Mandated report: Telehealth services and the …medpac.gov/docs/default-source/default-document-library/...Medicare covers telehealth in four areas of the program to varying degrees
16
Mandated report: Telehealth services and the Medicare program Zach Gaumer and Amy Phillips September 7, 2017
Mandated report: Telehealth services and the Medicare program
Zach Gaumer and Amy Phillips September 7, 2017
Presenter
Presentation Notes
Good afternoon. This will be the first of several sessions we will have this Fall discussing telehealth services. As you recall, Congress has mandated MedPAC to write a report about telehealth coverage under the Medicare program.
Presentation outline
Overview of the mandate Project plan Definition of telehealth services and framing the
issue Mandate question 1:
Current Medicare coverage of telehealth services Use of telehealth under the physician fee schedule (PFS)
Discussion and next steps
2
Presenter
Presentation Notes
Our goal today is to walk through each of the items listed above. First we will review the language of the mandate itself. We will discuss the project plan for this report. We will define telehealth services and also frame the issue a bit by describing the current debate and other key information. Then we will dive into answering the first question of the mandate by describing current Medicare coverage for telehealth services and recent utilization patterns of telehealth under the fee schedule for physicians and other professionals. Finally, we will gather your thoughts on the information we have provided and lay out our next steps in the project.
MedPAC report mandated by Congress in the 21st Century Cures Act of 2016
By March 15, 2018, MedPAC shall provide information to the committees of jurisdiction that identifies:
1. The telehealth services for which payment can be made, under the fee-for-service program under Medicare Parts A and B; (September)
2. The telehealth services for which payment can be made under private health insurance plans; (October)
3. Ways in which telehealth services covered under private insurance plans might be incorporated into the Medicare fee-for-service program (including any recommendations for ways to accomplish this incorporation). (November)
3
Presenter
Presentation Notes
Through the 21st Century Cures Act of 2016, Congress mandated MedPAC to provide a report by March 15, 2018 answering three questions. The first question is: What telehealth services are covered under the Medicare FFS program, Parts A and B? This is what we will be talking about today, and we hope to resolve any questions you might have about current Medicare coverage. The second question Congress posed is: What telehealth services do commercial health plans cover? This question will be the focus of our October session. Third, Congress asked the Commission: How telehealth services covered by commercial health plans might be incorporated into the Medicare FFS program. We will address this question at our November session. After these three sessions we will have discussed all three of Congress’ questions. To complete our work on this report and deliver it on time in March, we will come back to you in January 2018 to review the entirety of our findings and gather your final thoughts.
Telehealth definition: Services fall into six general categories Telehealth services include various combinations of:
Services (e.g., primary care, mental health, neurology), Technologies (e.g., two-way video, email, phone, text), and Modalities (e.g., internet, internal IT system, monitoring center)
4
Basic medical care and consultations
Remote monitoring
Asynchronous transmission of data
1. Patient in the presence of a clinician connecting to a second clinician
2. Patient at home connecting to a clinician
3. Clinician connecting to another clinician (patient not present)
4. Patient in the hospital or other facility
5. Patient at home, referred to as remote patient monitoring (RPM)
6. The storing and subsequent forwarding of data such as images, scans, video, or written descriptions to a clinician for evaluation
Presenter
Presentation Notes
Telehealth services are defined broadly and they continue to evolve. These services encompass a variety of combinations of clinical services (such as primary care, mental health, or neurology), technologies (such as two-way video, email, text, and telephone), and modalities (such as using the inTERnet, internal intranet IT systems, or telehealth monitoring center systems). It is important to recognize that telephone, email, and text are often considered telehealth systems, along-side two-way video and remote patient monitoring. I also want to point out that the definition of telehealth services expanded significantly with the dawn of wireless internet, smart-phones, and easily accessible two-way video technology. While telehealth services can mean a lot of different things, for the sake on discussion, we organized these services into 6 general categories. Three of these categories, in the green box above, involve the provision of basic medical care and physician consultations. This includes, patients in the presence of a clinician connecting with a second clinician in a distant location for a telehealth consultation. This category would include services such as telestroke care in the ER or consults with specialists out of the primary care doctor’s office. Another category is when patients at home (or this could mean at work or in their car) connect with a clinician in a distant location. Companies like Teledoc and American Well largely exist in this space. Another category involves clinicians connecting to a second clinician in a distant location when the patient is not present at either location. In the blue box above we have two more telehealth categories, involving the remote monitoring of patients. One category of this involves patients inside a facility being monitored by clinicians down the hall or even at a distant location. This commonly occurs in hospital ICUs. A second category of this involved patients in their homes (or place of residence) being monitored by a clinician in a distant location. This is what we commonly refer to as remote patient monitoring, or RPM. Finally, in the purple box, the 6th category of telehealth involves the asynchronous transmission of data. This is also referred to as store-and-forward telehealth, and what that means is that the patient or a clinician takes an electronic image or video of the patient, saves it, and then sends it to a second clinician for evaluation at a distant location. So we think of telehealth services in these 6 categories.
