Medicare Still Lagging Behind on Telehealth

Ken Terry

April 19, 2017

Medicare has long been criticized for its narrow restrictions on the coverage and reimbursement of telehealth services. A new report to Congress by the US Government Accountability Office (GAO) shows that not much has changed over the years.

Mandated by the Medicare Access and CHIP Reauthorization Act, the GAO report noted that Medicare and the US Department of Defense (DoD) trailed the Veterans Affairs (VA) system in their use of telehealth and remote patient monitoring (RPM). On the other hand, the report painted an optimistic picture of Medicare demonstrations and new care delivery models that, it said, might increase the use of telehealth in Medicare.

But Gary Capistrant, chief policy officer of the American Telemedicine Association (ATA), told Medscape Medical News that the Centers for Medicare & Medicaid Services (CMS) is still moving very slowly on telehealth. His view is buttressed by the report's finding that less than 1% of Medicare patients received care remotely compared with 12% of VA patients.

"The big story of the GAO report is there's no story," he said. "Medicare continues to lag [behind] other federal efforts [to expand the use of telehealth]."

Currently, Medicare covers telehealth services only in underserved rural areas, and it requires that patients go to a specified healthcare setting like a doctor's office in order to receive remote services from other providers. Medicare also reimburses just 81 telehealth services.

CMS supports eight models and demonstrations in which certain Medicare telehealth requirements are waived, the GAO report says. Among these demonstration projects are Next Generation accountable care organizations (ACOs), Bundled Payments for Care Improvement, Comprehensive Care for Joint Replacement, and Episode Payment models, another bundling demonstration that is scheduled to begin this year. Coverage of telehealth in these initiatives is not limited to rural areas or specific types of sites.

Physicians who are subject to the Merit-Based Incentive Payment System (MIPS), the report noted, can use virtual visits, or remote patient monitoring (RPM), to raise their scores in the practice improvement category, which is 15% of the total score used to determine whether they receive a bonus or a financial penalty.

Restrictive Coverage

The GAO report placed strong emphasis on MIPS in predicting the evolution of telehealth in Medicare. "The use of telehealth and remote patient monitoring in Medicare may change depending on how many clinicians use them as a way to achieve the goals of the new Merit-based Incentive Payment System," the report said.

Capistrant does not share this view. Under MIPS, he said, CMS' coverage of telehealth is still very restrictive. Unless a patient is in a rural area and goes to an originating site of care, the doctor who provides telehealth services will not be reimbursed for them, he points out.

CMS is providing some telehealth coverage in its bundled payment demonstrations, he noted, but payments to physicians for telehealth services are often far lower than for in-person visits, Capistrant noted. One reason is that CMS has knocked out the practice expense component used in computing the allowable fees, he added.

The NextGen ACO demonstration, in which ACOs accept a lot of financial risk, have liberal rules on the use of telehealth. However, only a small number of ACOs participate in that program.

ATA would like to see Congress give Medicare Advantage and Medicaid managed care plans more leeway in their use of telehealth, Capistrant said. Legislation introduced in the Senate last December would clear away regulatory hurdles to telehealth in Medicare Advantage, he observed. The Trump Administration is likely to support this kind of approach, he said, because it wants to reduce health costs with the help of the private sector.

For now, however, telehealth is barely a blip on CMS' radar screen. Last year, just 68,000 Medicare beneficiaries accessed telehealth services, at a cost of $14 million, the GAO report said. While GAO could not find much data on RPM in Medicare, the report said that CMS spent $119 million on remote cardiac monitoring for 265,000 people in 2014.

CMS does not impose many restrictions on how state Medicaid programs can use telehealth. However, GAO interviews with Medicaid officials in Connecticut, Illinois, Kansas, Mississippi, Montana, and Oregon showed very low use of telehealth in those states.

The DoD allows a wide range of originating sites for telehealth, including (since February 2016) a patient's home. But the DoD's use of telehealth, as a percentage of eligible patients, is nearly as low as Medicare's.

The outstanding exception to the laggard state of telehealth use in government agencies is the VA system, which has been exploring telehealth and RPM for a number of years. The VA does not limit the sites that can originate virtual visits or the types of services that may be provided. Of 702,000 veterans who received telehealth services in 2016, the GAO found, 45% lived in rural areas — meaning that 55% were located in metropolitan areas. Of these veterans, 150,600 also used RPM services

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