Is another health plan featuring virtual PCPs as primary access point a sign of things to come?

• Washington state employers can purchase the Premera NOW plan for availability on Oct. 1 after Premera Blue Cross launched its first virtual care health plan for member access to primary care providers, according to Healthcare Finance.
• The plan is an on-demand, text-based primary care service platform from independent company 98point6. The plan is available at a lower premium than standard PPO plans, according to the same article.
• If these products gain traction post-pandemic, they have the potential to disrupt referral patterns and demand for ancillary services.

Healthcare Finance reports, “Premera Blue Cross has launched its first virtual care health plan for member access to primary care providers. Washington state employers can purchase the Premera NOW plan for availability on Oct. 1. While open enrollment varies by employer, many will hold open enrollment this fall for a Jan. 1, 2021, start date. Members may access a virtual primary care provider at any time, for a zero copay, through an app operating on 98point6. This is an on-demand, text-based primary care service platform from independent company 98point6. The plan is available at a lower premium than standard PPO plans.”

Takeaway

This is the second major plan that has announced something like this. But where Humana launched this as a pilot for the small group market, this appears to be aimed at all employers in the state of Washington (where Premera, at 37%, is the leader in the large group market but in a three-way split for market share with Cambia – 32% and Kaiser – 22%).

Like the Humana plan, Premera’s virtual primary care product is available at a lower premium than standard PPO plans and offers a specialist referral process. Given the need for lower-priced products in the exchange, I also would not be surprised to see this model pop up there as an option.

Just like everyone else, I’m assuming that Congress will pass legislation in the near future removing the Medicare barriers (originating site requirement, geographic restrictions) to expand telehealth on a permanent basis for Medicare.

Many people have experienced telehealth and seem to be relatively satisfied with the experience. You couple that with lingering concerns about additional flare-ups of COVID-19 and providers who have made investments to expand their capabilities, and it’s not hard to see a compelling coalition of technology companies, providers, consumers (AARP) and public health groups coming together to help get legislation over the finish line at the federal level. The state-by-state picture is murkier but given the relaxations on scope of practice requirements for all types of providers due to the pandemic, traditional arguments about telehealth quality become harder to credibly make post-COVID. And I think that leads to an explosion in both telehealth in general, but also to more health plans with telehealth first primary care as lower-cost alternatives.

Telehealth’s impact on provider facility fees and ancillary diagnostic services

Beyond the steerage implications discussed in my blog about Humana piloting a plan based on virtual care, the shift to telehealth has other revenue implications for providers related to the HOPD facility fee and ancillary services associated with ambulatory E&M visits. In terms of the facility fee (originating site), whether CMS and commercial payers will continue the originating site fee for provider-based settings post-pandemic is an open question. For CMS as a payment policy issue, shifting to telehealth would be a convenient way for them and Congress to do away with facility fees for low-acuity, low-risk outpatient services without having to do anything.

If you are well enough to be treated in the home, the odds of you needing the standby capacity/capabilities that the facility fee covers are probably pretty low. And the savings could be used to offset any concerns about increased utilization, which is why MedPAC has long argued against expanding telehealth.

However, CMS may have just made this harder in last week’s interim final rule. Once the agency starts paying for something, it is hard to stop. Additionally, CMS acknowledges hospitals’ shaky finances as justification for why it is paying facility fees (originating sites) for virtual services provided in the patient home. I do not see that problem going away any time soon unfortunately.

For commercial and MA payers, I suspect the ability to command facility fees for the originating site will be on a case-by-case basis depending on market dynamics in the near term. Over time, I think the balance will tilt in plans’ favor as network adequacy requirements can be met by providers who are not in the local market for services that can be delivered virtually. State-by-state licensing requirements may insulate some markets from interstate competition, but not intrastate. Additionally, I suspect we’ll see a spike in health plan employment of physicians previously in independent practice as a result of the pandemic.

The other question I have on the shift to telehealth is: What impact it will have on ancillary diagnostic services? I would expect to see some decrease in these services unless they are incredibly convenient. If the diagnosis was made on a virtual visit from a home or office, patients may be more likely, in many cases, to wait a day or two before going out to fulfill a doctor’s order for a diagnostic service to see if the problem resolves itself without further care.