TTA’s May Flowers: Walmart Health and Optum telehealth exits, UHG CEO’s Congressional roast, Teladoc’s red ink, Oracle’s Music City HQ move, MobileHelp PERS for sale, fundings, more!

 

 

Surprises and shockers abound this week. If Walmart can’t make it in providing basic health services, what hope does a retail model really have? Optum and Walmart exit telehealth, while Teladoc grows–firmly in the red. Change Healthcare’s troubles led to UHG’s CEO grilling on both sides of Congress and humiliation on MFA. MobileHelp PERS up for sale, Owlet’s new partner, fundings, partnerships. And a shrinking Oracle goes to Music City!

News roundup: UHG CEO’s Bad Day at Capitol Hill; Kaiser’s 13.4M data breach; Walgreens’ stock beatup; Cigna writes off VillageMD; Oracle Cerner shrinks 50%; Owlet BabySat gets Wheel; fundings for Midi, Trovo, Alaffia, Klineo (A rough week for some)
Teladoc’s Q1: increased revenue, increased net loss, dealing with slowing growth–as is CVS Health (Teladoc in existential crisis?)
Midweek news roundup: Optum exiting telehealth, laying off; Advocate Health selling MobileHelp; VA notifying 15M veterans re Change PHI breach, Oracle moving to Nashville–maybe? (updated) (A lot of jettisoning)
Walmart Health shutters health centers, Walmart Virtual Care, in sudden move (updated–why?) (If Walmart can’t make it…)

Returning to the Cyberattack That Changed Everything, wondering how much and to whom UnitedHealth paid ransom–now that they’ve finally admitted it. Also returning to those Merger Guidelines and how they may change the face of healthcare M&A. VA and DOD hard at work on their EHRs and systems, Lumeris gains a luminous funding, but Optum staff are seeing pink slips.

Two studies: Telehealth underutilized, underbilled, even during pandemic–and accounted for only modest increases in costs, and quality (Perhaps undercaptured?)
Short takes: VA seeks vendor to support EHR testing; Defense Health seeks ‘digital front door’ vendor; GAO recommendations to Oracle; Nonin partners with Finland’s Medixine; Lumeris gains $100M equity funding 
What the DOJ and FTC Merger Guidelines mean for healthcare M&A–a Epstein Becker Green podcast (Legal department torture)
Breaking: UnitedHealth admits to paying ransomwareistes on Change stolen patient data (updated) (For what and how much?)
Who really has the 4TB of Change Healthcare data 4 sale? And in great timing, Optum lays off a rumored 20K–say wot? (UHG has some ‘splainin’)

Another packed week, with a few baffling events. Leading in bafflement is NeueHealth’s additional $30M from NEA, which now owns 60%. UHG battling on multiple fronts between the Change hacking and the House, Walgreens lays off more to cut costs, VillageMD sued on ad trackers, and Cerebral’s comeuppance costs $7.1M. VA may restart Oracle Cerner implementation, Epic and Particle Health feud. But restoring faith in health tech benefiting a neglected group is TandemStride. 

TandemStride launches platform to assist survivors of traumatic injury; a personal look (A real care gap)
News roundup: Congress hammers absent UHG on Change cyberattack–and more; 10% unhinged at Hinge Health; Steward Health nears insolvency; Two Chairs $72M Series C (UHG’s troubles cover the waterfront)
ISfTeH student contest and award 2024–deadline 26 April! (Move fast!)
Mid-week short takes: UnitedHealth’s $1.2B Q1 loss from Change attack, another Walgreens layoff, Dexcom-MD Revolution partner, Kontakt.io $47.5 raise, GeBBS Healthcare may sell for $1B (Walgreens still downsizing–what’s next)
News roundup: VillageMD sued on Meta Pixel trackers; Cerebral pays $7.1M FTC fine on data sharing, cancellation policy; VA may resume Oracle Cerner implementation during FY2025; Epic-Particle Health dispute on PHI sharing (Cerebral still in trouble)
The New Reality, Bizarro World version: NeueHealth gets $30M loan increase from NEA, now majority owner (Baffling)

This packed week was about righting listing ships. Teladoc’s CEO suddenly departs, Amwell at risk of a NYSE delisting–we look at What Happened and what needs to be done. VillageMD gets new COO to manage the shrinkage. And Change Healthcare data on sale from disgruntled ALPHV affiliate. Digital health funding continues to limp along. Clover looks at another delisting, Walmart Health applies the brakes. And we highlight innovations from Novosound, Biolinq, Eko, Universal Brain. 

Digital health’s Q1 according to Rock Health: the New Reality is a flat spin back to 2019 (Limping, but alive)
VillageMD names new president and COO as it shrinks to 620 locations (Ex Centene, Humana exec comes out of short retirement to clean up)
News roundup: Now Clover Health faces delisting; BlackCat/ALPHV affiliate with 4TB of data puts it up for sale; $58M for Biolinq’s ‘smallest blood glucose biosensor’ (Will UHG pay more ransom?)
Opinion: Further thoughts on Teladoc, Amwell, and the future of telehealth–what happens next? (A hard look at the follies, mistakes, and saving ships)
News roundup: Amwell faces NYSE delisting; Walmart Health slows Health Centers, except Texas; Novosound’s ultrasound patent; Eko’s Low EF AI; Universal Brain; Elizabeth Holmes in ‘Dropout’ + update
Teladoc CEO Jason Gorevic steps down immediately in shock announcement (Now what?)

A damp start to April leads with puzzling news. NeueHealth loses plans and big money in ’23–but gives a big bonus to its CEO. Cano Health reorganizing or selling by June. ATA kicks DOJ about expediting controlled substance telehealth regs. Apple keeps kicking around the ‘Davids’, but Davids won’t stop slinging either. And if you work with a PR or marketing agency, our Perspectives has some advice for you.

More New Reality: NeueHealth (Bright Health) CEO’s $1.9M bonus, 2023 financials–and does Cano Health have a future? (Two stories gone way sideways)
ATA requests expediting of revised proposed rule on controlled substance telehealth prescribing; announces Nexus 2024 meeting 5-7 May (DEA needs to get moving now, not later)
Davids (AliveCor, Masimo) v. Goliath (Apple): the patent infringement game *not* over; Masimo’s messy proxy fight with Politan (updated) (Seeing value in Masimo?)
Perspectives: Working with a PR Agency–How to Make the Most of the Partnership (Expert advice if you manage communications)

It was a pre-Easter week that started as quiet and got VERY LOUD at the end. Walgreens took the hard road, writing down VillageMD even before the closures were final and lowering forecasts. An important metastudy+ casts doubt on the efficacy of present digital health diabetes solutions but provides solid direction forward. And it’s definitely an early sunny spring for funding, but there’s continued bad weather forecast for UnitedHealth Group and Oracle Cerner’s VA implementation.

Facing Future 2: Walgreens writes down $5.8B for VillageMD in Q2, lowers 2024 earnings on ‘challenging’ retail outlook (Biting bullet early and hard)
Short takes: PocketHealth, Brightside fundings; VA OIG reports hit Oracle Cerner; Change cyberattack/legal updates; UHG-Amedisys reviewed in Oregon; Optum to buy Steward Health practices (UHG carries on as does company funding)
Can digital health RPM achieve meaningful change with type 2 diabetics? New metastudy expresses doubt. (Major digital health findings from PHTI)

This week’s Big Quake was DOJ’s antitrust suit against Apple for smartphone monopoly and control over apps. Another quake: 2023 data breaches were up 187%–when a medical record is worth $60, it’s logical. Early-stage funding and partnerships are back with a roar when AI’s in your portfolio. And Walgreens shrinks both VillageMD and distribution.

