GAO’s Report on Telehealth

GAO released the report “Telehealth Use in Medicare and Medicaid” on July 20, 2017 with highlights obtained from testimony by A. Nicole Clowers, GAO’s Managing Director for Health Care. The testimony was submitted to the House Subcommittee on Agriculture, Energy, and Trade, the Subcommittee on Health and Technology, and the Committee on Small Business.

Medicare and Medicaid use telehealth to provide healthcare services. As noted previously, the Medicare Payment Advisory Commission shows that Medicare providers use telehealth services for a small proportion of beneficiaries.

Medicare pays for certain telehealth services including consultations, office visits, and office psychiatry services. While telehealth visits with providers are conducted from a separate site, Medicare requires that the patient be physically present at a medical facility such as a hospital, rural health clinic, or skilled nursing facility.

According to MedPAC, beneficiaries accessing telehealth averaged about three telehealth visits per person per year in 2014, and Medicare spent an average of $182 per beneficiary for a total of about $14 million. MedPAC’s analysis shows that ten states accounted for 42 percent of all Medicare telehealth visits with South Dakota followed by Iowa and North Dakota.

Previously, GAO found that CMS is supporting eight models and demonstrations with the potential to expand telehealth in Medicare. These demonstrations and models waived certain Medicare telehealth requirements related to locations and facility types as to where beneficiaries could receive telehealth services.

CMS is supporting a demonstration that could increase the amount a facility is paid when it serves as the originating site. This demonstration called the “Frontier Community Health Integration Project Demonstration” (click on Innovation Models) aims to develop and test new models of integrated healthcare in sparsely populated rural counties.

As for Medicaid, the GAO reports that CMS does not limit the use of telehealth in Medicaid. Therefore, individual states have the option to determine whether to cover telehealth, types of telehealth services to cover, and which providers can receive reimbursement for telehealth services.

It is not unexpected that states that were more rural than urban, report using telehealth more frequently than officials from more urban states. For example, Montana uses telehealth as a tool to help patients see both in-state and out-of-state specialists remotely as there is limited access to specialists in the state.

In contrast, the State of Illinois contains more urban areas and therefore telehealth represents a very small portion of the state’s overall Medicaid budget and was used primarily to provide psychiatric services.

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