How Telehealth Services Help Medicare Recipients

Telehealth services remain a relatively new asset of the American healthcare system. Also referred to as telemedicine, the process involves a video conference between a patient and a doctor, clinician or healthcare provider to provide diagnosis and other medical services. As web and video technology continues to expand in quantity and improve in quality, it’s no secret that telehealth isn’t just here to stay, it’s the next big thing.

How Medicare Covers Telehealth Medical Services

Fortunately for Medicare beneficiaries, a limited number of telehealth services are covered by Medicare Part B. These remote medical services remain subject to statutory and regulatory requirements, such as requiring the patient be present at an originating site like a rural health clinic. Medicare patients are eligible to receive telehealth services if they are reside in counties outside of a Metropolitan Statistical Area (MSA), or rural Health Professional Shortage Areas (HPSA) located in a rural census tract. Learn if your residence qualifies for telehealth services by visiting the Medicare Telehealth Payment Eligibility Analyzer.

Sites that are authorized by law to provide medical services via telecommunications include:

  • Offices of physicians or practitioners
  • Hospitals
  • Critical Access Hospitals (CAHs)
  • Rural health clinics
  • Federally qualified health centers
  • Hospital-based or CAH-based Renal
  • Dialysis centers (including satellites)

Healthcare professionals who may furnish and receive payment for telehealth services under Medicare include:

  • Physicians
  • Nurse practitioners
  • Physician assistants
  • Nurse-midwives
  • Clinical nurse specialists
  • Certified registered nurse anesthetists
  • Registered dietitians or nutrition

Clinical psychologists and clinical social workers are authorized to user telehealth services for patients, but their services are not covered under Medicare.

The Positives and Negatives of Telehealth Services

The Government Accountability Office (GAO) has found reasons to encourage the expansion of telehealth in Medicare. Such benefits include the potential to improve the quality of care, ameliorate doctor shortages, and increase efficiency for patients. Telehealth services can also address medical specialties, including diagnosis of stroke, while potentially increasing productivity and ensuring on-time scheduling of appointments.

At the same time, however, the GAO has found problems behind using telehealth services under Medicare. The primary issues involve payment, restrictions to coverage, and infrastructure barrier. The issues involving infrastructure revolve around having enough broadband coverage to provide strong signals for the telecommunications systems that allow Medicare beneficiaries to remotely conference with their healthcare provider. As for costs, there may be some changes on the way thanks to legislation proposed by members of Congress.

The Price of Telehealth Services

The Congressional Budget Office’s (CBO) recent report on the “Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017” suggests that expanding telehealth services under Medicare programs will drive up costs in the short term, but will reduce spending in the long run. There are three main areas of spending and saving issues for telehealth services under Medicare: Medicare Advantage (MA) bids, Accountable Care Organizations (ACOs), and the treatment and/or diagnosis of strokes (also referred to as telestroke).

The CBO estimates that telehealth costs in MA bids would decrease by about $10 million per year from 2020 to 2027. That may be misleading, however, as the same report notes that increases in savings have to come with increased spending. As the CBO notes, “the savings from [MA] plans that begin or expand telehealth services would slightly exceed the increased cost for plans that already offer telehealth services as a supplemental benefit.”

The biggest spending for telehealth services would involve ACOs and telestroke treatment. By expanding the capabilities of ACOs to receive Medicare payments for telehealth services provided in the patient’s home, estimated direct spending would increase by about $5 million per year from 2020 to 2025, then jump to $10 million in 2026 and 2027. For providing telestroke coverage, direct spending would increase by about $180 million by 2027.

While the initial impact of this spending may seem drastic, the amount of reduced spending in the long term would potentially counteract it. Costs would go down as spending was reduced on transportation for patients to facilities, for example. In addition, treating a stroke as soon as possible after its onset not only helps the patient get better sooner but it also cuts down on costs for the provider. Avoiding misdiagnoses saves money, time, and resources for other healthcare emergencies.

The CHRONIC Care Act of 2017 is not the first piece of legislation aimed at expanding and leveraging telehealth services. The Medicare Telehealth Parity Act was introduced in May of 2017 and was most recently referred to the House Ways and Means Subcommittee on Health. The CONNECT for Health act of 2017 was also introduced in May of 2017 and has been referred to the Senate Committee on Finance. With members of Congress pushing for an increase in telehealth services in the American healthcare system, expect the new medical service to play a bigger role in Medicare coverage.

Related Links

Congress Considers Multiple Telehealth Bills

AHA Calls for Personalized Care Access in Medicare Advantage

Significant Telehealth Expansion Re-proposed in Bipartisan Senate Bill

mHealth, Telehealth are Making the House Call Meaningful Again

CMS Proposes Paying for More Telehealth Services in New Rule

Both Sides of the Aisle Agree- Telemedicine is the Future

House Passes Bill to Improve Medicare Part B

7 Acts of Legislation that Improve Medicare



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