The shape of telemedicine during the first half-year of the pandemic: significant but wildly uneven usage

There has been a plethora of tracking studies starting last year on how telemedicine stepped in for in-person visits during the early months of the COVID-19 pandemic. Telehealth visits peaked, then tapered off as medical offices reopened. Reviewing our articles:

  • Commonwealth/Phreesia: tracking the latter’s practices, they dropped from a high of 13.9 percent on 18 April to 6.3 percent by early October. Where telemedicine use stayed high was behavioral health–psychiatry–which remained at 41 percent.
  • Epic Health Research Network’s data, which concentrated on hospitals and clinics, showed a similar drop from the mid-April high of 69 percent but ended August at 21 percent. Regionally, the South had the least takeup of telehealth even in the critical period. 
  • FAIR Health, using insurer claims data, tracked with Commonwealth/Phreesia from 13 percent in April to 6 percent by August.

The latest study has been just published in Health Affairs (abstract free, paid access full study). Using data from 16.7 million commercially insured and Medicare Advantage enrollees from January to June 2020, the steep rise from a negligible base was the same but the percentages were between the Commonwealth and Epic studies. 30.1 percent of all visits were provided via telemedicine (including telephonic) and the weekly number of visits increased twenty-three-fold compared with the prepandemic period. The database also permitted a deeper analysis of usage.

  • Telemedicine use was lower in communities with higher rates of poverty (31.9 percent versus 27.9 percent for the lowest and highest quartiles of poverty rate, respectively). Unfortunately for comparison, not included in the information was the actual rate in wealthy counties.
  • Overall visits (in-person and virtual) plummeted by 35 percent, a backlog in deferred care still being made up
  • Rural telemedicine use was lower than urban–24 percent versus 31 percent by county
  • How specialties incorporated telehealth varied widely. As previously reported, psychiatry had a high uptake of telemedicine and reported the least drop in overall visits. Surprisingly, endocrinology (68 percent) and neurology also had high utilization. Only 9 percent of ophthalmologists reported telehealth use, because the physical exam requires highly specialized equipment. 
  • Management of chronic conditions was in between those two extremes. Conditions like hypertension and diabetes had a big drop in care volume that was mitigated by a large increase in telemedicine use.

Healthcare Dive 

Bluestream Health telehealth partners with Impresiv Health management consultants

Bluestream Health, which we noted back in November as partnering with LanguageLine to add language interpretation to their telehealth platform, has a new partnership with the interestingly named Impresiv Health. Impresiv is a national healthcare management consulting firm concentrating in clinical, operations management, and software consulting for payers and accountable care organizations (ACOs). They also provide permanent and interim staffing in multiple healthcare areas. Adding virtual care now allows Impresiv to deliver telehealth services as part of their management services menu. Bluestream Health is a secure telehealth platform which provides whitelabeled telehealth services to approximately 50,000 providers. Release   Hat tip to Erin Farrell-Talbot

COVID-19 and telehealth–promise or peril? And the perils of digital health in conflict countries and India.

The Journal of the International Society for Telemedicine and eHealth (JISfTeH) has published its latest issue today (13 Jan). JISfTeH is one of the few journals which shine a bright spot on digital health in developing countries. This month concentrates on conflict countries and COVID in India: 

  • Scaling Up Digital Health In Conflict Countries discusses the lack of any form of digital health and coordination in Afghanistan, Somalia, Sudan, and, with some exception, Nigeria. It compounds the extreme lack of healthcare services–for instance, 23 percent of Afghanis have poor access to healthcare, resulting in a high mortality rate. It can change. Rwanda, once synonymous with war, has one of the best healthcare systems in Africa due to the use of digital health services. India is using digital health in combating the TB explosion of 300,000 cases in one year. The exception in Nigeria is the liftoff of 54Gene, a genomic studies company in the world’s most genetically-diverse continent, which has secured $4.5 million in seed funding.
  • Speaking of India, telehealth has been kickstarted there due to COVID-19. The Indian Government is prioritizing the use of telehealth in the population and both public and private institutions have rolled out initiatives. India’s challenges are how patients pay for it (70% of healthcare expenses out of pocket) and how it reaches the two-thirds of population in rural areas where there is inadequate telecom and broadband for services. The irony, of course, is that India is a huge exporter of software and telecom services to the world. COVID-19 As A Catalyst for Telehealth Growth In India: Some Insights.

The editorial by Richard E. Scott of Canada and Prof. Maurice Mars of South Africa, COVID-19 and eHealth: A Promise or Peril Paradox?, cautions on the floodgates opening for telehealth in COVID’s wake. Spontaneous telehealth, where “healthcare providers themselves saw the value of an eHealth solution and implemented it independently and without traditional steps or approval” is quite separate from evidence- and needs-based telehealth. There is a lot of pressure at the national level, by the WHO, and by vendors to ‘make hay while the sun shines’. “Enthusiasm must be tempered with thoughtful guidance” on multiple and quite variable factors.

