Using Telehealth to Prevent Readmissions

Hospitals can lose up to 3% of Medicare payments when certain patients return

Preventing unnecessary hospital readmissions has been a top priority of hospitals and physician executives since the Centers for Medicare & Medicaid Services (CMS) began reducing reimbursement for them in 2012 as part of the Affordable Care Act (ACA). Today hospitals can lose up to 3% of their Medicare payments if patients admitted to the hospital for one of five conditionscongestive heart failure (CHF), heart attack, pneumonia, chronic lung problems like emphysema, bronchitis and chronic obstructive pulmonary disease (COPD), and elective hip and knee replacementsreturn within 30 days of discharge.

The American Hospital Association (AHA) estimates that unnecessary readmissions cost U.S. hospitals $26 billion; more than half of all hospitals were fined last year. The numbers tell the story: 1 in 5 readmissions is unplanned; 2 in 4 CHF patients is readmitted, along with 1 in 5 COPD and pneumonia patients.1 With the average cost to a hospital for each of the five conditions ranging from $11,000 to $13,000, reimbursement penalties can add up quickly.2

This is just the beginning. Pay for performance (P4P) and risk-based contracting will only increase as U.S. healthcare moves away from fee-for-service to a value-based care model.

Figure 1: Key Components of a Next-Generation Telehealth Solution
Figure 1: Key Components of a Next-Generation Telehealth Solution

Accountable care organizations (ACOs) will become the governance structure for managing the health of populations, with special emphasis on the high-risk chronically ill.

As an interventional cardiologist, I have given much thought on how to improve efficiency and efficacy for the health management of large populations, especially the chronically ill. Shifting from the traditional one-on-one clinical encounter to the massive scale of population health will require imaginative use of information technology and telecommunications. It will require a 21st century telehealth approach that spans the continuum of care from acute-care hospital rooms to physician offices, schools, public health agencies and ultimately the home.

CHF patients are some of the most at-risk populations for unnecessary hospital readmissions. As a member of the executive committee of the American College of Cardiology’s initiative H2H (Hospital to Home), an initiative aimed at reducing hospital readmissions, I am part of a team studying the use of advanced telehealth solutions to help achieve this goal. We are finding that telehealth greatly helps engage patients in managing their own health.

A 2015 study of mobile, web-based telemonitoring of CHF patients who used tablets to self-manage their disease found that 95% felt more connected to their care team and more confident in performing care-plan activities. Also, 90% felt better prepared to start discussions about their health with their doctor.3

Real-World ROI

As researchers reaffirm telehealth’s significance in transforming the delivery of care, disease monitoring and patient management, adoption of telehealth solutions by healthcare providers is beginning to increase. Nearly 30 states have extended the equivalent of Medicaid telemedicine coverage to private insurance. CMS now reimburses 38 telehealth procedure categories and 88 telehealth procedure codes. For physicians this means a valuable new funding source with billing codes to encourage the adoption of telehealth solutions in a variety of care settings.

That’s not all. New CMS codes also reimburse non-face-to-face chronic care management for at least 20 minutes of staff time a month for each enrolled patient, specifying guidelines for what patients are eligible and what services are covered.  The reimbursement rate averages $40 per patient per calendar month or about $500 per patient annually. The new rule recognizes that chronically ill patients were often managing their own care between physician visits because providers were not reimbursed for care that is not face-to-face.   

By using telehealth to help manage chronically ill patients, a hospital can exploit an opportunity for real-world return on investment (ROI) through cost avoidance by reducing readmissions. A well-designed telehealth solution with cloud subscriptions for 100 tablets, for example, at a hospital treating 100 CHF, 50 heart-attack, 75 COPD, 150 pneumonia, 200 hip-replacement and 10 knee replacement patients each month can cut their readmission rates by 44% within three months and save as much as $26,553,264 during the four ensuing years.4

What’s Ahead

We are entering an era of convergence. New reimbursement models such as value-based payment, new care models like patient-centered population health, digital technology, telehealth and big-data analytics are coming together to properly align financial incentives with the mission of care.

Next-generation, mobile and cloud-based telehealth solutions connect physicians, patients and other members of the care team in an integrated platform to support the continuum of care for population health and value-based healthcare. See Figure 1. A well-designed, next-generation telehealth solution needs to achieve five goals:

  • Clinical accuracy
  • Facilitates FDA clearance
  • An integrated, connected system that’s portable and easy to use by clinician or home users
  • Meets cybersecurity and HIPAA compliance
  • Easily scalable for adoption by the healthcare industry
  • When it comes to managing chronically ill populations, a next-generation telehealth solution should be built upon a foundation of an acute-care-ready medical tablet and secure video conferencing with simultaneous health-data streaming to provide in-office exam quality for clinical care anytime, anywhere.


  1. American Hospital Association Trend Watch March 2015 Lochner KA, et al. (2013). Multiple Chronic Conditions Among Medicare Beneficiaries: State-Level Variations in Prevalence, Utilization, and Cost, 2011. Medicare & Medicaid Research Review
  2. Telemedicine and e-Health: Is Telemedicine the Answer to Reducing 30 Day Readmission post MI Sept. 20014 Healthcare Cost and Utilization Project—COPD 2011 Hospital Readmission Rate in Medicare Advantage Plan February 2013
  3. Patient Engagement With a Mobile Web-Based Telemonitoring System for Heart Failure Self-Management: A Pilot Study, Zan S, Agboola S, Moore SA, Parks KA, Kvedar JC, Jethwani K Patient Engagement With a Mobile Web-Based Telemonitoring System for Heart Failure Self-Management: A Pilot Study JMIR mHealth uHealth 2015;3(2):e33 DOI: 10.2196/mhealth.3789
  4. Telemedicine and e-Health: Is Telemedicine the Answer to Reducing 30 Day Readmission post MI Sept. 20014 Healthcare Cost and Utilization Project—COPD 2011