2023 US data breaches topped 171M records, up 187% versus 2022: Protenus Breach Barometer (And that was LAST year!)
Why is the US DOJ filing an antitrust lawsuit against Apple–on monopolizing the smartphone market? (One wonders)
Mid-week roundup: UK startup Anima gains $12M, Hippocratic AI $53M, Assort Health $3.5M; Abridge partners with NVIDIA; VillageMD sells 11 Rhode Island clinics; $60 for that medical record on the dark web (Funding’s back and AI’s got it)
Walgreens’ latest cuts affect 646 at Florida, Connecticut distribution centers (More in next week’s financial call)


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Telehealth & Telecare Aware: covering the news on latest developments in telecare, telehealth, telemedicine, and health tech, worldwide–thoughtfully and from the view of fellow professionals

Thanks for asking for update emails. Please tell your colleagues about this news service and, if you have relevant information to share with the rest of the world, please let me know.

Donna Cusano, Editor In Chief
donna.cusano@telecareaware.com

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Teladoc’s Q1: increased revenue, increased net loss, dealing with slowing growth–as is CVS Health

Teladoc had a passable Q1, given the sudden departure of their CEO, a lackluster 2023, and a downbeat (realistic?) 2024 forecast. The highlights were versus Q1 prior year:

  • Revenue increased 3% to $646.1 million. This exceeded their 2024 projection of $630 to $645 million but the percentage increase is below the 5.2% Teladoc is forecasting for the full year. Their US revenue grew 1% to $547.6 million while international revenue grew 13% to $98.5 million.
  • But net loss also increased far more on a percentage basis–18% to $81.9 million, or $0.49 per share. Some of the loss was due to stock-based compensation expense, severance expenses, and amortization of acquired intangibles. Due to these, the increased revenue did not offset or narrow losses.
  • Adjusted EBIDTA increased 20% to $63.1 million, which is positive.

Looking at their main market segments, their Integrated Care segment revenue grew 8% to $377.1 million, Once again, BetterHelp, their behavioral telehealth unit and one-time hope for growth, continued to disappoint with a 4% decrease in revenue to $269.0 million.

The forecast for Q2 is: 

  • Revenue $635 – $660 million
  • Net loss per share ($0.45) – ($0.35), slightly lower than Q1
  • Adjusted EBITDA $70 – $80 million

Integrated Care’s forecast is an increase of 2 to 5% in revenue, while BetterHelp’s remains weak with a decrease of 4 to 8% in revenue.

So far, cutting costs, higher margins, cutting jobs in data science and engineering, third-party (supplier?) costs, and getting on that ‘path to profitability’ has had limited results, at least to Mr. Market which continues to drop the stock–40% to date and deteriorating. On the earnings call, interim CEO and CFO Mala Murthy, in referring to this, said “We are not waiting. We have a plan to deliver, we have investments to execute, and that is absolutely our focus.” Will Mr. Market believe this in a shrinking market? The search for a permanent CEO is underway, and the replacement is expected to be named later this year. Teladoc release, Mobihealthnews, FierceHealthcare

The broader meaning? This Editor explored what happened at Teladoc and the aftermath after some of the dust settled [TTA 9 April]. The Teladoc foundational model as a stand-alone, mostly urgent care service is not growing but shrinking. It doesn’t coordinate care nor does it integrate well into providers. While the pandemic gave that model a lift, it also boosted integrated services as modules into patient portals, EHRs, population health, and other provider-based platforms. Among higher care need Medicare beneficiaries, usage was there but minimal detailed in two recent studies. Even asynchronous and telephonic telehealth gained since they were reimbursed or low cost. Before, during, and after the pandemic, there were too many telehealth companies for the limited demand. Add in the continuing proliferation of telementalhealth providers, still popping up like tulips in spring–another reason why BetterHelp, one of the earlier entrants, isn’t getting traction. FierceHealthcare adds more points such as over-supply cratering price (and the revenue model) and hybridization: white-labeling with providers, virtual specialty clinics such as those under Included Health’s, and partnerships with health plans and employers. 

CVS Health’s Q1 also wasn’t swell for reasons that are impacting their full year. High medical costs affected their Aetna plans, with high utilization in Medicare Advantage, inpatient admissions, and outpatient services were all high in Q1–$900 million higher than CVS expected. Lower MA STAR ratings will affect their forward Federal reimbursements, with one of their largest MA plans falling from 4.5 to 3.5 rating in 2024. According to CEO Karen Lynch, most of this utilization was from a patient usage reversion to pre-pandemic patterns. Their Q1 revenue of $88.4 billion was up 4% versus prior year with net income falling by almost half to $1.1 billion, both significantly below analysts’ expectations. CVS adjusted their full year downward, which led to their stock falling another 19%. Change Healthcare’s data breach is also affecting their forecasts with delayed claims, leading CVS to set a reserve of $500 million. HealthcareDive

Telemental news roundup: Brightside Health expands Medicaid/Medicare partners; Blackbird Health gains $17M Series A; Nema Health’s PTSD partnership with Horizon BCBSNJ

Mental health, whether pure ‘telemental’ or an integrated in-person/virtual model, remains one of the healthier (so to speak) sectors of digital health.

Brightside Health announced today a series of new and expanded health plan partnerships as well as expanded state coverage for Medicare and Medicaid plans.

  • CareOregon with a new contract to serve Medicaid beneficiaries.
  • Blue Shield of California with a new contract to serve Medicare Advantage enrollees.

These add to Brightside’s partnerships announced last October:

  • Blue Cross and Blue Shield of Texas–expanded contract to include Medicare Advantage coverage.
  • Centene’s expansion of coverage state-by-state, including Nebraska Total Care Medicaid and Wellcare Medicare Advantage.
  • Optum for UnitedHealthcare Medicare Advantage members
  • Lucet for Florida Blue members

Under traditional Medicare, coverage now includes Texas, California, Delaware, Arizona, New York, Washington, Florida, North Carolina, Michigan, and Illinois.

Beneficiaries and members can access Brightside’s virtual psychiatric therapy including medication, plus cognitive and behavioral therapy with independent skill practice, and Crisis Care, Brightside’s program for those with elevated suicide risk. With the new partnerships, Brightside is now estimating that they cover approximately 100 million lives–one in three US covered lives–and is seeking to further expand these partnerships as well as to traditional (original) Medicare Part B beneficiaries. Brightside Health was founded well before the gold rush in telemental health–2017–and has raised over $81 million over five rounds up to a Series B in March 2022, mainly led by Acme Capital (Crunchbase). Brightside release, Yahoo! Finance, Psychiatric Times

Blackbird Health raised $17 million in a Series A funding. This was led by Define Ventures with participation from Frist Cressey Ventures and GreyMatter, for a total raise of $23 million to date. Blackbird addresses the other side of the spectrum from Medicare–pediatric mental health in an integrated in-person and telemental health model–and serves patients aged 2-26. Blackbird’s care model considers in an ‘understand-first’ approach how children’s brains develop over time and the impact that growth has on mental health. Another unique aspect is that they developed a series of ‘Blackbird Biotypes’ based on 50 million data points drawn over a decade that identify patterns of behavior in clusters of individuals with similar symptoms-linked brain features. These assist in assessment, accurately identifying the underlying root cause of symptoms, and proposing integrated and personalized treatment plans. Blackbird claims this approach results in substantially lower use of medications and ED utilization. Last year, Evolent Health co-founder and COO Tom Peterson joined the company after his own family’s experience with Blackbird’s therapeutic model to help it scale from its three clinics and 40 providers in the Mid-Atlantic region. Blackbird release, Forbes

