Telehealth and Medicare
Updated May 11, 2017
Telehealth and Medicare
Introduction
renal disease); Part C (managed care); and Part D
(prescription drugs).
Telehealth is a multidimensional set of health care services
delivered via a range of telecommunications technologies,
Telehealth Access
including the Internet, video, and telephone, according to
the Medicare Payment Advisory Commission (MedPAC).
Under Medicare Part A, telehealth services may be utilized
Access to telehealth services involves a broad range of
in the treatment of hospital inpatients, but there is no
providers, services, settings, modalities, and patients. For
statutory authority for a separate payment under the hospital
example, telehealth providers include physicians, nurses,
Inpatient Prospective Payment System (IPPS). Although no
and psychotherapists who examine and prescribe treatment
payment is involved, CMS guidance for Part A explicitly
for patients who are located at home, at a health center, or
identifies “telehealth” as an alternative to face-to-face
other location that separates the provider and patient.
encounters when a physician writes an order for home
Telehealth providers may consult with patients via
health services.
synchronous communication, such as live
videoconferencing, or asynchronous communication, such
Section 1834(m) of the SSA, which establishes telehealth
as store-and-forward technologies. “Store and forward”
requirements for Medicare Part B, has been an area of focus
technologies feature a time delay between the capture and
of recent telehealth-related legislative activities. Statutory
evaluation of patient data. Store-and-forward telehealth is
requirements for Part B specify the conditions for payment
used by some providers to assess radiologic images, photos,
for telehealth services. Location, provider, technology, and
and videos that are shared among providers for consultative
other parameters for telehealth service are defined. A
purposes, when a face-to-face visit is not required. For
distant site is the site where the physician or practitioner is
detailed information on telehealth and its applications, see
located at the time the service is provided via a
CRS Report R44437, Telehealth and Telemedicine:
telecommunications system. An originating site is a site
Description and Issues. The rapidly evolving nature of
where the eligible telehealth patient is located when the
digital medicine raises questions about newer technologies,
service is furnished via a telecommunications system. The
such as mobile applications and wearable technology
originating site must be located (1) in an area that is
systems, which do not always fit with more traditional
designated as a rural health professional shortage area
concepts of health care delivery (both in private and public
(Section 332(a)(1)(A) of the Public Health Service Act); (2)
health insurance systems, including Medicare). Although
in a county that is not included in a Metropolitan Statistical
these and other telehealth modalities have the potential to
Area—or a rural county; or (3) from an entity that
increase health care access among certain patient
participates in a federal telemedicine demonstration project
populations, not all are paid for under programs such as
that has been approved by (or receives funding from) the
Medicare. Medicare covers telehealth services to a limited
Secretary of HHS as of December 31, 2000. Distant
extent.
telehealth providers are physicians, nurse practitioners,
physician assistants, nurse-midwives, clinical nurse
The Centers for Medicaid and Medicare Services (CMS),
specialists, certified registered nurse anesthetists, clinical
within the Department of Health and Human Services
psychologists, clinical social workers, and registered
(HHS), administers the Medicare program and makes
dietitians or nutrition professionals and, under current
decisions on telehealth coverage and reimbursement. The
regulation, they are the only providers who are eligible to
Medicare program was established in 1965 under Title
receive payments as “distant site” providers (42 CFR
XVIII of the Social Security Act (SSA, P.L. 74-271, as
410.78(b)(2)).
amended) to pay for benefits in the form of health insurance
payments to providers who deliver services to beneficiaries.
Telehealth services for Medicare beneficiaries must be
In 2017, Medicare expects to provide health insurance
delivered via a “telecommunications system.” The systems
benefits to more than 58 million seniors and certain
must have an interactive audio and video component that
individuals with disabilities at an estimated annual cost of
supports real-time (or synchronous) communication
$705 million. The program organizes payments for health
between the provider and patient. Asynchronous or “store
services mainly through the following parts: Part A
and forward” technologies, where there is a time delay
(inpatient hospital services, skilled nursing facility services,
between the capture and evaluation of patient data, are paid
and hospice care); Part B (physician and non-physician
for only by federal demonstration programs taking place in
practitioner services, therapy services, preventive services,
Alaska and Hawaii. Outside of demonstration projects,
clinical laboratory and other diagnostic tests, Part B drugs
telehealth visits must take place at qualified facilities in
and biologics, and other selected types of outpatient
rural locations. Note that location is a significant matter for
services); Part A and B (home health services and end-stage
health centers and rural health clinics because the law or
regulations restrict telehealth payments to location.
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Telehealth and Medicare
Originating sites may include Federally Qualified Health
Innovation Initiative models. Following the ACA, the
Centers (FQHCs) and rural health clinics. FQHCs must
Medicare Access and CHIP Reauthorization Act of 2015
serve a Medically Underserved Area (MUA) or Medically
(MACRA, P.L. 114-10) repealed the Sustainable Growth
Underserved Population (MUP) as well as meet other
Rate formula and replaced it with the Quality Payment
statutory requirements for Medicare payment (in Section
Program (QPP), which rewards providers for delivering
1861(aa)(4) of the SSA). FQHCs are located in rural and
high-quality patient care through Alternative Payment
urban locations. Rural health clinics, on the other hand,
Models and (APMs) and the Merit-based Incentive
must be located in a non-urbanized area, and be designated
Payment System (MIPS). APMs such as ACOs may
as a Health Professional Shortage Area (HPSA), a MUA, or
incorporate telehealth systems or modalities, as specified in
a governor-designated and Secretary-certified shortage area.
