2016 Will Be the Year of Telemedicine and ACOs

Foley & Lardner LLP

If 2015 was the year that brought telemedicine directly to consumers, 2016 will be the year of telemedicine and Accountable Care Organizations (ACOs). ACOs are expected to increase the use of telemedicine technologies as a way to improve patient quality, achieve greater cost savings, and meet Center for Medicare & Medicaid Services’ (CMS) patient threshold.

According to a CMS report of 2014 data, while CMS considered the Medicare Shared Savings Program (MSSP) a success, only 27 percent of ACOs achieved enough savings and quality improvements to trigger financial incentives. At the same time, only 20 percent of ACOs employ telemedicine services, according to separate recent research.

Moreover, recent CMS/OIG regulations expressly mentioned telemedicine services as arrangements protected under the MSSP fraud and abuse waiver programs. This means ACOs can use and offer telemedicine and remote patient monitoring services in ways other traditional non-ACO providers cannot. In protecting these arrangements, CMS and OIG recognize how telehealth technologies and innovative care processes can help reduce costs for the Medicare program and benefit Medicare patients.

Telemedicine will only become more important as CMS continues to expand its use of alternative payment models in the Medicare program. CMS has announced plans for 30 percent of Medicare payments to be made in alternative payment models by the end of 2016. That number increases to 50 percent by the end of 2018. Additionally, CMS seeks to have 85 percent of Medicare fee-for-service payments in certain value-based purchasing categories by 2016 and up to 90 percent by 2018.

ACOs are entities that have already made significant financial, operational, and cultural investments to improve the delivery of health care. And yet, 80 percent of ACOs have not pursued one of the most powerful health care delivery technologies available to achieve these quality and cost savings goals.

ACOs are well positioned to follow other health care providers’ leads and take full advantage of what telemedicine has to offer in 2016 – short and long term cost savings, increased patient satisfaction, and greater likelihood of triggering shared savings incentives. Those that capitalize on telemedicine and remote monitoring technology are likely to be the winners of financial incentive payments at the end of 2016.

This is the last in a series of posts covering the five telemedicine trends driving health care transformation in 2016, including employer and retail clinics’ telemedicine expansion, expected reimbursement growth, an uptick in international arrangements, and burgeoning state legislation.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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