Telehealth claims rose 3,060 percent to October, settling in to over 5 percent of all claims–led by mental health (US)

Utilization statistics confirm telehealth’s staggering rise and stabilization. US private insurance telehealth claims data, collected by non-profit FAIR Health in the year October 2019 to October 2020, rose from 0.18 percent of medical claim lines in October 2019 to 5.61 percent in October 2020, a 3,060 percent increase. While the percentages may be low, this tracks with the rise and fall of telehealth visits from February tracked by the last Commonwealth Fund/Phreesia/Harvard University study in October to about 6 percent of medical visits [TTA 29 Oct 20] as well as Epic’s tracking into September [TTA 2 Sept].

According to FAIR’s claim data, telehealth utilization peaked in April at 13 percent, falling in May to 8.69 percent, 6.85 percent in June, and 6 percent in August. This followed the trends reported by both Commonwealth Fund and Epic.

Telehealth visits ticked up September to October, tracking with the rise of positive COVID diagnoses. Telehealth share of medical claim lines rose 10.6 percent nationally, from 5.07 percent in September 2020 to 5.61 percent in October 2020

In every month, mental health led the top five diagnoses in the 30-50 percent range, cresting above 51 percent in October. This points to a greater acceptance of telehealth treatment in this specialty, which is positive, but also the distressing rise in CoronaDepression which TTA has been tracking in both the US and UK [TTA 18 Dec 20]

‘Exposure to communicable diseases’ were, up to September, not consistently among the top five reasons for telehealth visits. They re-emerged on the list in October. In other months as well as October, ‘respiratory diseases and infections’ may have been where active COVID was categorized. Other telehealth conditions were ‘joint/soft tissue diseases’ and ‘developmental disorders’. CPT/HCPCS codes are also listed for reference.

To view FAIR Health’s monthly national and regional analyses, go to their Monthly Telehealth Regional Tracker. Release.

News roundup: Milken Institute’s telehealth brief with ATA push on Congress, GoodRx confirms 62% are CoronaDepressed, Johns Hopkins’ COVID mortality risk study and calculators

The hot US health tech issue is retaining, consolidating, and adding to the gains that telehealth and remote patient monitoring (RPM) made during the pandemic. The influential Milken Institute (formally the Milken Institute Center for the Future of Aging, Center for Public Health, and FasterCures) has published a short white paper on how best to increase access to telehealth services and support innovation as part of that aim. Their five core recommendations are: 

  1. Permanently lift Medicare location restrictions on telehealth to ensure that older adults can receive a variety of services in their homes and communities, regardless of where they live. (This was also recommended by the Taskforce on Telehealth Policy (TTP) [TTA 18 Sep] which was jointly formed by the ATA, NCQA, and the Alliance for Connected Care.)
  2. Meet the growing need for behavioral health care by addressing barriers to remote care and expanding the availability of telebehavioral  health services.
  3. Increase equitable access to telehealth services through digital technology, literacy programs, and broadband coverage.
  4. Support development and implementation of innovative telehealth and mobile health technology for prevention, well-being, clinical care, and research.
  5. Develop and document clear data sharing standards to support transitions of care across acute, post-acute, and long-term care settings, including care provided in the home and in residential care facilities. 

The consensus is that CMS’ 2021 Physician Fee Schedule post-pandemic (public health emergency=PHE) does not do nearly enough in that it returns–of legal necessity–to the status quo ante geographic restrictions, though it devised a temporary Category 3 to store over 50 telehealth billing codes [TTA 3 Dec]. The American Telemedicine Association (ATA) was joined by multiple organizations on Monday in pressing Congressional leaders to extend national telehealth ‘flexibilities’ as part of the $1.4 trillion omnibus spending deal that is needed to avoid a government shutdown on Friday (yes, this Friday) at midnight. The organizations joining the ATA on the letter to Congress are the Alliance for Connected Care, College of Healthcare Information Management Executives, Connected Health Initiative, eHealth Initiative, Health Innovation Alliance, HIMSS, and PCHAlliance. ATA release.

We are shocked, shocked that CoronaDepression worsens in those already suffering. Prescription discounter GoodRx analyzed prescription fill trends for anxiety and depression meds and found that they reached an all-time high in 2020–9.5 percent higher than the previous high in 2016. It peaked in April as the pandemic was underway, and possibly reflected some stockpiling.

Of their sample of 1,042 individuals diagnosed with anxiety and depression prior to the pandemic:

  • 22 percent responded that their symptoms were “much worse”
  • 40 percent said they were “worse”
  • 28 percent stated that symptoms were the “same”
  • a surprising 10 percent said symptoms were “better” or “much better” 

One of the main factors in that 62 percent reporting worse/much worse was the length of quarantine. “Those who reported quarantining due to COVID-19 were far more likely to report “worse” or “much worse” symptoms compared to those who did not quarantine. Over 70% of those who reported quarantining for more than one week said their depression and/or anxiety symptoms were “worse” or “much worse.” Loss of job and income, plus COVID-related events affecting friends and family, were also key in worsening symptoms. Many also had difficulty reaching their doctors/therapists and renewing medication. The study was conducted 1-10 November. GoodRx study

More depressing news (sic) of mental health challenges to older adults in the Isolation Age: The Future of Remote Care Technology, Lockdown Loneliness feared more than COVID, and the PLOS One study.

