Catalyst for Payment Reform

Feeding two birds with one seed: payment reform, telehealth, & health equity

Feeding two birds with one seed: payment reform, telehealth, & health equity

Like so many technologies before it, telehealth is a disruptive force with seemingly limitless potential. It can be a phone call between a doctor and a patient, or a message exchange between a primary care provider and a specialist. It can even be a consumer answering a few simple questions online and getting the prescription they need with the help of an algorithm.

Telehealth has gone through a roller coaster ride in the last year and a half.  In the early months of the pandemic, the number of virtual visits between providers and patients surged to a magnitude never before imagined. By October, the number of virtual visits began leveling out high above the pre-pandemic rate. The most recent data from April of 2021 shows that virtual visits continue to account for a large portion of health care services, especially in areas like behavioral health.

But what tomorrow holds is still a mystery. Will telehealth help save health care from unsustainable cost growth and inequities in outcomes? Or will it do the opposite?

Two clear goals for telehealth expansion

Stakeholders across the health care industry are currently drafting their telehealth roadmaps for the future. Virtual-first health plan products are popping up. Providers are figuring out how much of their patient care will continue to stay virtual post-pandemic and studying best practices to effectively engage diverse patients. At the federal level, Congress introduced the CONNECT for Health Act of 2021, which would permanently expand telehealth coverage in Medicare. The time is now for health care purchasers – including states – to demand telehealth programs and policies with two clear goals in mind:

  1. Be financially sustainable for those who use and pay for it
  2. Be implemented so that everyone has a fair and just opportunity to benefit

Luckily, there’s one way to achieve both goals, and it’s as simple as moving primary care providers away from fee-for-service payment. In fact, there’s already evidence that, during the pandemic, patients seen by primary care providers paid under advanced alternative payment models received more telehealth than their peers whose providers were paid through fee-for-service or other upside-only payment methods.

Partial capitation for primary care

By paying primary care providers predictable per-patient-per-month lump sums along with appropriate fees for certain high-value services, partial capitation allows providers the flexibility to deliver cost-effective, equitable, and high-quality care. Providers can use the flexibility of this hybrid payment model to take advantage of provider-facing telehealth modalities – like Project ECHO– that are proven to improve quality in a cost-effective manner, especially for rural communities. It can also provide them with the stable revenue necessary to invest in their telehealth capabilities, like implementing a secure text message platform that gets patients the information they need without the hassle of logging into email or an online portal.

Team-based care is another care delivery innovation facilitated by partial capitation that helps ensure telehealth benefits all patients, everywhere, while maintaining cost-effectiveness. During a July 2021 webinar, Shoshanah Brown, Founder/CEO at AIRnyc emphasized leaving extra time for technical support as one of the most critical factors to ensure a patient’s telehealth experience is positive. Unfortunately, many patients haven’t been getting that support: a consumer experience survey conducted by the California Pan-Ethnic Health Network (CPEHN) in September 2020 found that 40% of consumers reported not receiving any instruction from their provider on how to prepare for or access their telehealth appointment. A payment arrangement that supports team-based care – including nonclinical staff like health promoters or community health workers-  opens the door for providers to offer technical support for virtual visits without eating up precious time with a clinician.

Ditching fee-for-service

Partial capitation in primary care doesn’t just facilitate positive care innovations, it also avoids negative, unintended outcomes around telehealth expansion. This is why Bob Berenson, MD, Senior Fellow at the Urban Institute, cites telehealth as the leading reason to ditch fee-for-service. The most pressing issue is pay parity: if fee-for-service continues as the dominant payment structure and providers continue to get paid the same amount for a virtual visit as an office visit – as has been the case during the COVID-19 public health emergency, there’s a huge risk that purchasers could see telehealth use as a formidable cost driver moving forward. Because families with lower incomes spend a greater share of their income on health costs than those with higher incomes, rising costs are a huge barrier to achieving health equity.

Experts advised Congress on telehealth payment considerations during the Senate Finance Committee’s May 2021 hearing. Bob Berenson, MD laid out the three reasons why fee-for-service is a “particularly inappropriate payment method for most telehealth services” and why extending current payment rates for telehealth visits “could produce sustained increases in Medicare spending for years to come.” Kisha Davis, MD, a member of the Commission on Federal and State Policy with the American Academy of Family Physicians, warned that if the policy to allow HSA-eligible high-deductible health plans to cover telehealth services on a pre-deductible basis is made permanent but the same provisions aren’t extended to in-person primary and mental health care, it could create a “two-tiered system where low-income enrollees are only able to afford virtual care.” Purchasers and health plans in the commercial sector are grappling with the same payment questions that Congress is for Medicare, pushing CPR, the American Benefits Council, and Mercer to publish four policy recommendations on the future health of telemedicine in October 2020.

Looking ahead

As purchasers look ahead to future contract negotiations with their third-party administrators, CPR’s Aligned Sourcing & Contracting Toolkit can provide them with the specific contract provisions and RFI questions, including around telehealth payment and investments to reduce health disparities. Concurrently, initiatives like the HCP-LAN’s Health Equity Advisory Team will help plans and providers stay abreast of emerging best practices in using payment reform to advance health equity. Finally, for more information on primary care transformation, check out the National Academies of Sciences, Engineering, and Medicine 2021 policy brief, or CPR’s 2017 employer case study on pioneering a near-site clinic to improve primary care access in rural Idaho.

Photograph by Beci Harmony on Unsplash.

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