Population health insights

How telehealth will grow: payments and usage

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Oct 02, 2018

The next two years will see substantial growth in telehealth reimbursement and clinical setting expansion based in part by acts of Congress and CMS implementation.


One key to growth within both counts is the continued elimination of historical originating site restrictions on where telehealth can occur. CMS has long been tied to originating site federal rules dating back to the Social Security Act, meaning reimbursable telehealth could only occur in federally designated rural zones, aka rural health shortage areas, and be conducted by “distant site practitioners.”


These limitations are increasingly going away.


In the meantime, telehealth has still grown. According to MedPAC, telehealth visits per beneficiary from 2014 to 2016 rose 79 percent, resulting in $27 million in spending, and by that comparing claims from 2015 to 2016, the number increased by 33 percent, totaling out at just below 500,000.


Not huge numbers, but growth. There is arguably no greater summation of the state and future of telehealth than MedPAC’s March, 2018 report to Congress on telehealth, which can be accessed in full here.

The report, mandated by the 21st Century Cures Act, also notes that commercial payment models need to catch up, describing a landscape of “few plans” offering “variable” levels of comprehensive payments as of 2017 that could be counted as quality or value-based care programs.

At the state level, 35 states and Washington, D.C. do have telehealth parity laws, requiring insurers to cover payments for telehealth occurrences equal to an in-person visit.


Growth within private payers should be impacted by upcoming government-led expansions impacting ACOs, Medicare Advantage and the physician fee schedule, where originating site restrictions won’t apply based on new federal law.

New laws and policy

  • Embedded within the Bipartisan Budget Act of 2018 is language that will allow ACOs to begin offering telehealth in 2020 with no originating site restrictions.
  • Likewise, in 2020, Medicare Advantage plans can offer telehealth to patients beyond what’s already in Part B.
  • Also Per the Bipartisan Budget Act, CMS is supposed to report back by November of this year on exactly what types of telehealth is to be included. And the MedPAC reports here recommend that MA plans and two-sided ACOs should be granted flexibility in how telehealth can occur, and that CMMI payment models should be taken up.
  • Also included in versions of current Congressional opioid bills are new telehealth expansions to patient populations with substance abuse conditions, also with no originating site restrictions. House and Senate versions are passed and going to committee at this writing.
  • And also in the news is the FCC’s recent passage of a $100 million fund to expand rural broadband and existing models of traditionally successful VA telehealth programs.

The way the process works, Congressional laws expanding telehealth are then implemented via rulemaking by CMS. The good news is CMS is already doing so via the 2019 physician fee schedule. On tap for 2019 are reimbursement codes for stroke and ESRD telehealth, again not bound by originating site restrictions.


The 2019 physician fee schedule, headed for a final rule this year, can be found here.

The remote monitoring factor

On pace with telehealth expansion is fee schedule growth in device-centric remote patient monitoring (RPM).


For 2019, CMS is expanding RPM reimbursement codes from one that is available this year to three next year. These codes would follow the steps of RPM care, from setting up equipment and educating patients, to the ongoing monitoring and use of the equipment, on to clinicians taking action on the data via communications with patients, caregivers or peers.


All three can be billed per month.


RPM functions are not bound by any site restrictions.


The RPM codes are part of a new virtual care ecosystem CMS is also putting forth, with news reimbursement codes for virtual patient check-ins, virtual peer consulting and the remote assessments of patient-generated photos and images known as “store and forward.”


Side note here that store and forward is another chipping away of originating site restrictions, which traditionally would only allow CMS fees for real-time AV, with store and forward only being allowed demonstration programs in Alaska and Hawaii.


Also within RPM expansion, CMS in its separate home health agency rule for 2019 is allowing agencies to include the costs of RPM technology into cost reports.


All told there are 13 new telehealth, RPM and virtual care codes for 2019 within the fee schedule, with more implementation to come for telehealth within ACOs and Medicare Advantage.

About the author

Greg Fulton
Greg Fulton,
Industry & Public Policy Lead, Philips
Greg Fulton is Industry & Public Policy Lead for Philips PHM. He has extensive health IT experience in government relations at Congressional, Health & Human Services, state and industry organizational levels. He is a current member of the CommonWell Health Alliance Government Affairs Advisory Council and the HIMSS Government Relations Roundtable.

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