Reimbursement: The Key to ROI

Forrester analyst explains reimbursement options for remote management of chronic diseases.

This article appears as a sidebar in the January/February 2020 edition of HealthLeaders magazine. We invite you to also read the cover story, 3 Ways to Tame Chronic Disease With Technology.

New approaches to chronic disease management rely heavily on biometric devices and dedicated teams to monitor data and interact with patients. While these tactics appear to be lowering the overall cost of care, there is a price to pay to launch and maintain these initiatives.

"How you actually drive change in healthcare is by creating a return on investment," says Jeff Becker, MBA, senior analyst at the Boston location of consulting firm Forrester. The Centers for Medicare & Medicaid Services (CMS) recognizes the value this technology can have in lowering costs, he says, and it now has several ways health systems can generate revenue from using these devices.

"The onboarding experience is reimbursable," says Becker. "CMS pays for the education of members being onboarded onto chronic disease management platforms." In addition, it provides reimbursement for physiological data monitoring. Neither of these activities involve patient interaction or outreach, which is another reimbursable expense, he says. "That's three different pieces of revenue that hospitals are starting to realize are out there and available to them."

The data monitoring component is significant, says Becker, because "this is an opportunity to bill recurring revenue, which is relatively rare in healthcare." By sending a wireless glucometer or blood pressure cuff home with chronically ill patients, for example, and letting related data flow back to the hospital and be monitored, a hospital can bill CMS every month, he says. This creates a recurring monthly revenue stream that doesn't even involve interacting with the patient, he explains.