But cheer up and carry on, your COVID mortality risk may not be as bad as you think. A team of researchers at the Johns Hopkins Bloomberg School of Public Health created a COVID mortality risk calculator, based on algorithms calculating factors such as age, gender, sociodemographic factors, location, and a variety of different health conditions. Risk scores are grouped into five categories from lower than average/close to average to high.  While primarily for public health authorities to prioritize populations for vaccination, uninfected individuals can use it to determine their personal risk of future infection and complications after infection. It’s easy to use and your results may surprise you. There is also an interactive US map of the risk level of major cities, counties, and states. The study is published in a paper that appears in the journal Nature Medicine.  Johns Hopkins release, risk calculator

Weekend Must Read: The Future of Remote Care Technology and Older Adults 2020

Laurie Orlov, founder of Aging and Health Technology Watch and well-known industry analyst/advocate in health and aging-related technologies, has released her latest report, The Future of Remote Care Technology and Older Adults 2020 (PDF, free download). Recently, Laurie and I had an opportunity to catch up and review her findings.

This Editor immediately went to the ‘bleed lead’ which was:

COVID-19 HARMED THE WELLBEING OF OLDER ADULTS
Gap in technology access widened into connection chasm

The University of Michigan study from June (cited above and elsewhere in the report) illustrates the change in social isolation for those aged 50 to 80, with numbers that were slightly high to begin with in 2018. Isolation rocketed to 56 percent, putting a Klieg light on mental health that we’ve seen continued in the recent ‘lockdown loneliness’ PLOS One and SECOM studies. The reasons why will be no surprise, as they’re true for nearly all: a screeching halt to in-person experiences, severing in-person connections with family and friends, closing the doors of senior living and nursing homes to visitors (still closed in many states!), breaking healthcare contacts with providers, and losing timely diagnosis of health conditions, new and ongoing.

Most of the report documents the consequences: how telehealth rose, then fell (Epic and Commonwealth Fund last reports), how the experience wasn’t entirely satisfactory and held multiple structural limitations (e.g. tech, vision, hearing, dexterity) for the 50-80 age group (nor providers in obtaining a physical sense of the patient)–a POV you won’t see in mainstream healthcare/tech media nor the funding markets–and how technologies scrambled to fill the gaps (with plenty of examples).

But moving on to the future, which is the aim of this report, there are many gaps which need to be closed that are bigger than Teladongo:

  • synchronous and asynchronous telehealth–the latter primarily remote patient monitoring (RPM)
  • adoption of voice tech
  • broadband and device access, including training and management
  • governmental policy at all levels from Federal to local, including payer reimbursement

The last section of the report (page 18 to end) takes a look at where innovations could take remote care, where expectations are now, and where the opportunities are in connecting older adults. On page 22, there is a checklist for care providers and what they must consider in managing remote care. The summary of the future on page 23 wraps it all nicely.

The Future of Remote Care Technology and Older Adults 2020 (PDF, free download)

 

CMS expands telehealth, RPM in 2021 Physician Fee Schedule, creates post-pandemic temporary category (updated)

On 1 December, the Center for Medicare & Medicaid Services (CMS) announced its all-important 2021 Physician Fee Schedule (PFS), which sets out the fees and rules for physicians providing services to Medicare fee-for-service beneficiaries and generally serves as a guideline to commercial payers. If one only reads the release headline, one would assume that the national telehealth payment expansion that was approved when the public health emergency (PHE) was declared in March would be largely retained permanently in the 2021 PFS after the earnestly desired end of the PHE, extended to 20 January 2021,

Interpreting CMS-speak is always a task, and so it is here. Your Editor will do her best to unpack it. 

Paragraph 5 is the sobering note for the telehealth ‘bulls’. Telehealth expansion, on a permanent basis, applies to Rural Health, Federally Qualified Health Centers (FQHC), and certain Medicare program models (e.g. two-sided Medicare Shared Savings Program ACOs, ESRD, Episode Payment models, and Medicare Advantage), and with a limited number of new codes. From the release:

“This final rule delivers on the President’s recent Executive Order on Improving Rural Health and Telehealth Access by adding more than 60 services to the Medicare telehealth list that will continue to be covered beyond the end of the PHE….These additions allow beneficiaries in rural areas who are in a medical facility (like a nursing home) to continue to have access to telehealth services such as certain types of emergency department visits, therapy services, and critical care services.”

The release then goes on to explain the kicker: “Medicare does not have the statutory authority to pay for telehealth to beneficiaries outside of rural areas or, with certain exceptions, allow beneficiaries to receive telehealth in their home.” (Editor’s emphases) 

What seems like a pullback in the PFS is a reversion to status quo ante in geographic and model restrictions, which can’t be changed except by Congress. What CMS can do is expand, and create, new Categories for covered codes.