Startup Nema Health, a virtual clinic targeting a single condition–post-traumatic stress disorder (PTSD)–is now in-network in Horizon Blue Cross Blue Shield of NJ (Horizon BCBSNJ) commercial plans. Nema’s model is virtual care for PTSD from evaluation and virtual therapy sessions, starting with intensive sessions 3-5 times per week for 2-4 weeks, through support from a designated peer mentor plus messaging and interactive exercises. Based in NYC, Nema is in-network with UnitedHealthcare/Optum, Oxford, Oscar, and Connecticare in the states of New York, New Jersey, and Connecticut. Horizon is New Jersey’s largest insurer. Nema claims that 76% of their patients no longer meet PTSD criteria after completing Nema therapy. Nema is at seed stage funding of $4.1 million from .406 Ventures and Optum Ventures, raised last November. FierceHealthcare, Nema release

Why this matters:

Since 2020, telemental health got a black eye (and then some) from ADHD and opioid medication-assisted treatment (MAT) providers such as Cerebral, Done Health, Truepill, and others. Thriving during the pandemic, many of them are now facing various Federal charges. Others, like Calm, are basically meditation and sleep apps. The real need, and provider shortage, remains.

The need for psychiatric care and support for Medicare and Medicaid covered populations is high, but clinical supply is low.

  • According to the Center for Medicare and Medicaid Services (CMS) in announcing the state-based Innovation in Behavioral Health (IBH) eight-year, eight-state integrated care model last month, among the 65 million Americans currently enrolled in Medicare, 25% have at least one mental illness, with 40% of Medicaid members experiencing mental illness or substance use disorders (SUDs).
  • Yet provider shortages have worsened over time–as of 2020, The Commonwealth Fund estimated that an additional 7,400 providers (not necessarily psychiatric MDs) were needed to meet demand. Studies cited in Psychiatric Times (2022) estimate that the current shortage of psychiatrists, running at 6%, is expected to be between 14,280 and 31,109 psychiatrists by 2024. Distribution is concentrated in urban areas and their suburbs as well. It doesn’t help that physicians entering psychiatry in 2003-13 decreased by 0.2% and their average age is 55. Even in well-covered geographic areas, retiring doctors with no replacements have created coverage shortages.
  • For child psychiatry, the American Academy of Child and Adolescent Psychiatry (AACAP) reports that there are just 14 psychiatric specialists for every 100,000 children in America. 

News roundup: Musk’s Neuralink implants first human BCI; Cigna’s $3.7B MA sale to HCSC; no Amazon deal for iRobot; DispatchHealth-Instacart food Rx; 5 India health tech fundings (updated)

Elon Musk first out (again) with a human brain-computer interface (BCI). Announced Monday by Neuralink, founded by Elon Musk, is the first human implant of a BCI. No details in the tweet beyond “recovering well’ and “promising neuron spike detection”. The device is a cosmetically invisible implant (N1) in the part of the brain that plans movements. It interprets neural activity, sending a signal to a computer or smartphone through thought. The N1 device, containing several dozen threads holding over 1,000 electrodes, is implanted by a R1 robot. FierceBiotech, MM+M Online

The subjects of the PRIME study are likely those recruited last fall after the FDA approved proceeding with a clinical trial. A blog post on the Neuralink website recruited adult volunteers with quadriplegia–paralysis of the arms and legs caused by a cervical spinal cord injury or amyotrophic lateral sclerosis (ALS). Earlier, Neuralink raised $280 million in a Series D led by Founders Fund. FierceBiotech 8 Aug 2023  There were difficulties, however. Within the past two years, Reuters reported 1,500 animal deaths over four years of research that attracted the attention of the Department of Transportation (DOT) (!) and the Department of Agriculture’s inspector general. FDA held up approval of human clinical trials until last year.

Research and companies in the BCI race have been making news since at least 2016 but have not reached clinical trials. In 2022 Synchron had an oversubscribed Series C of $75 million for the Stentrode blood vessel device (in clinical trials) and Synchron Switch BCI devices [TTA 17 Dec 22]. Last year, Precision Neuroscience raised $41 million in a Series B [TTA 28 Jan 23]. Their focus is on treatment of neurological illnesses and events such as stroke, traumatic brain injury, and dementia. Of course, one could debate implant ethics, but not for these limited uses right now.

To no one’s surprise including the relatively low price of $3.7 billion, Cigna sold its 600,000-member Medicare Advantage business to HCSC, beating out Elevance (the former Anthem). Cigna is also selling its supplemental benefits and Medicare Part D plans, along with CareAllies, a subsidiary that assists primary care practices with value-based care in Medicare and commercial plans. Together, they cover 3.6 million people, but the now-money-losing MA business represented only 2% of the total MA market. Closing is expected to be in 2025, subject to the usual regulatory approvals. HCSC currently operates in five states and this marks a major growth opportunity for them, if they pass state and Federal scrutiny.

Update: Some speculation remains that now that Cigna has agreed to sell the MA and other businesses, a Humana buy may be more of a go–at a reduced price given Humana’s recent earnings difficulties. This feels, to this Editor, like whistling in the dark. Prima facie, it ignores two factors: the major stumbling block was their respective strengths in pharmacy benefit management (PBM) though with different focuses, and that Cigna, having rid themselves of a money loser in MA, would buy it back and take on short term pain just to get bigger. Perhaps the two, because they seem to like dancing with each other, may partner in some areas like home health or other services, but for now the regulatory landscape is waaaay too hostile to mega-mergers in healthcare and the shareholders feel the same. Why buy the cow, etc.? MedCityNews  Further evidence? The CEO bragged about the sale as moving towards a leaner and more focused organization (the new catchphrase) on the 2 February earning call, as well as their interest in providing services via their Evernorth unit to MA providers, such as tying pharmacy services to the MA plans for four years after the HCSC buy. Healthcare Dive

iRobot sale to Amazon fails due to “no path to regulatory approval”, company lays off 31% of staff. In more bad news for Amazon, regulatory disapproval by the EU finally put paid to the deal for the Roomba maker. The EU found that Amazon’s ownership would have restricted competition in the robot vacuum cleaner category by restricting access to Amazon’s marketplace. This is no different than the FTC and DOJ in the US which blocked it for two years. Amazon will pay iRobot a $94 million breakup fee, which the latter will need as their market capitalization has crashed to $400 million from the $1.7 billion original sales price.  iRobot is reducing staff by 350, its CEO is also stepping down immediately, and they are concentrating now on margin improvements, restricting lines of business, and reducing R&D. CNBC  Consider this Lina Khan’s first ‘scalp’ in her War on Amazon.

