As Credit Suisse https://www.credit-suisse.com reports, the Medicare Payment Advisory Commission (MedPAC) http://www.medpac.gov weighed in on telehealth in their March 2021 Report to Congress. MedPAC’s report on Medicare payment policy, includes recommendations for telehealth policy beyond the COVID-19 public health emergency.
MedPAC is urging Congress to continue some expanded telehealth services for 1-2 years after the Public Health Emergency (PHE) ends in order to collect and analyze more information about telehealth’s effects on Medicare access, quality, cost, and fraud. The information would be used as evidence to inform any permanent changes.
During this limited period, MedPAC recommends that Medicare 1) temporarily pay for specified telehealth services provided to all beneficiaries regardless of location, 2) temporarily cover selected telehealth services in addition to services covered before the PHE if there is potential for clinical benefit, and 3) temporarily cover certain telehealth services when they are provided through an audio-only interaction if there is potential for clinical benefit. After the PHE ends, MedPAC recommends that Medicare return to paying the physician fee schedule’s facility rate for telehealth and collect data on the cost of these services.
As explained by way of background, that while the Commission has no binding authority over CMS policy or Congressional legislation, MedPAC strongly influences the direction of discussion on Medicare’s payment policy for the coming years. However, MedPAC often makes more drastic recommendations than CMS or Congress is willing to implement in the near term.
MedPAC also suggests that providers should not be allowed to reduce or waive cost sharing for telehealth services after the PHE ends. Further, the agency is recommending that CMS implement safeguards to protect against unnecessary spending and potential fraud related to telehealth.
Potential fraud related to telehealth includes 1) applying additional scrutiny to outlier clinicians who bill relatively more telehealth services per beneficiary, 2) requires clinicians to provide an in-person visit before they order high cost durable medical equipment of clinical laboratory tests, and 3) prohibits “incident to billing” for telehealth services provided by any clinician who can bill Medicare directly. MedPAC is especially concerned about telehealth’s impact on the Medicare program’s integrity with the argument that it could allow providers to “commit fraud at scale.”
Credit Suisse analysts checked with several industry experts on the MedPAC report. Most industry experts see the proposal related to the extension for 1-2 years beyond the PHE encouraging. However, some expressed frustration with the attention being paid to fraud & abuse in telehealth. They argue that attempts to regulate the use of telehealth in order to make fraud harder to commit can also limit what legitimate physicians can do to increase costs and inefficiencies.
With respect to MedPAC’s recommendation “Medicare return to paying the physician fee schedule’s facility rate for telehealth”, experts note that the physician fee schedule’s normal facility rate for telehealth when the patient is at home is zero dollars.
However, some industry experts see MedPAC’s recommendation as “putting a marker out on how to enable telehealth in the long run rather than to block it” with the argument that even the likelihood of a temporary extension of telehealth rules rather than an immediate permanent extension, should be workable.
States are making progress on payment parity. By way of background, when a state passes a telemedicine payment parity law, private payers in that state have to reimburse for telemedicine in the same way they would for in-person care.
However, states can design payment parity laws that give payers some leverage. For example, in both GA and CA, lawmakers have set the stage at equal coverage for both virtual and in-person services, and then allows payers and providers to negotiate alternate payment rates.
Some 29 states and Washington D.C. have passed parity laws for telemedicine, with eight additional states currently having proposed parity laws. In Credit Suisse’s CIO Survey in December, payment parity was picked by most hospital CIO respondents (70%), as the most crucial regulation to sustain momentum in telemedicine adoption. Cross state licensing regulations were the second most crucial regulation highlighted by respondents at 30%.
According to Credit Suisse’s CIO Survey in June, under the assumption that telehealth regulations do not revert to pre-COVID levels, 96% of hospital CIO respondents said they would maintain their current virtual care offerings.
Even under the assumption that a majority of regulations are reverted to pre-COVID levels, 91% of respondents indicated they would still maintain their virtual care offerings. However, it is fair to assume that a less than ideal reimbursement environment is unlikely to encourage providers to leverage their telehealth services to the fullest.
For more information on MedPAC’s March 21 Report to Congress, ask questions, or to provide news, email Jailendra Singh at Jailendra.singh@credit-suisse.com or call 212-325-8121.