  • CMS expanded Category 1 which is the basic list of telehealth covered codes (CPTs and HCPCS). If you are in a rural area or a covered model, the expansion is real but limited: the number of new codes in Category 1 is nine codes of the 60 stated in the release. 60 is also far less than the 144 service codes added since the start of the PHE.
  • The remaining telehealth codes of the 60 quoted are in a new, temporary Category 3, which will extend through the calendar year the PHE ends–which is, as of today, 31 December 2021. (If the PHE goes into 2022, unless the rule is changed, 31 December 2022.)
    • Category 3 includes over 50 telehealth service codes for the PHE that are not in Category 1–thus the count of 60 the CMS press release trumpeted. 
    • What is not spelled out in CMS’ press release or public Fact Sheet is if statutory geographic (rural) and model restrictions will apply to this category after the PHE ends. Given the above, this Editor’s interpretation is that statutory restrictions will apply unless there’s a Federal change.
  • The Fact Sheet also clarifies certain frequency limitations, who can deliver telehealth services in a practice, telephone-only interactions with a new HCPCS code, and direct practitioner supervision.  Fact Sheet–Final Policy, Payment, and Quality Provisions Changes

For remote patient monitoring (remote physiologic monitoring) services which were modified during the PHE, there are important clarifications and two finalizations of modifications to RPM services made during the PHE, also in the Fact Sheet. 

The exception to the above is apparently the Medicare Diabetes Prevention Program (MDPP). Virtual delivery of certain services, such as educational classes which shifted from in-person to virtual and weight measurement, will not continue past the end of the PHE. CMS MDPP release. Also mHealth Intelligence.

What this all really means. CMS has Kicked The Telehealth Can Down The Road for 2021. They have retained many of the changes that the pandemic forced, but the geographic and model restrictions remain. But practices have made serious procedural modifications to incorporate remote and telephonic visits. Many patients in the Medicare age group are still self-isolating to a significant degree, and depending on the path of COVID-19 (and the flu) have good reason to limit in-office visits. This year’s use of telehealth in this group, according to CMS, was astounding: between mid-March and mid-October 2020, over 24.5 million out of 63 million beneficiaries received at least one of those 144 Medicare telemedicine services. What remains unclear is if Category 3, after the PHS, could continue to apply nationally through Congressional action, as there are several bills before this soon-to-close Congress.

Certainly this, plus post-COVID usage, will influence the 2022 PFS and perhaps stimulate Congress to allow CMS to permit payment for telehealth services nationally.

Editor’s note: References in addition to above are Center for Connected Health Policy’s Telehealth and Medicare page, the proposed CY 21 PFS Fact Sheet (PDF), and COVID-19 Telehealth Coverage Policies. Hat tip to former colleague Madeline Short, COO of Wilems Resource Group.

Update 3 December: The American Telemedicine Association published its comments on 2 December, agreeing with CMS Administrator Seema Verma’s comments on making telehealth permanent outside of geography, itemizing the present bills languishing in Congress, and also lamenting the short shrift that the final rule gave to remote patient monitoring. Also, Healthcare IT News includes additional comments from ATA chief Ann Mond Johnson. Some states like Texas and Wisconsin are pushing for updated parity rules applying to state-regulated plans, which would include commercial plans and Medicaid. Hat tip to reader Paul Costello for the heads-up.

Health tech M&A moves: Well Health’s $45M Series C, GigHealth2/UpHealth’s $1.35 bn ‘blank check’ acquisition

Santa Barbara, California-based Well Health, a patient communication platform that connects patients and providers through the care experience including the home, earlier this week announced a $45 million Series C funding round, bringing total funds raised to $75 million since its founding in 2015. The lead investor is Lead Edge Capital, with Martin Ventures plus previous funders Jackson Square Ventures, Health Velocity Capital, Summation Health Ventures, Structure Capital and Freestyle Capital. Their target markets are providers, payers, and accountable care organizations (ACOs). Well Health’s CEO/founder Guillaume de Zwirek, claimed that annually 200,000 healthcare providers use the platform to send more than 1 billion messages with 30+ million patients.

Well Health also announced Dana Gelb Safran, Sc.D. as Senior Vice President, Value Based Care and Population Health. She was previously with Blue Cross Blue Shield of Massachusetts. Well Health release, Mobihealthnews

GigCapital2 Inc., a publicly-traded US special purpose acquisition company (SPAC) or ‘blank check’ company, has agreed to merge with UpHealth Holdings Inc and Cloudbreak Health LLC to create a digital healthcare company valued at $1.35 billion. According to their release, UpHealth is expected to generate over $190M in revenue and $24M in EBITDA next year; 69% of the 2021 incremental revenue growth is already contracted. The combined company will be named UpHealth, Inc. and trade on the NYSE under UPH.

The new company will be organized in four lines across population health management and telehealth: Integrated Care Management, Global Telehealth, Digital Pharmacy, and Tech-enabled Behavioral Health. Global Telehealth under the Cloudbreak brand claims 100,000 encounters per month on over 14,000 video endpoints at over 1,800 healthcare venues nationwide, with telepsychiatry, telestroke, tele-urology, and other specialties.

