How to plan for and profitably operate telehealth services

May 21, 2020 2:30 pm

“By failing to prepare, you are preparing to fail.” ― Benjamin Franklin

The COVID-19 pandemic has forced every industry to rethink how they do business — and the healthcare industry is one of the most heavily impacted. In this ever-changing set of circumstances, providers are challenged to determine the best way to adapt the delivery of care.

One tool they increasingly are turning to is telehealth services.

The appeal of telehealth right now is obvious. Patients appreciate being able to receive healthcare without risking exposure, while physicians appreciate being able to provide safe and convenient care.

Before the COVID-19 pandemic, a small percentage of all physician visits were conducted via telehealth, whereas as of early May, telehealth surged upwards of 50% to 90% in some areas and with some specialty physicians, including primary care. And it appears this shift is not temporary. It is widely believed the pandemic is a tipping point for telemedicine, and that the new demand for telehealth services will persist well into the future.

“I think the genie’s out of the bottle on this one,” Seema Verma, CMS administrator, said. “I think it’s fair to say that the advent of telehealth has been just completely accelerated, that it’s taken this crisis to push us to a new frontier, but there’s absolutely no going back.”

For healthcare administrators wondering how to plan for this not-too-distant new normal, the good news is that, done right, telehealth can be efficient, effective and profitable.

How to plan for successful telehealth service delivery

With telehealth services, proper implementation is critical. Fortunately, the planning process is relatively straightforward, comprising the five essential steps. As with any business strategy, alignment among key stakeholders is important. The planning process should start with the formation of a telehealth committee, which would include business, office staff and clinical leaders (and a patient for feedback, if necessary). 

1. Create operational guidelines. The committee will decide what types of visits are appropriate for telehealth and set up guidelines, including operational workflows and clinical protocols for all staff and physicians, with consideration about what role advanced practice providers (APPs) will play. This approach helps ensure messaging is consistent and allows for efficient triaging of patients’ concerns and medical conditions  (and aids to determine the appropriate care setting and provider speciality, as well as appointment type and when the patient should be seen, where and by whom). Triaging allows for better management of patients and of resources, ultimately allowing for better care delivered at the right place and right time and right setting. It also allows the medical staff to provide clear instructions during a time of social distances (e.g., where to go, how to stay safe). Standards should be clearly and comprehensively documented.

2. Arrange space and technology. Patients expect a professional, confidential environment, whether in a physician’s office or living room. Providers should ensure their telehealth workspace has an appropriate background, no distractions, and no interruptions from family members or pets — remember, the provider is on camera.

It also critical to the efficiency of visits to set up the provider workspace so the provider not only can see the patient, but also can easily access the electronic health record (EHR), staff messages and other pertinent resource information.

Having the right technology also is imperative to help prevent miscommunication and frustration. Essentials include strong and consistent Wi-Fi or broadband connection and good sound, made possible via a good headset and microphone.

3. Set up the EHR and PMS. Providers may find their EHRs and practice management systems (PMSs) are already set up for telehealth. If not, there are many other options for virtual communications, with a free app like FaceTime or a HIPAA-compliant monthly subscription-fee services.  

From there, the committee should establish time slot templates and appointment types and lengths, and load any new codes, including procedure codes, modifiers and place-of-service codes.

4. Set up scheduling. To optimize scheduling, the committee should walk through the entire telehealth call process from start to finish. They should consider adding buffer time between visits, at least initially.

The committee should make sure the patient scheduling technology is both user-friendly and reliable, and they should develop clear instructions for patients on how to use the technology, given that many of them will not be tech-savvy. Staff also should be prepared to help both providers and patients navigate the technology. Once everyone has mastered the processes, scheduling can be tightened up with shorter visit time slots.

5. Communicate to patients. Patients should be made aware that telehealth services are available, and they should be furnished with the easy-to-understand instructions on how to schedule and use the services. The organization should update answering services, send out emails, use social media and update their website, making sure consistent and clear information is disseminated at every touchpoint of communication.

Maintaining profitability with telehealth

Despite the ease and popularity of telehealth, a big question remains: Is it possible to maintain the same profit margins with telehealth as with in-person visits? In general, at this point, yes. But several elements should be carefully considered when forecasting revenue and profitability with telehealth.

Efficiency of service delivery. The use of telemedicine varies by physician speciality. Historically, radiologists, psychiatrists and cardiologists showed the highest use. Today, primary care physicians are at the top of the list, along with other specialists like dermatologists, oncologists and emergency physicians.

For this reason, telehealth can make it easier for multi-speciality medical groups, accountable care organizations (ACOs) and clinically integrated networks (CINs) to keep more patients in-network. How? For starters, patients with minor, routine conditions or concerns can easily grab 10-minute virtual visits with their preferred providers rather than heading to a retail clinic. Similarly, patients with chronic conditions or who receive care management services may appreciate the ease of virtual in-home visits.

The relative speed of telehealth visits also improves patient throughput, which in turn creates more billing opportunities. (Time will tell if this remains the case in the future.)

Consider that in an average four-hour shift, a primary care physician typically sees about 12 patients. With telehealth, physicians may be able to “see” 16 or more patients in that same timeframe. Moreover, as of March 1, the provider can bill Medicare a telephone (or telehealth) visit and be paid at the same rate as in-person visit.

