Medicare’s telehealth utilization nudges upward, but overall rates still hamstrung by payment policies

Telemedicine consultation
Telemedicine visits could see a 13-fold increase if just 1% of face-to-face Medicare encounters were virtual. (Getty/AndreyPopov)

Nearly 90,000 Medicare beneficiaries used telehealth services in 2016, according to a new federal report.

That’s 48% increase compared to 2014, but it still represents just 0.25% of the 35 million people that have Medicare coverage.

The new data, released by the Centers for Medicare & Medicaid Services (CMS) on Thursday, shows just how limited telehealth adoption has been at the federal level. The agency attributed the low level of overall utilization to two “significant” payment restrictions that require the original site of care to be in certain rural areas and prohibit a patient’s home to be classified as an eligible originating site.

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But the analysis (PDF), mandated under the 21st Century Cures Act, also identified a massive opportunity to increase telehealth visits. If just 1% of the 355 million in-person encounters in 2016 were provided virtually, there would be a 13-fold increase in telehealth visits, according to the report.

RELATED: With CMS' new physician fee schedule on the way, 2018 could be a 'turning point' for telemedicine

That includes a significant opportunity for office and outpatient visits that totaled 243 million face-to-face encounters a service that was delivered via telehealth just 173,000 times.

“It appears that telehealth could play an important role in achieving the goals associated with value-based models by providing clinically indicated, high quality, ‘anytime, anywhere’ care to Medicare patients,” the report stated. “In addition, many health disparities in rural communities are related to poor access to care, and most evidence supports telehealth use in these communities.”

Several other intriguing statistics from the report:

  • While Medicare coverage is obviously limited to people 65 and older, there was a steep increase in older beneficiaries. Between 2014 and 2016, there was an 84% jump in the number of beneficiaries 85 and older that used telehealth, up from nearly 5,000 to almost 34,000. That demographic saw a 136% increase in telehealth services during that time.
  • Telehealth appears to be particularly useful for patients with a mental health condition. In 2016, 85% of telehealth users had a mental health diagnosis. Seven of the top ten diagnoses for beneficiaries that used telehealth were a mental health condition, including major depressive disorder, bipolar disorder, schizoaffective disorder or schizophrenia.
  • Between 2014 and 2016 there was a 170% increase in individual psychotherapy assessments provided virtually and 709% increase in neurobehavioral status examinations used to evaluate neurocognitive functioning.
  • Dual-eligible beneficiaries accounted for 60% of telehealth users and receive two-thirds of all telehealth services in 2016.

RELATED: CMS proposed rule expands telehealth for Medicare Advantage plans, beefs up payment audits

Though it is still limited by statutory restrictions, CMS has been buoyed by provisions in the Bipartisan Budget Act aimed at expanding telehealth services reimbursed by Medicare and new flexibilities for Medicare Advantage plans. The agency has also finalized new payment rules that reimburse physicians for virtual check-ins, though doctors have said that won’t be enough to motivate physicians to use the technology. The agency has also approved Medicaid demonstration waivers to expand access to telehealth services.

CMS Administrator Seema Verma has voiced support for increasing access to telehealth. On Thursday she told audience members at the Alliance for Connected Care’s Telehealth Policy Forum for Health Systems that the administration is “looking to especially promote innovation by supporting and furthering telehealth.”

“With 20 million people coming into the Medicare program, CMS understands that we need to embrace the promise of technology and innovation,” she said.