GigCapital2 previously raised $150 million in an IPO in June 2019. It will raise an additional $160 million as a private investment in a public equity, or PIPE, transaction. GigCapital is located in Palo Alto and is led by CEO/President Dr. Raluca Dinu and Executive Chairman Dr. Avi Katz. The roots of the company are interestingly in the companies ultimately rolled up into GigPeak, which was sold to Newark NJ-based telecom company IDT Corporation in 2017.

‘Blank check’ acquisition companies are becoming a popular way for digital health companies to go public without the fuss and bother of the necessary and expensive filings, SEC review, financing, etc. of an IPO. In August, SOC Telemed went this route in the other direction, acquiring a SPAC [TTA 4 August]. Hims, Augmedix, and Clover Health also went public through SPACs.The former principals of Livongo, post-Teladoc, are also forming a SPAC [TTA 30 Oct]. Reuters, Fierce Healthcare

Telemedicine office visits versus in-person recede to 6%, concentrating in behavioral health. Will the gains hold?

Has the telehealth wave receded to a ‘new normal’ tide? An updated Commonwealth Fund/Phreesia/Harvard University study, including data through 4 October, confirms that we are far past the point of telemedicine dominance of the office visit. Office visits to providers have largely returned to the 1-7 March baseline and even slightly above for ages 6 and above. But telemedicine visits, from their high in this study of 13.9 percent on 18 April during the peak of the COVID-19 pandemic, have continuously dropped and have leveled off to 6.3 percent. (Telemedicine here includes both video and telephonic visits; the sample is 50,000 providers that are Phreesia clients.)

To put this in proper perspective, the pre-pandemic baseline of telemedicine in practice use was an infinitesimal .1 percent.

Larger organizations use more telemedicine than smaller ones. Primary care practices with 6 or more physicians in the group account for 9.4 percent of telemedicine visits, while practices of 1 to 5 physicians account for 4.3 percent.

Even so, by September, only 9 percent of practices were heavy users (20 percent +) of telehealth, compared to 35 percent in April. Minimal use (5 percent or less) moved up to 39 percent. One-third never used telemedicine at all–did they shut down completely?

For those seeking to segment the overall telehealth market, the chart detailing telemedicine in visits to medical specialists is of interest. It confirms the anecdotal information this Editor has heard that telehealth remains highly popular and used in behavioral health (psychiatry)–41 percent of visits. By comparison, the next most popular are rheumatology and endocrinology at 14 percent of visits. The pandemic apparently has forever changed the mental health visit and acceptance of non-face-to-face delivery, with interesting (isolating?) consequences for both patients and doctors.

crystal-ballCan telehealth hold this gain, and develop from this base? What will it look like for the average practice? Pay the lady with the crystal ball! CMS will eventually roll back the waivers on usage of non-HIPAA platforms such as Facetime (appropriately so for security and privacy reasons). Reimbursement by Medicare and commercial plans will be a major hot button. A recent survey of health system executives presented at the HLTH virtual conference indicated yawning uncertainty at the top level:

  • 30 percent of respondents said they were unsure what their plans are if telehealth reimbursements return to pre-COVID levels
  • 13 percent said they’d return to face-to-face visits
  • 20 percent said they’d continue doing virtual visits regardless
  • 17 percent said they’d analyze the financial viability of continued use

(Nokia-UPMC Center for Connected Medicine and Klas Research, Healthcare Dive)

More on this: The hazy post-pandemic future of telehealth and From back-to-work to telehealth to retail rebranding: HLTH 2020 takeaways   

Previously: As practices reopen, telemedicine visits continue to plunge from 69% to 21%: Epic (September), COVID effect on US practices: in-person visits down 37%, telehealth peaks at 14% (Commonwealth Fund through July)

Teladoc sues Amwell on patent infringement–again

This week’s Big News in the Telehealth Wars was Teladoc suing their chief rival Amwell (the former American Well) for patent infringement. These relate largely to telemedicine carts and robotic technology patents acquired by Teladoc via InTouch Health, which was finalized in July. InTouch Health’s value in the neighborhood of $1bn, when all was factored in, was reinforced by its over 130 patents and pending applications.

Notices were sent by Teladoc in mid-September for compliance by 18 September. It was mentioned by Amwell as meritless in filings with the Securities & Exchange Commission but apparently did not make a dent in their through-the-roof IPO raise of $742 million on 16 September. Their share price remains steady at over a $10 per share increase from the IPO price.

Amwell’s infringing products, according to reports on the lawsuit filed in the US District Court for the District of Delaware, encompass their Carepoints line of digital scope, stethoscope, and four different types of telemedicine carts, including the Horus HD Digital Scope System and the Thinklabs One Digital Stethoscope. There are nine contested patents. Teladoc is asking for treble damages plus court fees. Amwell has already stated that this type of business for them is in single digits–5 percent of revenue in 2019.

