The healthcare industry has seen a myriad of changes since the passing of the Medicare Improvements for Patients and Providers Act of 2008. Although the initial goal of this piece of legislation was to improve the access to and affordability of Medicare, it also precipitated a transition from fee-for-service (FFS) to value-based care (VBC). The Centers for Medicare & Medicaid Services (CMS) Primary Cares Initiative announced last year further provides incentives for healthcare providers to adopt a VBC model.

CMS defines VBC programs as those that “reward healthcare providers with incentive payments for the quality of care they give to people with Medicare” and support the agency’s 3-part aim of better care for individuals, better health for populations, and lower cost. Drivers of the shift to VBC include a rise of consumerism in healthcare, the emergence of new technologies, importance of achieving the Quadruple Aim, and emphasizing preventive care while reducing unsustainable healthcare costs.

Newer payment models incentive value, emphasize patient needs, and permit providers to address social determinants of health (SDOH) and disparities across the healthcare system. To reduce costs, they prioritize the use of the most expensive aspects of healthcare for when they’re most necessary.

Digital health as a driver 

The move to VBC also has boosted the utilization by healthcare providers of technology solutions to assist them in keeping track of patients – especially after-care encounters – and improving access to care. Many of these technologies focus on digital healthcare, which is preferred by many younger consumers.

digital health

According to a digital health consumer survey:

  • More than half of patients are more likely to choose providers who have digital capabilities in such areas as booking appointments, requesting prescription refills, communicating with providers via secure email, easily accessing test results via mobile or online.
  • Younger generations are dissatisfied to varying degrees with aspects of traditional care.
  • Consumers make decisions on when to seek medical treatment based on affordability, convenience, and reputation.
  • Younger generations place greater importance on convenience of appointment times, wait time, and speed. Older consumers place greater importance on transparency about care.
  • More than half of patients expect digital capabilities and are more likely to use a provider offering remote or telemonitoring devices

To address the healthcare consumerism aspect of VBC, digital technologies offer the capability to improve the process of identifying populations for whom feedback is most needed, including individuals with multiple chronic conditions and those negatively affected by SDOH. They also improve communication between providers and patients, promoting patient-cared care.

The telehealth trend

One of the most prominent categories of digital health over the past year has been telehealth. By March 2020, approximately 97 percent of healthcare leaders reported expanding telehealth access amid the COVID-19 pandemic. Between March and October 2020, almost 25 million Medicare beneficiaries received services via telehealth, and Medicaid and CHIP beneficiaries received nearly 35 million services through the technology.

Though most of the increased telehealth usage over the past year is due to the COVID-19 outbreak, many patients utilize it as a lower-cost care option and one that offers increased access. Telehealth and its components enable residents of rural areas to receive high quality healthcare without having to drive a long distance to an urban-based facility and allow providers from different facilities to collaborate with each other on patient care.


Telehealth can be used for a variety of purposes ranging from urgent care and triage for emergent conditions to medication education, post-discharge management, behavioral health counseling, and chronic care management. According to the American Hospital Association, the most frequent uses cases for telehealth are pharmacy services, chronic care management, telestroke services, tele-ICU tools, specialty telemedicine consults, diagnostic screening for diabetes-related eye disease, sleep disorders, telepsychiatry, and opioid-use disorder.

Advantages of telehealth include:

  • increased patient engagement
  • more predictable costs
  • improved preventive medicine
  • enhanced risk monitoring
  • more proactive treatment
  • increased convenience
  • expansion of connected health to a large population of individuals
  • reduced wasted time
  • extended access to specialty care
  • lower hospital readmission rates
  • improved medication adherence
  • reduced overhead costs of inpatient care
  • enhanced clinical relationships with partners and within specialty networks
  • improved central monitoring for early detection of decline, improved quality in ICU and other acute settings

Remote patient management is another important use of telehealth to promote VBC: it allows for the use of multidisciplinary teams to create a more patient-centric experience. Patient-centered medical homes let doctors see where their patients live and how their surroundings might affect their health.

The value of telehealth for VBC

Along with other digital health and virtual care technologies and services, telehealth supports consumer-directed care and value-based models and provides technology infrastructure for population-health initiatives. Because these resources can be used to reduce the cost of care, they’re valuable in value-based reimbursement models that reward hospitals and health systems for lower utilization costs.

By reducing wait times and lowering care costs, the use of telehealth can improve other VBC metrics and providers’ Hospital Consumer Assessment of Healthcare Providers and System (HCAHPS) scores. By providing incentives for care delivery in the lowest-cost care settings, the transition to VBC along with the identification of and interaction with high-risk persons before disease onset and the efficient use of integrated care teams provide incentives for the growth of telehealth.

Healthcare providers can invest in telehealth to reach out to patients facing transitions in care, close patient gaps in care and track adherence for patients with chronic care management plans. They have the ability to implement a detailed virtual care strategy to provide more access to lower cost care for low-acuity patient encounters, thereby benefitting more in a VBC program.

Legislation’s effect on telehealth and VBC

Multiple pieces of legislation have been developed by members of Congress to advance the use of telehealth to address the COVID-19 pandemic and for VBC, although many still have not been signed into law. For example, the Protecting Access to Post-COVID-19 Telehealth Act of 2021 was reintroduced last week by a bipartisan group of U.S. representatives.

telehealth legislation

According to one of those representatives, the bill would:

  • eliminate most geographic and originating site restrictions on the use of telehealth in Medicare and establishing the patient’s home as an eligible distant site
  • authorize the Centers for Medicare and Medicaid Service to continue reimbursement for telehealth for 90 days beyond the end of the public health emergency
  • make permanent the disaster waiver authority, enabling Health and Human Service to expand telehealth in Medicare during all future emergencies and disasters
  • require a study on the use of telehealth during COVID, including its costs, uptake rates, measurable health outcomes, and racial and geographic disparities

A similar bill, the Temporary Reciprocity to Ensure Access to Treatment (TREAT) Act, was recently filed in both the House and Senate and aims to allow providers to bypass state and federal licensing requirements during the COVID-19 public health emergency and improve access to care for consumers. 

In a move already completed, CMS in December 2020 released its 2021 Medicare Physician Fee Schedule final rule, which adds to the Medicare telehealth list more than 60 services that will be covered even after the COVID-19 pandemic has ended.

Looking ahead 

Though there are challenges for some healthcare providers striving to accomplish the goals of value-based care, being aware of how to overcome those barriers is essential. Navigating the shift to a value-based care environment while still operating in a fee for service reality requires more education and innovation as well as better data.

At Harmony Healthcare, we deliver expert consultants within reimbursement to providers of all sizes on a national basis and across all care settings.

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