Background and framing the issue
Interest in telehealth has grown in recent years Advocates: Telehealth expands access, increases convenience,
improves quality, and reduces costs Critics: Telehealth services may increase costs because they
supplement rather than substitute for in-person visits June 2016 MedPAC chapter:
Efficacy of telehealth services is mixed Incentives for use differ among various payment systems
Most Medicaid programs, DOD, and VA cover telehealth to varying degrees
34 states have passed telehealth parity laws that require commercial insurers to cover telehealth visits equal to in-person visits
5
Presenter
Presentation Notes
There has been growing interest in telehealth in recent years, by a variety of different stakeholders. Advocates of telehealth assert that telehealth expands access, increases convenience, improves quality, and reduces costs. Others assert telehealth services increase costs because it supplements in-person care rather than substitutes for in-person care. In June 2016 the Commission concluded that existing evidence on the efficacy of telehealth was mixed, and that the incentive for using telehealth services differed among the various types of payments systems. We know that several government programs cover telehealth services, but to varying degrees. In addition, to date, 34 states have passed telehealth parity laws requiring commercial insurers to cover telehealth services equal to in-person services.
Medicare covers telehealth in four areas of the program to varying degrees
1. Physician fee schedule (PFS) (constrained)
2. Other fee-for-service (FFS) payment systems (flexible)
3. Medicare Advantage (flexible)
4. CMMI initiatives (flexible)
6
Presenter
Presentation Notes
In answering the first question of the mandate, I’m now going to walk you through telehealth coverage in 4 areas of the Medicare program. Medicare currently covers telehealth services under three different areas of the program with varying flexibility. Flexible coverage exists under: Several FFS payment systems which account for 46% of overall Medicare spending,� Under the Medicare Advantage program which accounts for 29% of overall Medicare spending, As well as under 2-sided risk Accountable Care Organizations (whose spend, for purposes of this charts, is captured in other categories). Under the fee schedule for physicians and other health professionals, which accounts for 12% of overall Medicare spend, telehealth coverage is more limited. The remaining 13% on the pie chart captures Part D and other expenditures which will not be a focus of our conversation today. I will now walk you through the 4 listed areas and explain in-detail their coverage policies for telehealth.
Physician fee schedule (PFS): Telehealth coverage
7
Coverage parameters: Originating sites: Rural facilities and physician offices Distant sites: Clinicians in any location Modalities: Two-way video, and some store-and-forward Services covered: Among others - office visits, kidney disease,
mental health, substance abuse, nutrition, and pharmacy management
Constraints: Some limits on frequency of use
Payment: Each discrete service paid separately (originating site = $25, distant site = 100% of PFS facility rate)
Cost sharing: 20% (originating and distant site payments)
Incentive: increase volume of services
Presenter
Presentation Notes
As I previously mentioned, Medicare currently covers telehealth services under three different areas of the program with varying flexibility. For this slide I am going to review the most limited coverage which exists in the traditional fee for service payment system which accounts for only 12% of overall Medicare spend. Under the fee schedule for physicians and other health professionals there is a limited set of telehealth services on a fee-for-service basis. These services are covered if they originate in rural areas at one of several different types of facilities. Rural areas are defined by HPSAs and MSAs. There are no restrictions on the location of the distant site, which are defined as where the consulting clinician is located. Payment used to be based on the type of site, but starting this year with a CMS rule change, all consulting physicians are paid 100% of the hospital fee schedule rate, regardless of it they are in an office setting. Originating sites still receive a flat facility fee payment of roughly $25 for each visit. Medicare permits two specific types of telehealth modalities eligible for reimbursement, two-way video and in Alaska and Hawaii, what is called store-and-forward technology. CMS largely determines which fee schedule service codes are covered as telehealth services. These currently include general services like E&M visits and specific services like psychotherapy (you can refer to page BLANK of your mailing materials for a complete list of covered services).