Both Amwell and Teladoc have been down this road before in 2015 and 2016. Teladoc also started it then, with Amwell countersuing–and losing in June 2016, with additional patent challenges filed by Teladoc with the USPTO. This record doesn’t bode well for Amwell, but even though IP fights tend to generate nasty headlines and drain resources, what is contested is a fraction of their business. Curiously, to this Editor’s knowledge, there is no record of InTouch Health, prior to their acquisition, challenging Amwell on these systems. Healthcare Dive, Healthcare IT News, Fierce Healthcare, WSJ (paywalled)

Digital health investment smashes the ceiling: $9.4 bn invested through 3rd Q

$9.4 bn is a whole lot of bubbly! To no one’s surprise in the industry, kick-started by telehealth, Rock Health’s tracking of US digital health company investment through 3rd Q smashed through 2018’s full-year high point ($8.2 bn) with a cannonball of a total. Adding $4.0 bn to first half’s $5.4 bn, it represents 311 deals and is 27 percent above last year’s oddly fading-in-the-stretch $7.4 bn [TTA 7 Feb]. Rock Health projects the year total to be about $12 million and 400 deals. 

  • Average deal size topped $30.2 million, 150 percent greater than the $19.7 million average in 2019.
  • Driving this total were “mega deals” of $100 million or more, accounting for 41 percent of all deals (compared with 30 percent for year 2019). Even with the inclusion of fitness companies that this Editor does not consider true health tech, such as Zwift (interactive fitness entertainment), ClassPass (online fitness), and Tonal (more online fitness), the 20+ remaining companies indicate a concentration of Big Capital into Big Deals. The Big Deals concentrate in three sectors: on-demand virtual care delivery, R&D process enablement, and fitness/wellness.
  • Not surprisingly, telehealth and telemedicine are soaring: $1.6 bn in funding compared to $662 million same period 2019
  • Also pointing to concentration: 64 percent of this year’s investors have previously made investments in digital health, which exceeds any prior year. Institutional venture firms have the largest share of transactions (62 percent), with corporate venture capital accounting for 15 percent of transactions.
  • Given COVID and election year craziness, IPO action has moved right along and matched 2019’s six. Accolade and GoHealth in July; Amwell, Outset Medical, and GoodRx in September. Hims Inc. is merging with a blank-check company as SOC Telemed did in August. MDLive may be going public in early 2021.
  • What is down so far this year is merger and acquisition activity. Through September, there are only 63 acquisitions, which will likely trail by year’s end 2019’s 113. Teladoc is the 9,000 Elephant in M&A, with InTouch Health closing in August ($1 bn final due to the stock value soaring) and Livongo at $18.5 bn dwarfs the remainder. Optum-AbleTo has been reported in ‘advanced talks’ but there’s no confirmation of closing; it was reported to be at $470 million. 

Note: Rock Health only counts US deals in excess of $2 million, so international activity by companies like Doro are not included.

Also Mobihealthews.

DOJ ‘takedown’ charges 86 defendants with $4.5 bn in fraudulent telemedicine claims in largest ever action

We unpack the 2020 National Health Care Fraud and Opioid Takedown. Closing out September was the largest simultaneous group of Department of Justice (DOJ) and Federal agency coordinated actions concerning fraudulent medical claims. The indictments charged 345 defendants, including 100 medical professionals, across 51 federal districts, for submitting fraudulent claims against Medicare and private insurance programs totaling over $6 bn.

The vast bulk–$4.5 bn–of the fraudulent claims were classified as ‘telemedicine’ and were perpetrated by more than 86 criminal defendants in 19 judicial districts. The remainder of the charges rounding to the $6 bn were for substance abuse treatment and opioid distribution fraud: more than $845 million connected to substance abuse treatment facilities, or “sober homes,” and more than $806 million connected to other health care fraud and illegal opioid distribution schemes across the country. 

These ‘telemedicine’ claims included unnecessary durable medical equipment (DME), genetic or diagnostic testing, and prescription drugs. The typical scam worked like this:

  • Telemedicine company executives paid doctors and nurse practitioners to order unnecessary durable medical equipment, genetic and other diagnostic testing, and medications, often for pain, for patients
  • The patient for whom it was ordered had either no contact with the doctor or nurse practitioner or only a brief telephonic conversation. The person may not have been a patient of the practice.
  • DME companies, genetic testing laboratories, and pharmacies then purchased those orders in exchange for illegal kickbacks and bribes, then submitted false and fraudulent claims to Medicare, state Medicaid, and private insurers which are Medicare Advantage plan sponsors

Most of the Federal charges in the indictments here cite Federal anti-kickback statutes in both criminal and civil law.

The nationwide charges were executed by an alphabet soup of agencies at the Federal level:

  • Enforcement actions were by the Criminal Division, Fraud Section’s Health Care Fraud Unit, in conjunction with its Health Care Fraud and Appalachian Regional Prescription Opioid (ARPO) Strike Force program, and its core partners, the US Attorneys’ Offices, Department of Health and Human Services Office of Inspector General (HHS-OIG), the FBI, and the Drug Enforcement Agency (DEA)
  • Prosecution is by Health Care Fraud and ARPO Strike Force teams from the DOJ’s Criminal Division’s Fraud Section, 43 US Attorneys’ Offices nationwide, and agents from HHS-OIG, FBI, DEA, and other various Federal and state law enforcement agencies. 

