OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http://www.cga.ct.gov/ofa

SB-298

AN ACT CONCERNING TELEHEALTH SERVICES FOR MEDICAID RECIPIENTS.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 17 $

FY 18 $

Social Services, Dept.

GF - Uncertain

See Below

See Below

Note: GF=General Fund

Municipal Impact: None

Explanation

There will be a fiscal impact to the Department of Social Services (DSS) to provide Medicaid coverage for telehealth services. The state's Medicaid program does not currently provide telehealth services or have a telehealth reimbursement policy. The impact will depend on (1) the extent to which telehealth will be utilized by clients, (2) the impact of telemedicine on total overall utilization of services covered by Medicaid, and (3) patient outcomes.1 The bill also requires the commissioner to report to the General Assembly on telehealth, which does not result in a fiscal impact.

Various case studies have suggested net health care savings from telehealth/telemonitoring, primarily resulting from reduced hospital readmission, particularly for individuals with chronic diseases. It is important to note, it is uncertain from the following case studies what the upfront technology and personnel costs were and the time lag before a return on investment was realized through a reduction in overall health care costs.

Case 1: The Partners HealthCare program out of the Center for Connected Health did a study on their telehealth/telemonitoring program for individuals with cardiac disease and reported net savings over a seven year period of approximately $10 million for 1,265 patients (net savings per patient of $8,155).2 The Partners' program savings included participants predominately enrolled in public programs (e.g. Medicare, Medicaid and the state's safety net program).

Case 2: The Veterans Health Administration (VHA) started its telehealth program as a multisite pilot program and as of 2010 had over 300,000 lives in its Care Coordination/Home Telehealth Program.3 The VHA reported cumulative net benefits of $3 billion since the program's inception in 1990. Savings are attributable to a reduction in redundant services and improved quality and health outcomes. The VHA program provides biometric information to remote monitoring care coordinators for individuals with various conditions, including heart failure, diabetes and Post Traumatic Stress Disorder (PTSD). The VHA reports annual costs per patient of $1,600.

The Out Years

There may be savings to the state in the future depending on the health outcomes of participants and any changes in the utilization of services.

1 The State Innovation Model (SIM), which includes Medicaid, is reviewing telemedicine.

2 Source: Broderick, A., (2013). Partners HealthCare: Connecting Heart Failure Patients to Providers Through Remote Monitoring. Case Studies in Telehealth and Adoption; The Commonwealth Fund.

3 Source: Broderick, A., (2013). The Veterans Health Administration: Taking Home Telehealth to Scale Nationally. Case Studies in Telehealth and Adoption; The Commonwealth Fund.