Physician fee schedule (PFS): Telehealth coverage
Telehealth services are contemplated within various PFS management codes: Transitional care management (TCM) Chronic care management (CCM) Others:
90-day global surgery Behavioral health integration Continuous positive airway pressure (CPAP) codes
Remote interpretation of tests Cardiac monitoring Retinal imaging
8
Other Medicare FFS payment systems: Telehealth coverage
Other FFS systems with telehealth coverage include: Inpatient hospital, outpatient hospital, skilled-nursing
facilities, long-term care hospitals, inpatient rehabilitation, dialysis facilities, home health, and hospice
Payment: Telehealth contemplated in fixed payment for patient encounters
Incentive: Use telehealth if it reduces costs (at risk if cost of encounter exceeds fixed payment)
Reporting of telehealth costs to CMS Included in cost report: hospitals, SNFs, LTCHs, IRFs, and
dialysis facilities Not included in cost report: home health and hospice
9
Presenter
Presentation Notes
Under Medicare’s other FFS payment systems, such as for inpatient hospitals, skilled nursing facilities and home health agencies, providers receive a fixed payment for patient encounters. Different from the physician fee schedule, the payment these providers receive for using telehealth services is contemplated in the fixed payment the provider receives for the beneficiary encounter. These Medicare fee for service payment systems include: inpatient hospital, outpatient hospital, SNF, IRF, LTCH, ESRD, home health, and hospice. An example of how telehealth costs are contemplated would be hospitals using telehealth services to treat beneficiaries in the intensive care unit (ICU). The hospital may use telehealth, but their payment rate would be based on the Medicare severity-diagnosis related group (MS-DRG) corresponding to the patient’s condition and they would not receive a separate payment for using telehealth services. Most FFS payment systems permit providers to include costs related to telehealth services on their annual CMS cost reports as allowable (or reimbursable) costs. These providers include: hospitals, SNFs, IRFs, dialysis facilities, and LTCHs. As a result, Medicare builds these telehealth costs into the provider’s payment rates. However, Under the home health and hospice payment systems, telehealth services are not considered equivalent to in-person home health or hospice visits for the purposes of payment and these costs are not included in CMS’s calculation of future fixed payment rates for these providers. Therefore, home health agencies and hospices are not allowed to include the costs of telehealth services in their annual cost reports.
Medicare Advantage: Telehealth coverage
Coverage parameters: Must mirror telehealth coverage under FFS Flexibility to cover additional telehealth through
supplemental premiums and rebate dollars
Payment: Annual capitated payments Incentive: Use telehealth if it reduces costs (at risk if
annual beneficiary costs exceed payment)
10
Presenter
Presentation Notes
The most flexibility to use telehealth in the Medicare program occurs in Medicare Advantage and within CMMI demonstration programs, mainly ACOs. Under MA, payments to plans are capitated and plan coverage must include telehealth services covered under FFS Medicare. These benefits are constrained to the same rural and originating and distant site rules as the physician fee schedule. As part of that requirement, MA plans can use telehealth services adjunct to the delivery of the broad range of services covered under the PFS which are considered to be within the scope of Medicare-covered services. However, plans also have the flexibility to finance the coverage of additional telehealth services through a supplemental premium or through their rebate dollars. These telehealth services offered by plans as supplemental benefits may not be built into the plan bid, but any savings from their use can be captured by the plans. Under CMS’s Center for Medicare & Medicaid Innovation, organizations selected for several programs have waivers to use telehealth services beyond the limits of PFS coverage. For example, the Next Generation ACO initiative has waivers to use the telehealth services covered under the PFS in urban settings and at patients’ place of residence. In the case of the Next Generation initiative, ACO physicians receive FFS payment rates telehealth visits, and the ACO remains at risk for each patients’ total spending. CMMI also maintains several other smaller initiatives incorporating telehealth services.
