Presentation by Ben Ulrich, CVA 2015 Becker’s Hospital Review CIO/HIT + Revenue Cycle Summit, July 21, 2015 At Becker’s Hospital Review CIO/HIT Summit CVA, Ben Ulrich, explained the reimbursement environment, strategies and structures, and fair market value considerations involving telemedicine arrangements.

1. Trends, Strategies, and Payment Models in
Telemedicine
Becker’s Hospital Review CIO/HIT + Revenue Cycle Summit
July 21, 2015
2515 McKinney Avenue Suite 1500 • Dallas, Texas 75201 • Telephone: 214.369.4888 • Fax: 214.369.0541
Ben Ulrich, CVA
Director – Physician Compensation Valuation

2. Overview
2
Telemedicine Introduction
Reimbursement Environment
Telemedicine Strategies & Structures
FMV Considerations

3. Telemedicine Introduction
3

4. Source: “Help Wanted: More US Doctors –
Projections Indicate America Will Face
Shortage of MDs by 2020” by AAMC
4
Telemedicine
 Not a new mode of care
 Current concept has existed for at least 20 years – 20th annual American Telemedicine
Association Conference in May 2015
 Certainly expanded with technology development and is continuing to evolve
 Short form definition - Leveraging technology to enhance access to care for
patients
 Telemedicine implementation & expansion is broad
 Direct to Patient/Consumer
 Provider to Provider
 Facility to Facility
 Chronic Care Mgmt.
 Tele-Monitoring, Remote Diagnostics
 Teaching Hospitals
 Mobile Health/Apps
 International Care
 Concierge Medicine
 Call Center – 24/7 Access

5. Source: “Help Wanted: More US Doctors –
Projections Indicate America Will Face
Shortage of MDs by 2020” by AAMC
5
Telemedicine
 3 Overarching Categories or Types of Telemedicine Care
 Real-Time Care
 Live video conferencing between provider and patient
 “Store and Forward”
 Digital data (images, records, audio/video, etc.) that are captured and transmitted to a
provider for further study or second opinions
 Remote Monitoring
 Monitoring equipment transmits patient data to healthcare professionals (ex. chronic
care management, diabetes, cardiac care, etc.).
 Benefits/Strengths of Telemedicine
 Access to care that eliminates local market/geographic barriers
 Rural coverage in areas with physician shortages
 Reduces emergency department stress/overutilization
 Network cost reduction
 Market expansion, outreach, and integration
 Convenience for the patient (i.e. 24/7 access)
 School health & employer based programs

6. Source: “Help Wanted: More US Doctors –
Projections Indicate America Will Face
Shortage of MDs by 2020” by AAMC
6
Telemedicine
 Challenges
 Finding the right vendor or partner – understanding your goals/needs
 Efficiently leveraging the technology & managing the system
 Medical Board Licensure – state by state
 HIPAA & data security issues
 Keeping the physicians engaged (ex. lower volume arrangements)
 Overcoming patient “technology fear”

7. Source: “Help Wanted: More US Doctors –
Projections Indicate America Will Face
Shortage of MDs by 2020” by AAMC
7
Telemedicine
 Predominant Specialties Leveraging Telemedicine
 Acute Care –
 Stroke
 Inpatient & ED Neurology
 Critical Care
 Inpatient & ED Psychiatry
 Outpatient Coverage –
 Primary Care / Pediatrics
 Behavioral Health
 Cardiology
 Tele-interpretations
 Radiology
 EKGs, EEGs

8. Source: “Help Wanted: More US Doctors –
Projections Indicate America Will Face
Shortage of MDs by 2020” by AAMC
8
Telemedicine
 Equipment Needed
 Patient Site of Service –
 Live audio/video connection
 Typically a cart, webcam & video monitor
 Support staff/physician on site with the
patient & cart to monitor & support
 Remote monitoring in some instances
 Patient records transmitted
 Specialist/Telemedicine Physician –
 Internet connection supporting live video
 Webcam & microphone
 Typically some sort of computer/smartphone
to review any documentation
 Telemedicine equipment needs are very dependent on
the goals/needs of the contracting party. More or less
sophisticated technology may be warranted