Unpacking the actions which reveal some dizzying schemes, some of the more interesting individual cases against fraudulent ‘telemedicine’ in the 2020 National Health Care Fraud and Opioid Takedown took place in Florida and Illinois:

  • Middle District of Florida: a telemarketing operation collected the personal information of Medicare beneficiaries, purchased doctor’s orders for orthotic braces, and then submitted more than $25 million in claims to Medicare
  • Southern District of Florida: three telemedicine executives and three owners of durable medical equipment companies were charged and pled guilty in connection with more than $175 million in fraud loss
    • Editor’s note: none of the principals of QuivvyTech have been identified by this Editor in the ‘Takedown’ indictments and corresponding information documents listed for the Southern District. Humana’s civil suit against QuivvyTech is here [TTA 27 August]. 
  • Northern District of Illinois: seven defendants were charged with defrauding insurance programs of more than $205 million. One is a very busy doctor who, according to the indictment, was the top prescriber in the United States for multiple genetic testing billing codes. He worked for more than 10 telemedicine companies, was licensed in 17 states, and allegedly paid five of his friends and relatives to sign telemedicine orders in his name for medically unnecessary genetic testing and durable medical equipment. “In total, the scheme allegedly resulted in $145 million in false and fraudulent claims billed to Medicare and approximately $54.6 million paid by Medicare for claims associated with this doctor’s name.” 
  • Your Editor cannot resist the twist that ‘telemedicine’ fraud took in her home state of New Jersey. Two cases involving telemarketing, senior health fairs, and door-to-door sales (!) of genetic testing, including genetic cancer screening, had a total fraud value of nearly $1bn. A multi-jurisdictional case involving the District of New Jersey, the Middle District of Florida, and the Southern District of California also involved the ordering of orthotic braces signed off by ‘telemedicine’ doctors who didn’t speak or only briefly spoke to Medicare beneficiaries/members. $871 million purchased a great deal of real estate, personal luxury items, and nightlife events for the two owners of the DME companies involved, who incidentally entered guilty pleas.

A biotech extra. In the list of multi-jurisdictional actions is a scheme to mislead investors, manipulate a biotechnology company’s stock price, and defraud payers for COVID-19 and allergy testing. The company named in the complaint is Arrayit Corporation, a publicly-traded company (OTC) located in Sunnyvale, California. This was jointly prosecuted by the National Rapid Response Strike Force, the Market Integrity and Major Fraud Unit of DOJ’s Fraud Section, and the US Attorney’s Office for the Northern District of California. The separate Securities and Exchange Commission (SEC) charges on the veracity of their COVID-19 test is here. For those with a speculative bent, the current value of the stock is zero.

DOJ press release. Also FierceHealthcare’s overview.

Editor’s note: ‘Telemedicine’ has been placed in quotes to differentiate these scams from legitimate provider-patient telemedicine video/audio consults or telephonic medical visits which may involve patient diagnosis and prescribing. These are now more frequently called telehealth. The differentiation is already well understood by our professional Readers and is made for the benefit of our non-professional Readers who may view this article on Twitter and LinkedIn feeds, or via Google search. 

Doro adds Spain’s Victrix SocSan to its growing brand portfolio for £1.28 million plus shares

Sweden’s Doro has a new addition to its portfolio, and it’s an interesting one. Victrix SocSan, headquartered in Madrid, coordinates health and social care primarily through data analysis blending different health and social care sources “to provide low-cost yet highly effective proactive interventions for chronic disease management, elder care, and wellbeing.” It concentrates on care workflow and information exchange, according to their website. Unlike previous Doro acquisitions such as ElderCare UK [TTA 11 Aug], Invicta Telecare, parent of Centra Pulse and Connect [TTA 19 Sept 19], and Welbeing [7 June 18], it’s about the technology and not the territory or system. “A strong technical platform and knowledge is an important component in our strategy. The Victrix Care Platform gives us new opportunities to develop and offer coordinated and proactive care services, both in individual and assisted living, ” according to Doro Group President and CEO Carl-Johan Zetterberg Boudrie. 

The acquisition cost is modest compared to some of the US blockbuster deals we’ve seen lately. Cash upfront is SEK 14.8 million (UK£1.28 million, US$1.65 million, €1.41 million). The 232,744 shares in Doro AB closed today at SEK47.50 which is about SEK11.05 million (UK£956 thousand, US$1.2 million, €1.1 million). There are other payouts noted in the press release. Their results will be consolidated into Doro’s from 30 September. According to the release, the Victrix team will be joining Doro. Their CEO and founder, Joe Killen, is a familiar figure in the UK from his nearly 20 years at Tunstall Spain and Southern Europe. Hat tip to one of our UK Readers who wishes to stay anonymous.