DispatchHealth, an in-home care provider, has a new partnership with Instacart, a food delivery service, to directly address nutrition needs for their advanced care patients being treated at home.  Dispatch provides same-day, urgent medical care; hospital alternative care; and recovery care. With Instacart Health, Dispatch creates meal plans and medically tailored meals through shopping lists on Instacart that can be delivered direct to home. Payment must be made by the patient or if their Medicare Advantage plan permits. Food is a significant part of social determinants of health (SDOH) and Dispatch has found that 33% of their patients struggle with this and 22% have serious food insecurity. Orders can be made by phone, phone app, or website. McKnights Home Care, Mobihealthnews, DispatchHealth release   DispatchHealth has also experienced recent layoffs of 88 employees. Home Health Care News

And now for something completely different. India has been buzzing with several fundings in digital health. The roundup’s from Mobihealthnews with additional information from other sources:

  • CureBay, a rural-focused e-clinic from visits to lab tests and prescriptions with 90 locations, scored another Rs 620 million ($7.5 million) in funding as part of a Series A round led by Elevar Equity. IndianStartUpTimes
  • Mental health platform Amaha raised over Rs 50 million ($6 million) in an extended Series A funding round. The app-based treatement platform connects members with clinicians and psychiatrists. It also acquired the Delhi NCR-based Child and Adolescent Mental Health Institute, Children First, that has been providing support to 12,000+ families since its inception in 2008. Release
  • Healspan, an insurance tech startup that manages cashless health insurance claims for 60 hospitals, raised Rs 1.2 million (over $100,000) in pre-seed funding from a round led by startup accelerator PedalStart. ExpressHealthcare India
  • FlexifyMe, a chronic pain digital therapeutics platform with AI-powered patient scanning, gained pre-seed funding from angel platform ah! Ventures Angel Platform. Based in India but with operations in the US and Dubai, their therapy addresses back pain, cervical pain, spondylosis, and other conditions via what they term a unique combination of online physiotherapy, yoga therapy, and AI. BiospectrumIndia  In October, they had raised $1 million from Flipkart Ventures. Times of India
  • Docosage, described as an AI-driven health solutions provider with a telehealth consult, e-prescribing, lab testing, and genetic studies platform, also has an undisclosed amount of pre-seed funding from an individual angel investor. The funding will be used for strategic partnerships by exploring collaborations with hospitals, clinics, insurance companies, and incorporating tech advancements to enhance product features. ExpressHealthcare India 

*Updated 2 Feb for additional analysis around Cigna MA sale to HCSC and copy editing

Short takes: Humana’s big MA loss (updated); Medicare telemental care bill back in Senate; HHS releases cybersecurity performance goals; Texas Healthcare Challenge hackathon 23-24 February

Humana apparently surprised Wall Street with their Q4 losses, driven by escalating Medicare Advantage (MA) costs.  While revenues ($26.5 billion) for MA’s second largest plan provider were up from prior year’s $24 billion, MA expenses drove an adjusted Q4 loss of $361 million under the insurance segment. From Humana’s earnings statement: “The sector is navigating significant regulatory changes while also absorbing unprecedented increases in medical cost trends. We believe the elevated MA medical costs are an industry dynamic, not specific to Humana, and that they may persist for an extended period or, in some cases, permanently reset the baseline.” On the earnings call, their CFO cited increased inpatient costs, especially for short stays, and more spending in outpatient surgeries and supplemental benefits–trends that Humana expects to continue into 2024 and even into 2025. Home health under CenterWell were tidily profitable and growing. Perhaps MA’s sector problems were the reasons why Cigna, selling off their MA plans, backed out of their acquisition/merger? Q4 press release, management remarks, Becker’s, Healthcare Dive

Updated Humana announced the appointment of a President of Enterprise Growth, David Dintenfass, to spearhead customer growth and retention. His background is not healthcare but Fidelity Emerging Growth Markets, with previous stints at Procter & Gamble and Bank of America. This assumes that the cost problem can be grown out of. Expect more departures and arrivals to roil Humana, as their current CEO moves to a planned retirement transition later this year and has already laid off staff in January Healthcare Dive

A bipartisan Senate bill proposes to continue coverage of virtual-only telemental health for Medicare beneficiaries. The ‘Telemental Health Care Access Act of 2023″ is sponsored by four Senators: Bill Cassidy, R-La., Tina Smith, D-Minn., John Thune, R-S.D., and Ben Cardin, D-Md. and is designed to make permanent the pandemic waiver of in-person requirements that expires at the end of 2024. The senators cited rural health and overall access to mental healthcare. Mental health remains the leading claim line for telehealth. Healthcare Dive, draft bill

The Department of Health and Human Services (HHS) published voluntary cybersecurity performance goals for healthcare and public health organizations. These fit within the HHS 405(d) Program and Health Sector Coordinating Council Cybersecurity Working Group’s Healthcare Industry Cybersecurity Practices as well as the NIST Cybersecurity Framework and the Cybersecurity and Infrastructure Security Agency’s National Cybersecurity Strategy. (Whew!) The two voluminous sets of goals, Essential and Enhanced, directly address common attack vectors against U.S. domestic hospitals as identified in the 2023 Hospital Cyber Resiliency Landscape Analysis. As noted earlier this week, there were 116 million patient records exposed in 2023 data breaches, doubling that in 2022.

HHS means well, but this is another ‘blood out of a rock’ situation. Health IT departments all over the US, from providers to payers, have had or are facing layoffs in the ongoing clash of business versus technology, which won’t cease because HHS would like it to. HealthcareDive, HealthcareITNews

The Texas Healthcare Challenge Hackathon is back! After three years dark, this year’s edition will be held this year 23-24 February in Dallas. Sponsored by the Health Wildcatters, a Dallas-based accelerator in the DFW area, it is open to just about anyone who can apply–you don’t have to code or hack. Friday kicks off with “problem pitching,” where participants form teams around identified issues, with Saturday starting with morning motivation and intensive team hacking, moving to participants developing viable solutions, assessing market potential, creating functional business models, and addressing risks with mentor support from industry experts. The day culminates in team presentations, with judges awarding cash and in-kind prizes to winning solutions. Learn more and apply here (application form is under the numbers, click on “Hackathon Sign-Up”). Sponsorship is the second button.

Why the ‘insurtechs’ didn’t revolutionize health insurance–and the damage they may have done

crystal-ballIce water on hopes that many placed in ‘insurtechs’. This is the umbrella term that healthcare dubbed the upstart tech-enabled, health tech-friendly US payers which were supposed to deliver health insurance plans more efficiently (buy online!), more conveniently using apps and telehealth, with strong networks and at a lower delivery cost to consumers, from those who needed individual plans to Medicare Advantage. Around 2019-2020, these insurers gained billions in funding before going public through IPO or SPAC: Bright Health’s $500 million Series E in 2020 was only a chunk of their total $2.4 billion; Oscar Health raised $1.6 billion, Clover Health $1.3 billion. All three have struggled to stay clear of the insolvency precipice, with Friday Health Plans going over [TTA 23 June]. Bright Health Group will be exiting the insurance business after this year with the stock sale of their plans to Molina Healthcare–provided they survive to Q1 2024 [TTA 6 July]. Oscar and Clover have exited states and cut back offerings. In April, in a real retrenching, Oscar hired on Mark Bertolini, late of Aetna, pushing back a founder to an operational role. 

This Editor, in a marketing assessment for a client two years ago, believed as many did that Insurtechs Were The Future. At the very least, their practices would be adopted by the legacy insurers: easy online enrollment, lower premiums, predictive analytics, machine learning, digital documentation, online health education via apps, outsourcing areas such as customer service 24/7 and even marketing. Even those like Cigna through their Ventures arm bet some millions on insurtechs redefining payer-member relationships and payer structure, gaining better margins at profitable lines of business like Medicare Advantage (MA) and special needs plans (SNPs). After all, these plans did have people with decades of experience at insurers in their management, didn’t they, and they’d know what NOT to do. (And that’s the problem with gazing into crystal balls…eyestrain.)