9. Reimbursement Environment
9

10. Source: “Help Wanted: More US Doctors –
Projections Indicate America Will Face
Shortage of MDs by 2020” by AAMC
10
Reimbursement Environment
Medicare
 “Telehealth” services reimbursed to the same degree as services delivered in the traditional
manner. Telehealth does not apply to teleradiology or telepathology (no asynchronous
connection)
 Covered services limited by the location of the patient, service rendered, provider type and
technology utilized. Requirements:
 Real-time video & audio – face to face connection between patient & doctor
 Phone calls, emails, faxes or one-way video connections are not allowed
 Service must be a approved telehealth service
 Office/OP visit, consultation, psychotherapy, drug mgmt, transitional care, etc.
 Physician must be credentialed with the patient-site facility
 Physician must be a authorized provider of the Specialty service
 Physicians, PA/NPs, midwives, nurse specialists, psychologists, social workers,
dietitians
 Patient must be at a facility in a rural market (could be changing)
 Health Professional Shortage Area
 Patient originating site must be a qualified facility

11. Source: “Help Wanted: More US Doctors –
Projections Indicate America Will Face
Shortage of MDs by 2020” by AAMC
11
Reimbursement Environment
Medicaid
 Reimbursement must follow Medicare conditions for participation but states can decide and
elect unique payment policies.
 States can elect what technologies to require, provider type, and the actual reimbursement
levels
 45 states reimburse for some level of telemedicine services – rules vary greatly state to state
 Only 10 states provide reimbursement for remote patient monitoring

12. Source: “Help Wanted: More US Doctors –
Projections Indicate America Will Face
Shortage of MDs by 2020” by AAMC
12
Reimbursement Environment
Commercial Payors
 Parity laws have driven commercial reimbursement for telemedicine
 Many states prohibit commercial payors from denying telemedicine reimbursement if they
reimburse for traditional on-site care
 State policy driven

13. Source: “Help Wanted: More US Doctors –
Projections Indicate America Will Face
Shortage of MDs by 2020” by AAMC
13
Reimbursement Environment
Private Payors
 Typically depends on the parity laws as well
 Many payors are starting to establish independent telemedicine coverage (typically through
contracted arrangements with vendors) to connect their beneficiaries virtually with providers
 Aetna, Cigna, and BCBS all have individual state technology platforms used in this manner
 Goal is greater integration, cost reduction and taking on population health initiatives on a
grander scale

14. Telemedicine Strategies & Structures
14

15. Source: “Help Wanted: More US Doctors –
Projections Indicate America Will Face
Shortage of MDs by 2020” by AAMC
15
Telemedicine Strategies & Structures
Rural Coverage & Network Expansion
 Desire for telemedicine coverage driven from need to provide care in rural
locales
 Telemedicine used as strategy for expanding system network &
maximizing/integrating delivery of care
 Expense reduction
 Integrated healthcare

16. 16
Telemedicine Strategies & Structures
Telemedicine Delivery of Care Structure
 Model #1: Hospital needing Specialty Coverage
 Patient presents at the Rural Hospital originating site.
 Connects with Specialty Physician via telemedicine
 Both parties bill for their respective services
Specialty
Physicians
Rural
Hospital
Telemedicine

17. 17
Telemedicine Strategies & Structures
Telemedicine Delivery of Care Structure
 Model #2: Central Hospital with Specialty Coverage Provides to Spoke
Facilities
 Spoke facility patients connect with Hub facility physicians via telemedicine
Telemedicine
Physician
Coverage
Central
Hub
Facility
Spoke
Spoke
Spoke
Telemedicine
Telemedicine

18. Fair Market Value Considerations
18

19. Source: “Help Wanted: More US Doctors –
Projections Indicate America Will Face
Shortage of MDs by 2020” by AAMC
19
Fair Market Value Considerations
FMV Considerations
 Favorable OIG Advisory Opinions (98-18, 99-14, 04-07, 11-12) assuming intent to
induce referrals is non-existent
 Payment Rates to Physicians for providing coverage
 Considerations for potential professional reimbursement
 Payment Structure –
 Per-consult (potentially grossed up for availability)
 Daily availability; Coverage Stipend
 Combination of these rates
 $ / annual ED visit
 Lease rate for equipment hardware/software
 Charge Rates to Spoke Facilities
 Considerations for potential professional reimbursement
 Payment Structure –
 Per-consult
 Daily availability (potentially at reduced rates depending on network)
 $ / annual ED visit
 Lease rate for equipment hardware/software

20. Source: “Help Wanted: More US Doctors –
Projections Indicate America Will Face
Shortage of MDs by 2020” by AAMC
20
Questions?
Ben Ulrich, CVA
Director – Physician Compensation Valuation
972-616-7798
benu@vmghealth.com
vmghealth.com