The federal government has talked a big game about shifting toward value-based payments for Medicare and Medicaid providers, but fee-for-service reimbursements have remained a primary force governing operations in the post-acute and long-term care sector.
COVID-19 has subtly shifted that dynamic, however — especially in the field of telemedicine, which has seen skyrocketing adoption rates in nursing homes under emergency waivers designed to increase access to care during the global pandemic.
That acceleration prompted the launch this year of Curve Health, a new venture from the founder of the now-defunct telemedicine provider Call9, Timothy Peck. That company couldn’t square the financial circle of providing a value-based solution in a fee-for-service world, but Peck and Curve CEO Rob MacNaughton see a new opening in the coronavirus upheaval.
Curve recently pulled down $6 million in venture funding and added MacNaughton, a health care veteran who took the leap from specialty retail to home health about 15 years ago after a disappointing firsthand experience navigating the system on behalf of his father.
Peck and MacNaughton joined SNN’s “Rethink” podcast to discuss the ongoing evolution — and revolution — in the ways that we pay for senior care, as well as their top hopes for continued reform and change under the incoming Biden administration.
We talked right when you relaunched as Curve earlier this year — what’s changed from then to now?
Peck: To offer background, Call9 was the company that we created back in 2015, out of Silicon Valley, which was a connected care billing system. [It] had some predictive analytics, was a telemedicine platform, connected a physician group that I had created to reduce hospitalizations in nursing homes — and was very successful doing so. [It] had 10 payer contracts with Medicare Advantage plans, and was a profitable business, and was very effective for improving patient care.
The issue, though, was Medicare itself didn’t have a way that we can contract value-based-wise.
I spent a lot of time in Washington, D.C., with CMS and CMMI and with Congress, trying to advocate for reform and value-based care and being able to do connected health and telemedicine into nursing homes. I even was able to get the RUSH Act — the Reducing Unnecessary Senior Hospitalizations Act — which would have created value-based care incentives for groups doing telemedicine into nursing homes for Medicare patients.
But all of that kind of got arrested in 2019 after the government shutdown, and health wasn’t really prioritized during that year. And then in March of this year, 2020, after COVID hits, all of that changed. In a week — and really even less than a week — a number of executive orders and Congressional acts were passed, and CMS made changes that allowed for telemedicine in nursing homes to really flourish, and adoption rates started to go through the roof. And that’s because it was allowed to be paid for.
One number I like to give is back when we started Call9, 2% to 3% of physicians had ever used telemedicine. Now it’s up to somewhere well above 50%. And then another one is over the first six weeks of COVID, after these changes were made, there was an over 11,000% increase in Medicare beneficiary use of telemedicine.
All of a sudden, people knew the value of what we were doing because of COVID. But really this patient population, as we know, is isolated, is hard to get to, doesn’t necessarily have the reach of the medical system to them — even without COVID. So with that, we put together a new company called Curve — and it is called Curve because we often said, “Hey, we were ahead of the curve here,” when we were at Call9: “I hope the Medicare world kind of catches up to us.”
Now that it has, we’re calling ourselves Curve and moving forward. We’ve made a connected senior care platform that has yes, telemedicine involved in it, but it’s more based off of the health information exchange. We’ve integrated ourselves deeply into the EMRs of nursing homes and of hospital systems and other physician group systems, and this allows us to put this information together and really ramp up our predictive analytics side that we had started at Call9 — being able to look at which patients are high likelihood of going to the hospital on any given day.
It also allows us to really rev up our smart billing system and the algorithms behind that, which allows for that profitable model in Medicare Advantage to be applied to Medicare. The physicians using the platform that we sell to treat patients in nursing homes are able to treat these patients in a profitable way and be led in a data-driven way.
Rob, when you started looking to invest in skilled nursing and home health, what were some of the biggest gaps that you saw? Nursing homes in particular can be very set in the traditional ways of doing business and providing care, so I’m always curious to hear the perspective of people who didn’t grow up in the industry.
MacNaughton: Well, from my vantage, it was about increasing access to care. What was really needed at that point was: How do you craft a business model that works for all the constituencies involved, so that you can put into place a solution that increases access to care as well as has strong business fundamentals and business dynamics?
For us, on the Curve platform, we have a proven solution, and it was now a matter of a crafting the business model that works such that what the SNFs are investing would allow them to essentially have that solution in place — so they could provide greater access to care for the residents and patients.
