Now is the time to get a jump on preparing for the pay-for-value model.
When the world of medicine finally makes the complete transition from fee for service to pay-for-value, emergency medicine physicians are likely to be in a prime position to be the universal entry point for patients of all kinds. A small number of emergency physicians see this coming and are preparing to take advantage of it. One of them is North Carolina’s Bobby Park, MD of Wake Emergency Physicians PA, or known locally as WEPPA.
WEPPA is a private practice group of 102 doctors and 65 PAs that staff nine different ERs in the triangle area of North Carolina with a combined volume of about 350,000 patients per year. In 2014, WEPPA started a telemedicine service called RelyMD that was 100% owned and staffed by the group.
Originally the service was the typical tele-urgent care reaching out directly to consumers. Telemedicine Magazine did a feature on RelyMD at its inception as they were one of the first EM groups to co-develop a HIPPA-compliant platform with a tracking board, not unlike those seen in many EDs.
That service has continued successfully, but Dr. Park admits that urgent care on demand wasn’t the real reason the group entered the field of telemedicine. “We started looking at telemedicine in the pre-hospital setting to avoid unnecessarily EMS transport,” Park said. In one feasibility pilot trial they were able to show a 90 percent diversion rate from the emergency department for low acuity visits. In a county where all EMS transports were covered by county, that amounted to huge savings.
Medicaid saw what RelyMD did and became one of its first clients to consider value based contracts covering large numbers of patients in an attempt to lower the number of avoidable ED visits. This was followed by contracts with self-insured companies with large numbers of employees.
Park draws a distinction between what ReLyMD does and what most telemedicine services do as a part of a wellness program. ReLyMD’s service is not primarily for urgent care: its main focus is keeping people who don’t need to be there, out of the ER. “The diversion rate of people going to the emergency department is around 10 to 20 percent of the visits that we see, based on survey data,” Park said.
RelyMD now has over 80 different corporate partners, but Park notes that the most enthusiastic partners are the self insured hospital systems they serve. “Every single one of our hospital partners has stayed on as clients year over year because they get a return on their investment,” Park said. “If they spend X, they typically save two to three times X.”
An Important Distinction
In some cases, it appears that telemedicine is a service that many insurance programs added to their coverage without really wanting the insured to utilize. Some national telemedicine groups only report 3-5% utilization of their service due to large co-pays for the patients. If the co-pay is too high the employees don’t see the benefit of the telemedicine service over a face to face visit in the ED.
Low utilization rate defeats the benefit of increased diversion. Further, a low rate of compensation for the treating physician encourages churning the patients to achieve a higher per hour compensation. That, too, works against diversion as the EP is reluctant to take on the liability of triaging the patient away from face to face care based on a fleeting encounter. Park said the best kind of card requires more time by the tele-physician, which results in higher diversion rates. The tele-triage physician needs to know the local resources and networks in order to be cost effective while delivering quality care.
Appropriate Patient Selection
Hospitals see another benefit of telemedicine — having a ‘digital front door.’ Hospitals who are competing for patients find that about 25% of the “unassigned patients” who contact their virtual platform eventually convert to in-patients. That generates over $3,000 per patient per year for the hospital. EM groups who provide telemedicine services for their hospital become vital to the hospital’s survival.
The other side of the coin with tele-triage is avoiding the fines and penalties to hospitals for inappropriate transports and re-admissions from skilled nursing facilities.
Compensation for tele-triage services still remains affected by state and local politics. There are only 32 ‘parity states’ in the US paying the same for telemedicine as a face to face visit.
“Even in these parity states you have to be an in-network provider as a telemedicine provider to be reimbursed by private insurance,” Park said. “But, if you can negotiate rates for telemedicine for your services, you have a steady income stream. We know right now we have a contract with a multi-state ACO… Value-based care is the motivation: to keep these patients out of the ER, out of higher cost facilities and instead have it handled by telemedicine.”
Building a Telemedicine Practice
For other medical groups interesting in creating their own version of RelyMD, Park said there is now a playbook of two or three workable business models. It requires upfront investment of capital and a group that is totally on board although it can be several years before the project is financially profitable. The key, Park stresses, is “playing for the long game.”
Using emergency physicians to triage patients to the right provider is one that is already starting to revolutionize medical care. Park advises to take advantage of the opportunities to come gaining experience now is vital.
The business of medicine
Telemedicine triage is an entrepreneurs’ dream. It’s high risk, but the rewards could be huge. Many people are keeping a close eye on ventures like RelyMD. Some because they want to watch and avoid same mistakes as they build their own systems. Others are simply waiting for the systems to mature to the point that they need capital for expansion, leading to mergers and/or acquisition.
There is one hurdle that physicians don’t often see. As experts in so many areas of medicine, it is easy to think that we emergency physicians are also experts in business. Sometimes that can be the case while other times, it is the limiting factor. Sales, new business development, contract negotiation and raising capital are not always our strong suits. Dealing with the government contracts, especially Medicaid can be the key to success.
Emergency physicians must realize that the success of our specialty relies more on the change in model of the delivery of care than to the actual expansion of the knowledge. With more emphasis placed on acute care in the ER that body of knowledge will certainly expand. Emergency medicine must also realize that our expanded role as knowledgeable providers of medical triage will, in the end, be our greatest contribution to the success of health care.