Removing Cost-sharing from Remote Physiological Monitoring (RPM)
The bill in Congress, what this means for RPM, and some other thoughts
The RPM Cost Sharing Elimination Study Act of 2023 was introduced in mid-December to Congress by Reps. Sheila Cherfilus-McCormick (D-FL), Raul Ruiz (D-CA), and Terri Sewell (D-AL). Rep. Cherfilus-McCormick is a former home health executive, Rep. Dr. Ruiz is an emergency physician, and Rep. Sewell is from Alabama where the prevalence of hypertension and diabetes is quite high and much of the state is rural. These three representatives have a good understanding of RPM’s value to patients in the US. Coincidentally, Avenue Health operates a large FQHC-based RPM program in Alabama and I can personally attest that it is a game changer for patients who have transportation barriers, are in rural areas, and require additional support from dedicated nurses.
The bill (full text) removes cost-sharing (20%, typically) from RPM services and provides the opportunity for the Centers for Medicare and Medicaid Services (CMS) to study the impact on healthcare utilization, cost, and health outcomes.
I was on the Hill with the Connected Health Initiative (CHI) in May 2023 discussing the RPM cost-sharing issue with several committees and members of Congress. I am not surprised that this bill was introduced as we found a good bi-partisan understanding of RPM and the importance of ensuring positive access during our visit. This is a bi-partisan win for members of Congress as it provides healthcare access to rural and urban areas alike, allows patients more convenient care, and supports primary care providers by opening a new revenue stream. Medicare beneficiaries vote!
Cost-sharing is an old concept that should be used more surgically. It is currently a broad, non-specific incentive to prevent unnecessary utilization of healthcare services. Economists call this “moral hazard” which is, essentially, the tendency of individuals covered by a risk pool to act in a manner that harms the risk pool either by engaging in activities that increase the probability of needing to draw from the risk pool (e.g., doing unhealthy things), or, in the case of health insurance, over using covered services because they are covered. Cost-sharing mechanisms such as deductibles, co-pays, and co-insurance are designed to reduce this behavior. But do patients want to overuse remote physiological monitoring? Is it really bad if a patient shows up to their primary care provider 10% more often? Do people want to get five extra mammograms per year? The answer is probably not.
We know that cost-sharing produces barriers to access and can even increase downstream healthcare costs. The classic example of this is medication cost-sharing. Patients who are more price-sensitive to cost-sharing may choose to forgo refilling a medication for their condition due to cost and then show up to the hospital because of that decision. When it comes to the choice of putting food on the table or taking congestive heart failure (CHF) medication, the decision may often be food—just ask Maslow. Thus, cost-sharing can cause more cost to the risk pool than it avoids via moral hazard reduction. Here is an article that discusses this further. The Affordable Care Act (ACA) recognized that we should remove cost-sharing for high-value, preventive services. However, this recognition only removes cost-sharing for services reviewed by the United States Preventive Services Task Force (USPSTF) and rated as an A or a B in terms of evidence quality. This is not a bad system, but is may not go far enough to incentivize healthcare services that also produce benefits for patients.
At Avenue Health, the number one reason why a patient leaves or chooses not to participate in our high-touch, evidence-based RPM program is because of out-of-pocket costs. Avenue Health is among the ethical RPM service providers who are transparent with patients about the costs of participating in the program. These costs currently stand at 20% of the billed charges to Medicare per the rules under Medicare Part B. For example, if a patient transmits 16 out of 30 days’ worth of data and speaks with one of our nurses for 20 minutes each month, the patient would pay an average of $19.79 per month or $237.48 per year. Patients who seek additional time and support from the care team may pay closer to $30 per month. While this does not seem too cost-prohibitive relative to other healthcare expenses (e.g., hospitalizations), it is still a barrier to those with lower incomes and who rely on Social Security to cover expenses, as many Medicare beneficiaries do.
For patients on Medicare Part B, supplement insurance policies can cover these coinsurance payments in some circumstances and most patients on traditional Medicare have some form of additional coverage (i.e., Medicaid, supplement insurance). However, the coverage varies and many patients currently still pay the co-insurance.
For patients covered by Medicare Advantage plans (Part C), there is a wide array of cost-sharing arrangements that are plan-specific. Many patients in Medicare Advantage do not have co-insurance whereas others have both co-insurance and deductibles that can produce a financial barrier to for patients. These plans operate very similar to employer-based insurance which is most familiar to the general public. Medicare Advantage plans are required to offer the same benefits as traditional Medicare (Part B), so they do cover RPM services in most circumstances, however, the coverage does come with additional administrative burdens for providers (e.g., pre-authorizations, submitting patient data).
What would cost-sharing removal do for patients, the RPM market, and healthcare costs?
Patients would see financial barriers to participation removed. This would likely increase enrollment and patient acceptance of RPM care models thus enhancing access to care and improving outcomes. There is mixed, but generally positive evidence that RPM-based care models can improve health outcomes for patients with certain conditions such as hypertension, diabetes, COPD, congestive heart failure, and other conditions. To learn more about this, take a look here. If these programs produce better health, adherence, and emergency and inpatient visit reductions for patients, they may save patients money, as well.
For the RPM market, we would see healthcare providers and practices more readily seek RPM programs and technologies. Providers and clinics are very attuned to the financial burden on patients and this removal would encourage them to offer these services to their patients. This is a big barrier to the B2B adoption of RPM services. Thus, for SaaS solutions, device companies, and full-service RPM companies; this would be a significant win.
The impact on healthcare costs across the Medicare population is more challenging to assess. On one hand, there is a good body of evidence that RPM programs can reduce inpatient and emergency department utilization due to proactive and real-time patient management—especially for conditions like CHF. However, this is an area that is lacking in the literature and thus a large CMS-funded study (probably by Mathematica) will be important for the field.
However, I have some concerns about this that are very important for the future of RPM. First, the study design has to be comprehensive and informed by individuals who have experience operating RPM programs. It will be essential that the researchers who are tasked to evaluate RPM at scale have a good understanding of the actual ways in which the programs operate, the conditions that are covered, the ancillary benefits of patient participation, and how to think about utilization reductions (it is hard to assess a reduction in utilization when that utilization does not occur). This study proposed in the legislation is not currently indicated to be a large-scale randomized clinical study which would allow for better evaluation of cost at scale. Thus, it will be very important that the details and methods are carefully informed.
Second, I have concerns about the quality of RPM programs in the current market. There are plenty of stories of unethical, illegal, and clinically-poor practices. Despite how we speak about RPM programs as a monolithic concept, RPM programs are very heterogeneous in design and the interventions employed. Some are very bare bones and simply manage to the minimum billing requirements. Some are high-quality, high-touch care for patients. While impossible to assess, I would be willing to venture to guess that a significant proportion of RPM programs operating in the country are of low to moderate clinical quality. In the absence of standards-setting organizations and clinical guidelines, program operators are free to operate without evidence-based and accessible guidance outside of the minimum billing rules set by CMS. Thus, from a cost-effectiveness analysis perspective—RPM, in its current form, may not save money for Medicare. It will be essential that program operators and Medical-specialty societies work together to establish good clinical practice and evidence-based standards for RPM.
Good RPM programs improve health outcomes for the target population and reduce avoidable emergency department and inpatient utilization. Bad RPM programs do not seek those outcomes and prioritize billing a high volume of CPT codes. Financial sustainability is important for any healthcare service, but not at the expense of clinical outcomes and value.
The question for the industry will be: how can we collectively weed out the bad programs and demonstrate the value of good programs to CMS and other payors?
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