Medicare Reimbursement an Obstacle to Growth of Telemedicine

Despite slow progress, hopes for steady growth endure.

Is telemedicine about to get a big financial boost? Maybe, but regardless, momentum seems to be with it these days regardless.

For many years, telemedicine advocates have worked to put it in the mainstream of healthcare services – no small task, considering the many aspects of the healthcare regulatory structure.

The issues telemedicine faces involve both state and federal jurisdiction,  falling within the domain of at least 51 different jurisdictions and nearly countless regulatory agencies and legislative committees. Despite this messy environment, however, progress has been made, particularly at the state level.

According to many, the most significant barrier to the broader adoption of telemedicine has been the burdensome limited reimbursement offered by Medicare. Recently, Congress has taken steps that have given telemedicine supporters hope on this front:

  • In September, the U.S. Senate, in a rare bit of bipartisanship, adopted the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act, representing the single largest potential expansion of telemedicine reimbursement in a long time. Specifically, the law would:

    • Allow Medicare Advantage plans to include telemedicine as a primary service and not a supplemental benefit;
    • Allow reimbursement for telemedicine check-up visits for at-home dialysis patients; and
    • Expand reimbursement for telestroke programs.
  • While the House is not considering corresponding legislation, it has adopted legislation covering much of what is covered by the CHRONIC Care Act.
  • In addition, the federal legislative bodies have continued to offer and pass legislation calling for further study, analysis, and experimentation with telemedicine – including by the Center for Medicare & Medicaid Innovation (CMMI). 

While these expansions to Medicare coverage and reimbursement are very positive, we must also recognize that obstacles and pitfalls remain. These include the following:

  • First, while the introduction of these bills offers reason for hope, they remain bills and not laws.
  • Second, telemedicine prescribing remains difficult, subject to restrictions imposed by state anti-Internet pharmacy rules dating back many years and the federal Ryan-Haight Act, which restricts electronic prescribing of controlled substances.
  • Third, there is a significant and remarkable lack of public awareness of the extent and degree of integration of telemedicine and other digital health tools into health programs.  Recent surveys of Medicare and non-Medicare beneficiaries indicate a massive disparity between their use of digital health tools – which is quite high – and their understanding of whether digital tools are incorporated into their plans – which is quite low (as low as 9 percent).
  • Finally, even though telemedicine reimbursement represents .00046 percent of Medicare reimbursement, this has not stopped the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) from taking notice and forming a plan for tracking and monitoring certain billing discrepancies, which could have a chilling effect under existing Medicare reimbursement models.

So where does this leave us?

What is important to note, I believe, is that we appear to have reached a tipping point in that support for telemedicine generally appears to be both growing and expanding across many sectors of the healthcare industry. And while issues remain, there now appears a growing consensus that poor Medicare reimbursement for telemedicine services – one of the largest obstacles to the growth of telemedicine so far – should be addressed.  How we get there remains to be seen.


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