Despite discovering the myriad benefits of remote monitoring over the past year due to the necessity of COVID-19, a December final rule around reimbursement severely disincentivizes providers from using them. While this initially appears foolish and out of touch with the way facilities actually use these solutions, the rule is feeding into global paradigm shifts in the “when” and “where” of care provision, as well as the “who.”
In this case, the “who” refers to significant changes in who is doing the paying.
While there were many positives to telehealth expansion, the new rules around remote monitoring are not aligned with current stakeholder needs and in some ways discourages use of powerful care tools supported by remote monitoring.
As currently written, the process for deploying a remote monitoring device requires separate codes for each process step (start and train the patient, program and monitor, review data, and communicate with the patient). The data review requires a 40-minute block of time, and the discussion of the treatment plan requires a minimum 20-minute patient visit. This contrasts with the current typical approach, which uses two CPT codes to account for both the data review and monitoring, as well as the treatment planning.
Essentially, the Centers for Medicare & Medicaid Services is requiring more time to manage the data and communication to patients — undermining the entire value proposition of streamlining care and providing intervention at the point of need.
What does it mean?
At face value, this is a terrible proposition.
However, the decision to require antithetical compliance for reimbursement has a significant implication for the market deployment of remote monitoring tools. Whether we like it or not, the consumerization of health is a key trend driving change in healthcare across the globe, ultimately driving down costs.
These tools still have value and will likely continue to be a critical part of future care, however, with the disincentivization of physicians, the payer burden will fall on patients. This will likely be challenging initially, as patients (especially in the U.S.) are notorious for their reluctance to pay out of pocket.
But this is a necessary first step in bringing down healthcare costs. Placing the burden on patients necessitates a transparent, price-sensitive, go-to-market approach on behalf of remote monitoring device developers.
The current market approach for these device developers is to appeal to physicians and payers by setting pricing on reimbursement rates, varying across hospital systems and payers. Due to this lack of transparency, pricing is often set with high margins, despite the relatively low-cost nature of these sensor-based products.
Many of these products are developed with established, FDA-cleared, off-the-shelf sensors at a minimal cost. It is true that the software advancements that allow for clinician decision-making support are time-consuming and can be costly to develop. Still, on the whole, remote monitoring solutions are inexpensive to produce and deploy, and there is no reason that they should not stay low-cost.
By forcing these companies to consider a consumer-based approach rather than one subsidized by a healthcare system, this change has the potential to lower costs overall by keeping the market price sensitive.
What can care providers do?
Accept and embrace this shifting care paradigm. Consider current partnerships with solutions providers and shift them — instead of being the primary buyer, look for ways to partner with these companies to support deployment directly into the patient population. Leveraging a B2B2C model rather than a B2B model can still bring in revenue.
Rather than fully subsidizing the offering, be educators and communicators around the benefits of these devices, and encourage the use of them — and help support the opening of the market. Ultimately, the advantage in healthcare will not be held by those who can increase profit margins, but by those who can engage patients with a deeper market penetration of high-quality services that ultimately save physicians time and effort.
The earnings per patient will go down, but the quality of care and thus the attraction of more patients will go up. In order to survive in these changing ecosystems, care providers must adapt and champion the changes that lead to a more sustainable healthcare system.
Dani Bradnan is an analyst at Lux Research and leads the digital program team’s coverage of digital health and wellness. In this role, she covers all areas of digital health and wellness but specializes in digital therapeutics, digital biomarkers, and telehealth.