Care Transformation Center Blog

CMS is expanding telehealth for Medicare Advantage. Here's how to prepare.

by Samara Ford, Anna Yakovenko, and Clare Wirth

Editor's note: This post previously ran as two separate posts in The Growth Channel blog. The first post can be found here, and the second one can be found here.

Over the past several years, Medicare Advantage (MA) has been a high-risk, high-reward entry point into risk-based contracts. In particular, MA plans have more flexibility to determine the types of supplemental benefits they can offer chronically ill enrollees, including nonmedical benefits.

Ready-to-present slides: Telehealth industry trends for 2019

Medicare's latest 600-page rule dramatically expands telehealth coverage for MA beneficiaries. Here's what the final version says, why we think it will increase telehealth adoption among  MA patients, and how to prepare.

Two key takeaways

The rule makes two major changes to how MA plans can reimburse telehealth, effective in 2020:

  1. It expands the funding available for plans to spend on additional telehealth offerings. Historically, plans were only able to fund additional telehealth as a supplemental benefit. The small pool of supplemental benefits could be used for anything (e.g., gym memberships, vision coverage). The resulting "competition" for funding meant that MA plans were slow to reimburse for any telehealth services that were not covered by fee-for-service (FFS). Now, additional telehealth services can be considered "basic benefits," which are funded by the plan's core funding source—that is, the money received from its initial bid to CMS. According to observers, this change will make MA plans more likely to offer telehealth benefits that extend beyond what is allowed under FFS.

  2. It eliminates the location restrictions for MA patients. This change means patients are not required to be in rural areas to receive billable telehealth services. It also means that patients are allowed to receive services without being in a qualified health care facility, so patients can be anywhere, including their homes.

How these changes improve access

While the first change—offering more funding—makes plans more likely to offer expanded telehealth coverage, we believe that the second change will make consumers more likely to adopt these newly available services, especially in two key markets:

  1. Urban dwellers: Urban patients are already using telehealth at much higher rates than do rural ones. More than a third of urbanites have used a virtual visit, compared with only 9% of rural patients. By extending coverage to urban beneficiaries, MA plans give these already inclined consumers even more reason to use telehealth.

  2. Direct-to-consumer services: Many of the services that Medicare beneficiaries would consider receiving virtually are those that allow the patient to remain at home. For example, nearly half of Medicare beneficiaries in our survey said they would definitely/probably consider virtual visits for prescription refills or questions, and 29% said the same for health coaching.

Here's how to design an effective, efficient telehealth program

However, just because patients have telehealth coverage does not mean they will automatically use it. Here's how you can design programs that have the biggest effect on cost of care, patient access, and quality:

  1. Reduce the friction around trying a first virtual visit

    Just because patients have telehealth coverage does not mean they will automatically use it. MA patients have unique preferences that providers must appeal to in order to engage them. According to our Virtual Visit Consumer Preferences Survey:

    • Clinician buy-in begets consumer buy-in: 28% of Medicare beneficiaries reported they would definitely or probably try a virtual visit if their provider suggested it. A recommendation from someone they already trust for medical advice is likely to encourage these patients to make the leap, especially if technology is not second nature to them.

    • Make the first a no-cost visit: Two-in-five Medicare patients said they would definitely or probably try a virtual visit if it was free.
  2. Build on the patient-clinician relationship

    According to our Virtual Visit Consumer Preferences survey, Medicare patients would much rather do a virtual visit with their provider than with a new provider from the same practice. You can do this by encouraging all clinicians to block off dedicated telehealth hours, where they conduct virtual follow-ups with their regular patients. To incentivize clinicians who participate in your telehealth program, you can perhaps factor telehealth-related metrics into bonus calculations (a tip from Lyle Berkowitz, CMO of MD Live).

    If your program is not yet ready to cater to patients' specific preferences, remember that this policy won't come into effect until 2020. Early-stage telehealth programs can use the next year to plan for an increased demand from MA patients by paying attention to what this market wants out of virtual care.

Why telehealth technology isn't enough

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There are dozens of telehealth technologies to choose from. But planners who ask, "What technology should I invest in?" are focusing on the wrong question.

Technology is a tool that enables strategy, not a stand-alone solution. To build a successful strategy that effectively leverages telehealth technology, start by asking these three targeted questions.

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