CMMI’s two-sided ACOs: Telehealth coverage
Coverage parameters: Waivers to cover telehealth in urban areas and in the patient’s home
Payment: Paid FFS rates, but bonus payments or losses tied to cost savings and quality
Incentive: Use telehealth if it reduces costs (risk of not receiving bonus payment if annual beneficiary costs exceed target)
11
Telehealth use under the Medicare PFS
Use was low in 2016 108,000 unique beneficiaries (0.3 percent of Part B beneficiaries) 9.5 telehealth visits per 1,000 Part B beneficiaries (7,800 total
physician visits per 1,000 Part B beneficiaries) $27 million for 319,000 encounters
Use concentrated among few providers and beneficiaries 10 percent of providers accounted for 72 percent of visits 10 percent of beneficiaries accounted for 46 percent of visits
Most common services: E&M office visits (58 percent) Mental health visits (23 percent) Inpatient hospital or nursing care follow-up visits (13 percent) Other: 2,000 ESRD visits and 2,000 telestroke visits
12 Preliminary and subject to change
Presenter
Presentation Notes
Our knowledge of the use of telehealth services under Medicare is limited to the physician fee schedule, where individual telehealth visits are reported on claims. This information is not included on claims data for the 3 other areas of the Medicare program Amy described. Therefore, we do not know the extent to which telehealth is being used under the other FFS systems, Medicare Advantage, and ACOs. However, we are able to identify some clear trends within the physician fee schedule. Physician claims indicate that the use of telehealth services was low in 2016. That year, just over 100,000 unique beneficiaries had a telehealth visit, or 0.3 percent of all Part B beneficiaries. Use amounted to roughly 9.5 telehealth visits per 1,000 Part B beneficiaries, and this is extremely low relative to the use of physician services. Spending on physician telehealth amounted to only $27million, and this was for just over 300,000 encounters. Telehealth use was highly concentrated into a small group of providers and beneficiaries. 10 percent of providers accounted for 72 percent of visits, and 10 percent of beneficiaries accounted for nearly half of visits. The most common physician services used via telehealth were basic evaluation and management office visits and mental health services such as psychotherapy. A wide variety of services account for the remainder of visits, but we also see telehealth use for inpatient and nursing follow-up care, ESRD, and telestroke in the emergency department.
Telehealth use under the Medicare PFS….continued
Rapid growth between 2014 and 2016: 79 percent increase in visits per 1,000 beneficiaries (5.3 to 9.5) 65 percent increase in spending ($16 million to $27 million)
Most rapidly growing services: Subsequent nursing care (263 percent) Psychotherapy (180 percent) Pharmacological management (148 percent)
Growth most rapid in states with large rural populations Mississippi Alaska Virginia
13
Presenter
Presentation Notes
While use was low, the growth in telehealth use has been rapid. Between 2014 and 2016, the number of telehealth visits per 1,000 beneficiaries increased 79 percent. Similarly, telehealth-related physician fee schedule spending increased 65 percent. This is very rapid growth considering that all Medicare physician services increased no more than 3 or 4 percent over the last 2 year period we measured. The most rapidly growing services were for subsequent nursing care, psychotherapy, and pharmacy management. Each of these services grew by over 140 percent over the two year period. Keep in mind that one factor in this rapid growth is that the base use in 2014 was extremely low. Growth was also faster in states with large rural populations. Growth was highest in Mississippi, North Dakota and Virginia.
Characteristics of beneficiaries using telehealth services under the PFS in 2016 Characteristic Telehealth users All beneficiaries
Average number of physician claims per beneficiary
49 claims 29 claims
14
Source: CMS Carrier and Denominator files
Presenter
Presentation Notes
Beneficiaries using telehealth services under the PFS were disproportionately dually eligible, under age 65, and disabled. ESRD patients represented a small share of telehealth users, but their use was still disproportionate to their representation in the program overall. A disproportionate share of telehealth users were in chronic condition categories such as mental health conditions and diabetes. The dual eligibles accounted to 71 percent of all telehealth visits. Telehealth users with Alzheimer’s and CHF have higher average use of telehealth services. Finally, across all telehealth users, approximately 6 percent of all their physician visits were telehealth visits. This varies by chronic condition category.
Summary
Medicare coverage Broadly available under some FFS systems, MA, and ACOs
Providers/payers bear some financial risk Telehealth contemplated as part of a fixed payment Incentive to use telehealth if it is efficient
Less flexibility under the PFS (rural and certain services) Telehealth paid on FFS basis with volume May increase costs if it is a supplemental service Some blocks of PFS cover telehealth as part of a fixed payment
Patterns of telehealth use under the PFS Low use: primary and mental health visits, concentrated Rapid growth: nursing care, psychotherapy, drug management Telehealth users: Duals, rural, and mental health conditions
15
Discussion and next steps
Questions about Medicare coverage and utilization?
October: Coverage of telehealth services by commercial plans
November: Discussion of incorporating elements of commercial plan telehealth coverage into the Medicare FFS program?
16
Presenter
Presentation Notes
That concludes our presentation. We are particular interested in gathering your thoughts on the additional information you need in order to form your thoughts about telehealth coverage under Medicare As you know, our next steps are to bring you new information in October and November.
