As the state implements two new programs that will expand health care providers’ use of telemedicine, private technology companies that provide the necessary equipment are gearing up for an explosion of new business.
Medicaid, the state-federal health insurance program for low-income residents, is now required to reimburse eligible health care providers for certain services they deliver via telemedicine, thanks to two new state initiatives: the Rural Access Telemedicine Program and the Cardiovascular Disease and Stroke Telemedicine Program.
Telemedicine enables real-time communication between providers at different locations. Officials and business executives say it’s a cost-effective solution to situations where a patient would benefit from a particular specialist’s expertise but no such physician is physically present.
The benefits of telemedicine are more obvious in rural settings, but officials say it can benefit any population. Yet, health care systems across the country have been slow to adopt telemedicine, said Simon King, president of Annapolis-based MedVision TeleHealth Solutions, which creates technology products for the health care industry.
But that’s all about to change, he said, at least in Maryland.
“I think realistically, within the next 36 months, our revenue will grow tenfold,” King said.
He declined to share specific financial information because MedVision is private, but he did say it’s a “multimillion-dollar” company and that the days of revenue hitting the “hundreds of millions” are “just ahead.”
“Telemedicine is an emerging business,” he said. “It’s a new way of providing health care that the U.S. is starting to embrace out of a dire need to provide better clinical services with less clinicians and less money. So we’re just getting started. The technology is available. The businesses are in place. … It’s just a matter putting in place changes to regulations and reimbursement that allow it to happen.”
Now, any Marylander enrolled in Medicaid will be able to request telemedicine services. Patients can go to an “originating site,” where providers would start a virtual consultation with their partners, usually specialist physicians, at a “distant site.” Those specialists will then use video conferencing to confer with the patient and original provider to choose the best treatment. They can also oversee the actual care delivery.
But that’s the bare minimum, King said. Telemedicine systems come in all shapes and sizes, depending on the type of clinician and needs of the patient. Some systems enable providers to share crucial information, such as lab tests or a patient’s electronic medical record, assuming they’re using a secure network deemed compliant with the Health Insurance Portability and Accountability Act (HIPAA).
Maryland’s new Rural Access Program is meant to widen the breadth of services available in rural areas. To be eligible for reimbursement in this program, the “originating site” must be in one of Maryland’s 15 rural counties. Eligible providers include physicians, nurses and midwives at hospitals and Federally Qualified Health Centers, nursing facilities and renal dialysis centers.
The other new program focuses on getting more patients evaluated by cardiovascular or stroke experts when a timely in-person consultation or diagnostic evaluation is not feasible because no specialists are available. The “originating site” must be a hospital’s emergency department.
In both programs, the consulting providers may be located at a “distant site” across the state, in Washington, D.C., or in any contiguous state as long as they’re licensed to practice in Maryland.
Maryland’s new mandate that Medicaid pay for care delivered via telemedicine means the state will rack up a higher bill, because more services will be covered for beneficiaries. Additionally, Medicaid’s rolls will swell by at least 81,000 people when the program is expanded on Jan. 1under the Affordable Care Act.
State Department of Health and Mental Hygiene officials estimate the additional cost to Medicaid will be about $760,000 during the first year, said Tricia Roddy, director of planning administration for Maryland Medicaid. About half of those costs will fall to the state and half will fall to the federal government because of how Medicaid is structured.
The actual cost will depend on the number of providers that choose to offer telemedicine through the new programs and how many patients use the services. Offering telemedicine is mandatory for the hundreds of providers in one of the state’s seven Managed Care Organizations — groups that abide by special payment rules. MCOs cover about 75 to 80 percent of Maryland’s Medicaid population, Roddy said.
For other providers, telemedicine participation is voluntary. Those interested in participating must demonstrate they have the requisite technology and secure connectivity capabilities for real-time video and audio conferencing. They also must specify the program in which they want to participate and with which sites they plan to partner. Since Oct. 1, when the programs went into effect, one hospital has applied to participate, Roddy said.
A potential roadblock to participation is that the state isn’t helping providers cover the cost of telemedicine systems. MedVision offers a downloadable software application for about $250 that can enable basic video conferencing on a computer or tablet, King said. The system that would generally be required for a primary care practice would run about $40,000 per set. More advanced systems can cost even more.
Of MedVision’s 10 telemedicine customers, King said, seven are in Maryland. He also said he’s negotiating pilot telemedicine programs with several long-term care facilities in rural parts of Maryland, although he declined to share which ones.
“With all the additional people coming into the system, it’s going to overburden the clinicians and the hospitals and the other facilities,” King said. “Any way that you can effectively deliver medicine or clinical services to the population is going to be welcome, and telemedicine is going to play a major role in that.”