Featured Health Business Daily Story, Sept. 11, 2013

S.C. Blues Plan Makes Major Initial Move Into Telemedicine, Covers Three Specialties

Reprinted from HEALTH PLAN WEEK, the most reliable source of objective business, financial and regulatory news of the health insurance industry.

By ,
September 2, 2013Volume 23Issue 30

Health insurers armed with data to show that telemedicine can increase access to quality medical care and reduce costs by preventing unnecessary emergency room visits are gradually shifting coverage policies to allow reimbursement in selected specialties. A case in point is in South Carolina, where the state’s leading insurer by market share, BlueCross BlueShield of South Carolina, in mid-August said it would start to cover telemedicine for use in high-risk pregnancies, strokes and mental health.

Other insurers already have taken steps to cover telehealth or telemedicine services. For example, Aetna Inc. in 2011 began offering its Florida and Texas members in most of its fully insured plans a telemedicine option in the form of the 24/7 Teledoc service for phone consultations with a physician. WellPoint, Inc., three years ago affiliated with American Well, which has set up similar networks for Blues plans in Hawaii, Minnesota and New York, as well as for UnitedHealth Group’s OptumHealth subsidiary, to offer telemedicine services for virtual office visits by Web or telephone. Highmark Inc. in 2012 launched a program offering a telehealth service to its members giving them 24-hour access to physicians. Under the program run by Teladoc, the country’s largest telehealth provider, members complete a medical history disclosure form and request a consultation. The service costs $38 per consultation and is designed for minor illnesses (HPW 4/2/12, p. 8).

Still, the change in policy by the South Carolina Blues plan is a major breakthrough that should lead to even more inroads for telemedicine in the state, says Jim Ritchie, executive director of the South Carolina Alliance of Health Plans. “I think it is an important development for telemedicine in South Carolina. The carriers that I have represented have all been advocates for telemedicine when it is used appropriately, for ways to reduce costs and increase access and allow the market to develop,” he tells HPW. “When a Blue Cross steps into the market to reimburse for telemedicine it is an indication that the data is in and this is going to be an effective method, an effective technology, to meet those goals.”

Ritchie says UnitedHealthcare, a unit of UnitedHealth Group, already covers some procedures, as does Medical Mutual of Ohio subsidiary Carolina Care Plan and the state’s Medicaid program. Emails to UnitedHealthcare and Carolina Care Plan requesting comment on the programs were not returned by press time.

The alliance, which fought against legislation this year in South Carolina that would have mandated coverage for telemedicine, wants to divide the line between appropriate and inappropriate use of the various forms of telemedicine — including remote monitoring, telephonic consults and video examinations. “Let me give you an appropriate one. South Carolina like many states is a combination of urban and rural communities, so when a rural physician needs a consult in a distant place, telemedicine can fill that gap. That’s a good thing. When physicians use telemedicine between floors in the same hospital, that’s a bad thing,” Ritchie says. “The bill that was introduced to mandate reimbursement to physicians at the same rate whether the physician was an in-person experience or a telemedicine experience; that mandate we opposed strongly. We worked to change that bill so it became a framework for developing telemedicine collaboratively without the need for a mandate. It passed the Senate and is now in a House committee, which will be taken up in January.”

Mandates, Reform Law Spur Take Up

Growth in the utilization of telemedicine is being driven by a mix of market drivers and state mandates, American Telemedicine Association CEO Jonathan Linkous tells HPW. “Certainly coverage is growing and utilization is growing. There are about 19 states that mandate for private coverage and Medicaid in 44 states covers some part of telemedicine,” he says. Radiology and imaging have been a mainstay in the telemedicine coverage area for some time, but that has evolved into live video conferencing led by employers and private payers, including HMOs and other types of capitated plans, Linkous says.

The Affordable Care Act (ACA) also is helping to fuel more acceptance of telemedicine, he says. “In the ACA you see a move away from fee-based structures to managed care and capitated care,” he says. There are also dollars being directed to research and development in telemedicine through grants awarded by the Center for Medicare & Medicaid Innovation. “A large number of grants are going to telemedicine,” Linkous says.

