- Medicare policy changes have led to a vast expansion in telehealth care during the COVID-19 pandemic.
- A key challenge regarding long-term expansion of telehealth is its cost to Medicare and other insurers.
- To provide robust telehealth platforms, hospitals will need commensurate payment rates.
Medicare’s expanded coverage of telehealth has been credited with an explosion in such care during the COVID-19 pandemic. Now the Trump administration is hinting at how it will determine whether to make such changes permanent.
“The cat is out of the bag, and we look forward to helping policymakers, congressional leaders and regulators move the interest of telehealth and healthcare consumerism, particularly for rural areas, forward in a more permanent way,” said Jim Parker, senior adviser for health reform in the U.S. Department of Health and Human Services (HHS).
Since the start of the pandemic, the administration’s deregulation of Medicare has led to the expanded use of telehealth, according to industry leaders, through a series of steps that included:
- Expanding the list of eligible providers
- Removing geographic and technology restrictions
- Expanding the types of services that can be delivered telephonically
- Increasing payments to match in-person rates
The Centers for Disease Control and Prevention recently also released guidance on using telehealth to expand access to health care services during the COVID-19 pandemic and beyond.
Congress also expanded Medicare’s role in telehealth through legislative waivers enacted for the pandemic, including allowing rural health clinics and federally qualified health centers to bill for telehealth.
As a result of such changes, weekly use of telehealth by Medicare patients increased from roughly 11,000 encounters pre-pandemic to 1.3 million by late April, according to CMS.
Most commercial health plans also have expanded access to telehealth by waiving or lowering cost-sharing and increasing coverage for telehealth services, healthcare policy advisers said. And state Medicaid programs and Medicaid plans have expanded coverage and payment for a broad range of telehealth services.
“As a result of all this, we’ve seen a significant ramp-up in the use of telehealth services; we think that’s very positive and was certainly critical during this time,” Parker said during a recent webcast by the Bipartisan Policy Center.
Where telehealth goes from here
Several factors will determine the post-coronavirus use of telehealth, Parker said. Among the key factors the administration will consider:
- Changed consumer expectations on the availability of a telehealth option
- Data on the extent of the use and cost of telehealth during the pandemic
Some post-pandemic options to expand the use of telehealth could be pursued administratively, but permanent changes will require congressional action, Parker said.
Kripa Sreepada, a health policy advisor for Sen. Tina Smith (D-Minn.), said there is bipartisan interest in pursuing permanent telehealth changes.
Costs present questions
A key challenge to long-term expansion of telehealth is its cost to Medicare and other health plans.
“As to whether telehealth increases costs or saves money, it’s probably still an open question,” Parker said.
For instance, the Congressional Budget Office (CBO) has generally viewed telehealth expansion proposals as invariably adding cost, as both legitimate and fraudulent healthcare service utilization would be expected to increase. CBO has placed hefty price tags on telehealth legislation, affecting the progress of those bills.
“While there may be additional quality-of-care savings from telehealth, the technology of telehealth has some costs and we must determine if convenience for patients justifies that cost,” Parker said. “The pandemic-driven increase in the use of telehealth may provide, however, more data to potentially get to clarity on this.”
Health systems see promise in telehealth
Alan Levine, executive chairman, president and CEO of Johnson City, Tennessee-based Ballad Health, said telemedicine may raise the cost of healthcare services “incrementally,” but overall costs may decrease once actuaries account for the technology’s ability to reduce missed care that can increase downstream costs.
That health system is among many that have seen an explosion in the use of telehealth, with visits increasing from about 2,400 in the nine months before April to a total of 15,000 in just April and May.
Even since the area has begun to reopen, Ballad Health physician practices have continued to provide up to 70% of their patient visits through telehealth, Levine said.
“And this is particularly impactful in Medicare, where you are going to have a number of elderly people who are still going to be afraid to leave home for a period of time,” Levine said.
Health plan decisions on whether — and how much — to pay for telehealth services are critical for health systems because telehealth systems carry large capital costs, Levine said.
Levine urged all health plans to base their payment polices on telehealth capital costs and “true cost variation” determined using data from the pandemic period.
The long-term continued use of telehealth also will be determined by other issues, such as state licensure requirements for clinicians trying to practice across state lines and logistical challenges for providers.
Many states have lowered licensure obstacles to telehealth through expanded use of multistate compacts, said Jennifer McKay, MD, medical information officer for Avera Health. Health systems also need to address the extensive physician credentialing requirements for telehealth.
“The good news is we’re making progress, and technology has really forced the issue,” McKay said.