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A handful of telehealth companies are dipping into payment systems that reward them for keeping patients’ costs low and penalize them for overspending — a potentially risky move for companies still finding financial footing, but one that could win them favor with large health plans and employers.

These companies are negotiating new contracts that give them a bigger financial stake in patients’ care. They can shoulder that risk in a number of ways, such as by covering the full cost of patients’ care up front and pocketing the savings, or by betting that their offerings can drive down costs and splitting the savings later. These types of contracts are a departure from fee-for-service, a system that reimburses providers a set fee for doctor’s appointments or procedures and has long been a mainstay of both brick-and-mortar medicine and telehealth. The riskier approach also reflects the need to find novel ways to get paid for a bevy of telehealth offerings that don’t fit traditional billing models, like in-app messaging and automated reminders to check vital signs.


“Many of these companies have a model where they’re having lots of touch points [with patients],” Harvard health policy professor Ateev Mehrotra, who studies telehealth insurance claims, said. “Payments for a visit doesn’t really make sense in that view.”

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