Two-Sided Risk Key to Telehealth’s Promise in Skilled Nursing

Telehealth has promise for long-term care facilities in rural areas, but a new risk model may be needed to fully realize the technology’s potential, according to testimony at a hearing before the U.S. House Ways and Means Committee that focused on innovation in health care.

Rep. Adrian Smith, a Nebraska Republican, noted the significance of telehealth for long-term care, particularly for rural facilities.

“On average, 19% of hospital transfers originate from skilled nursing facilities; approximately one in five patients admitted to a skilled nursing facility are re-admitted to the acute hospital in 30 days,” he said during the April 26 hearing. “Studies have found promising results in the use of telehealth to cut down on these massive amounts of ER trips for our most frail Medicare patients, and instead allowing patients to be treated in their homes. Telehealth can allow providers to be with nursing home patients at the time of their emergency.”

Though several factors drive telehealth spending, skilled nursing facilities are one of the settings where it could provide savings, an Annals of Internal Medicine study found. And in rural settings, deploying telehealth could provide a substantial return on investment for more isolated facilities, another study suggested.

But promise of savings doesn’t always translate to cost reductions. Several initiatives have focused on providing ways to cut health care costs, particularly at the federal level. But they have hit some speed bumps. A study from consulting firm Avalere Health found the Medicare Shared Savings Program (MSSP) increased federal spending by $384 million between 2013 and 2016, while a Kaiser Family Foundation study showed that accountable care organizations (ACOs) only saved the government money when providers accepted risk.

Similarly, for telehealth to maximize its potential, operators will have to take on risk, Sean Cavanaugh, chief administrative and performance officer at accountable care organization company Aledade, told the committee.

“If you can get more providers to move to two-sided risk models, meaning they have an incentive not to overspend but use it appropriately, then CMS can unleash — and they’ve started — to loosen the rules on telemedicine,” he said in the hearing. “But only for providers who are onto two-sided risk.”

Before joining Aledade, which advises independent primary care doctors on value-based payment models, Cavanaugh served at the Centers for Medicare & Medicaid Services (CMS) for six years, including stints as deputy director of the Center for Medicare and Medicaid Innovation (CMMI), deputy CMS administrator, and director of the Center for Medicare.

In his testimony, he stressed the need to limit one-sided risk, as upside-only models don’t force an organization to commit to a new business model centered on outcomes and value.

“The goal for all of us is to make these two-sided risk models workable for providers, so we can take advantage of these technologies,” Cavanaugh said in response to Smith’s questions at the hearing.

Written by Maggie Flynn