ROI of RPM CCM and RTM :

The best way to calculate return on investment (ROI) for remote patient monitoring (RPM) , Chronic Care Management (CCM) and Remote Therapeutic Monitoring (RTM) depends on the use case of the organization or practice in the healthcare industry.

There are a number of different inputs that have to be considered in order to evaluate this all-important metric.

It’s good to be as comprehensive as possible. The ROI equation becomes more complicated as the number of cost and revenue variables increase. But it also becomes more accurate.

A lengthy ROI equation accurately portrays how much revenue a hospital, clinic or private practice can expect to make, and the total costs it can expect to incur.

Due to the fact that any one particular equation will not satisfy the context of a particular organization or situation, we wanted to look at all the factors that could potentially affect revenue and costs in RPM.

To understand the ROI of RPM, CCM and RTM, we have divided this article into two sections, return and investment.

Return (Total revenue + savings)

RPM Return (Total revenue + savings)

The return section consists of all gains you can expect from setting up RPM capability at your organization or practice.  There are different types of returns. We look at the revenue generated, savings made, and other indirect advantages that are obtained from investing in an RPM system.


RPM Revenue

The revenue made from RPM depends on the number of eligible patients enrolled in RPM, RPM+CCM (chronic care management), or RTM (remote therapeutic management). All of these services may be furnished by setting up the right devices and monitoring subsequent patient data.

It also depends on how many additional minutes of care each patient needs each month, the complexity of the care received, and if they receive the care for the entirety of the year.

It’s good to be conservative with these estimates because overestimating them will lead to false reassurances.

For the sake of foresight, it’s helpful to plan for a year’s worth of operations. It forces us to look past any instabilities or fluctuations in numbers on a month-to-month basis, and calculate the ROI for a whole year.

It is also a fair amount of time to calculate the ROI, as there are always more fixed costs in the form of device purchases in the first month. A realistic depiction of the ROI can be considered only after enough time has passed after the initial recoupment of the fixed cost.

We will thus provide a revenue estimation for a year. However, it’s helpful to keep in mind that the yearly ROI is supposed to increase over the course of many years as the number of patients increases.

If the quality of the RPM devices and RPM software is up to par, then it will last for a considerable amount of time before needing any maintenance or repairs. Even on the off chance that it does, a lot of RPM companies will eat that cost as a part of the device and software monthly supply.

The number of eligible patients you can enrol is the single most important variable that determines the ROI.

We now consider the minimum yearly average revenue for one patient from the three revenue streams. RPM, CCM and RTM.

It’s possible to generate income from these three different streams with the purchase and set up of the right RPM devices and a RPM software that will be used to receive data and manage patients.

The Minimum Avg. Yearly Revenue from RPM for One Patient

CPT 99453 is for RPM device set-up and patient education. The average reimbursement rate for this code is $18.77

CPT 99454 is for supplying the RPM device for daily recording or programmed alert transmissions. The patient must use the device at least 16 days/month. The average reimbursement rate for this code is $62.44

CPT 99457 is for the initial 20 minutes of data interpretation. The average reimbursement rates for this code are $32.84 (for facility) and $51.61 (for non-facility).

Therefore, Avg yearly reimbursement from RPM for a patient = $18.77 + 12($62.44 + $51.61) = $1390 (Rounded to the nearest 10th)

The Minimum Avg. Yearly Revenue from CCM for One Patient

CPT 99490 is for at least 20 minutes of clinical staff time per calendar month. The average reimbursement rate for this code is $64.

Therefore, Avg yearly reimbursement from CCM for a patient = 12($64) = $768

The Minimum Avg. Yearly Revenue from RTM for One Patient

CPT 98975 is for initial RTM device set-up and patient education on the use of equipment (e.g. respiratory system status, musculoskeletal system status, therapy adherence, therapy response). The avg. reimbursement rate for this code is $19.38.

CPT 98976 is for supplying the RTM device for daily recording or programmed alert transmissions to monitor the respiratory system for 30 days. The avg. reimbursement rate for this code is $55.72.

CPT 98977 is for supplying the RTM device for daily recording or programmed alert transmissions to monitor the musculoskeletal system for 30 days. The avg. reimbursement rate for this code is $55.72.

