Physician Practice Roundtable Outlook for Medicare Reimbursement of

Physician Practice Roundtable Outlook for Medicare Reimbursement of Telehealth Board Update from the Physician Practice Roundtable March 2018

2 Rapid Growth in Medicare Reimbursement for Telehealth Medicare Telehealth Spending Increases Despite Narrow Coverage Total Year-Over-Year Medicare Reimbursement for Telehealth Services 1 In millions of dollars $28. 7 $28, 7 20, 0 15, 0 Increase in Medicare telehealth spending from 2016 to 2017 $28. 7 M 2016 Medicare Part B telehealth reimbursements 10, 0 5, 0 63% $588 B $2, 5 Total 2016 Medicare Part B reimbursements 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 08 20 07 20 20 20 06 0, 0 1) CMS data. 2) 2015 HIS Analytics report. © 2018 Advisory Board • All Rights Reserved • advisory. com Sources: Pittman D, “Medicare telemedicine spending jumped 28% last year” Politico Pro, August 9, 2017; Gooch K, “Medicare telehealth spending rose nearly 30% in 2016: 4 things to know” Beckers Hospital Review, August 29, 2017; Advisory Board research and analysis.

3 Medicare Imposes Restrictive Eligibility Criteria Limits Most Virtual Visits to Rural or Underserved Locations Eligibility Criteria for Telehealth Reimbursement Under FFS Medicare 1 3 1 Modality 2 Distant Provider 2 4 Real-time audiovisual virtual visits between a patient and provider and remote patient monitoring (new in 2018); asynchronous store-and-forwarded not included Physicians, advanced practice providers (e. g. , PAs, NPs), psychologists, LCSWs, certified nurse anesthetists, and registered dietitians among select others 3 Patient Location Qualifying rural or underserved area, including a rural census tract, health care professional shortage area (HPSA), or a region located outside of a Metropolitan Statistical Area Is your organization eligible for reimbursement? For more information, check out HRSA’s Medicare Telehealth Payment Eligibility Analyzer Tool. © 2018 Advisory Board • All Rights Reserved • advisory. com 4 Care Site Originating site is a medical facility such as a hospital, physician’s clinic, skilled nursing facility, or federally-qualified health center Source: CMS, “Telehealth Services Fact Sheet, ” Nov 2016, available at: https: //www. cms. gov/Outreach-and-Education/Medicare. Learning-Network-MLN/MLNProducts/downloads/Telehealth. Srvcsfctsht. pdf; Advisory Board research and analysis.

4 Popular Telehealth Use Cases Lack Coverage Virtual Care Applications Not Typically Covered by Medicare Provider-to-Provider Education Direct-to-Consumer Primary/Urgent Care Reimbursement is largely limited to patient-to-provider, live, audiovisual interactions Medicare does not reimburse for services delivered in the home setting e. Messaging, Store -and Forward Home Health Virtual Care Asynchronous messaging, including emailing and texting, is the least reimbursed modality Medicare and most commercial health plans will not reimburse for home health tele-services Alternative Funding Sources Grants © 2018 Advisory Board • All Rights Reserved • advisory. com Self-pay Charity care Value-based payment models Advisory Board research and analysis.

5 Greater Flexibility for Select Value-Based Programs Waivers Broaden the Application of Telehealth, but Adoption Limited Telehealth Waiver Provisions Available to Select Models and Demonstrations Delivery of virtual care in urban and suburban locations Next Generation Accountable Care Organizations (ACOs) Bundled Payments for Care Improvement (BPCI) Initiative 44 Model participants 1 1, 189 1, 422 Telehealth claims 2, 3 7 1) CMS (2017). 2) GAO (2017). 3) Services provided Jan - June 2016. 4) Services provided Oct 2013 - Oct 2015. 5) Services provided April - Sept 2016. © 2018 Advisory Board • All Rights Reserved • advisory. com Telehealth available to patients in the home Models 2 or 3 participants 1 Telehealth claims 2, 4 Comprehensive Care for Joint Replacement (CJR) 34 0 Mandatory metropolitan statistical areas 1 Telehealth claims 2, 5 Sources: “Innovation Models, ” CMS, https: //innovation. cms. gov/initiatives/index. html#views=models, “Telehealth and remote patient monitoring use in Medicare and selectedfederal programs, ” GAO, http: //www. gao. gov/assets/690/684115. pdf, Advisory Board research and analysis.

