We won’t pay the same for a virtual visit as for an office visit

Mitchell Kaminski, MD, MBA

May 28, 2020

Will payment for virtual care continue after COVID-19 has abated? Will CMS, as they do now, continue to pay equally for a telemedicine visit as they do for an office visit?

As we marvel at the transformation that COVID-19 has fueled for telemedicine and virtual visits, talk has begun of a “new normal.” In considering the new normal, a graduate student in our Population Health program recently predicted: “Telemedicine has been transformed and Pandora won’t go back in the box; telemedicine visits are here to stay!” He felt that we had crossed a “tipping point.” But have we?

In 2019, CMS had put into place an incremental policy for payment of telemedicine visits on a limited basis, for specific situations. When office visits suddenly became harmful to our patients’ health, CMS on March 6 with admirable agility announced that telemedicine visits would be reimbursed for Medicare patients without the 2019 restrictions. Since March 6th, not only are virtual visits reimbursed, they are reimbursed the same as for an office visit! Will this payment response to the pandemic continue after COVID-19 has abated? And will private payers follow the CMS lead and reimburse equally for telemedicine visits as well?

As we conjectured about the new normal, the student, who works in the insurance industry, said matter-of-factly, “We won’t pay the same for a virtual visit as for an office visit.”

That caught my attention; in addition to insurers, the “we” in that statement could represent employers paying for their employees’ healthcare. It could also represent patients, if their co-pay was the same for a telemedicine as an in-office visit. This sentiment underscores an assumption that could push us to revert to pre-pandemic payment rules.

Underlying that statement is an assumption about value: an in-person office visit is worth more than a virtual visit. Is more accomplished at an office visit? When one considers the added inconvenience to the patient (time away from work or family, travel, and cost of transportation and parking), and the cost to the provider (office overhead, including staffing) is this offset by the added value of a face-to-face encounter? In some cases, where a hands-on assessment is required to address a problem, it may.

For over a century, the value of medical services in America has been judged based upon office and hospital encounters, and procedures. Physicians and hospitals are rewarded for doing things, and doing more pays more. The Relative Value Unit (RVU) system, established in 1989, determines the “value” of an encounter or procedure, and ties payment for that work using formulas. RVU values are largely determined and updated by the American Medical Association's Specialty Society Relative Value Scale Update Committee (RUC), an AMA panel of 29 (mostly specialist) private physicians. “Cognitive physician visits” (where a procedure is not performed) are valued with far fewer RVUs, and have only recently received a little more credit by the RUC. Still, the care of patients with chronic diseases and behavioral disorders, although often complex and time-consuming and involving coordination of care, do not generate RVUs at the same level that procedures do. A complex “cognitive physician visit” may receive half of the RVU credit that a routine colonoscopy does while contributing much more to the comprehensive management of the patient.

COVID-19, at least temporarily, has changed that. There was urgent need to manage a large group of patients-not just those presenting to the ED with serious illness, but those with moderate illness not needing a hospital, those possibly exposed, and those who were just worried. And their chronic needs still required attention. A disincentive for doing the right thing was removed. Suddenly, payment was transformed to manage a pandemic need, and for now, telemedicine visits are being reimbursed by CMS the same as in-office encounters.

In a “pay-vider” system, the payer and the healthcare provider are the same organization, responsible for the total cost of care and comprehensive management of a discrete population. Healthcare providers are paid to care for their population of patients in whatever way is appropriate, assuring that patient needs are met and quality is maintained and improved. The focus is on care quality, not on generating RVUs. Payment for an office versus virtual visit is not an issue. “We won’t pay the same for a virtual visit as an office visit” is a non sequitur for organizations responsible for the total cost of care.

Join me and Colleen Baum, MD, MMM, FAAPL, FACOG, for "What's the Value of Virtual Care" webinar, June 11, 3:00 - 4:00 PM ET.

Registration: https://register.gotowebinar.com/register/6260346936535771659

Mitchell Kaminski, MD, MBA, is the NAVVIS Associate Professor of Population Health; Associate Professor, Jefferson College of Population Health;Program Director, Population Health; and Clinical Associate Professor, Department of Family and Community Medicine, Sidney Kimmel Medical College.