Marissa Plescia’s article in MedCityNews is an excellent review on why the insurtechs’ centre did not hold. Key points made from her dive among the experts:

  • They underpriced and took heavy losses to grow their member base
  • They didn’t understand that some ‘inefficiencies’ in the health insurance market exist for reasons–perhaps not good ones, like state mandates through their departments of banking and insurance, but they exist and cannot be ignored. [Ed.–health education for MA has to be provided or at least available in written form in most if not all states]. Compliance can’t be skirted or ignored. Were they paying attention to the compliance of their plans?
  • They didn’t pay provider claims efficiently or at all [the SSM lawsuit of Bright]–a nifty way to lose networks and be sued by states, very damaging if the network wasn’t all that competitive to begin with.
  • Contracted rates with providers weren’t competitive. Were they managing risk adjusting coding well? 
  • Did they leverage sales channels beyond online such as brokers and their provider network? What about customer service?
  • The plans were not sticky enough to create some loyalty to an infamously non-loyal product

The insurtechs perhaps expected the technology to do too much–and for legacy payers to not catch up to them if they weren’t already moving there. Another problem–they (largely) were.

Disruption–but not the Clayton Christensen definition. Their disruption so far has been financial and legal (insolvency, cracked SPACs, lawsuits, share prices below $1.00, and delistings pending), loss of coverage for members; unpaid providers. With this track record, investors will avoid this category beyond the legacies. States won’t approve new plans from new companies. (This Editor believes that there are some overlooked positives such as inclusion in marketing of specialized and underserved groups, as well as some forced streamlining of processes.) There will be survivors–Alignment Health, kind of a below-the-radar operation and an afterthought in funding at $375 million, is in a few states and is mentioned. It’s also hard to bet against Bertolini leading Oscar–except that this is maybe Act V for him and he’s had his share of bunts and misses (bunt–ActiveHealth Management, misses–Healthagen, CarePass, iTriage) before his contentious departure from CVS. But in this particular widening gyre, while more revelations will be at hand, innovative newcomers in health plans won’t be seen for a long time, if ever. If the saga of airline deregulation (1980-1995) is a model, payer disruption just took a fraction of that time.

Bright Health to exit insurance business, selling California plans to Molina for up to $600 million–contingent on surviving to 2024

Over the slow July 4th holiday weeks, Bright Health perhaps staved off the inevitable. Maybe. Molina Healthcare agreed to pick up all of Bright Health’s California Medicare Advantage plans, Brand New Day and Central Health Plan. The deal: purchase 100% of the issued and outstanding capital stock of the two plans. Molina’s valuation is $510 million plus a $90 million tax benefit. It is contingent on the usual government approvals, of course–and Bright Health surviving into Q1 2024 for the closing.

For Bright, of the $600 million, approximately $500 million will eventually go to JP Morgan to pay off their outstanding and overdue credit facility with the remaining proceeds to be used towards liabilities from its discontinued ACA (Affordable Care Act-individual plan) insurance business. Bright also announced a waiver extension and amendment to its credit facility.

There is no mention of a bridge loan from Molina or any other lender. As Ari Gottlieb of A2 Strategy pointed out in the Fierce Healthcare article, Bright Health must absorb any and all losses from the California plans, their operations, and survive into Q1 2024 for the deal to execute. Given their current situation, that is still a mountain for Bright to climb. According to Bright’s release, they do not intend to comment or disclose further developments until the transaction is closed.

As of today, the Bright plans cover 125,000 members in 23 California counties. They include Medicare Advantage prescription drug plans (PDP), dual eligible special needs plans (D-SNP), and chronic conditions special needs plans (C-SNP). There is a 60% overlap with Molina’s Medicaid footprint in California.

Molina using ‘on hand’ funds, and the deal depends on Bright Health staying solvent into 2024. In Molina’s release, they stated that “Molina intends to fund the purchase with available funds including cash on hand. The transaction is subject to federal and state regulatory approvals, the solvency and continued operation as a going concern of Bright Health Group throughout the pre-closing period, and other closing conditions. It is expected to close in the first quarter of 2024.” Molina is atypical–it is the largest ‘pure’ health plan group serving over 5 million members. Unlike UHG, CVS Health, and Cigna, it long ago shed healthcare-related service businesses to concentrate on plans and plans only. The deal adds about $1 to their $5.50 share price.

What’s left at Bright Health Group is NeueHealth, also called their Consumer Care Delivery business. That will now be part of a provider agreement with Molina to serve Medicaid and ACA Marketplace populations in Florida and Texas starting in 2024. Bright Health stopped nearly all plans at the end of 2022 and will cease coverage of members in their Texas ACA plans at the end of July.   Healthcare Finance, Becker’s   More on Bright Health’s health status here

Zipnosis, health system telemedicine/triage provider, acquired by insurtech Bright Health Group

Breaking: Zipnosis, a telemedicine/telehealth company that provides telehealth and diagnosis triage for large health systems, had a stealthy announcement of its acquisition by Bright Health Group late yesterday. The announcement is not on either corporate website but was made by Zipnosis’ financial advisers in the transaction, Cain Brothers/KeyBanc. Neither the value of the transaction, the transition plans for Zipnosis management and staff, nor operating model, were disclosed. Both Zipnosis and Bright Health are HQ’d in Minneapolis. Release

Why This Is Verrrry Interesting. Zipnosis developed an interesting niche as a relatively early starter in 2009 by providing white-labeled telemedicine systems to large health systems. They made the case to over 60 health systems across the US, including large systems like Allina Health with a ‘Digital Front Door’ that provided initial triage for a claimed 2 million patients, moving them into synchronous or asynchronous care fully integrated with hospital EHRs. They were named as the ‘Hottest Digital Startup from Flyover Country’ by Observer.com, once upon a time in this Editor’s wayback machine an actual print weekly newspaper and, as is obvious, NYC-centric. Release Their funding to date is, surprisingly, limited: under $25 million from seven investors, including Ascension Ventures, Safeguard Scientifics, Hyde Park Ventures, and Waterline Ventures, with the last round back in 2019. Crunchbase

Bright Health Group, on the other hand, is an insurance provider in both the exchange and Medicare Advantage (MA) markets in 13 states and 50 markets, covering 500,000 lives. Their model integrates both technology like web tools and apps with their insurance plans to be an ‘insurtech’ like Oscar Health and Clover Health. They claim to be the third-largest provider of the highly specialized type of Medicare Advantage plans called Chronic Condition Special Needs Plans (C-SNP) for those with severe and/or disabling chronic conditions. Bright Health operates in 13 states and 50 markets. In January, they announced the acquisition of Central Health Plan in California with 110,000 MA members.

However, what is verrrry interesting about Bright’s model, compared to other ‘insurtechs’, is that they own or manage a care delivery channel–40 advanced risk-bearing primary care clinics delivering in-person and virtual care to 220,000 members. The ‘risk-bearing’ is also interesting as it leads one to believe that some of these practices may participate in Center for Medicare and Medicaid Services (CMS) value-based care models such as Primary Care First, the Medicare Shared Savings Program, or End-Stage Renal Disease (ESRD).

