As CMS Relaxes Telehealth Rules, Skilled Nursing Startup Call9 Sees Second Chance at Success as Curve

Skilled nursing telehealth provider Call9 last year became another casualty of a central tension between innovation and reality: The law often takes years to catch up to new technology.

But a crisis can accelerate the glacial rule-making process, and amid the COVID-19 pandemic, the federal government erased decades of telehealth law in a matter of weeks — giving the leadership team at Call9 a second chance at success with a new company called Curve Health.

“The mission was able to continue,” former Call9 CEO Timothy Peck told SNN of the moment he realized that the legal tide was turning. “It was this feeling of great responsibility to move forward.”

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Backed with upwards of $34 million in total funding — including capital from actor Ashton Kutcher and the chairman of Silicon Valley startup incubator Y Combinator — Call9 promised to help skilled nursing facilities clear a major roadblock to improving care and reducing costs.

By embedding emergency medical technicians in SNFs along with a telehealth platform, Call9 sold itself as a way to cut expensive hospital readmissions and provide higher-acuity care in the post-acute setting, both primary aims of the value-based payment reform that has swept the industry in recent years.

But because the Centers for Medicare & Medicaid Services (CMS) maintained restrictions on Medicare coverage of telehealth services, the financial benefits of Call9’s services remained more theoretical than real. For years, only rural nursing facilities could bill for telehealth services, with restrictions on the number of interventions per week.

Peck, now Curve Health’s CEO, helped champion the RUSH Act, federal legislation that would have expanded access to telehealth in skilled nursing facilities; the bill never made it to a full vote, though an updated version was reintroduced early on during the COVID-19 pandemic.

Faced with that legal inertia, Call9’s investors pushed the company to focus on more financially lucrative fee-for-service arrangements, Peck told SNN last year, but the split model wasn’t enough to save the company, which suspended operations in June 2019.

“You can’t lean into fee-for-service in order to maximize the amount of cash that you’re getting in the short term, and keep the good graces of the payers and the world out there, who’s trying to work with you toward being a value-based company,” Peck told SNN at the time. “You have to decide one way or the other.”

In the wake of Call9’s fall, Peck took a position at IDEO, a design firm that focuses on health care innovation.

Then this spring, in a matter of weeks, COVID-19 accomplished what years of lobbying — by Call9 and countless other telehealth leaders — had failed to achieve.

CMS took a chainsaw to its telemedicine rules in an attempt to maintain nursing home care amid strict visitation bans, providing emergency Medicare coverage of telehealth services at all nursing homes — and eventually expanding the list of approved providers to include physical, occupational, and speech therapists, who never before had been allowed to perform virtual consultations.

For the duration of the emergency, health providers can even use platforms, such as Skype and iMessage, that do not comply with HIPAA privacy rules, opening the door for both creative and financially supported solutions to long-term health care problems in a pandemic.

Peck admits that he felt stung as he read the news that the reforms he’d spent years futilely working to implement fell into place almost overnight.

“For me, it was a quick moment of feeling bad about myself, that I wasn’t able to keep Call9 going long enough to get there, followed by a moment of feeling responsibility to serve these patients,” Peck said.

Curve Health, which Peck launched in conjunction with IDEO, won’t follow the exact Call9 blueprint.

Instead, the new company — named after the idea of both flattening the COVID-19 curve, and being ahead of the wider health care curve — will target physician groups with software that serves as a “data bridge” between hospitals and nursing facilities. The idea is to give beleaguered acute care providers a way to manage post-acute patients without resorting to readmissions.

“The operations are difficult, and sending them to the hospital has always been a bad solution for patients that don’t need to go from a nursing home — and it’s even worse now that the hospitals have COVID in them,” Peck said, adding that hospital revenues have dropped sharply amid a pause on all non-emergency procedures.

The new model, which is currently in the alpha testing phase, will blend data-sharing and telehealth software to achieve the goal of treating in place; Peck retained Call9’s intellectual property and branding rights, which Curve Health now owns.

That intellectual property also includes methods for managing telehealth payments, a new experience for many providers — and a vital consideration as operators stare down skyrocketing costs.

Peck declined to give an exact funding number, citing an ongoing round, but did allow that Curve has already attracted seed investments from a group of former Call9 backers and other investors.

“We have a technology team, the know-how, the market connections that that $40 million afforded us,” he said, pointing to Call9’s original funding haul. “So now you’re investing in a company that has all of those assets. It has all that institutional knowledge to create what we have right now.”

Like many other leaders in the space, Peck predicted that it will be difficult for the government to reverse the telehealth progress once the COVID-19 crisis passes. But he also emphasized that complete, permanent reimbursement parity between in-person and virtual visits may not be the best solution either, arguing that it would devalue the real benefits of face-to-face interactions between doctors and patients.

Instead, Peck said, payers should focus on ways to cover each new innovation that reflect their value to the patient.

“The health care system is kind of a blank slate right now, and we can re-envision how we bring care to people. Think about what you can do with the idea of continuous monitoring. Think about what you can do with your devices in the home and how you can count calories using your stove, how you can use video, how you can use various ways of managing data — predictive analytics,” he said. “All of this makes an ecosystem that’s going to need to be paid in its own way.”

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