A post-COVID reimagining of telehealth in Medicare

Temporary changes to Medicare policy during the COVID-19 pandemic prompted a level of telehealth adoption previously unimagined and they demonstrated telehealth’s value beyond emergency use. 

Prior to the pandemic, Medicare’s telehealth coverage was narrow and outdated compared to other payers. Coverage was restricted to patients who were already in a hospital, skilled nursing facility, federally qualified health center or physician’s office. What’s more, with few exceptions, that “originating site” had to be in a rural community or designated Health Professional Shortage Area. Telehealth could only be used to consult with a clinician in another location and the interaction had to be via a secure video platform, mimicking a face-to-face encounter.  

Reimbursement for telehealth visits was also subject to its own arcane rules. The “originating” provider received a fixed telehealth facility fee as host of the patient visit, while the “distant site” provider also received a lower, partial payment. Beneficiaries were subject to copayment on both portions. 

In contrast, state Medicaid programs are more flexible. Typically, they do not limit telehealth coverage to shortage areas and some state programs allow non-traditional originating locations such as schools and patient homes. They have also expanded their lists of providers eligible to bill for remote consultation. Fourteen state Medicaid programs now cover teledentistry and 14 cover store-and-forward, the asynchronous transmission of digital images and videos from clinician to clinician. In these and other respects, state Medicaid programs are leading the way on telehealth. 

Virtual visits may be synonymous with telehealth in the public’s mind, but they accounted for only one third of market revenue for telehealth prior to the pandemic, according to an August 2020 IBIS World report. Remote monitoring — the use of software and medical devices to capture patient health data and transmit it to a provider at another location — made up 44 percent of the market and store-and-forward services made up 20 percent. These services must also be considered as Congress reimagines telehealth in Medicare.

Where should lawmakers begin?

• They could expand the list of conditions that can be treated remotely. The Bipartisan Budget Act of 2018 allowed Medicare beneficiaries to receive substance use treatment via telehealth in their homes and removed geographic restrictions on the use of telehealth in stroke care and end stage renal disease. At a minimum, Congress could add mental health, but why stop there?
• Let’s cover telehealth in primary care without geographic restriction and revisit reimbursement rates. MedPAC reports that Medicare beneficiaries have more difficulty finding these providers than specialists. Over time, remote access to primary care could have the added benefits of improving chronic care and care coordination for patients, and stabilizing primary care incomes.
• Let’s also cover telehealth for needed specialist care delivered to hospitals and skilled nursing facilities without geographic restriction.
• Lastly, let’s invest in the telehealth infrastructure needed to kickstart widespread use of telehealth by independent practices, critical access hospitals and others. For some providers, the challenges of fully integrating telehealth will be comparable to the experience of adopting electronic health records.

These steps would be achievable and transformative, for patients and providers alike. Medicare could easily implement them for providers already participating in alternative payment models. Telehealth policy might even support providers transitioning away from fee-for-service arrangements. If so, this possibility could begin to address fears that the convenience of telehealth will lead to the overuse of services. In the meantime, Medicare can take additional steps to keep costs in check. Lower reimbursement for telehealth visits can be justified by reduced provider outlays for physical space, supplies and equipment. New telehealth benefits could initially be limited to beneficiaries living in shortage areas. By definition, these individuals should be able to access telehealth from home rather than having to travel to a health care facility first. This would be especially favorable to members of racial and ethnic minority groups, who face the greatest difficulty accessing care. 

The Senate Telehealth Working Group and House Telehealth Caucus plans to introduce an updated version of the Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act (S.2741/H.R.4932) which could implement these changes and more. To quell any fears about the quality of care or possible excess utilization, some expansions could be started on a demonstration basis with rigorous evaluation. The Alliance for Connected Care also urges lawmakers to include funding to strengthen existing fraud, waste and abuse mechanisms in the legislation.  

With these guardrails in place, lawmakers can build on the lessons of the past year to develop a far more comprehensive Medicare telehealth policy, one that can transform care. 

Alison E. Cuellar is a professor of Health Administration and Policy at George Mason University.