Bright Health is also extremely well funded now–and may be even better funded in the near future. Last September, they raised $500 million in a Series E led by New Enterprise Associates with Tiger Global Management, T. Rowe Price Associates, and Blackstone, as well as existing investors including Bessemer Venture Partners and Greenspring Associates (Crunchbase and Mobihealthnews). The purpose stated at the time was new market expansion both geographically and to small groups. Last week’s rumor was that they are preparing for an IPO in the $1 bn range with a valuation between $10 and $20 bn, which is Big Hay indeed. No paperwork has been filed yet with the SEC. Twin Cities Business, YahooFinance.

As an acquisition for Bright Health, Zipnosis brings in large healthcare systems with a unique triage platform that could be modified for primary care practices. It seems like a snack-sized acquisition that doesn’t require Federal approval but can be operated stand-alone–as health systems may be leery of an insurer’s ownership–with technology that can be integrated into other parts of the Bright Health business. This will be updated as additional news develops.

Deals and news roundup: Ginger’s $100M, myNEXUS to Anthem, Everlywell snaps up PWN, Amwell’s banner year for revenue–and loss, VA reviews Cerner rollout, voice visits for MA, GE’s vScan goes wireless, uBiome founders indicted

Deals–and news–are piling up like Easter eggs before the hunt. Mental health and cognitive digital therapy scored another raise with Ginger‘s $100 million Series E to fund expansion into health plan and government partnerships. Blackstone Growth led the round. Total funding to date is $220 million. It’s entered unicorn status with a valuation just north of $1 bn. Ginger to date has concentrated on corporate mental healthcare. From being an ugly duckling only a few years ago, digital mental therapies are this year’s ‘it’. But competition is fierce: the traditional telehealth companies such as Teladoc, Doctor on Demand, and Amwell are closing in on the early entrants such as AbleTo. Direct-to-consumer models like Talkspace; UK/Ireland’s SilverCloud Health; and Lyra, Spring Health, and Happify, which just closed a $73 million Series D, all step out with slightly different ‘differentiators’ but target the same companies, health plans, and health systems. FierceHealthcare, Ginger release

Home health is also another former ugly duckling transformed into a swan. Anthem is acquiring home health/nursing management company myNEXUS, which manages home-based nursing services for 1.7 million Medicare Advantage members across 20 states. Their digital authorization and visit management couples with a nationwide network of providers and nursing agencies for local care. Exiting myNEXUS are private equity investors led by New York’s WindRose Health Investors, after four rounds and a conservative $31 million in funding (Crunchbase). Neither terms nor management transitions were disclosed. myNEXUS will join Anthem’s Diversified Business Group. FierceHealthcare, release.

Home testing+telehealth company Everlywell (not connected with the Everly Brothers) has a different take on home health. They are now integrating their self-test kits with fully owned lab testing. New acquisitions PWNHealth and its subsidiary Home Access Health Corporation will join Everlywell in Everly Group. PWN was Everlywell’s main telehealth partner and diagnostic testing partner since 2016. It will become Everly Health Solutions with their testing data kept separate from Everlywell’s. Home Access was PWN’s self-collected lab test company. Everly Health now will support more than 20 million people annually in all 50 U.S. states, Canada, and Puerto Rico. Acquisition terms were not disclosed. PWN’s CEO will take a seat on the Everly Group board to assist integration. Valuation is now estimated at $2.9 bn.  Mobihealthnews, Everly release, Bloomberg News

And in other news…

Amwell reported a Very Good Year in their telehealth services, with visits growing to 5.9 million from 2019’s 1.1 million. Total revenue was up over 65 percent to $245.3 million. However, profitability continues to be elusive, with net loss almost equaling revenue. Release

The Department of Veterans Affairs (VA) finally announced a review of the Cerner-Leidos EHR integration. Back in February, VA was hanging tough on the rollout after the GAO report questioning its wisdom and recommending postponement until high severity issues were corrected. Secretary Denis McDonough, new VA head, has directed the undertaking of a 12 week strategic review without pausing the project. Taking bets on that 12 weeks! Healthcare Dive

Payers and their lobbyists are supporting a newly reintroduced House bill that would permit telephonic-only telehealth visits to be reimbursed for their Medicare Advantage plans after HHS closes the pandemic period. There is considerable information that video/audio virtual visits still have limitations with the 65+ group, clustered around high-speed internet or good data connections, smartphones, and computers with cameras, making video visits difficult or impossible. Which begs the question about continuing coverage for those on Original Medicare. Healthcare Dive

Those readers with long memories will recall GE Healthcare’s heralded introduction of the VScan handheld clinical-grade ultrasound device–back in 2010, complete with Eric Topol rave and demo. Not much has been heard from GEHC since till this month, and other competitors, such as the Butterfly IQ from 4Catalyzer, have made handheld ultrasound common and affordable. GEHC announced Vscan Air, a fully wireless version that connects to iOS or Android. It was FDA cleared in November 2020 and will be shipping its dual-headed probe and accessories starting 1 April for a US-listed target price of $4,495. GEHC page (with the cute domain vscan.rocks), Mobihealthnews

And in our Scandal Sheet section, a Federal grand jury in the Northern District of California has indicted the founders of now-bankrupt uBiome on 40-odd counts encompassing conspiracy to commit securities fraud, conspiracy to commit health care fraud, money laundering, and identity theft. Separately, the Securities and Exchange Commission (SEC) also filed charges. Between 2016 and 2018, uBiome had raised $100 million through a Series C, and was likened to Theranos, after its fall, in the Big Claim (‘inventing the microbiome industry’). Its business was analyzing the DNA of fecal and other biological matter to sequence the bacteria of the body’s microbiome. Starting with low-cost, limited data comparison for at-home tests, the founders progressed to claiming to doctors that their diagnostic tests were clinical-quality and would be reimbursed by payers. Payers did–for awhile–and the investors piled in. By 2019, the wheels fell off their scheme and the FBI came knocking at their Silicon Valley offices after the founders cashed in. Chapter 7 followed in late 2019. The Register reports that the two married founders are on the run, whereabouts unknown. US Attorney’s Office release, SEC filing (PDF)

 

‘Neoinsurer’ Oscar Health goes for $100 million IPO; Clover Health’s big SPAC under SEC microscope

Oscar Health, one of a number of US ‘insurtech’ or ‘neoinsurance’ private health insurance companies that have nipped at the heels of the Big 9, announced late Friday an IPO on the NYSE. The number of shares and their value is not on the SEC S-1 filing but the estimate of the raise is $100 million. Timing is not disclosed but rumored to be by March or early Q2. The offering is underwritten by Goldman Sachs, Morgan Stanley, and Allen and Company.

Oscar was one of the first to offer members apps, telehealth, and fitness trackers–revolutionary back in 2012 but routine now. Expanding beyond its original base of individual health insurance coverage, it now offers Medicare Advantage and small group coverage in 18 states to over 500,000 members. Oscar remains a virtual-first platform with the majority of its members in Florida, Texas, and California. Oscar makes much of member engagement and its partnerships; 47 percent of its overall subscribing membership and 44 percent of its 55-and-up subscribers are monthly active users. Oscar has also partnered with Cleveland Clinic and other larger insurers like Cigna. 

Financing for Oscar to date is over $1.5 bn. It has tidily grown in geographic coverage, members, and revenue–$1.67 billion in 2020 and $1.04 billion in 2019–no simple feat against the Big 9. Oscar’s problem is profitability–operating losses grew proportionately, $402.3 million (+56% from $259.4 million). Operating expenses also grew by 16 percent. TechCrunch gives additional crunch in the financial analysis (article in part, full paid access). Mobihealthnews

Oscar is one of a few health-tech heavy survivors of insurance companies that bloomed like flowers–and wilted–during and post-Obamacare. Clover Health, which thrived in a slice of the Medicare Advantage market, went the SPAC (blank check) route 8 January with Social Capital Hedosophia Holdings. Now with an enterprise value of approximately $3.7 billion, the SPAC indeed put Clover in the clover [TTA 14 Jan].