CPT 98980 covers the first 20 minutes of RTM treatment, physician/other qualified health care professional time in a calendar month requiring at least one interactive communication with the patient/caregiver during the calendar month. The avg. reimbursement rate for this code is $50.18

Therefore, Avg yearly reimbursement from RTM for a patient = $19.38 + 12($55.72+$55.72+$50.18) = $1960 (Rounded to the nearest 10th)

Different patients will be billed for different codes, but all codes can also be billed together for a single patient.  We can make our ROI calculation easier, by estimating the total revenue that can be generated from 1 patient In reality, the organization or practice will have a particular patient mix. Some patients will need chronic care and require RPM devices that measure vital signs, and others will need remote therapeutic monitoring and require devices that measure sleep and mobility.  Since we do not know about the particular patient mix of the organization, we can assume for the sake of ROI calculation that they will see 100 patients, and all 100 of them will be connected to two RPM devices (the avg. number of devices per RPM or CCM patient), and two RTM devices (1 for respiratory care, and 1 for musculoskeletal care)

Total revenue from 100 patients annually = 100 x ($1960+ $768+ $1390) = $411800


RPM Savings

Besides generating revenue, savings is another source of return for RPM. The good thing about RPM, CCM and RTM services are that they offer ongoing value for a set fee. It promotes continuous value for the patient for a fee, which is the monthly reimbursement.

But whether future incidents that happen to the patients are a source of revenue or cost depends on the healthcare model.

In a fee-for-service model, the incidents will go in the revenue column. But in a value-based care model, these incidents will be a source of costs for the healthcare facility or the practitioners, since care is tied to value and not volume.

Investing in an RPM system and service helps to achieve this, where the reduction of these incidents is a major source of savings.

In particular, RPM has been shown to reduce:

  • Costly ER admissions
  • Costly readmissions
  • Other post-discharge utilizations

There are other cost-savings as well which come from delivering care in a lower-cost environment that uses automation, as RPM does. By streamlining the patient journey and experience, professional costs can be reduced where midlevel providers can be employed to do the job instead of more expensive providers.

How much the savings factor plays into the ROI equation will ultimately depend on the payment model used by the health system.

Those using value-based care will have an incentive to reduce overall medical spend, whereas those using primarily a fee-for-service model will be more oriented towards driving volume. Annual cost savings of approximately $8000 per patient has been reported from studies done on heart failure patients. For diabetes patients, cost savings of $3400 per patient has been achieved.

There are many such reported cost savings, but because they will vary so much by organization, we are not including it as a part of the ROI calculation.

Indirect Gains

Indirect Gains

Besides revenue and savings, there is a third category of return when investing in RPM. We are labelling it as Indirect gains because they are moderated by some other factor that lies between RPM implementation and the actual monetary returns. They are listed below.

Improved Patient Experience

Reducing the likelihood of readmission and post-discharge visits increases member satisfaction. The new and improved patient experience leads to more loyalty. It also improves payer quality scores.

Healthcare Effectiveness Data and Information Set (HEDIS) is a comprehensive set of standardized performance measures designed to provide purchasers and consumers with the information they need for a reliable comparison of health plan performance. 

More patients opting for the particular health system or practice employing RPM is good for the brand. It drives popularity amongst patients in what is a very competitive healthcare market in the US.

Improved Patient Outcomes

Running an RPM program ensures the collection of more health data, which is invaluable in determining the best possible outcome for the patient.

As patient data is being recorded for at least 16 days a month, it’s possible to see any fluctuations in real-time. The medical team is able to monitor their condition closely.

Also, patient adherence is improved as patients know that they are obliged to send back data. Greater adherence to treatment plans results in more positive outcomes.

Improved Efficiency of Care

Perhaps most importantly, clinicians are able to care for more patients via RPM. They are able to outsource some activities such as the patient’s monthly interactions to a third party, while continuing to manage each patient.

Clinicians have a limited amount of time a day, and so the increased efficiency an RPM program provides allows them to see other patients, regardless of whether they use RPM or not.

This in turn translates into more revenue for the healthcare organization due to the greater capacity.

As with savings, the indirect gains will differ so much between each organization according to the nature of their operations. As such it too will be left out of the ROI equation, but we wanted to mention it to show the full breadth of revenue considerations.

Thus, the total minimum annual return for 100 patients from a RPM system is $41100.

That’s the minimum return because we are not considering the change in patient acuity levels.

Investment (Total Costs)

Investment (Total Costs)

Thus far, we have calculated the return portion of the ROI equation. Let’s now dive into the investment, that is, the cost of generating those returns.

For a just comparison, we will also calculate investments on an annual basis and per patient, since the same time frame and unit respectively were used to calculate the return. This is the annual cost, that is, the total amount that would need to be invested per patient annually.

We will subtract the total cost from the return identified in the previous section to arrive at the net return. This is the return made after all associated costs have been accounted for. We would then divide this net return by the total cost to find the ROI.

Your investment in RPM depends on how much of the work you want to do versus how much of it you want to outsource.

