Wake up call for mobile health reimbursement

By: Brian Dolan | Jul 8, 2010        

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Brian Dolan, Editor, MobiHealthNews“You are not going to get paid for cool ideas. You are not going to get paid for saving lives. You are not going to get paid for anything unless you can prove that you can save them money.”

If that sounds familiar, it may be because I started an editorial with those same words almost a year ago today. Or maybe you heard CardioNet founder (now Patient Safe Solutions CEO) James Sweeney speak at the Wireless Life Sciences Alliance event in San Diego last June.

His words were stirring then. Impossible to ignore now.

This week CardioNet, one of the few wireless health companies with reimbursement secured, announced that United Healthcare, a large payer in the U.S., does not believe that CardioNet and other mobile cardiac outpatient telemetry (MCOT) services are “proven.” The news followed on an update from the Centers of Medicare and Medicaid last week that confirmed their plans to keep in place the current reimbursement rate for MCOT services. That rate came about last September when CMS slashed the fee-per-service by about one-third.

Corventis is perhaps the latest wireless health startup to venture into the MCOT space. The company set up a testing facility in Pennsylvania, which is where CardioNet is also based, likely because Highmark CMS is known to reimburse for home telemetry equipment. To wit, CardioNet moved to Pennsylvania from San Diego years ago for this very reason.

But is there a cheaper way?

This week I had the chance to discuss this situation with another veteran in the wireless health industry, a physician who wished to remain anonymous.

The physician pointed me to another startup, iRhythm that has recently curried favor among some luminaries in the wireless health industry. That’s odd because iRhythm is not — in any way — wireless-enabled. Quite the opposite, in fact. The startup uses “snail mail” to “transmit” their data. No wires but also no radios.

iRhythm’s Zio Patch is designed to diagnose cardiac arrhythmias by providing (up to) seven to 14 days of continuous recording. The user then mails the Zio Patch back to the company’s Independent Diagnostic Testing Facility for analysis. Real-time? No. Cheaper? That’s the pitch: Cheaper and easier to use.

The costs associated with these new wireless health services have every payer squinting hard. And serious questions remain unanswered:

Is there a statistical difference between the care provided by iRhythm vs. CardioNet?
By connected vs. unconnected offerings?
Are MCOT service providers like CardioNet, Corventis and others in serious financial turmoil?
Should the focus switch to user experience: Design products that customers will want to buy themselves?
Is the industry acting too complacent, assuming reimbursement is just going to “happen”?

“In the world we are moving in to, more than ever, if you can’t justify the cost benefits, then you will fail,” Sweeney said.

Better consider us moved into that world. CardioNet’s reimbursement kerfuffle over the last year is well-documented in this publication’s archives. As a public company, their agony is, in turn, public. The industry as a whole must learn from it.

  • Brian Dolan

    New comment system from echo looks great! If only mHealth reimbursement was so easy to implement… (test comment)

  • Bruce Ahern

    Brian,

    We are experiencing the same thing with regards to reimbursement. MyGlucoHealth meters and strips get reimbursed for exactly the same amount as every other non-connected blood glucose meter by Medicare and the major insurance carriers. This, even though we have to support an extensive online network, text messaging services and more importantly the added expense of Bluetooth communication within the meter. In other countries around the world, like Australia and Bangladesh this “value-added” approach is being embraced, but the US is slow to adapt to any solution that promises better clinical outcomes that can reduce overall cost of care for the provider.

    The one interesting statistic, at least for diabetes management, is that when a patient tests more frequently, or at least as frequently as a physician proscribes, the cost of the patient’s care is reduced significantly. In some cases by as much as 90% due to decreased complications and most of all the high cost of ER visits for blood sugar extremes high or low. The mHealth connection afforded by MyGlucoHealth reminds patients to test using text messages and alerts, but more importantly it informs the patient’s family and connected care network when the patient is struggling. All this for exactly the same reimbursement as the generic meter and strips offered by the chain drugstores.

    It’s frustrating to be a pioneer in an industry when you know you have a solution that will lower cost while improving clinical outcomes.

    Bruce Ahern
    Entra Health Systems

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