Medicare's telehealth, remote monitoring reimbursement changes could save $1.8B

Three Medicaid reimbursement policy changes for telehealth and remote patient monitoring (RPM) would save the federal government $1.8 billion over the next 10 years, according to a new report by consultancy Avalere Health.

The firm arrived at that estimate by calculating the overlap of these proposals:

  • Policy 1, which provides telehealth and RPM payment under a waiver from September 2016 until December 2018 for providers eligible for the Merit Based Incentive Payment System, would increase federal spending by $1.1 billion.
  • Policy 2, which provides coverage for providers who participate in Alternative Payment Models, would decrease federal spending by $2.2 billion.
  • Policy 3, which would cover RPM for patients with chronic conditions for all fee-for-service physicians and practitioners, would decrease federal spending by $3 billion.

The study assumed 75 percent of all telehealth use would replace existing in-office services and 25 percent would be new use, which would add to Medicare costs.

The analysis is the basis for a new telemedicine bill, the Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act, which would eliminate location-based reimbursement restrictions and provide coverage in alternative payment models. HIMSS, the American Medical Association, and the Personal Care Health Alliance are among the bill's supporters.

"This legislation has the potential to remove barriers to new health care delivery models that promote coordinated and patient-centered care. Importantly, the bill aims to maintain high standards whether a patient is seeing a physician in an office or via telemedicine," AMA President Steven J. Stack, M.D., said in a statement.

The bill is similar to an August version in that it would add coverage for some services in the home.

Bipartisan support has been growing in Congress to improve telehealth reimbursement and the broadband connectivity required for telehealth services.

To learn more:
- read the highlights of the  bill (.pdf)
- here's the Avalere report (.pdf)
- check out the AMA statement