Data Prove Telemedicine Is Useful

Laura Long, M.D., chief medical officer and vice president for the South Carolina Blues plan, tells HPW that the move to cover more telemedicine was a natural, given the progress in collecting data in the specialty areas. “We have well-developed programs in these three areas that have shown improved outcomes for patients,” she says. Long estimates that more than half of the nation’s 37 Blues plan licensees cover some aspect of telemedicine, as do other carriers in her state. There will be no difference in payment for telemedicine. “It will be the exact same way as in-person visits for all plans. A high-deductible health plan member will still pay like any other visit, and if you have a copay then they just pay for the copay,” Long says.

The Blues plan’s definition of telemedicine is the provision of health care across a distance, with the delivery typically involving two-way, real-time videoconferencing by a referring facility — usually a local physician or emergency room staff at a small hospital — and including the patient for a “face-to-face” consultation with a specialist in a referral center. Telemedicine requires secure network connections with active firewalls and encryption modes that meet federal health care privacy laws, Long says.

The South Carolina Blues plan selected the three specialties to cover for telemedicine care — and more specialties are in the offing — after reviewing the data proving the usefulness of doing so and the medical need. “For instance, in teleneurology the South Carolina REACH [Remote Evaluation of Acute ischemic Stroke] program provides state-of-the-art stroke consultation for facilities that don’t have access to real-time stroke care. In that golden hour, a member can show up in the emergency room, where they can be evaluated on whether they should be given a clot-busting drug or not. That decision has to be made within the first hour and it really needs that level of expertise,” she says. Prior to the REACH program, 40% of the state was within 60 miles or an hour of such a consult, but with REACH that number is up to 80%, Long adds.

Mental health is another area where there has been success in using telemedicine in trials and pilot programs. Long says a lot of patients stay in the emergency room or are inappropriately admitted to a hospital for a more thorough evaluation, but through video conferencing the numbers have been reduced, cutting by 50% the length of stay in an emergency room.

Long says the cost savings are apparent, pointing to the South Carolina Department of Mental Health’s (SCDMH) reported savings of $1,800 per member per year when treated with telemedicine consultations. “Most of this is from a 50% reduction in length of stay in the emergency room as well as avoided admissions. Total savings year-to-date from telepsych is $22.8 million [according to SCDMH data],” she says. For telestroke, the REACH program published a recent modeling study that estimated a cost savings of $3,454 and an increase in quality of life by 5.1 adjusted months per patient treated with a throbolytic agent. Overall, the model predicted a $16 million savings in South Carolina over five years if stroke care was increased by 20%.

Meera Narsimhan, M.D., vice dean of Innovative Healthcare Technologies at the University of South Carolina School of Medicine, tells HPW that the statewide telepsychiatry initiative has proved to be a promising strategy because of the increased access to emergency psychiatric consultation, facilitated appropriate treatment and increased discharge activities, providing quality care on the one hand and reduced length of stay on the other hand.

The telepsychiatry service provides consults at 18 emergency departments in rural and urban parts of South Carolina and has served more than 16,000 patients since March 2009. “This program provides emergency psychiatric care access 24 hours a day, seven days a week. The psychiatrist provides assessment and recommendations for initial treatment and works closely with the emergency department doctor in identifying resources in the community to help the patient with follow-up care, a necessity for many patients that reduces the need for re-hospitalization and improves quality of life for the patient,” she says. The program shows lower rates of inpatient admission from the emergency department for telepsychiatry versus the control group (11.5% vs. 23.0%) and reduction in length of stay from 3.6 days for the control group compared with 2.9 days for the telehealth group.

Narsimhan adds that BlueCross BlueShield of South Carolina has seen some of the robust results from this project and has been a champion in leading the way to reimburse telehealth, thus increasing access to specialty care for its members in underserved areas. “We are very hopeful that other payers in the state will follow suit.”

© 2013 by Atlantic Information Services, Inc. All Rights Reserved.

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