6 CMS Improves Telehealth Outlook with FY 2018 Rule New Policies Increase Care Management Support, Buoy Business Case Three Changes to Medicare Payment Policy for FY 2018 Expanding support to new modalities Growing the scope of virtual care Reducing administrative burden New fee-for-service CPT code 99091 created for FY 2018 for remote patient monitoring. Two new CPT and four add-on codes for virtual specialty, ongoing, and chronic care. Recognizing duplicative claims procedures, CMS will no longer require the “GT” modifier. q Involves ECG, blood pressure, q CPT codes for lung cancer q Place-of-service (POS) code and glucose monitoring screening, crisis psychotherapy q $60/patient/month offered for 30 minutes or more of service q Add-on codes for interactive complexity, risk & care planning previously added in CY 2017 q Providers in Alaska and Hawaii retain the “GT” modifier “The establishment of these new CPT codes will allow us to work with the payers to build the evidence base that demonstrates both cost savings and improved patient outcomes. ” Karen Rheuban, Medical Director, Center for Telehealth, University of Virginia 1 1) POLITICO, October 2017. © 2018 Advisory Board • All Rights Reserved • advisory. com Sources: Pittman D, “Digital health industry sees breakthrough moment in CMS, AMA, ” POLITICO, https: //www. politico. com/story/2017/10/25/digital-health-industry-sees-breakthrough-moment-in-cmsama-moves-244161, “Final policy, provisions, and quality provisions in the Medicare Physician Fee Schedule for CY 2018, ” CMS, https: //www. cms. gov/Newsroom/Media. Release. Database/Factsheets/2017 -Fact-Sheet-items/2017 -11 -02. html, Advisory Board research and analysis.

7 Telehealth Is a Tool, Not a Self-Contained Strategy Virtual Care Can Promote Different, Sometimes Contrasting Goals Using Telehealth to Advance Fee-for-Service Versus Value-Based Payment Strategies Real-time Virtual Visits Remote Patient Monitoring Growth Population Health q Enhance patient access and q Reduce costs by shifting convenience q Attract and retain new patients q Cut patient/provider travel time q Differentiate from competitors q Reduce avoidable emergency q Align with consumer interest in department utilization and 30 -day readmissions technology Asynchronous Store-and-Forward patients to lower cost settings q Reduce wait time to next appointment and no-show rates q Achieve operational efficiencies q Increase patient activation and engagement q Expand specialist coverage For guided questions on how to approach telehealth investments, check out our infographic, Telehealth technology isn’t enough. Start with the “Why” and plan for the “How” © 2018 Advisory Board • All Rights Reserved • advisory. com Advisory Board research and analysis.

8 On-Demand Support from the Advisory Board What Do Consumers Want from Virtual Visits? Strategic Program Development for Specialty Telehealth Executive Research Brief White Paper Learn what types of telehealth services consumers are most willing to try. Review best practices toward developing, implementing and scaling effective specialty telehealth. Virtual Visits Opportunity Audit State Policy Profiles Excel-based Tool Research Briefs Estimate the financial impact of direct-to-consumer primary and urgent care visits in your market. Understand the telehealth reimbursement and regulatory landscape in your state. For more information on custom telehealth support available through Advisory Board, contact your Dedicated Advisor. © 2018 Advisory Board • All Rights Reserved • advisory. com Advisory Board research and analysis.