Telemedicine comes to rural California in Blue Cross demonstration project

Five specialty facilities and 37 primary care clinics in rural California are linking up in what organizers say is the first time a commercial health plan has been funded to establish a telemedicine program.

With $2 million in grant funds from California’s Managed Risk Medical Insurance Board, Wellpoint, the for-profit parent of Blue Cross/Blue Shield of California, is installing hardware, phone lines, and infrastructure needed to link Medi-Cal and Children’s Health Insurance Pro gram (CHIP) providers and patients in 23 of California’s 58 counties.

"If you understand how telemedicine is delivered and see it in action, you see this is the wave of the future," says Dawn Wood, MD, medical director in California for Blue Cross’ Medi-Cal and CHIP programs.

At full implementation, telemedicine services will be available to about 45% of Blue Cross’ half-million Medi-Cal enrollees through a variety of live and off-line audio and video modalities. Specific installations will be determined by the particular needs of a patient population. Tools available include an ophthalmoscope and dermascope, with the use of an electronic stethoscope, Ms. Wood said. Radio logy, the mainstay of many telemedicine projects, will take a back seat—at least at the start of the project—to the primary care-related services.

Telemedicine services also will be offered in the project counties to those who sign up with Blue Cross to get coverage from California’s fledgling CHIP, the Healthy Families Program.

Adequate reimbursement is crucial in getting physicians to sign on to the telemedicine project. Blue Cross project manager Nicolette Worley says the health plan’s reimbursement structure is more generous than that of Medi-Cal, which places significant administrative demands on physicians to be reimbursed for store-and-forward consults.

While Medi-Cal generally splits a single telemedicine fee 25/75 between the primary care and specialist physician, Ms. Worley says Blue Cross, by comparison, will pay standard office visit rates to both the referring and specialist physician, regardless of whether the consult is conducted live or is a review of data that are stored and forwarded to the consulting physician for later review.

The company also will help subsidize the telephone charges of primary care physicians who initiate a live consult, particularly important for a mental health counseling session or a similarly lengthy visit.

"Telemedicine isn’t going to happen unless you pay the people who are involved in it," says Ms. Wood. "It does increase the cost of a consulting visit through telemedicine, but we feel overall this is going to deliver better care."

Blue Cross doesn’t know exactly how many primary care telemedicine visits it will pay for in the project, but hazards a very rough estimate of about 400 primary care referrals per month at $15 each. "We’re not talking about a lot of money here," acknowledges Ms. Wood. Project managers says even if telemedicine increases the rate of referrals to specialists, they expect the savings from early detection and treatment of diseases will produce long-run costs savings for them and their enrollees.

"Our role is to figure out how to make it cost-effective," Ms. Wood says. "Even though right now I can’t say to you, This is how it’s going to be cost-effective,’ my belief is that this will be a cost-effective technology."

Initial installation of the telemedicine hardware is done at no cost to the participating primary care clinics and the five "hub" specialty facilities: Childrens' Hospital Los Angeles, Cedars Sinai Medical Center in Los Angeles, Pediatric Diagnostic Center in Ventura, the University of California-Davis campus in Sacramento, and Eureka Pediatrics. The primary care clinics range in size from one physician and one nurse practitioner to a clinic with 10 primary care physicians. Many of the primary care sites are organized through the Northern Sierra Rural Health Care Network.

Additional specialty clinics may be added, but probably will be asked to bear the cost of the technology themselves, says telemedicine project manager Kathleen Brown.

"We believe that if we bring the specialists the members, they are going to pay their own way and join up," says Ms. Brown. "Almost every day I’m contacted by another group of specialists who are interested in providing services."

Although Blue Cross’ reimbursement obviously is limited to services for its own members, the hardware is available for patients in any health plan.

Blue Cross’ managed care networks are unlikely to interfere with the development of telemedicine referrals within the plan, says Ms. Wood, because only 20% of the company’s members are served by capitated provider groups.

Five specialist areas were targeted for the telemedicine rollout: dermatology, endocrinology, mental health, orthopedics, and neurology. Long-standing shortages in some clinical areas, e.g., dermatology and orthopedics, helped define the project design. In some cases, shortages are particularly acute in defined geographic areas or among providers fluent in certain languages.

Reimbursement was only one of several obstacles that Blue Cross anticipated in establishing the network. Project managers have sought to make the technology easy and quick for both physicians and other providers at both the sending and receiving ends of the consult. A third problem, overcoming primary care physicians’ fear that they will lose their patients to urban specialists, is a bit tougher.

"The way to address that is to get the physicians to aggressively participate and see that this does nothing but help their practice, and, in fact, because they have access to telemedicine subspecialty services, they are perceived as the provider of choice in that community," says Ms. Brown.

Counties are scheduled to come on-line with the project throughout the summer, though in what order depends upon a complication Blue Cross had not anticipated: the ability of local phone companies to string high-speed integrated services digital network (ISDN) lines to the rural clinics.

The rural demonstration project runs for one year, after which Blue Cross has the option of discontinuing the effort, applying for additional funding, or shouldering the burden on its own. Project managers expect a positive outcome, though, and already are considering how to tackle the next major hurdle: state laws that prohibit interstate telemedicine consults without state-specific licensure.

"The states will need to be the ones to take the lead because the professional organizations tend to be state-oriented," Ms. Wood says.

Contact Ms. Wood at (805) 384-3510.