Better than ever with a long way to go: The future of digital health reimbursement

The digital health sector had a huge funding year in 2021, with Silicon Valley Bank reporting health tech companies scored nearly $40 billion, double 2020’s total. 

As more of these companies move out of the growth stages, how will healthcare providers get reimbursed for using their technologies? And what’s the state of the reimbursement landscape right now?

“So I would typify it as better than it’s ever been. Yet, it still has a very long way to go. There have been many, many developments on digital health, not only reimbursement, because it’s really a package deal. To have reimbursement, you need coding, and then you need a payer to offer coverage, and then payment,” Robert Jarrin, strategic advisor to ResMed Corp., told MobiHealthNews.

“And over the last five years, I would say, that really has taken off in a very substantial and consequential way. However, there are a lot of nuances and complications within the payment rules assigned to all of these new codes. And that makes for a very complex area that isn’t necessarily user friendly.” 

It gets complicated because some payment policies were created long before digital health was even a concept, so they don’t always mesh with current digital health space today, he said. 

Brian Scarpelli, senior global policy counsel at the Connected Health Initiative, notes a lot of different stakeholders in the healthcare industry – from payers to technology developers to providers – are excited about the prospect of digital health. But reimbursement decisions by the Centers for Medicare and Medicaid Services will advance that interest.

“Where the Medicare system comes in, it is like a bellwether. Just by the magnitude of the program, the sheer spend alone and the number of beneficiaries that it supports, drives broader changes in the healthcare ecosystem widely. So that alone brings a lot of attention, never mind organizations that are directly impacted by Medicare payment policies. But that’s driving the increased interest and excitement,” he said.

CMS took a huge step forward when it distinguished remote monitoring from telehealth services a few years ago, Jarrin said. And the COVID-19 pandemic has also significantly pushed the adoption of remote care as providers and patients were forced to conduct care at a distance.

“How do I think CMS has done? They’ve done fantastic, but we are living under temporary waivers, which are all going to disappear. And we’re also living under cautious, methodical, very conservative steps since that bold stroke,” he said.

Scarpelli said CMS staff has made great progress in implementing new rules, but he would like more endorsement for digital tools at the leadership level.

“I think that a refrain from them on that topic, how digital health tools are so critical to the equity goals of the administration, which are paramount to them,” he said. “How critical these remote care tools are to reducing the digital divide for underserved communities in the context of healthcare and otherwise. And that it is much broader than just telehealth.”

So how should providers use digital tools, given the landscape that exists now? They need to do their research and make sure they’re vetted by the FDA, Jarrin said. There are options on the market that may not satisfy billing codes.

And to the larger digital health sector industry, he argues they need to keep in mind that this is medical care and it needs to benefit the patient.

“At the end of the day, it’s going to be your mom, my sister, someone’s kid, that’s going to be harmed,” Jarrin said. “Garage entrepreneurs who don’t care about anything other than the bottom line, stay at home, look at another industry. Because they’ll ruin it for the rest, and a person’s health is at stake.”

The HIMSS22 session “The Dawn of Digital Health: Coding, Coverage and Payment” will take place Wednesday, March 16, from 11:30 a.m. to 12:30 p.m. in the Orange County Convention Center W307A.

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