The Centers for Medicare and Medicaid Services (CMS) recently enacted modest but important expansions in Medicare’s telehealth policy.
Telehealth, which uses telecommunications to support virtual health care delivery to improve access to and quality of health care, is moving from promise to reality. The benefits are appealing: Patients can interact with their providers remotely, which improves access to care and can help providers manage chronic conditions from afar.
However, a number of federal policies hinder its proliferation in Medicare. As a result, only one-quarter of 1 percent (0.25%) of beneficiaries — or 90,000 people with fee-for-service (FFS) Medicare — used about 275,000 telehealth services in 2016.
The limited use of telehealth in Medicare is largely driven by requirements that restrict telehealth coverage to beneficiaries residing in rural areas and to services performed at authorized “originating sites,” which typically do not include a beneficiary’s home. These limitations, CMS acknowledges, reflect the fact that the Medicare telehealth benefit was implemented nearly 20 years ago. Since then, any potential expansion of the benefit has been shaped in part by the Congressional Budget Office’s (CBO) history of “scoring” telehealth expansion proposals as potentially high-cost, under the assumption that providers would deliver telehealth in addition to in-person services for the same episode.
However, recent federal policy changes suggest a broader application of telehealth in Medicare in the near term. These changes span new legislative authorizations, enhanced regulatory flexibilities, and testing of innovative approaches through demonstrations.
Recent Federal Changes to Telehealth Policy
The Bipartisan Budget Act (BBA) of 2018 authorized targeted expansions of telehealth in Medicare FFS. This included kidney care and acute stroke care by expanding the list of eligible originating sites, removing geographic restrictions, enhancing access to home dialysis, and offering telestroke services (e.g., remote consults with neurologists) for a wider swath of beneficiaries, including those in urban locations. Also, beginning in 2020, beneficiaries participating in risk-based programs, such as Medicare Advantage (MA) plans and the Medicare Shared Savings Program (MSSP) accountable care organizations (ACOs), also will have access to telehealth services from additional locations, including their homes, because of new flexibilities afforded by the BBA. Finally, as part of broader legislation on opioid addiction and treatment, Congress expanded access to telehealth services for Medicare treatment of substance use disorders, allowing beneficiaries to seek convenient and private treatment from their homes.
CMS is also broadening the application of telehealth through the Center for Medicare and Medicaid Innovation (CMMI), which tests new payment and care delivery models and their impact on quality and cost of care. For example, CMMI’s value-based insurance design model examines how MA plans can use telehealth to meet network adequacy requirements. In addition, the Next Generation ACO model has the same telehealth flexibilities recently afforded to MA and the MSSP. These initiatives demonstrate CMS’s willingness to further the use of telehealth on a more targeted basis, largely under the premise of risk-based payment arrangements. The rationale is that providers have less incentive to overuse telehealth if they are accountable for the total cost of care for their patients. In such arrangements, CMS can test the efficacy of broader telehealth use without excessive fear of overspending.
Further Expansion of Telehealth May Be Coming Soon
More recent developments suggest that Congress may take additional steps to expand telehealth.
First, the recent opioids legislation requires CMS and the Government Accountability Office to produce reports on how to further leverage telehealth, which are due in October 2019. In addition, the Congressional Telehealth Caucus recently requested stakeholder input on bipartisan, low-cost approaches that could translate into passable legislation. While a wholesale waiver of Medicare’s statutory telehealth coverage restrictions may prove difficult because of expense (i.e., high telehealth utilization rates as projected by the CBO), we are likely to see continued expansions for certain service categories or for populations that appear promising in terms of improving outcomes or reducing costs, such as behavioral health, pediatrics, and skilled nursing care.
Legislators also may consider restructuring telehealth payments; for instance, by bundling reimbursement for telehealth consults from specialists to rural hospitals with limited specialty-care capabilities. Additional changes could include expanding the list of providers eligible to administer telehealth under Medicare. Last, Congress may expand broadband infrastructure, especially for rural locations. Absent broader statutory reforms, CMS will likely continue to expand telehealth via its more limited administrative authority, including through annual additions to the list of Medicare Part B–covered telehealth services and leveraging its CMMI section 1115A waiver authority in demonstration projects.
Where Will Congress Act?
Medicare’s coverage of telehealth services has gotten a major boost from Congress. Signals point to Congress gearing up for more action this year, and the timing is certainly ripe. Congress will soon turn to health care–related legislation — such as an “opioids 2.0” package or the imminently expiring Medicare “extenders.” Both legislative packages may serve to advance a new wave of telehealth reform proposals, giving the tool an even bigger boost in the health care system.