Thursday, August 25, 2016

Step into the Future: Increase Your Practice’s Revenue with Telemedicine

Why do many providers think an innovative way to deliver healthcare like telemedicine would align with outdated reimbursement models? Thinking out of the box in regards to getting paid for your telemedicine services is the winning mentality. Establishing these alternative revenue models and pursuing strategic partnerships are all major keys in creating telemedicine revenue. The concept of government funded fee-for-service payments (i.e. traditional reimbursement) is becoming an increasingly outdated and less than ideal payment model for 21st century healthcare. CMS is pushing for 50% of reimbursement by 2018 tied to alternative payment models (Accountable Care Organizations, bundled payment). The most successful telemedicine providers and companies understand the current healthcare payment landscape and shift their thinking from “reimbursement” to “revenue”. Though there are many creative revenue models, here we will cover three revenue models providers should consider offering as revenue streams.

Institution to Institution

Academic medical centers or even small physician groups can leverage their expertise and contract their specialty services to small rural hospitals or other institutions with specialist coverage need. These contracts can be structured to either provide peer to peer consults, direct patient care, or both. These entities could utilize a monthly rate, a hybrid payment, a special fee schedule menu or just a cafeteria list style of multi-specialty services. In the end, this is a professional services agreement and does not have any dependence on traditional Fee for Service reimbursement to drive revenue. Creating these relationships and servicing them well can become a revenue source for years to come.

Employer Workforce Offerings

Telemedicine Providers with a network of primary care providers can offer telemedicine services to an employer’s workforce via on-site kiosks or online apps. This was in the past an overlooked telemedicine setting but now gaining a lot of steam. This type of offering is becoming very attractive to self-insured employers because of the real ROI that can be realized. The benefits of reduced absenteeism, better workforce health, reduced direct care costs, and reduced overall workforce health costs are just some of the benefits. Showing a minimal 5% redirection of a workforce to use telemedicine first, instead of traditional office visits, ER or urgent care can mean big savings to employer’s bottom lines. The telemedicine provider could negotiate a variety of different compensation approaches with the employers. The compensation may be on a per-encounter fee or a base services rate, combined with a reduced per-encounter fee. Sometimes a fully capitated per employee per month payment may be negotiated. The different compensation methodologies will impact telemedicine utilization by the employers. All these factors should be considered and tailored specifically to the employer’s goals. The payments for the employee telemedicine services could be made by the employer’s self-funded plan, the employee’s third party administration, or even by the employees themselves as an out of pocket cost. The best way for telemedicine providers to obtain these types of contracts is outreach, engaging local employers on the benefits and cost savings of providing a telemedicine offering. These contracts should be the first step. Show them the benefits, the cost savings, the advantages of a healthier, present workforce, along with your dedication to making the program work. Almost always, this payment model is a new program being introduced. Take the time to educate the employer and the employees of the capabilities and limitations of the telemedicine offering. Taking these steps to encourage utilization will increase ROI in the long run.

International Arrangements

New technology has created an explosion in demand for international telemedicine, especially in fields such as radiology and pathology that lend themselves to virtual care. It's an area that has humanitarian interest and is also a growing business for the hospitals, AMCs or physician participating in it. Not only can physicians treat patients in remote or underserved regions, but they can also tap into a market of international patients who want access to specialty care in the U.S. without getting on an airplane. A country such as China, with increased middle-class purchasing power, means more patients have the opportunity to pursue treatment from Western medical centers. That means U.S. medical centers, particularly large academic institutions, are making a concerted effort to build their brands abroad. Payment can be better than reimbursement in the U.S., as patients are either self-pay or have government health plans. Physicians can also bypass the additional licensing and paperwork they would need if they were going to expand their practices in another state. Contractual per consult or basic monthly fee arrangements can be made to provide direct care, and/or even second opinions abroad.


Telemedicine is here to stay. Our aging population, increase in chronic diseases among the population, and physician shortages are the main drivers for consumer demand of virtual health services. The old Fee-for-Service model is going the way of the typewriter, and it’s critical to position yourself for the new age payment models, to avoid being left behind the pack. IN addition, the models discussed in this article shed new light on new, disruptive ways to get paid for delivering healthcare services without getting involved with insurance companies and their paternalistic controls over the way you practice medicine. In the end, patients will enjoy more convenient access to care and better health outcomes. Providers will enjoy more secure revenue streams, and job satisfaction. Those are the key ingredients for maximum patient-provider relationships that lead to long-term, sustainable health quality.

Written by Aneel Irfan, CTL, CTC