmission of patient information between the virtual care provider and the patient comply with all applicable state and federal laws and regulations.

If you are looking for more information on patient privacy and security in virtual health, HIPAA and Telehealth, published by the Telehealth Resource Centers, is an excellent resource.

3. How are other organizations incentivizing their physicians to participate in virtual visits?

Incentives vary depending on program type and organizational culture. One health system that introduced a novel virtual pilot framed the initiative as an exclusive offering open to only a few practices. The physicians who were most interested signed up to participate and slowly word began to spread about the value of the work.

In circumstances where virtual care may replace and/or supplement in-person visits, physician compensation should be equal to or greater than the current compensation model. For example, when Carolinas HealthCare System implemented a virtual cardiology program, participating cardiologists received a relative value unit (RVU) credit as they would for a face-to-face visit.  Similarly, a health system in the Midwest is in the process of implementing a virtual cardiologist program that will remotely link 22 outreach sites with the main cardiology practice. With the traditional model, cardiologists received compensation for “windshield time.” As the model shifts to virtual, eliminating almost all travel, leadership realizes that a new compensation model for the virtual cardiology program should recoup any financial incentives lost with the elimination of drive time.

When organizations adopt virtual primary and urgent care programs, their primary care physicians may balk at the idea and worry that the virtual program will cannibalize in-person primary care visits. Remind physicians that these direct-to-consumer programs target nonaffiliated patients in addition to current patients and have the potential to drive new patients to their practices. This trend is playing out in virtual urgent care programs across the country.

Have a question that wasn’t on this list? Tune in for part 2 of this installment, and feel free to give us a call to discuss your current virtual health needs and how Sg2 can help.

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As of February 11, 2016, Vizient, Inc. has completed its purchase of MedAssets Sg2 and spend and clinical resource management segments from Pamplona Capital Management, LLC. MedAssets revenue cycle business will continue to operate as a wholly-owned subsidiary of Pamplona Capital Management LLP.

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