But perhaps short-lived. Clover’s SPAC is now being scrutinized by the SEC based on last week’s explosive charges by short-seller maven Hindenburg Research (!). Hindenburg’s research report alleges that Clover “lured retail investors into a broken business” by not disclosing a Department of Justice (DOJ) investigation that started (at least) last fall. Clover countered that the investigation is “routine” since Clover is in the Medicare business. Thus, it was not disclosed by Clover to investors as ‘non-material’. DOJ investigations are far more serious than CMS fines for compliance violations, which are not uncommon. Back in 2016, Clover was fined just over $106,000 by CMS on misleading marketing practices.

In short, DOJ investigations are never routine. They usually are the start point for enhanced claims scrutiny and a concatenation of charges, as WellCare, then a scrappy upstart insurer, found out over six agonizing years, 2006-2012, that were serious enough to send much of top management to Club Fed.  The Hindenburg paper (linked above) details other business practices that if true, are dodgy at best and fuel for further investigations.

The SEC notice of investigation was disclosed by Clover last Friday evening, usually a good time to disclose Bad News. This SPAC may have feet of clay.  PYMNTS.com, CNBC

Short takes: Livongo buys myStrength, Apple Watch cozies with insurers, Lively hears telehealth and $16 million

Livongo gets behaviorally stronger with myStrength. Extending from their base in diabetes and chronic disease management into behavioral health, Livongo made a logical extension with early-stage behavioral health company myStrength. A large percentage of those with chronic conditions are also struggling with a behavioral health issue–Livongo cites 20 percent but in this Editor’s opinion, the estimate is low. Both Livongo and myStrength have been very successful in the payment game, with both companies achieving payment and reimbursement by employers, insurers, health systems, and state/Federal payers. The other factor is that employers and payers want single, integrated platforms for wellness and disease management. Livongo last year bought Retrofit for its weight management program. Competitor Omada Health recently acquired the behavioral health technology of defunct Lantern. MedCityNews, Fortune, Livongo release

Apple Watch wastes no time in partnering with insurers. Or vice versa! Confirming that Apple Watch’s growth strategy hinges heavily on health via its new features are fresh agreements with Aetna/CVS Health and a rumored reach into three Medicare Advantage plans. The Aetna partnership is with an app called Attain, which blends Apple Watch activity tracking data with users’ health history to create personalized programs. The program is limited to about 250,000 slots plus additional slots for employer plans, and will debut this spring. Late last year, United HealthCare announced Apple Watches would be added to existing wellness program called Motion and their Rally platform. Both Aetna and United have tiered payment programs for the watches, with United adding a HSA reward. For Medicare Advantage plans, Apple is rumored that they will subsidize the watch for use as a health tracker and coach. FierceMobileHealthcare 30 Jan (Aetna), 14 Nov 18 (UHC), and 29 Jan (Medicare Advantage).

Lively adds telehealth to hearing assistance. Lively’s mobile-connected, direct to consumer hearing aids are adding more telehealth features such as remote tuning, virtual video consults with an audiologist, and an online hearing assessment/uploading audiogram for assessment. The NYC-based company also announced closing on a $16 million seed/Series A fundraising round led by Declaration Capital with participation from Tiger Management. There are an estimated 35 million Americans with hearing loss in a $10bn annual market. Hearing aids are rapidly adding digital and DTC features–others in the field are Eargo and ReSound. Lively releaseAlleyWatch, Mobihealthnews. (Lively is not to be confused with Lively!, acquired by GreatCall two years ago)

Medicare Advantage model covering telehealth for certain in-person visits starting in 2020

Another small step for remote monitoring and visits. Late last week, the Center for Medicare & Medicaid Services (CMS) announced a limited expansion of telehealth (remote patient visits) coverage as part of the Value-Based Insurance Design (VBID) model. In 2020, plans can apply to use telehealth as part of their coverage. According to the CMS release, Medicare Advantage (MA) is testing a new series of service delivery approaches, including “increasing access to telehealth services by allowing plans to use access to telehealth services instead of in-person visits, as long as an in-person option remains, to meet a range of network requirements, including certain requirements that could not previously be fulfilled through telehealth.” Other MA additions under the VBID mode include expanded rewards and incentives for beneficiaries for health improvement, and reduced cost sharing and additional benefits to enrollees, including those around chronic conditions or socio-economic status, such as aid around social determinants of health. 

The VBID model is administered under CMS’ Center for Medicare and Medicaid Innovation (Innovation Center, also CMMI), which tests innovative payment and service delivery models to lower costs and improve the quality of care. It began in 2017. The CMS VBID page lists 14 participating plans concentrated in a few states; however, it was open to 25 states this year. The 2020 model expands to 50 states under the Bipartisan Budget Act of 2018 plus will accept other MA plan types such as Special Needs Plans and Regional PPOs. Applications will start later this year. CMS press releasemHealth Intelligence 

The wind may finally be at the back of telehealth distribution and payment (US)

Medicare Advantage may lead, but Medicaid and regular Medicare are not far behind. The Centers for Medicare & Medicaid Services (CMS) has announced in two proposed rules changes expansion of telehealth access for both privately issued Medicare Advantage (MA) plans (26 Oct) and state-run Medicaid and CHIP (Children’s Health Insurance Plan) (14 Nov) plan members. This may mean greater acceptance by providers because they will be paid for these services.

For MA, the proposal would, starting in 2020 as part of government funded basic benefits, eliminate geographic restrictions (rural telehealth) and allow members in urban areas to access telehealth services. It would also broaden present location restrictions, allowing MA members to receive telehealth from home versus traveling to a health care facility. The most intriguing wording is here: “Plans would also have greater flexibility to offer clinically-appropriate telehealth benefits that are not otherwise available to Medicare beneficiaries.” which very well could mean remote patient monitoring in conjunction with visits. MA plans have always had more latitude to offer telehealth benefits to members, which are about 1/3 of Medicare-eligibles (over 65). Over 11 percent growth is forecast and it is highly competitive though dominated by United Healthcare and Aetna–over 600 new plans are entering the market next year. Enrollments close on 7 Dec for 2019. CMS.gov release, mHealth Intelligence, Healthcare Finance News.

For Medicaid and CHIP, which states use to extend insurance to low-income individuals and families via private plans, states would be able to, under an approved rule, to more flexibly determine what criteria determine telehealth access. Currently, states use proximity factors–distance from provider and time. The proposed criteria under 10. Network Adequacy (pages 15-16) recommends that time and distance be deleted and instead “adding a more flexible requirement that states set a quantitative minimum access standard (later listed) for specified health care providers and LTSS (long term services and supports) providers”. The reasons why are the limited supply of providers and the functional limitations of the LTSS population. Also notable was language in section 8 discussing access to provider directories via smartphone, as 64 percent of the population with incomes less than $30,000 own a smartphone and use it to access health information.  CMS proposed rule, POLITICO Morning eHealth

This adds to the momentum of the Medicare Physician Fee Schedule published on 1 Nov that added even more:

  • Virtual brief patient checkins and evaluation of patient-recorded photos and video to payments
  • CMS is also finalizing separate payments for three new codes covering chronic care remote physiologic monitoring that unbundle 99091 (CPT codes 99453, 99454, and 99457) and interprofessional internet consultation (CPT codes 99451, 99452, 99446, 99447, 99448, and 99449).
  • Two new codes covering telehealth for prolonged preventive services
  • Finalizing the addition of renal dialysis facilities and the homes of ESRD beneficiaries receiving home dialysis as originating sites
  • After 1 July, the home will be permitted as a permissible originating site for telehealth services furnished for purposes of treatment of a substance use disorder or a co-occurring mental health disorder. CMS.gov fact sheet 

The importance of this is that more digital health covered by Medicare and government payments in public/private programs such as Medicaid and MA lead private insurers to pay doctors for these services, who will then be willing to pay vendors for providing them. For the telehealth and telemedicine companies that have weathered the storms and lean times of the past decade, there may be light at the end of the tunnel that is not an oncoming train.

