Medicare Telehealth Restrictions Too Tight

If accountable care organizations are being set up to improve healthcare and lower costs, rules that put severe restraints on telemedicine reimbursement seem counterintuitive.

Marianne Kolbasuk McGee, Senior Writer, InformationWeek

May 5, 2011

5 Min Read

In the Boston suburbs, a three-mile, 10-minute ambulance ride to the hospital can cost a whopping $900; I've seen the ambulance bills and the insurers' explanation of benefits statements. In many cases, Medicare or other health payers will pick up much of the tab, but those charges don't include the thousands of dollars in additional fees for ER visits or hospitalizations.

Many of these expensive hospital trips involve the elderly, disabled, or chronically ill. I suspect that many of those situations would not require an ambulance, an ER visit, or hospitalization if alternative care, including video consultations with specialists, remote monitoring, and other telehealth services were available.

Under the Affordable Care Act health reform legislation signed into law last year, accountable care organizations (ACOs) are being established to help improve quality, manage patient care, and reduce costs. The ACOs are to be made up of participating healthcare providers--such as regional hospital groups and doctor practices--who will be reimbursed a premium from the Centers of Medicare and Medicaid Services (CMS) for their coordination and shared savings in caring for patients, including those with certain chronic conditions.

According to the Affordable Care Act, ACOs "shall define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth, remote patient monitoring, and other such enabling technologies."

However, CMS's recently published proposed rules for ACOs have provoked the American Telemedicine Association to write a letter of protest. That's because several of the proposed rules subject an ACO to "formidable statutory restrictions for telehealth services under Medicare Parts A and B," according to the ATA.

12 Innovative Mobile Healthcare Apps

12 Innovative Mobile Healthcare Apps

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12 Innovative Mobile Healthcare Apps

Among the restrictions that ATA opposes is one that only allows coverage of videoconferencing services to patients in rural communities, even though 35 million Medicare beneficiaries live in U.S. metropolitan areas. Other restrictions being protested include disallowing coverage for telehealth services if they originate from a patient's home, hospice, or dialysis center. The regulations also rule out coverage of telehealth services for occupational, physical, speech, and other therapies.

I agree with the ATA: The proposed telemedicine rules need to be loosened, allowing for more widespread covered use of telehealth. For one thing, ACOs will likely have millions of urban patients with chronic conditions or who are recovering from illnesses such as stroke or heart attacks that could benefit through telehealth services.

Patients often have to wait days if not weeks to get an in-person office visit with a medical specialist. Telehealth technologies can help some practitioners "see" more patients sooner.

Furthermore, the elderly often rely on others to drive them to appointments, and if a patient also has a chronic illness or physical disability, he or she may find it quite difficult to travel at all, whether by car, bus, or train, to a doctor's office.

If taking an ambulance a short distance to a local ER can cost close to $1,000 in some metropolitan regions of the country, isn't it better for the patient and less costly to CMS if the patient can be evaluated or monitored remotely before a non-urgent medical problem becomes an emergency?

It's likely that CMS is looking to restrict the use of some telehealth services by ACOs for fear they'll be overused, misused, or even abused. That would mean some patients receive less adequate care than in-person encounters or lead to dishonest providers overbilling for unnecessary or undelivered telehealth services. Better fraud detection technologies will hopefully deal with that issue.

With CMS waving $27 billion in Health Information Technology for Economic and Clinical Health (HITECH) Act incentives at healthcare providers who invest and meaningfully use health IT, these technology deployments also serve as a foundation for further innovations. But regulations being proposed by CMS for ACOs seem to be counterintuitive to the goals of the HITECH Act and the Affordable Care Act, which both promote IT-enabled healthcare.

As new ACO efforts emerge, what's needed are CMS demonstration pilots that reimburse ACOs for innovative telemedicine and mobile health programs offered to patients in many regions, including metropolitan areas. These pilots should also include patients who need to initiate telehealth services from their homes or other places not currently included in the CMS proposals.

If these ACOs succeed in keeping a test group of patients healthier through the help of telehealth programs--by reducing ER visits, hospitalizations, and expensive ambulance rides--then the investments in telehealth by ACOs and the reimbursements paid by CMS are well spent.

If you want to let CMS know what you think about the proposed telehealth regulations for ACOs, the agency is accepting public comments until June 6.

In the meantime, InformationWeek Healthcare would like to hear about compelling and transformational telehealth or mobile healthcare apps that you think will help practitioners communicate with patients or do their jobs better.

In fact, you can nominate your favorite mobile health or telehealth applications as part of our first Mobile Application Smackdown competition. Finalists for the competition will provide live demos of their products at the first InformationWeek Healthcare IT Leadership Forum to be held at the Grand Hyatt Hotel in New York City on July 12, 2011.

Nominate your favorite mobile health or telehealth application as part of our Mobile Application Smackdown competition.

Marianne Kolbasuk McGee is a senior writer for InformationWeek.

Recommended Reading: Mobile Health App Users Want Intelligent, Interactive Features National Health IT Coordinator Mostashari Outlines Challenges Program Links Hospital Labs To Public Health Agencies Vidyo, Massachusetts Hospital Partner On Telemedicine USDA To Fund 45 Rural Telemedicine Projects American Well Launches Telehealth For SMB Practices See more by Marianne Kolbasuk McGee

About the Author(s)

Marianne Kolbasuk McGee

Senior Writer, InformationWeek

Marianne Kolbasuk McGee is a former editor for InformationWeek.

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