Medicare ACOs Leverage Telehealth to Manage Costs and Share in Savings

Medicare Accountable Care Organizations (ACOs) are increasingly leveraging telehealth and Remote Patient Monitoring (RPM) to enhance care coordination, improve patient outcomes, and reduce healthcare costs.

These solutions constitute a powerful combination where telehealth delivers timely access and RPM provides continuous monitoring.

Their value was proven during the COVID-19 pandemic when 55% of Medicare beneficiaries in urban areas and 44% in rural areas used telehealth. During that same period, RPM use increased by 555%.

Increased adoption of telehealth and RPM helped Medicare ACOs realize three areas of savings:

• 8.3% decrease in per capita spending
• 14.6% reduction in acute inpatient spending
• 7.5% decrease in outpatient costs

In light of telehealth extensions in 2025, which could be made permanent, ACOs can achieve four outcomes through the continued adoption of telehealth and RPM together via streamlined operational workflows, automation technologies, and standardized software:

• Reduce high-cost care channel utilization
• Cut readmission rates
• Improve treatment adherence
• Intervene sooner and reduce exacerbations

These four objectives are essential for ACOs to meet their Medicare Shared Savings Program (MSSP) targets and reap their reward from a record $3.1 billion in shared savings payments in 2024 and the $21 billion in gross savings ACOs have achieved since 2012.

Reducing high-cost utilization and readmissions

Telehealth is becoming an essential feature of value-based care, while RPM is enabling continuous care at a distance.

Providers can help keep patients at home and avoid high-cost care channels, such as emergency department (ED) or urgent care visits, hospital admissions, or skilled nursing stays. RPM alone is projected to save healthcare $200 billion over the next 25 years.

Telehealth and RPM have been shown to deliver several utilization benefits, including:

• Triage patients to the most appropriate and cost-effective care setting
• Proactively monitor conditions and avoid acute care
• Avoid unnecessary visits
• Reduce no-shows

Real-world examples highlight the value of using telehealth to avoid costly care 

• Remote Patient Monitoring, provided through telehealth, enables early detection of potential complications or new symptoms, which can lead to timely interventions. Michigan Medicine reduced hospitalizations by 59% for its high-risk patients by using RPM.
  
  
• An RPM program for patients with heart failure demonstrated a 52% monthly cost savings for Medicare beneficiaries, primarily reducing the most significant portion of costs associated with ED visits, hospitalizations, and nursing home stays.
  
  
• One study estimated that virtual care could substitute for up to $250 billion of current healthcare spending.
  
  
• Research has shown that nearly 70% of patients would seek treatment via a more expensive care channel if telehealth were not available.
  
  
• Even a pre-COVID study found that patients who used telehealth had 17% lower costs and experienced a 36% net reduction in emergency care use.
  
  
• One initiative used RPM and virtual consultations as part of a remote care management program for patients with CHF and COPD, achieving a 75% reduction in hospital readmissions.

Improving treatment adherence

Various research studies demonstrate that telehealth and RPM can improve patient participation and adherence to treatment plans.

This is particularly important for senior adults living with hard-to-manage or multiple chronic conditions where treatment protocols overlap and may even conflict.

• For example, heart failure deaths have risen in the US due in part to increased diabetes and hypertension. The most challenging aspect of treating this trifecta of conditions is that the evidence-based clinical standard, including four medical therapies, is only followed by 3% of patients.
  
  
• A study using telehealth and RPM technologies increased the number of patients on all four from 7% to 23%. Patient outcomes improved, and the ACO saved 52% on per-member per-month (PMPM) costs, which was primarily attributed to fewer hospital stays and post-acute spending.
  
  
• Another example is NYU Langone Health, which has offered a home-based monitoring program for hypertension for more than 11,000 patients. Through the cardiology division, the health system realized an average ROI of 22.2% with 55% patient compliance, which is considered outstanding for a high-complexity program of this kind. More compliant patients helped the ACO realize ROI as high as 93.3% per patient.
  
  
• In addition to enabling higher treatment participation that can lead to lower care costs, telehealth and RPM have been shown to improve no-show rates. Providers consistently report lower no-show rates when using telehealth. This is particularly true for behavioral health visits, where research has found rates as low as 4.4% compared to the typical range of 19-22%. Some clinics achieved rates of 3.8%.

CMS has estimated that telehealth alone saves Medicare patients $60 million in travel costs, projecting $170 million in reduced annual costs by 2029.

A 2023 study evaluated an ACO-based, pharmacist-led telehealth intervention, demonstrating that improving medication management for clinically complex patients could also result in cost savings. The program generated a PMPM of $2,331.85 over the first 6 months.

Intervening sooner and reducing exacerbations

Telehealth and RPM enable ACOs to achieve improved outcomes at lower costs by allowing timely interventions and reducing acute disease exacerbations.

Many of the patients ACOs enroll in telehealth, RPM, and care management programs are sicker at baseline. Providing ongoing clinical monitoring, management, and engagement allows providers and their care teams to be alerted to significant changes in status and act accordingly.

Improved access, guided by critical and time-sensitive information, represents a new level of leverage that providers can use to slow disease progression overall and prevent further complications.

ThoroughCare delivers telehealth and RPM technologies to manage Medicare ACO costs better

Introducing and managing technologies like telehealth and RPM, alongside care management programs such as Chronic Care Management, Principal Care Management, or Advanced Primary Care Management, requires operational standards and clinical workflows that equip ACOs to oversee successful services.

Streamlined workflows and automation have been shown to significantly influence RPM and telehealth ROI.

ThoroughCare helps ACOs achieve cost-efficiency goals through utilization, patient engagement, and disease management via care coordination software, consulting services, and staff training. Equipped with standardized processes, policies, and technology, care teams can effectively monitor more patients.

Key questions answered

How can Medicare ACOs use telehealth to improve care costs?

Telehealth and Remote Patient Monitoring have been shown to help ACOs control costs by achieving four outcomes, including:

• Reducing high-cost care channel utilization
• Cutting readmission rates
• Improving treatment adherence
• Intervening sooner and reducing exacerbations

Through technology, operational standards, and clinical workflows, ACO care teams and care management services provide ongoing monitoring and the opportunity to avoid clinical complications, improve patient engagement, and reduce high-cost care utilization.