In office (4 hours)
CPT Visits (#) Revenue*
99213 — Level 3 office visit for established patient  8 $701
99214 — Level 4 office visit for established patient 1 $127
99202 — Level 2 office visit for new patient 1 $89
99203— Level 3 office visit for new patient 1 $126
Total 11 $1,043
Telehealth (4 hours)
CPT Visits (#) Revenue†
G2012 — Brief communication technology-based service 2 $34
99421 — Non-face-to-face online digital evaluation and management service 1 $18
99213 — Level 3 office visit for established patient  10 $876
99214 — Level 4 office visit for established patient 1 $127
99202 — Level 2 office visit for new patient 1 $89
99203 — Level 3 office visit for new patient 1 $126
Total 16 $1,270

* 2020 Medicare Physician Fee Schedule, National payment amount, non-facility price × 1.15.
† Expenses may be reduced due to less need for staffing, supplies and equipment, and efficiency may be improved due to fewer interruptions and less movement.

One physician told us: “I’m more efficient at home. I don’t go from room to room, so I move less. I’m very focused. I’m on time because I have to be — whereas in the office, I’m spending time chit-chatting with people. There are just more distractions overall.”

The right mix of services. Less chit-chat may be great for efficiency, but it can be an obstacle for providers in getting to know patients. It therefore is important to develop clear guidelines during the planning process to ensure every patient receives the appropriate level of attention and care. Healthcare organizations need to ensure patients have exceptional experiences with their first telehealth visits.

Also, providers should use a solid EHR template and continue to monitor performance on quality measures. As current restrictions on elective procedures loosen up, providers should make sure their patients are scheduled for routine and preventive procedures and tests, such as mammograms and colonoscopies.

Ultimately, the mix of telehealth and in-person services will vary by speciality. We anticipate the split among primary care visits may be 50/50, as the industry finds that telehealth is well-suited for managing certain straightforward acute conditions and for checking in on established patients with chronic conditions.  

Where possible, organizations also may begin to explore ways to leverage advanced practice providers deliver primary care services via telehealth. Again, this tactic increases patient access to care at a reduced cost and may favorably support risk-based contracts with quality and cost targets.

Telehealth coding. Coding is another major consideration in establishing a profitable telehealth service. Consider the following an example of telehealth coding:

A patient who has had Type 2 diabetes for 10 years has been successfully managing it through insulin and dietary changes, but has some mild symptoms and needs medication management. The patient sets up a telehealth appointment using audio-visual technology with her physician. In a 15-minute virtual visit, the physician reviews the patient’s glucose readings, asks a couple of follow-up questions, and modifies the patient’s treatment plan. With medical decision making at a moderate level, the physician now can code the visit using CPT 99214.

When billing for telehealth, the level of medical decision-making or time spent can be used to drive the level of visit billed. CMS has published a list of almost 200 telehealth codes that range from typical office and hospital visits, to telephone visits, to virtual check-ins to e-visits where online digital communications such as a patient portal is used.

Healthcare organizations should carefully review all telehealth-related policies by payer to ensure accuracy of billing. By negotiating the currently temporary telehealth rates with commercial payers, providers have an opportunity to enter permanent contracts to become an in-network telehealth providers — a prospect that has been challenging up until now, because many national payers have exclusively contracted with national telehealth vendors.  

Looking to the future

As telehealth becomes a part of the new normal, healthcare finance leaders should build their projections with an eye to the future, while also collaborating with their providers to determine the best way forward. Statistics suggest that almost 75% of all physician, urgent care and emergency department visits are either unnecessary or could be handled safely and effectively over the phone or video.

One major variable affecting projections is payment amounts. Currently, as part of COVID-19 relief, providers are being reimbursed the same amount whether in office or via telehealth. However, before the pandemic, Medicare and commercial payers paid evaluation and management (E&M) codes at lower rates for telehealth than for in-office visits. This standard may resume after this crisis has passed, so provider organizations are strongly urged to talk with their payers about inclusion of telehealth service coverage at the preferred payment rates.

This question of rates may tempt some healthcare organizations to roll back telehealth offerings once this crisis has passed, out of concern over profitability. However, context is needed for this decision.

With telehealth, some operating expenses may be reduced, because the organization may require less office space, equipment and staffing when a higher percentage of visits are conducted virtually. This potential reduction in expenses, combined with the potentially higher volume of visits via telehealth, could make a practice even more profitable than before or, in the very least, not less profitable because of telehealth.

Healthcare leaders also should consider how telehealth will affect patient and provider satisfaction as they work toward a process and guidelines that make the most sense for everybody. Many patients like telehealth, finding it less anxiety-inducing, more convenient and just as personal as an office visit. Provider organizations implementing telehealth should therefore market it early and often to their patient base, to retain (and even gain) market share.

Telehealth services can be a powerful pillar of value-based care, providing better access, easier coordination of care, smoother transitions in care, cost savings and additional opportunities to increase provider payment. So although the coronavirus crisis is indeed a unique circumstance, it is not solely the reason telehealth has gained popularity. We therefore can expect the popularity of telehealth to last in the long term, as it continues to be good for patients, good for providers, and — when properly implemented with careful planning — good for profitability.


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