Palmetto Health exec on overcoming telehealth funding and physician reimbursement challenges
While creating a telemedicine business plan and strategy for Palmetto Health, the telehealth team discovered challenges from both internal and external sources. To make progress with its telehealth and population health management efforts, the team knew it would have to face these challenges head on.
“One of the biggest challenges is, after you’ve considered that you need to transform how you deliver healthcare, there is the additional component of how to fund that infrastructure and change in process in a traditional funding mechanism,” said William “Tripp” Jennings, MD, chief value and informatics officer at Palmetto Health. “Most of the processes for demonstrating a return on investment prior to launching a solution do not work for the new types of healthcare delivery.”
This is because systems are set up for fee-for-service and new forms of healthcare delivery are aimed at value, and value is not traditionally measured in accounting systems.
“So you have to account for loss of acute care revenue and in-person visits, while you are trying to match that up with improved access, larger scale and decreased operational costs,” Jennings said.
Managing provider reimbursement models is another challenge Palmetto encountered.
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“We’ve had years of defining and redefining provider reimbursement in a fee-for-service world, and that time is agreed upon, but that same reimbursement per amount of time does not work in a virtual access care delivery model,” Jennings said. “If 15 minutes of an in-person visit is just going to be reimbursed the same way for telehealth visits, then all we’ve done is expand the fee-for-service model. There has to be a commiserate decrease in operational costs without punishing the provider for adopting new care delivery approaches.”
Palmetto Health has been working on overcoming the challenges of infrastructure funding and physician reimbursement, adopting new thinking and new processes.
“We have an ongoing effort to deeply involve finance within the organization, and have them commit to certain assumptions,” Jennings explained. “For one of our solutions, we spent time with them going through every one of the assumptions for the virtual care delivery. If we had a new patient who came into the system via virtual care delivery, how were we going to track that person and the downstream revenue? And at the same time account for the loss of that visit being in-person? Because payers do not pay for them the same way. It’s really hard to measure something that has not happened.”
The organization had to have finance buy into what the assumptions were going to be so there could be a reasonable return on investment model, he added.
Addressing the physician reimbursement challenge is a multi-year endeavor, Jennings said.
“That involves starting to unwind the RVU reimbursement system, and have more of a requirement or expectation for certain percentages of the providers’ time to be dedicated to virtual access,” he explained. “Or, in some cases, we’ve had revenue from that virtual access go into the provider reimbursement as more of a professional fee. Because candidly, we’ve had many providers who want to provide care via telehealth, but they’ve said, ‘You are not going to add more work on my schedule, I need to be paid more.’ So that has been one of the challenges.”
Overall, the way the organization has been able to bridge the current delivery and reimbursement model with what it desires for the future is by focusing on patient-centered care, and answering the question, What would administrators and providers want if they could design their own healthcare delivery model, Jennings said.
“And then constantly reinforcing that,” he added. “The other driving force that our system has had is we have more patients visiting our practices and hospitals than we can care for. We are busting at the seams, so there is a constant recognition that we have to change our delivery model.”
Jennings will be speaking on telehealth and population health at the HIMSS and Healthcare IT News Pop Health Forum, an educational event April 3-4, 2017, at the Westin Copley Place in Boston, Massachusetts. Register here.