A skilled nursing-focused telehealth provider with a presence in more than 200 facilities this week announced a $7.25 million funding influx.
The Chicago-based Third Eye Health recently closed its Series A funding round, led by Generator Ventures, with plans to expand beyond its current base of skilled nursing partners.
Third Eye provides remote physician coverage to major post-acute and long-term care providers, including Genesis HealthCare (NYSE: GEN), Consulate Health Care, and Life Care Services. The telehealth provider targets nursing homes that require night and weekend physician coverage, as well as those with additional weekday staffing needs.
Among the other participants in the Series A round was Cane Investment Partners, an affiliate of Cascade Global Properties, along with Ziegler Link-Age and Senior Care Development CEO David Reis, who has encouraged the use of Third Eye technology in his company’s facilities — as well as at Genesis, where he sits on the board of directors.
Reis will join Third Eye’s board of directors in the wake of the funding round, along with Generator’s Russell Hirsch and Katy Fike, and Amish Patel of Integrated Rehab Consultants.
“It saves the hospitals money, and hospitals — I would say in the last two or three years — are really starting to rank nursing homes by their readmission rates,” Reis told Skilled Nursing News. “I think it’s a great technology. “
In Reis’s experience, use of Third Eye’s remote physician consultations has allowed individual facilities to reduce their readmission rates from about 20% to the low teens or below. That metric has taken on outsized importance in the skilled nursing space in recent years, as the Centers for Medicare & Medicaid Services (CMS) has implemented a variety of measures designed to keep residents away from the hospital — the most expensive setting for care along the continuum — at all costs.
For instance, under the SNF Value-Based Purchasing (VBP) system, nursing homes receive an automatic 2% cut to their Medicare reimbursements, which they can win back by meeting certain readmission thresholds. The first round of results from VBP showed that about 73% of facilities nationwide received some level of penalty under the program, with just 27% seeing a bonus.
In addition, managed Medicare plans and acute care systems’ bottom lines increasingly depend on keeping residents in the lowest-cost care setting after discharge, leading them to cut underperforming SNFs out of their referral networks entirely.
These factors have prompted facilities to turn to telehealth technology as a potential solution, with companies such as Third Eye, Call9, and Tapestry Telehealth positioning their systems as ways for nurses to work with physicians — who are often too costly to keep on call around the clock — to intervene in the nursing home before a resident requires an acute-care visit.
Under current federal law, Medicare only pays for telemedicine services in rural nursing homes, which account for about a third of the more than 15,000 properties nationwide. Companies in the field thus frequently position their products as cost-saving in the long run if they can prevent rehospitalizations and keep referrals flowing.
Third Eye, for example, uses a software-as-a-service structure for its telehealth offering, with a monthly fee that covers any number of physician interventions that nursing home staff elect to initiate, according to CEO Dan Herbstman. This model encourages nurses and other frontline staff to use the tech as much as possible, and not be concerned about the potential cost for their bosses.
The past year has also seen a variety of wins for the telehealth industry, with expanded coverage under Medicare Advantage and a proposal before Congress — the RUSH Act — that would enshrine telemedicine in the normal roster of benefits to seniors under Medicare. And as incentives shift for providers under the Patient-Driven Payment Model, Third Eye only sees more potential ahead.
“We see the role of telehealth only getting bigger in the post-acute space, and in particular as homes continue to work with higher acuity patients under PDPM,” Herbstman said. “We believe that with all of the bills in front of Congress, and changes in Medicare/VBP, we see the role of telehealth only expanding from here.”