MedPAC recommends ‘measured approach’ to Medicare telehealth coverage

Businessman video-chats with doctor on laptop
MedPAC says policymakers should consider cost, quality and access before expanding telehealth coverage. (Getty/AndreyPopov)

Without a consistent comparison from commercial insurers, federal policymakers should adopt a “measured approach” to incorporating telehealth coverage into the Medicare program, according to the Medicare Payment Advisory Commission (MedPAC).

In a new report (PDF) mandated under the 21st Century Cures Act, the advisory organization shied away from recommending the Centers for Medicare & Medicaid Services (CMS) expand coverage for certain telehealth services, and instead urged policymakers to evaluate emerging modalities based on the ability to lower costs, improve access and drive quality care.

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MedPAC’s analysis revealed commercial plans vary considerably in their approaches to telehealth and rely primarily on competition and employer demands.

“We also found that cost is not a significant consideration in commercial insurers’ adoption of telehealth services," the report states. "However, as a public payer, Medicare is obligated to consider costs to the program, beneficiaries, and taxpayers in determining whether to expand coverage of telehealth."

Instead, MedPAC recommended policymakers consider pilot testing telehealth coverage for certain services through the Center for Medicare and Medicaid Innovation (CMMI). The group also echoed previous recommendations to grant greater flexibility to Medicare Advantage plans and risk-bearing ACOs, because “they have the financial incentive to assess the value of these services.”

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MedPAC noted the report was finalized in February, just as Congress passed the Bipartisan Budget Act of 2018. That legislation includes several provisions to expand telehealth coverage for Medicare Advantage plans and ACOs. MedPAC indicated there is clear evidence in favor of expanding telestroke services, another provision included in the legislation.

Telehealth utilization within the Medicare program has seen a notable spike in recent years, although it still makes up a small percentage of encounters. According to MedPAC, between 2014 and 2016 the number of telehealth services used per beneficiary increased 79%, while the number of unique Medicare beneficiaries increased 57%. Likewise, telehealth spending increased from $16.3 million in 2014 to $26.9 million in 2016.

However, the 108,000 people that used telehealth in 2016 represented just 0.3% of fee-for-service Part B beneficiaries.

The Medicaid and CHIP Payment and Access Commission (MACPAC) had a similar take for Medicaid programs, noting in a separate report (PDF) that states could benefit from more research about telehealth’s effectiveness, program integrity concerns and experiences across other states.