Latest telemedicine bill could save $1.8B by waiving Medicare restrictions

By Jonah Comstock
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A bipartisan group of US Senators led by Brian Schatz (D-HI) has introduced new telemedicine legislation that would move to waive restrictions on Medicare telehealth coverage that many consider antiquated or arbitrary. In addition to a coalition of six senators and three representatives, the bill has the support of the American Medical Association, the American Telemedicine Association, and a number of other industry groups, health systems, and tech vendors.

“Telehealth is the future of health care,” Schatz said in a statement. “It saves money and improves health outcomes. Our bipartisan bill puts us on a path to transform health care delivery, making it less costly and more convenient for patients and providers.”

A number of bills have been proposed since 2005 to eliminate provisions of the Social Security Act which restrict Medicare reimbursement for telehealth in various ways. Some of these provisions restrict the use of telemedicine to rural areas, some restrict it to certain originating sites, and some limit the use of store and forward technology outside of Alaska and Hawaii. All of these restrictions are addressed in the Schatz bill.

The bill, called the Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act, would improve access to telehealth in three major ways. It would establish a “bridge program” that allows doctors participating in the Merit-based Incentive Payment System (MIPS) to apply for demonstration waivers that would exempt them from restrictions Medicare imposes on the coverage of telehealth. It would automatically exempt participants in alternative payment models (such as ACOs) from those restrictions. Finally, it would expand the coverage of remote patient monitoring technologies for patients with chronic conditions.

Additionally, telemedicine reimbursement options would be expanded for non-hospital sites including telestroke evaluation and management sites, Native American health service facilities, dialysis facilities, community health centers, and rural health clinics.

Third Way, a centrist Washington think tank, crunched the numbers on the first three provisions and predicts that they would save the government $1.8 billion. Although the waiver program would increase federal spending by $1.1 billion, the other two would offset those costs.

The first proposal is quite a bit more complicated than simply amending the Social Security Act to eliminate the restrictions (the approach taken by previous, failed bills). In order to receive a waiver, providers will have to submit an application detailing how they plan to use telemedicine, and they’ll be subject to random audits to assess whether they’re using the technology in a way that’s consistent with the goals of MIPS. 

According to Third Way, the reason for the waiver program is a guard against over-utilization —to “ensure that telehealth services will be largely replacing the in-office services and that Medicare spending does not increase disproportionately.”