News roundup: FCC RPM/telehealth push, NHS EHR coding breach, unstructured data in geriatric diagnosis, Cerner-Lumeris, NHS funds social care, hospital RFID uses

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2017/12/Lasso.jpg” thumb_width=”125″ /]FCC backs post-discharge RPM plan. The “Connected Care Pilot Program” proposed by FCC commissioner Brendan Carr would provide $100 million for subsidies to hospitals or wireless providers running post-discharge remote monitoring programs for low-income and rural Americans such as those run by the University of Mississippi Medical Center. The goal is to lower readmissions and improve patient outcomes. The proposal still needs to be formalized so it would be 2019 at earliest. POLITICO Morning eHealth, Clarion-Ledger, Mobihealthnews

NHS Digital’s 150,000 patient data breach originated in a coding error in the SystmOne EHR used by GPs. Through the error by TPP, SystmOne did not recognize the “type 2 opt-out” for use of individual data in clinical research and planning purposes. This affected records after 31 March 2015. This breach also affects vendors which received the data, albeit unknowingly, but the duration of the breach makes it hard to put the genie back in the bottle, which NHS Digital would like to do. Inforisktoday, NHS Digital release

Unstructured data in EHRs more valuable than structured data in older adult patient health. A new study in the Journal of the American Geriatrics Society compared the number of geriatric syndrome cases identified using structured claims and structured and unstructured EHR data, finding that the unstructured data was needed to properly identify geriatric syndrome. Over 18,000 patients’ unstructured EHR notes were analyzed using a natural language processing (NLP) algorithm.

Cerner buying a share in population health/value-based care management company Lumeris through purchasing $266 million in stock in Lumeris parent Essence Group Holdings. The angle is data crunching to improve outcomes for patients in Medicare Advantage and other value-based plans. Lumeris also operates Essence Healthcare, a Medicare Advantage plan with 65,000 beneficiaries in Missouri. Fierce Healthcare

NHS Digital awarding £240,000 for investigating social care transformation through technology. The Social Care Digital Innovation Programme in 12 councils will be managed by both NHS and the Local Government Association (LGA). Projects to be funded span from assistive technologies to predictive analytics. Six winners from the original group of 12 after three months will be awarded up to a further £80,000 each to design and implement their solutions. New Statesman

Curious about RFID in use in healthcare, other than in asset management, access, and log in? Contactless payments is one area. As this is the first of four articles, you’ll have to follow up in Healthcare IT News

Is Uber fit to deliver healthcare transport? Healthcare organizations may want to check.

Healthcare-related organizations have codes of conduct pertaining to suppliers. Does Uber meet compliance standards? As we reported a few days ago in our article on the burgeoning area of non-emergency medical transport (NEMT) [TTA 9 Mar], Uber Health’s debut with a reputed 100 healthcare organizations has led this Editor to a further examination of Uber, the organization. Uber has had a hard time staying out of the headlines–and the courts–in the past two years, in matters which might give healthcare partners pause.

  • On 21 Nov, Uber reported that the personal data of 57 million users, including 600,000 US drivers, were breached and stolen in October 2016–a full year prior. Not only was the breach announcement delayed by over a year, but also in that year it was made to go away by Uber’s paying off the hacker. Reuters on 6 December: “A 20-year-old Florida man was responsible for the large data breach at Uber Technologies Inc [UBER.UL] last year and was paid by Uber to destroy the data through a so-called “bug bounty” program normally used to identify small code vulnerabilities, three people familiar with the events have told Reuters.” The payment was an extraordinary $100,000. “The sources said then-CEO Travis Kalanick was aware of the breach and bug bounty payment in November of last year.” The Reuters article goes further into the mechanism of the hack. It eventually led to the resignation of their chief security officer, former Facebook/eBay/PayPal security head Joe Sullivan, who ‘investigated’ it using encrypted, disappearing messaging apps. Atlantic.
  • CEO and co-founder Travis Kalanick was forced to resign last June after losing the confidence of the company’s investors, in contrails of financial mismanagement, sexual harassment, driver harassment, and ‘bro culture’. This included legal action over Uber’s 2016 acquisition of self-driving truck startup Otto, started by former Googlers who may or may not have lifted proprietary tech from Google before ankling. These are lavishly outlined in Bloomberg and in an over-the-top article in Engadget (with the usual slams at libertarianism). Mr. Kalanick remains on the board and is now a private investor.
  • The plain fact is that Uber is still burning through funds (2017: $1bn) after raising $21.1bn and its valuation has suffered. The new CEO Dara Khosrowshahi, who earlier righted travel site Expedia, has a tough pull with investors such as SoftBank and Saudi Arabia’s Public Investment Fund. Also Mashable.

Healthcare and NEMT, as noted in our earlier article, are a strong source of potential steady revenue through reimbursement in Medicare Advantage and state Medicaid programs, which is why both Uber and Lyft are targeting it. The benefits for all sides–patients, practices, these companies, sub-contractors, and drivers–can be substantial and positive in this social determinant of health (SDOH).  

Healthcare organizations, especially payers, have strict codes of compliance not only for employees and business practices but also for their suppliers’ practices. Payers in Medicare Advantage and Medicaid are Federal and state contractors. While Uber under its new CEO has shown contriteness in acknowledging an organization in need of righting its moral compass (CNBC), there remains the track record and the aftermath. Both deserve a closer look and review.

CBO finds as budget neutral telehealth in Senate CHRONIC Care Act

Sneaking under the holiday week wire, when Congress high-tails it for home, the Congressional Budget Office (CBO) reviewed the telemedicine and telehealth provisions in the US Senate’s pending CHRONIC Care Act and found last week that they do not increase or decrease Medicare spending overall. Formally S.870 – Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017–and sponsored by Sen. Orrin Hatch of Utah, this means that this bill developed by the Senate Finance Committee’s bipartisan Chronic Care Working Group has passed a key spending acceptability test, and is another step further towards passage. CHRONIC removes many of the qualifiers that Medicare hedged around telehealth and telemedicine, with most restricting reimbursement to rural areas. There are four areas where the Act removes barriers:

  1. Nationwide coverage for Telestroke
  2. Home remote patient monitoring for Dialysis Therapy
  3. Enhanced telehealth coverage for ACOs–this expands the provisions in the Next Generation ACO program to ACOs participating in the Medicare Shared Savings Program (MSSP) Stages II, III and the few left in Pioneer, so that telehealth will be reimbursed regardless of geographic location and in the home.
  4. Increased flexibility for telehealth coverage under Medicare Advantage plans

There’s a long way to go, but this is an important step forward to an equal playing field for telehealth services. National Law Review’s summary