Commercial risk will be a critical catalyst of progress – it’s complicated, but is it possible? We think so.

Blog Post

Telehealth's policy outlook: Sunny with a (good) chance of increased reimbursement

October 16, 2017

    The last few months have brought good news for telehealth advocates. Lawmakers from across the political spectrum introduced several bills that would expand adoption of telehealth, including the VETS Act of 2017, the Evidence-Based Telehealth Expansion Act of 2017, and the CHRONIC Care Act of 2017, the latter which unanimously passed in the Senate just a few weeks ago.

    Lawmakers are targeting telehealth for its potential to reduce health care costs and advance population health management—and at a time when many providers are transitioning to value-based care, planners should be aware of developments in the telehealth field.

    So what can you expect if the bills become law? Our experts predict the following four policy changes for 2018 and beyond:

    1. Reduced geographic restrictions

    Right now, Medicare reimburses real-time audio and video interactions for patients in rural markets. While the payment policy helps compensate for physician shortages in these areas, it falls short in that it doesn't cover telehealth services delivered in a patient's home.

    Several bills pending in Congress would get rid of Medicare's location restrictions on telehealth reimbursement, at least under certain circumstances. For example, the VETS Act would allow Veterans Affairs providers to deliver telehealth regardless of where the patient is located. Other bills, such as the CONNECT for Health Act, Medicare Part B Improvement Act, FAST Act, and HEART Act, would expand Medicare coverage for certain telehealth services beyond rural areas and in patient homes.

    2. Increased coverage of condition-specific telehealth programs

    Many of the bills would help pave the way for expansion of telestroke and remote chronic disease management programs—two telehealth applications that have been shown to produce positive quality and cost outcomes, according to recent research.

    For instance:

    • The FAST Act would expand Medicare fee-for-service reimbursement to any facility administering acute stroke care, even in urban markets;
    • The Medicare Part B Improvement Act and Chronic Kidney Disease Improvement in Research and Treatment Act would expand Medicare reimbursement for dialysis treatment in the home; and
    • The HEART Act would provide coverage for home-based remote monitoring of patients with congestive heart failure and chronic obstructive pulmonary disorder.

    3. Expanded reimbursement for telehealth services under alternative payment models

    Providers already see more favorable reimbursement for telehealth services under value-based payment models, including Next Generation Accountable Care Organizations (ACOs). The CHRONIC Care Act would go a step further, waiving geographic restrictions for telehealth programs delivered in Medicare Shared Savings Programs and Pioneer ACOs. This step emphasizes telehealth's value in preventing unnecessary health care utilization and controlling total cost of care.

    4. Increased cost-effectiveness research on telehealth

    A few of the proposed policies would advance new research on cost-effectiveness across telehealth modalities. The Evidence-Based Telehealth Expansion Act and CONNECT for Health Act, for example, would give HHS the authority to lift Medicare restrictions on telehealth services that have been proven to reduce avoidable spending and/or improve clinical outcomes. This means that providers would likely face increased pressure from payers to evaluate the impact of their telehealth programs, which requires the use of proper metrics to measure program ROI.

    The new policy outlook is promising for providers looking to use telehealth as a population health strategy under value-based care, and if lawmakers succeed in expanding reimbursement, we expect greater investment in evidence-based, specialty telehealth services in the upcoming years.


    Learn the latest telehealth trends

    Download our primers for a quick rundown of the latest trends in telehealth by service

    Download Now


    Have a Question?


    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.