MACRA (and in a November 2016 regulation). For
Section 1834(m)(4)(F) requires the Secretary of HHS to
information on QPP models and systems, see CRS Report
provide by regulation a process for adding or deleting
R43962, The Medicare Access and CHIP Reauthorization
telehealth services (and payment codes) that are authorized
Act of 2015 (MACRA; P.L. 114-10). Between 2010 and
for telehealth payment. As of November 2016, CMS
2016, CMS supported telehealth demonstrations that
published nearly 100 types of telehealth services that are
expand telehealth beyond current limits, and designed
covered under Medicare Part B. End-stage renal disease,
payment models that incorporate telehealth. For example in
smoking cessation, and advanced care planning are some
2016, CMMI announced that telehealth benefits are
examples of those services. Regulations further specify
expanded under the Next Generation ACO model. Those
requirements for telehealth providers, services, facilities,
expansions permit beneficiaries associated with a
and payments, but the requirements in both statute and
participating doctor to receive telehealth from their homes
regulation are restrictive in some instances, such as the
regardless of geographic (rural or urban) location. A second
location of the service or the type of technology that is
model, the MA Value-Based Insurance Design (MA-
covered. In 2014, the Medicare Part B telehealth program
VBID), which began in January 2017 and will run through
served approximately 68,000 beneficiaries (0.2% of all Part
2022, authorizes CMS to makes payments to telehealth
B Medicare beneficiaries). This calculation excludes
providers who use telehealth technologies to deliver health
telehealth payments made through the Center for Medicare
services (in the form of supplemental benefits) to specific
and Medicaid Innovation (CMMI), such as Accountable
beneficiaries who are diagnosed with specific clinical
Care Organizations (ACOs).
conditions (such as diabetes, chronic obstructive pulmonary
disease, and heart failure).
Regulations for Medicare Advantage (MA) require plans to
cover telehealth services as part of their basic coverage, as
In 2015, the Congressional Budget Office cited two issues
well as any telehealth services covered under Part B. As an
that make it difficult to predict the impact on federal
added option for enrollees, MA plans may offer telehealth
spending if coverage of telehealth services were changed
technologies as part of a supplemental benefit.
under Medicare—one is the uncertainty over payment rates
Requirements for the supplemental telehealth benefit are
for those services and the second is whether such services
found in the Medicare Managed Care Manual. Telehealth
would substitute for existing coverage or be in addition to
technologies included in MA plans include remote patient
existing coverage. In 2017, the Government Accountability
monitoring, teleconferencing, and nursing hotlines. In 2014,
Office investigated remote monitoring under Medicare and
up to 70% of 2,576 health plans (non-employer MA plans)
found that providers and patients stated that the potential
offered enrollees one or more of the following telehealth
that telehealth and remote patient monitoring have to
technologies: 1,799 plans offered nursing hotlines, 200
improve or maintain quality of care is a “significant factor”
plans offered remote patient monitoring, and 94 plans
that encourages utilization. According to a 2016 MedPAC
offered web- and/or phone-based technology.
report, different payment models (e.g., managed
care/bundled payments versus fee-for-service) impact who
Medicare Medication Therapy Management (MTM),
bears responsibility for the cost of services such as
authorized in Part D, allows participating pharmacists to
telehealth (one model may absorb the costs, another may
use “telehealth technologies” (undefined in the law) to
amount to additional spending for the program).
conduct an annual comprehensive medication review
(CMR) in-person or via telehealth. Telephones or
Legislation in the 115th Congress
interactive video conferencing are among the telehealth
options the MTM plans are offering to enrollees to
Among proposals that have been introduced thus far in the
complete the MTM annual assessment. CMS reports that in
115th Congress, some seek to ease or remove restrictions on
2016, there were 623 Part D contracts: all programs offer
telehealth utilization under Medicare. For example, some
CMRs via telephone consultations, and 36.1% of programs
proposals would amend the SSA to authorize CMS and/or
offered CMRs through telehealth technologies. Section
CMMI to explore the use of telehealth modalities through
10328 of the Patient Protection and Affordable Care Act
demonstration programs or models under Medicare. Other
(ACA, P.L. 111-148) amended Section 1860D–4(c)(2) of
proposals would expand the list of diseases or conditions
the SSA to strengthen requirements for the MTM program,
covered under Medicare Part B and evaluate the overall
and to add the telehealth option.
impact of such coverage on the program.
Established in the ACA, CMMI funds health care payment
Victoria L. Elliott, Analyst in Health Policy
and service delivery models, some of which incorporate
telehealth into their design, such as ACOs and Health Plan
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Telehealth and Medicare
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