A full-service model includes all of the following:

  • Device supply
  • Device setup
  • Patient Education
  • Data Collection
  • Data Review
  • Patient Interaction

A very common supply agreement is to provide the device, provide patient education, and ensure that patient data is being monitored remotely. But reviewing that data and following up with the patient every month is left up to the provider and the medical team.

Whether you want to go with a full-service model depends on the availability of your current staff. Obviously, hiring new staff will negatively affect your ROI as the total costs will shoot up.

For purposes of calculating the ROI, it is expected that the organization or practice employs the physicians who are already practicing in the organization and already have the medical assistants in place who can be supervised by the licensed clinicians.

Primarily, there are two types of costs in any RPM system. Cost of RPM devices and cost of setting up the program and running it. We will cover each below.

Cost of RPM Devices

Cost of RPM Devices

You can either lease or buy RPM devices. Prices are very transparent because each of the devices is available for purchase separately. They are normally included as a part of the RPM package, where it is cheaper because the unit costs are driven down for the RPM companies due to purchasing power leverage.

Prices range from $20 to $100 depending on the price and quality of the device, be it a glucose meter, pulse oximeter, or blood pressure cuff. It’s very easy to see the price of any of these devices, as they are listed so openly on so many websites.

As we calculated our returns for 100 patients, assuming each patient is connected to 4 devices, we will consider 400 devices for this part of the cost equation.

Just as we have used conservative measures when calculating the return, we would like to assume the most expensive price when calculating the costs. Doing so minimizes our risk and leaves room for error in case of the worst business case scenario.

Total annual cost of RPM devices = 400($100) = $40,000

Cost of RPM Set-Up and Ongoing Connection

Cost of RPM Set-Up and Ongoing Connection

This is the part of the RPM cost equation that is less transparent. Different RPM companies like to charge set-up and ongoing data supply at different rates depending on what is on offer.

Here is a list of things the availability of which could make the service portion of an RPM system more expensive.

  • Two-way Communication
  • Enrolment Feature
  • Reporting Capability
  • Integration Capability (both with device and EHR)
  • Time Logs
  • Billing Support
  • Care Plans
  • User Activity
  • Workflow Template
  • Data Analytics
  • Auditing Function

RPM companies will charge more per patient as these features are added on.

By being in this business and by browsing the websites of many RPM companies that have prices listed, we can tell you that the average monthly price per patient is $50. This comes to $600 annually.

However, we have collected an assortment of price quotations from research papers to understand the range of annual pricing per patient.

The installation and RPM software implementation for one connected device can range from $140 to $3220 annually according to one source.

Software Advice lists the annual costs per patient as $1000 to $2000.

The annual cost of RPM per hospital bed is said to be $1600.

In a systematic review of 13 studies, it was found that the combined cost of equipment purchasing, servicing and monitoring the patient ranged from $275 to $7963.

In the papers mentioned above, we see that there is a wide range of costs. In many instances the purchase device of the costs are also included, and in some cases professional staff expenses are included as well.

To understand just the costs of maintenance, and knowing what we know about the avg. annual price per patient, it makes more sense to average the bottom range numbers. When we do that, it comes to $(140+1000+1600+275)/4 = $753.75

For a 100 patient annually, this is $75375

Thus the total RPM investment cost per year for a 100 patients is = $75375 + $40,000 = $115375

The ROI of RPM Revealed

The ROI of RPM Revealed

Based on our total return and total investments, the net return is $411,800 – $115375 = $296,425 Thus the ROI is ($296,425/$115,375) = 2.57

So by investing in RPM, you can expect to make back two and half times the money invested in the first year, and depending on patient intake and churn the following year, this ROI can only improve.

This ROI is extremely cautious, because it assumes all patients will have the same acuity level, which is rare. As mentioned earlier, it also does not account for any cost savings or revenue generated from greater patient loyalty or value-based health outcomes.

View more : Remote Patient Monitoring

While it’s true that the professional expenses have not been accounted for, it’s known that a single care manager is capable of managing 250 patients a year and commands a salary of $40,000. Thus for 100 patients, such a role can be outsourced and performed at a cost of $16,000 a year. This cost of $16,000 would be easily offset by the revenue gains and cost savings, and so can be reasonably left out.

As demonstrated in this ROI exercise, RPM is a great investment. It’s why adoption amongst medical practices is set to increase from 57% to 76% in a recent survey conducted. If you are looking for exact device and monthly servicing costs, Humhealth is very transparent in its pricing page.

With the framework used in the ROI article, you can use the info listed in Humhealth’s pricing page to calculate your own ROI. But as our ROI calculation suggests, it’s very safe to assume that it will at least be 2.5.

If you have any questions, please contact us at info@humworld.com







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