Top Ten Issues for Reimbursement of Remote Monitoring Devices In a Changing Health Care Environment

Remote monitoring devices enable caregivers, health care professionals, and/or patients to monitor a range of non-physiologic and physiologic data when outside the health care setting — such as in the patient's home. There is a growing array of such devices, some of which are targeted to improving management of specific acute or chronic illnesses. In today's evolving health care system, stakeholders want to know: will payers provide reimbursement for these remote monitoring devices and services, and, if so, under what conditions? Numerous health care initiatives and reform proposals may affect reimbursement of remote monitoring services. Here are ten issues to consider when evaluating the potential for such reimbursement.

Health Care Reimbursement Environment: Fee-for-Service or Bundled

  1. Differing Initiatives. Health care initiatives include a spectrum of reimbursement methods, each with different implications for reimbursement of remote monitoring services. Some initiatives — for the most part — retain existing fee-for-service payment methods according to site of service (e.g., outpatient hospital, clinic, or home). Other initiatives propose to break the silos of fee-for-service reimbursement and establish bundled payment methods that bridge sites of service or professional specialties, or both. Numerous proposed health reform options exist within these two general categories of initiatives.[i] Often, traditional reimbursement precepts will be used, but enhanced with new dimensions (e.g., performance measures and supplemental payments for case management services) to support the goals of health reform. As shown below, successful adoption of remote monitoring technologies can occur among the reform initiatives, although significant hurdles exist under current site-of-service-driven payment methods.
  1. Varied Reimbursement Environment. Stakeholders should anticipate that the reimbursement environment for each remote monitoring device will vary considerably. A reimbursement system that supports one monitoring device may not always provide an open door for adoption of another. Each device is likely to be evaluated by various factors, including type of data monitored, patient conditions, the recipient of the data, frequency and duration of monitoring, mode of data transmission, and degree of patient surveillance by physicians or other health professionals.

Reimbursement Under Fee-for-Service Reimbursement Methods

  1. Unique Processes. Securing separate reimbursement for a remote monitoring device under a fee-for-service payment method that is targeted to a site of care is a multi-faceted and potentially lengthy process. For each device and remote monitoring service, one must determine the payer-benefit category, secure codes, develop coverage policies, and establish payment rates. Each of these reimbursement mechanisms will involve different decision-makers and unique processes. More detail is provided below.
  1. Multiple Codes. Multiple codes with detailed code descriptors may be required for a particular remote monitoring service. Most CPT[ii] or Healthcare Common Procedure Coding System (HCPCS) codes currently available to report remote monitoring services are unusually detailed in their descriptors. As demonstrated by new codes for remote cardiac monitoring[iii] effective January 1, 2009, the codes may define equipment requirements, type of data monitored, mode of physician surveillance, patient indications, or frequency and duration of monitoring. Separate codes may be required to report technical and professional services associated with device set up and use.[iv] However, award of a code does not guarantee coverage (see items #5 and #6 below).
  1. Covered Benefits. When making a coverage decision, the payer first determines whether the device and related service fall within an accepted payer-benefit category. For example, some remote monitoring devices may be classified as a physician service, while others are considered durable medical equipment. If a payer views the device and service as primarily patient and/or provider conveniences, they may not fall within any covered benefit category. Enhancement of devices to include a wireless capability that leads to more active involvement by the physician may make assignment of a benefit category less clear. For example, a device that was previously classified as durable medical equipment may now be considered a physician service.
  1. Medical Necessity. Although codes and the benefit category have been established, payers may not necessarily determine that such services are medically necessary; hence, such services may not be covered. New policies or revisions to existing coverage policies for each proposed remote monitoring device may be required. Payers will assess medical necessity in terms of the proposed patient indication; the mode of data transmission (wireless or patient-activated); frequency of remote monitoring; duration of monitoring; and the accuracy, validity, and reliability of data. Payers will likely require well-designed prospective trials to show the validity and accuracy of the data, the impact of the physiological data obtained from each device on patient management decisions, and, ultimately, improved patient outcomes. Evidence requirements may be higher if the duration of remote monitoring, frequency or use, or non-face-to-face interactions represent a change in standard of care.
  1. Attended Monitoring. When remote monitoring "alarm systems" are enhanced to provide "attended" monitoring, reimbursement restrictions and complexity (concerning codes, coverage and payment conditions) are likely to increase significantly. Medicare defines "attended" monitoring as requiring a technician at a monitoring site or a central data center to monitor data 24/7 or to have 24-hour access to a physician to review transmitted data and assist the patient in case of emergencies.[v] 
  1. Limited Reimbursement. A device itself is reimbursed once — either as the technical component of a physician service (e.g., under the Medicare Physician Fee Schedule) or as durable medical equipment, but not both. The payment method will determine the reimbursement amount for the device.

Reimbursement Under Bundled Reimbursement Methods

  1. Different Requirements. When payers make a more bundled payment for the range of services provided (e.g., capitated payment, episode payments, or case management fees), the health care provider, rather than the payer, becomes the decision-maker for services rendered. Under these payment systems, payers or providers may not always require codes for individual services or establish detailed coverage policies for all services. Instead, they may consider the service as a component of either: (i) a contracted primary care or chronic disease management program with physician groups or other health care organizations, or (ii) the standard of care adopted by the group. Also, health care providers will view remote monitoring services as the program's expense (e.g., affordable under episode payment), rather than as a reimbursable service. Despite this, be aware that these initiatives may contain a mixture of reimbursement requirements that retain some aspects of items #3 through #8.

Cross-Cutting Requirements Under All Health Care Reform Initiatives 

  1.  Clinical Evidence. Although requirements for codes and coverage policies may differ among reimbursement systems, some level of clinical evidence is needed to demonstrate the "value" of the remote monitoring service. The threshold of clinical evidence will probably be highest under traditional fee-for-service systems where explicit coverage policies are established. In making coverage determinations, payers will likely emphasize the impact on patient management and require clear linkages to improved health outcomes. Also, providers who have contracted to provide care to a group of beneficiaries will look for evidence, such as impacts on patient management, health outcomes, and/or resource utilization, to justify the expense of providing remote monitoring services.

[i] Congressional Budget Office. Budget Options Volume 1, December 2008.

[ii] Current Procedural Terminology (CPT) is copyright 2008 American Medical Association. All rights reserved.

[iii] CPT Code 93228: Wearable mobile cardiovascular telemetry with electrocardiographic recording, concurrent computerized real time data analysis and greater than 24 hours of accessible ECG data storage (retrievable with query) with ECG triggered and patient selected events transmitted to a remote attended surveillance center for up to 30 days; physician review and interpretation with report.  CPT 93229 code: Wearable mobile cardiovascular telemetry with electrocardiographic recording, concurrent computerized real time data analysis and greater than 24 hours of accessible ECG data storage (retrievable with query) with ECG triggered and patient selected events transmitted to a remote attended surveillance center for up to 30 days; technical support for connection and patient instructions for use, attended surveillance, analysis and physician prescribed transmission of daily and emergent data reports.

[iv] See above CPT codes for remote cardiac monitoring for an example of separate codes for professional and technical services.

[v]  Medicare National Coverage Decision for Electrocardiographic (EKG) Services (20.15).