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Telehealth Scores Big in Joint Replacement Bundled Payment Plan

CMS' new program eases the restrictions on both telehealth use and reimbursement, and could be a model for future post-acute care management programs

By Eric Wicklund

- A new payment model finalized this week by the Centers for Medicare & Medicaid Services may open the door for telehealth in remote patient monitoring programs.

CMS’ long-anticipated Comprehensive Care for Joint Replacement (CJR) model creates a bundled payment program for knee and hip replacements, making the hospital in which the procedure takes place accountable for quality and costs of the full procedure up to 90 days after discharge. More importantly, the rule waives geographic and originating site requirements that factor into reimbursement, enabling the hospital to use telehealth to facilitate the patient’s transfer to a skilled nursing facility and/or home.

Medicare has traditionally set strict guidelines on reimbursable telehealth uses, including limiting the sites covered to a medical facility (not a home) and located in either a rural area or one designated as a Health Professional Shortage Area. Another requirement was that communications between doctors and patients be restricted to interactive, two-way systems with real-time audio and video.

In its final rule, CMS relaxes the rules to allow the originating hospital to map out a post-operative care plan that uses telehealth to connect to wherever the patient is located, including the home. “Any service on the list of Medicare-approved telehealth services,” the 1,018-page document stated, “could be furnished to a (patient), regardless of (his or her) geographic location.”

This will "allow the greatest degree of efficiency and communication between providers and suppliers and beneficiaries by allowing beneficiaries to receive telehealth services at their home or place of residence," CMS wrote.

It could also be the first step in establishing telehealth as the standard of care for all post-discharge programs, not just those focused on knee and hip replacements.

American Hospital Association President Rick Pollack praised the final rule, noting it “takes several positive steps to provide the support hospitals need to be successful.” Of particular note, he said, both CMS and the Department of Health and Human Services’ Office of the Inspector General are waiving anti-kickback, physician self-referral and civil monetary penalty laws “with respect to certain financial arrangements and beneficiary incentives under the CJR model” so that healthcare providers have the leeway to create their own programs. In other words, providers are being given the freedom to experiment with this new bundled payment plan, to test out different ways of organizing and providing care beyond the hospital.

CMS and the OIG “recognized the importance of assuring that participating hospitals can pursue the program’s goals without running afoul of fraud and abuse laws,” Pollack said in a letter. “These legal protections are critical to hospitals’ ability to coordinate care among all caregivers.”  

Among those poised to benefit from the final rule is Reflexion Health, a San Diego-based provider of digital care coordination platforms that recently received FDA approval for a motion-tracking based physical therapy tool based on the Microsoft Kinect platform. In a recent commentary, company co-founders Spencer Hutchins and Ravi Komitareddy called the rule “innovative and game-changing,” and predicted it would lead to telehealth as the basis of post-acute care for high-cost, high-volume procedures.

“Innovation in mobile health, smart patient-focused software, telehealth and the smart medical home continues to accelerate,” they wrote. “These concepts are changing how we fundamentally think about delivering care, so that it's more effective, engaging and cost-effective. With telemedicine, the client care pathway increases and patients are more pleased with their experience overall.”

The final rule isn’t without its problems. Hutchins and Komitareddy said it’s “far from perfect.”

“Retrospective annual payment is going to be a bear,” they wrote. “Medicare's decision to put hospitals in charge may prove to be a major missed opportunity. For years, physicians have believed that if only a creaky, bureaucratic payment system got out of the way, they could deliver much better care and a better experience for less cost to the system. (CJR) gives joint surgeons and their team a chance to prove it.”

The CJR program is set to take effect April 1, 2016 and will run through Dec. 31, 2020. 

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