Federal Medicare program for seniors and disabled Americans currently does not reimburse for most telehealth, care coordination, and home monitoring services, but that could change soon.

Neil Versel, Contributor

January 19, 2012

5 Min Read

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The federal Medicare program for seniors and disabled Americans currently does not reimburse for most telehealth, care coordination, and home monitoring services, but that could change once new evidence comes to bear and health reform picks up steam, said healthcare stakeholders at the 2012 International Consumer Electronics Show last week in Las Vegas.

"I think the future is quite bright for payment," said Dr. Joseph Kvedar, director of the Center for Connected Health at the Harvard-affiliated Partners HealthCare in Boston. He was on a panel at the CES Digital Health Summit, discussing business models to support e-health.

Kvedar cited results from trials at Partners showing that home monitoring helped reduce readmission by 50% for discharged patients who had been hospitalized for congestive heart failure, and 69% of patients with hypertension had lower blood pressure at the end of the trial. He told InformationWeek Healthcare that there is a study about to be published, in a journal he would not specify, that will add to the scientific evidence that remote monitoring technology improves health outcomes.

[ Is it time to re-engineer your clinical decision support system? See 10 Innovative Clinical Decision Support Programs. ]

Patients in the trials were given access to Healthrageous, a software system that analyzes data collected from telemetric devices and then provides personalized guidance, support, and coaching toward health improvement. The Center for Connected Health spun Healthrageous off into a separate business, and Partners has gotten health plans to pay for these services.

Kvedar also said that any patient in the trial can download free videoconferencing software and have online chats with their doctors. "All these things are becoming quite real in the age of accountable care," he said. Kvedar later told InformationWeek Healthcare that Partners actually has re-worked all of its payer contracts to align incentives to quality rather than volume.

Another panelist, Robert Jarrin, senior director of government affairs for telecommunications equipment provider--and a big player in mobile healthcare--Qualcomm, predicted a fairly rapid shift away from traditional volume-based reimbursement, thanks in part to wide acceptance of e-health technologies. "Fee for service will move to a system predicated on efficiency and quality," Jarrin said.

Jarrin made the bold forecast that 25% of spending by the Centers for Medicare and Medicaid Services (CMS ) will move away from fee-for-service in the next five years, to things like the patient-centered medical home and bundled payments through accountable care organizations. That would affect more than $200 billion in health costs annually, based on CMS spending of $911 billion on care in federal fiscal year 2010 and $892 billion in fiscal 2011, either directly through Medicare or indirectly via Medicaid funding for states.

It may take time for the public to see the value of remote monitoring, though. "I think the thing we fail to realize is the low level of awareness among the general public" that home devices can really help people and that these gadgets are more than just another piece of technology to learn, said Bill Walsh, senior advisor at AARP, the group representing 37 million older Americans.

Walsh referred to the "PHR debacle," saying that people do not see the value of personal health records right now. However, awareness and desire to have a connected health device went up after people were explained the value proposition, according to an AARP survey that Walsh cited. "To us, the promise of mobile health is a no-brainer," he told the Digital Health Summit audience, who presumably had already drunk the Kool-Aid. Aging in place is something baby boomers will want, Walsh added.

Qualcomm's Jarrin also expressed optimism over the Center for Medicare and Medicaid Innovation, set up by and funded with $10 billion by the Patient Protection and Affordable Care Act. He noted that the CMS innovation center and the Office of the National Coordinator for Health Information Technology are pushing consumer involvement, though the $27 billion Meaningful Use program to boost electronic health records and interoperability of health data is a provider-centric endeavor.

"Meaningful Use does nothing to incentivize patients," Jarrin lamented. "The rich pearls of data coming off of each one of us get lost in manila folders and needs to be transcribed."

Changing how Medicare pays for many health services will take another act of Congress, however. "That is light years away," said Jarrin.

Walsh agreed that nothing will happen in the current political climate, with so much pressure to cut Medicare and other entitlement programs. He also said that the future of anything in the Affordable Care Act is up in the air since several states have challenged the constitutionality of the Obama administration's healthcare reform law.

"We are not going to have a good handle on this until this summer, when the Supreme Court rules," Walsh said.

When are emerging technologies ready for clinical use? In the new issue of InformationWeek Healthcare, find out how three promising innovations--personalized medicine, clinical analytics, and natural language processing--show the trade-offs. Download the issue now. (Free registration required.)

About the Author(s)

Neil Versel


Neil Versel is a journalist specializing in health IT, mobile health, patient safety, quality of care & the business of healthcare. He’s also a board member of @HealtheVillages.

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