That in turn would, by providing a solution that allows this access to care, allow them to take in and care for more acute patients, maintain a higher census, and also get reimbursed more for that enhancement in the acuity side of things.
Have you seen COVID materially shift the mindset in skilled nursing around value-based care? I’ve had consultants tell me straight-up that they couldn’t advise nursing homes to invest heavily in value-based strategies when fee-for-service reimbursements were still available, just given the financial math at the moment.
Peck: Telemedicine in nursing homes right now — even if it’s billing Medicare fee-for-service codes — is value-based care. That is an enormous shift.
What I mean by that is if you start decreasing hospitalizations, decreasing trips to the emergency department because you’ve increased access to 24/7 physicians, because you’ve decreased time to being seen of these patients upon admission … the five-star increases, and therefore the value pool that you get [improves]. You’re increasing your census, and you’re making the Medicare Advantage payers happier, because you’re decreasing these costly hospitalizations.
You get paid fee-for-service dollars that you didn’t get paid before, as a physician group treating these patients, and that’s value-based care. That’s being paid for the value that you’re bringing. That’s a nuance, but a major shift.
I didn’t see it at first. I think I realized that retrospectively, that CMS did make value-based fee-for-service codes already in the past. One of the major ones is advanced care planning. Advanced care planning, when you do it with patients, saves a ton of money and increases the quality of life of that patient — yet it’s paid with a fee-for-service code.
CMS is happy to pay it; Medicare’s happy to pay it. And so in a way, that’s almost like a case rate. It’s a value-based payment. Is it the shared savings that we all want to get to? Is it the bonus structure that we wish we were completely [seeing] on the value-based side? No.
But it is a really important step toward value-based thinking and mindset. I’m excited with the progress today, compared to a year ago. We’re starting to move that way.
We are in this world where we can lean on fee-for-service and create value, whereas before, we weren’t even given the opportunity to have fee-for-service codes that drove value.
What are the top areas that you think the incoming Biden administration should focus on as they look toward reform in post-acute and long-term health care?
Peck: One, two, and three is cooperation, cooperation, and cooperation.
Value-based care has been a bipartisan effort, as has telemedicine and connected care in general. Being someone who’s spent a lot of time in Washington, these things are bipartisan. These things are very bipartisan. Both sides of the aisle have supported this. The administration that just was — with Trump and Seema Verma and Alex Azar — did a lot for connected care, did a huge amount for value-based care, and I’m very grateful to that.
The Democrats, at the same time, were also pushing on it. Now, in 2019, there was less cooperation on both sides and coordination with both sides to get new codes through and new bills passed. There was some arresting of progress there.
I think the opportunity here is for Republicans and Democrats to work together on something that they both believe in. It’s a nice issue for the nation to start to work together, because it’s something they already both believe in. The more cooperation we have, the better it will be for our patients and our taxpayers.
I try to preach that a lot when talking about the space — we may not necessarily agree on the exact means for reform, but people of all political persuasions recognize the fact that our system is outdated, and it clearly failed during COVID. Rob, same question about the future.
MacNaughton: As you highlighted, Alex, I do think senior care is one [area] that I believe both sides can see the value. In general, I think there needs to be a greater focus on long-term care and SNF funding, particularly in this time. I think it was exacerbated by COVID. Perhaps revisiting reimbursement around higher-acuity patients, as well as COVID care.
But I think as I stand back even farther, it would be fantastic if the administration would take a look at the experience over the last eight or nine months. There’s, I think, been some positive lights, as we as a country and a health care system have had to battle the pandemic — and I think one of them is now the greater adoption and penetration of telemedicine and telehealth in general.
For all parties involved — whether providers, patients, payers — there’s been some absolute benefits to the greater adoption. How do you ensure we build upon that momentum?
There are other regulations that I’ve been chatting about … the one that jumps to mind is ET3, Emergency Triage, Treat, and Transport, which essentially allows ER docs to provide guidance to EMT teams in the field — which I think, again, just further underscores the value of this type of solution and technology to provide better care, enhanced care, that can also drive down costs immeasurably.
There’s some momentum that started as a result of us as a nation and a system grappling with a pandemic. It would be great to focus on those areas of light and continue them forward, even when the COVID malaise passes.
This interview has been condensed and edited for clarity.