As practices reopen, telemedicine visits continue to plunge from 69% to 21%: Epic (US)

The extreme high tide has receded–but still way up than before the pandemic.  The Epic Health Research Network (yes, that Epic EHR), updated its earlier study through 8 May [TTA 22 July] to compare in-office to telehealth visits through 12 July. The trend that EHRN spotted (as well as Commonwealth Fund/Phreesia/Harvard) continued with telemedicine visits declining as practices reopened. As of mid-July, telehealth visits, as a  percentage of national ambulatory visits, declined to 21.2 percent compared to 78.8 percent in-office. 

The new EHRN study used a broader sampling than previously. They surveyed healthcare providers of data: 37 healthcare organizations representing 203 hospitals and 3,513 clinics in 50 states. The decline in telehealth visits noted in early May continued, with May finishing with a national 50/50 split.

But in context, telehealth visits immediately before the COVID-19 pandemic were a whopping .01 percent

Regionally, the Northeast leads in July telehealth visits with 25 percent. The South has the least adoption of telehealth with only 13 percent. In terms of total office visits, neither the South nor West have rebounded to pre-pandemic levels, whereas the Northeast and Midwest have.

The key to the future of the telehealth bubble bath is if telehealth usage versus in-person stabilizes for several months. But there’s another factor which has come about through higher telehealth usage. Noted in our July article was speculation on the reasons why the sudden decline, other than practices reopening, most of which pointed to practice training, reimbursement, and older/sicker patients falling into the smartphone/digital divide. The STAT article has statements from telehealth providers which are quite bubbly and quotable, with the CEO of MDLive stating that new bookings are up 300 percent and mental health hasn’t declined. But a problem now surfacing is providing patients with the right care at the right time–and fitting it into the office schedule. What visits can best be handled as telehealth and which require an in-person visit? This Editor recalls that Zipnosis, a white-labeled telehealth system we haven’t heard from in a while, incorporated for health system applications a triage intake which would direct the patient to the right level of care. Can this be rolled out in a similar way to the practice level?

Is the NHS ready to adopt telemedicine through and through–and is telemedicine ready?

This analysis by Dominic Tyer in Pharmaphorum discusses the rapid adoption of telehealth during the COVID pandemic, both telephonic and online, to keep people in touch with their doctors. Health Secretary Matt Hancock quantified the changes wrought as “I’ve lost count of the number of times someone said to me: ‘what would have taken months took minutes’.” The article goes on to quote him as saying that COVID-19 has “catalysed deep structural shifts in healthcare that were already underway”, citing as examples data-driven decision-making, working as a system, and telemedicine. In fact, to Secretary Hancock, “From now on, all consultations should be teleconsultations unless there’s a clinical reason not to.”

For all the advances, Mr. Tyer points out flaws such as safeguarding sensitive health issues, particularly for young people, use by rare disease patients and those with a genetic condition, and reaching the 10 percent of the population who do not use the internet. All of these are significant. He concludes that “in the UK there’s clearly the political will and healthcare backing for wider use of telemedicine by the NHS, despite some, as-yet not entirely resolved, technological and safety issues.”

Will the UK revert to ‘underuse’, as the US has rolled back as well as practices have reopened? (What is ‘underuse’ defined as anyway?) Will these issues be resolved or ignored in a push forward for telehealth? And teleconsultations as a norm, with in-person an exception, is perhaps at this time, and in improving health outcomes, an overreach? Hat tips to Roy Lilley of the nhsManagers.net newsletter and Steve Hards

QuivvyTech: a ‘telehealth’ company, sued by Humana in telemarketing scheme (US)

It was inevitable–the first alleged fraud and lawsuit involving a ‘telehealth’ company. The interestingly named QuivvyTech, which has styled itself as a telehealth company with “virtual care in general medicine, mental health, and complex care”, has been sued by insurance giant Humana. The grounds are that QuivvyTech telemarketers cold-called Humana members, who are generally members of Medicare plans, asked them about common ailments, and claimed they were working with Humana. They then recorded information that was sent to QuivvyTech physicians who would prescribe the members pricey and unnecessary creams (content undisclosed) fulfilled by co-conspirator pharmacies with QuivvyTech. The physicians listed in the suit electronically signed prescriptions for the members without reviewing patient history or having a prior relationship with the patient.

Humana not only is alleging harm in the payer-member relationship, but also lost millions in fraudulent claim payments for visits and medications. 

The lawsuit by Humana seeks treble damages, plus interest and fees, from QuivvyTech. It was filed in the US Southern District of Florida as many of the scammed members lived in Florida. QuivvyTech is based in Boca Raton.

Defendants in the suit include Frank Michelin, associated with QuivvyTech; Reliable Medical Supplies and Reliable Document Solutions, a telemedicine company with about 200 physicians; and physicians Jeffrey Mahon, MD, Elie Hercule, MD, Samuel Teniola, MD, Louis Mojicar, MD, Ananda De Silva, MD, and Jeffrey Stern, MD.

One wonders where QuivvyTech obtained Humana members’ phone numbers and information. 

QuivvyTech is still recruiting for physicians on job boards such as ZipRecruiter and StaffPhysicians.com. Becker’s Hospital Review, Healthcare Finance, Fierce Healthcare