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Medicare Reimbursement Rules Limit Telehealth Adoption

Telehealth adoption for Medicare beneficiaries is still low because of current Medicare reimbursement rules on originating sites and telehealth delivery, CMS reports.

Medicare reimbursement and telehealth adoption

Source: Thinkstock

By Jacqueline LaPointe

- Telehealth utilization among Medicare beneficiaries is on the rise, but restrictive Medicare reimbursement rules are stifling the adoption of such services, a new report shows.

The CMS report on Medicare telehealth utilization between 2014 and 2016 revealed that nearly 90,000 Medicare fee-for-service beneficiaries used over 275,000 telehealth services by 2016, representing a 48.3 percent boost in the number of beneficiaries to whom telehealth services were furnished and a 65.3 percent increase in the telehealth services furnished by practitioners compared to 2014.

“Stakeholders generally agree that telehealth can bring medical care into communities with limited access to health care providers, reduce wait times for patients, and be more convenient than traveling to a provider’s office in both rural and urban areas,” the report stated.

“It appears that telehealth could play an important role in achieving the goals associated with value-based models by providing clinically indicated, high quality, ‘anytime, anywhere’ care to Medicare patients,” CMS continued. “In addition, many health disparities in rural communities are related to poor access to care, and most evidence supports telehealth use in these communities.”

However, the number of beneficiaries receiving telehealth services accounted for a small portion of Medicare enrollees, representing just one-quarter of a percent of the more than 35 million Medicare fee-for-service beneficiaries analyzed.

READ MORE: The Difference Between Medicare and Medicaid Reimbursement

Current Medicare reimbursement rules are limiting the adoption of telehealth services, CMS explained.

“To date, based on current statutory restrictions, Medicare has primarily offered telehealth services to meet the needs of rural beneficiaries and has provided coverage for a select set of telehealth services required by statute or for which there is strong clinical evidence,” the federal agency wrote.

Specifically, statutory barriers to the expansion of telehealth for Medicare fee-for-service exist in the Social Security Act. Section 1834(m) of the Social Security Act prohibits Medicare reimbursement for telehealth services to patients who are not located at a particular healthcare setting, known as originating sites.

Current law only permits eight types of originating sites, and those sites also be located in a rural healthcare professional shortage area or a county outside of a Metropolitan Statistical Area, or a site participating in a federal telemedicine demonstration approved by HHS as of Dec. 31, 2000.

Most notably, the beneficiary’s home is not currently an eligible originating site.

READ MORE: The Multiple Benefits of Remote Monitoring and Telehealth

The Social Security Act also limits the types of practitioners that can furnish telehealth services and restricts Medicare reimbursement for telehealth services to those furnish via a real-time, interactive audio and visual telecommunications system.

Medicare can only pay for telehealth services furnished using asynchronous store-and-forward technology in Alaska and Hawaii, which are part of a federal telemedicine demonstration program.

Providers and Medicare beneficiaries can circumvent the restrictive rules through waivers. But until policymakers significantly modify Medicare reimbursement rules for telehealth, the country’s largest payer will not be able to truly leverage the care quality and spending improvements of telehealth.

“In conclusion, telehealth offers the promise of a technology and approach to care for a broad range of populations, including those enrolled in Medicare,” the report stated. “Emerging evidence indicates that telehealth can be a tool for empowering healthcare providers and patients to offer the best approaches to care, including consideration of the patient’s age, race/ethnicity, geographic location, and diagnoses, and provide high quality care without increasing costs.”

In a recent speech to the Alliance for Connected Care, CMS Administrator Seema Verma emphasized that expansion of telehealth coverage is a top priority for the federal agency.

READ MORE: Telehealth Reimbursement Needed for its Growth, Advancement

“It gives patients another way to access care and puts them in the driver’s seat as they seek out new options,” she said. “It is particularly vital for our elderly and disabled populations—as well as caregivers—where transportation issues can be a barrier to care.”

“Telehealth also enables patients to become active members of the care continuum outside of a hospital setting and promotes long-term engagement between patients and practitioners,” she continued. “Using technology, a patient managing a chronic condition can connect more frequently with their care team from home, and spend less time going to the doctor’s office.”

Medicare has primarily leveraged the benefits of telehealth for its rural beneficiaries. But the technology has the potential to also improve the care quality and costs for urban enrollees, Verma stated.

“With 20 million people coming into the Medicare program, CMS understands that we need to embrace the promise of technology and innovation,” she said.

To keep up with technology, CMS will need to modify its Medicare reimbursement and coverage policies. Verma explained that the federal agency has started by paying for virtual check-ins and virtual consultations between physicians, as well as permitting home health agencies to use remote patient monitoring for Medicate patients and enrollees receiving home dialysis to do monthly assessments via telehealth.

“These are exciting changes which will increase access to care, give patients new choices, and foster the type of innovations we need to strengthen Medicare and ensure its sustainability into the future,” she said. “And we know that, given Medicare’s size, whatever we do affects the entire healthcare market.”

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