One of the most common questions we get from providers is “Will virtual rehab continue to be reimbursed after the Public Health Emergency (PHE) ends?” While we are hopeful that organizations like the AACVPR, AHA, ACC, AARC, and ATA will succeed in urging stakeholders like the Centers for Medicare and Medicaid Services (CMS) to extend coverage of virtual rehab after the PHE, there are many other ways that a more broadly defined “home-based” program can provide a strong return on investment to healthcare providers.

Many sustainable options exist in both fee-for-service and value-based payment models.

Fee-For-Service

In a fee-for-service (FFS) model, healthcare providers are reimbursed for providing specific healthcare services in accordance with a fee schedule. Maximizing the number of billable units to improve departmental productivity is often a main objective of healthcare administrators and a key aspect of succeeding in a FFS environment. Below are some ways to create value from home-based rehab from a FFS lens.

Hybrid Rehab

Popular before the pandemic ever started, hybrid rehab uses a combination of onsite sessions and home-based rehab to accommodate patients that are unable to participate in the traditional format. Hybrid rehab is a popular option since it minimizes many of the barriers of a traditional program and enables incremental revenue through the onsite sessions patients are able to attend. A typical hybrid program might consist of 12-18 onsite sessions, which equates to ~$1,400-$2,200 in incremental revenue per patient. For those interested in learning more on hybrid rehab, TAKEHeart recently released a comprehensive webinar and implementation guide for hybrid CR.

Private Payer Coverage

With Medicare’s recent inclusion of CR as a category III telehealth code, they have provided an avenue for commercial payers to follow suit and provide coverage for these programs when provided virtually. Although the process of obtaining commercial coverage may require negotiations with stakeholders in payer organizations, it would also allow for patients with commercial or Medicare Advantage plans to have sustained access to the program. Oftentimes, patients with commercial insurance plans can be excellent candidates for a virtual rehab program due to the prevalent barriers an onsite program presents, generally lower health-related risk factors, and higher technological competency. In addition, commercial insurance coverage for virtual CR is likely the most lucrative way to provide the program in an FFS environment. Working through the payer contracting process with a vendor and internal champion that understands this process can be paramount to your success at obtaining coverage in a timely manner.

Alternative Care Management Programs

With the multitude of readily available virtual care CPT codes whose existence are not dependent on a temporary PHE, a home-based program could be re-structured so requirements for these existing reimbursement codes are fulfilled. There can be many advantages to this approach. For starters, these virtual care services have already been assigned CPT codes which have been adopted by CMS and many private payers. The implications of this are twofold: First, it allows for the development of a predictable, sustainable and viable business case for providers. Second, it means these services have undergone and withstood rigorous scrutiny from organizations like the American Medical Association (AMA) and CMS. These services have also been built from the ground up to be performed virtually and remotely. In contrast, the virtual delivery of CR was allowed in response to the COVID-19 PHE; not necessarily because it is the best way of delivering a cardiovascular recovery program. In many cases, the activities required by these virtual services include the same types of activities that would be included in a rehab program like creation of individualized care plans, data & symptom monitoring, education, care coordination, and communication. Although preparing to use these CPT codes will need some coordination with the broader cardiovascular service line, establishing this process can create a scalable and a compelling business case for years to come. Because these services often have broad eligibility criteria, they provide a pathway for programs to serve many patient populations, including some that might not qualify for traditional rehab. With the experience rehab departments possess in providing secondary prevention, they are arguably one of the most well-equipped departments to deliver these virtual care programs.

Value-based Care

The underlying objective of value-based care is to compensate providers based on the quality and efficiency of the care they provide, helping to ensure that they are offering the most effective care at the most efficient price. This is in contrast to fee-for-service (FFS) where providers are simply reimbursed a fixed fee for providing specific services. Practically speaking, most healthcare providers exist somewhere in between the two paradigms of FFS and value-based care. Although FFS revenue is an important aspect of any healthcare service, the vast majority of the value from CR actually lies in its ability to improve health outcomes among its participants. The financial value of these improved health outcomes far outweigh the FFS revenue that can be generated from the program. For example, if a patient completes the national average of ~25 CR sessions, total reimbursement generated from that patient’s participation would be about $2,800. By comparison, each patient that participates in CR will save the health system between $4,950 - $9,200 per year of life saved. Since 35% of CR participants add an extra five years to their life, their participation could result in savings for their health system of up to $46,000 - more than 15x the FFS reimbursement generated. This means that in today’s increasingly value-based healthcare environment, CR providers in particular are doing themselves a disservice by not quantifying the value of patient outcomes. Below are some other specific examples of how a home-based program can provide an ROI from a value-based perspective.

ACO Shared Savings

One of the most common value-based arrangements for health systems is the Accountable Care Organization (ACO). ACOs allow providers to retain a percentage of savings from reducing their patients’ healthcare costs relative to a target benchmark cost. Depending on the type of ACO and its performance on various quality measures, an ACO can keep up to 70% of healthcare savings they generate. Referencing the example above from Million Hearts that states CR results in up to $9,200 per patient per year of life saved, CR could earn an ACO up to $6,440 per patient per year. Considering that up to 80% of eligible patients never enroll in a CR program, there is enormous potential for ACOs to capture shared savings by getting patients to enroll in a more accessible alternative to CR. In some cases, ACOs even have budgets for performance-improving initiatives, which could be used by a CR program looking to implement a virtual program. If you aren’t sure if your hospital or practice is part of an ACO, you can use this link to check.

Reduced Hospital Readmission Penalties

The most common value-based program for hospitals is the Medicare Hospital Readmissions Reduction Program (HRRP). Under this program, excessive readmissions that occur within 30 days after discharge for heart failure, CABG, and heart attacks trigger financial penalties to hospitals. Depending on the number of excess readmissions, penalties can be as high as 3% of a hospital’s total Medicare reimbursement. These penalties can reach as high as $20,000 or more per patient. In 2022, there are nearly 2,500 hospitals that will be penalized by CMS for excess readmissions. These penalties could be minimized or avoided altogether by implementing proven readmission reducing strategies like virtual rehab.

To learn more, read our case study to see how we’re helping CR programs become a key component of a hospital’s readmission reduction strategy!

Because of the importance of reducing readmissions, hospitals often have budgets specifically for readmission reduction strategies - which CR programs could tap into for funding a virtual program. If you aren’t sure if your hospital has excess readmissions, you can use this link from CMS to check.

Quality Measure Improvement

In a value-based care world, healthcare providers are assessed on specific outcomes and performance measures that indicate the quality of care they delivered. Depending on the provider’s performance on these measures, cumulative reimbursement will be either decreased or increased on behalf of the entire provider organization. Because of the comprehensive nature of CR and the outcomes its participants see, it is positioned as one of the most effective and readily available methods of improving performance on a wide variety of measures for healthcare providers. In fact, CR is recognized as such an important element of care delivery that referral and participation have been included as a quality measure in both MIPS and HEDIS for physician groups and health plans, respectively. In addition, there are many outcomes-based measures that could be directly improved by virtual CR including measures for hypertension, medication adherence, unplanned hospital readmissions, tobacco use, HbA1C, LDL and more.

Conclusion

As you can see, regardless of the short term future of FFS reimbursement for virtual rehab, there are a multitude of compelling ways a home-based program can be used to create tremendous value for hospitals, health systems, physician practices, and health plans. If you are interested in getting a home-based or virtual program started but don’t know where to begin, contact us at info@phas3health.com to see how we can help!