How Next Generation ACOs are Leveraging Telehealth Expansion

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Jan 17, 2017

Telehealth is becoming more of a real market force, and for good reasons — not the least of which is its strategic ability to align post-acute providers on risk, and the new Congress is to consider expansion language linked to CMS’ Next Generation ACO telehealth waiver.


While support is growing for wider adoption of telehealth, Medicare has been historically limited in its coverage of telehealth services, with the exception of interactive audio and video telecommunications, though expansion has also been trickling out in recent physician fee schedules.


In Congress, the newly introduced and bipartisan Chronic Care Act (Senators Isakson, Hatch, Wyden and Warner) seeks to expand the Next Generation ACO telehealth waiver to CMS Track 2, 3 and Pioneer ACO models, among other telehealth expansion language. Also in Congress, new House Energy & Commerce Chair Greg Walden is a strong supporter of telehealth expansion.

Next Generation ACOs and the Telehealth Waiver 

Current Medicare payment regulations have some restrictions on telehealth services for certain rural areas, but they are waived for the organizations currently participating in Next Generation.


The next set of participants is to be announced by the end of January, which itself will expand the waiver to new providers and populations.


The waiver helps reduce barriers associated with Medicare telehealth reimbursement provided to beneficiaries by removing the limitation of designated, rural originating sites.


The Chronic Care Act also seeks to expand telehealth for stroke evaluations, and for dialysis assessments occurring in the patient’s home.


And again, the Medicare physician fee schedule has extended reimbursement for treatment rendered via telehealth. This is in stark contrast to the past where practitioners were not reimbursed and coverage for chronic care management was prohibited. Now, chronic care management coupled with remote patient monitoring is available at a combined monthly fee of approximately $100. Additionally, there will also be seven new procedure codes for telehealth services, including annual wellness visits, psychotherapy services and prolonged services.

Maximizing the Telehealth Waiver

About 25 percent of all Americans are dealing with multiple chronic conditions like diabetes and congestive heart failure (CHF). Hospitals and providers share the obligation for the total medical expense (TME) and 40 percent of those costs come in the post-acute phase. Successfully integrating telehealth into a variety of post-acute care settings can help drive cost savings and improve outcomes while gaining greater network coverage and expanding post-acute services. Consider the following:

  • Gain Greater Network Coverage: The Next Generation ACO can reward beneficiaries for seeking care within the ACO’s network of providers; engaging patients within the network is equally important. Hospitals fear violating federal rules that prevent them from limiting patient care choices. However, the responsible sharing of quality data can contribute to better-integrated care and improve patient choices. Good strategies to address patient readmission and costs include:
  • Using existing EHRs to pinpoint high-risk patients.
  • Ensuring greater coordination amongst health system staff, preferably before even engaging with the post-acute care provider.
  • Adopting a holistic patient centered care approach that considers non-clinical health determinants like socio-economic and educational factors.
  • Developing better relationships with PCPs and becoming an extension of the provider at the patient level through better care coordination.
  • Expand Post-Acute ServicesResearch has found that hospital participation in an ACO is not correlated with improved performance in all Medicare value-based care programs. Telehealth allows for recognition of key indicators that put the individual at risk for readmission, including medication non-adherence, and provides a means for follow-up communication among multiple care providers. Some strategies to expand telehealth services include:
  • Using registries to monitor patients as well as medication compliance and visits.
  • Making better usage of scarce clinical resources to bridge the gap between clinician supply and patient demand.
  • Conducting regular needs assessment studies to identify and prioritize potential telehealth activities that will match gaps in services.
  • Integrating post-acute care providers into hospital care transition and readmission committee structures.

Impacting the Population

The Next Generation ACO telehealth wavier goes a long way toward eliminating barriers to access and coverage and allows beneficiaries to access telehealth services in their homes, irrespective of it being a rural area or not.


Under value-based care programs, providers are managing a population under an ACO initiative with approximately 64 percent of nursing home residents having their care paid for by Medicaid, another 14 percent are covered by Medicare and 22 percent have another payer. In such circumstances, there needs to be greater emphasis on collaborative relationships among payers to drive revenue and lower readmission.


Under the new rules, Next Generation ACOs have the freedom to offer telehealth to their members for the resolution of minor care needs, as roughly 90 percent of patients with these needs don’t need an in-person visit. Capitation is one of the primary alternative payment methodologies being explored in the Next Generation model to improve the accuracy and completeness of risk adjustment factor data. Research has shown that about 64 percent of Americans believe that online visits with a doctor should cost less than in-person care, and this improves an ACO’s ability to predict expenditures and receive accurate reimbursement per member.

Look for continued “de-regulation” of telehealth under the new HHS administration and through mounting Congressional bills.

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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