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Using Bundled Payments to Pay Providers for mHealth Nudges

A recent article suggested that providers receive bundled payments for using mHealth technology that nudges patients to improve health outcomes.

Providers should receive bundled payments for using mHealth solutions that electronically deliver nudges to patients, a recent article suggested

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- Many providers have been able to extend their reach outside of their office by using mHealth technologies that encourage patients to improve their own health outcomes through nudges. However, payment structures for the healthcare encounters have been lacking.

To ensure that providers are being reimbursed for interacting with patients through mHealth solutions, stakeholders should develop a bundled payment model for electronic nudges, suggested an article in Evidence-Based Diabetes Management.

Mike Payne, the article author and head of commercial policy at an online specialty clinic, explained using electronic patient nudges is key to improving a wide range of care quality measures, such as getting patients to show up to wellness checks or chronic disease management for diabetes.

For example, Minnesota-based Park Nicollet Health System adopted a text messaging program that reminds parents or caregivers about their children’s upcoming wellness visit. The program reached out to 70 percent of parents to nudge them to bring their children to their next wellness visit, which are especially important for pediatric development.

“(R)eminding parents to schedule their children’s well-child visits has many benefits,” said Ali Salita, Park Nicollet’s project manager for clinical health support. “It helps prevent missed visits and gaps in care for the children. And it provides an opportunity to improve immunization rates in the state. Children receive most of their immunizations during well-child visits.”

IBM’s Watson technology has also used a nudge system to encourage diabetics to make appropriate daily decisions when it comes to their care. For example, the program reminds patients throughout the day to monitor their blood glucose levels and maintain healthy levels through exercise and diet.

The technology can also collect patient data through the nudges. Watson can remind a patient to check their blood glucose levels, then patients can input the data into the program and providers can gain real-time access to patient information. The program can also use the data to create more helpful nudges for the patient.

The nudge-based mHealth applications have paid off for some providers. Payne wrote that Virta Health, the online clinic he works for, achieved a 54 percent diabetes reversal among patient with type 2 diabetes in 70 days using electronically delivered nudges to individuals from providers and health coaches.

Despite the proven and potential benefits of electronic nudges, the fee-for-service reimbursement model is not equipped to handle the small and oftentimes frequent encounters.

Under fee-for-service, providers are paid based on the number of encounters or services. But what happens when an mHealth application nudges a patient more than once a day? Providers under fee-for-service contracts would have to submit a claim for each nudge in order to get paid.

Submitting a claim per nudge may be overly burdensome for providers, Payne argued. Providers can spend up to $8 per claim submission to cover costs related to software and hardware, processing, and back-end collections, according to a cited 2010 study.

More recent research from CAQH also showed that many providers are still using manual claims management processes, making claim management even more expensive compared to automated processes. Just for claim submission providers spent $2.02 per claim under a manual process, but $0.59 per claim under an automated process.

Even though automated processes are cheaper, electronic claims management adoption only increased between 1 percent and 8 percent in 2015.

As a result, submitting either multiple claims for many nudges or even just one claim for one nudge may not be financially worth it for providers.

Provider reimbursement also gets more complicated with electronic nudges when solutions, like IBM’s Watson, uses intelligent technology. Instead of a clinician orchestrating the healthcare interactions, the program uses machine learning to provide better care.

“In a FFS [fee-for-service] world in which there are only codes for medical devices and human–clinician visits, there are few, if any, codes that exist for these frequent high-value patient touchpoints driven by technology rather than humans,” wrote Payne.

The fee-for-service reimbursement approach would lead to an undervaluation of healthcare nudges, he added.

To more appropriately reimburse providers for using electronic nudges, Payne offered two payment models.

First, payers and providers could develop codes for the nudges. He likened the strategy to Apple’s “pay per song” payment model.

However, the pay-per-nudge methodology would require extensive code development and it would only modestly reduce administrative costs per claim submission.

Second, Payne suggested implementing a bundled payment model for electronic nudges. The Bundle of Nudges, as he called it, would pay “a per-patient amount for a bundle of services to be provided, preferably with payment based on agreed-upon clinical outcomes achieved by the nudges, rather than just payment for the bundle of nudges itself.”

The model would function like the Medicare Comprehensive Care for Joint Replacement model, but focus on chronic disease management.

“The Bundle of Nudges approach is a clearly preferable model,” he added. “It does not require massive overhaul of claims systems or FFS coding rules and it allows for further innovation and application of technology to the achievement of desired behavioral change and modification.”

However, payers and providers must overcome three bundled payment model development obstacles. The challenges included garnering payer support for technology-supported remote healthcare services, developing clinical outcomes to measure bundled payment model reimbursement, and establishing faster contract development strategies.

“If we are to truly address chronic diseases that have become the largest medical scourge of today’s society, we need technology-enabled, nudge-based care to become prevalent,” Payne concluded.

“That, in turn, requires health insurance carriers to develop models beyond classic FFS schemes to reimburse bundles of nudges and to make the new bundled-payment schemes quickly available to the clinical innovators, like Virta, that are demonstrating the immense value and potential of nudge-based approaches.”

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