“Social distancing,” a euphemism for an infection prevention and containment strategy, will undoubtedly live in the annals of meme history for its incredibly disrupting effects on the world. Fortunately, advancements in technology that allow one to upload the same memes to the internet have also enabled medical providers to respond to the COVID-19 pandemic by furnishing medical care, also known as “telehealth” or “telemedicine,” to their patients in the comfort (and safety) of their own homes, thereby helping prevent the spread of COVID-19.
Payers have different rules regarding coverage and payment for telehealth, including public payers like Medicare and Medicaid. But while Medicare is limited in what they can do with telehealth on a permanent basis, Medicaid has considerably more flexibility to implement telehealth reforms that may endure past the public health emergency associated with COVID-19. Today, we thought we would explore the extent of that flexibility for our readers as we’re fairly confident that the nature of the delivery of care will change even after the conclusion of the COVID-19 pandemic.
The term “telehealth” or “telemedicine” is used widely in the Medicare program because Congress expressly allowed it to be paid in the same manner as the existing covered benefit for physician or practitioner services for Medicare beneficiaries. In Medicare, the Centers for Medicare & Medicaid Services (CMS) has defined the telecommunications technology necessary to furnish telehealth as requiring “two-way” interactive audio and visual telecommunications technology that allows real-time interaction between the provider and patient. Furthermore, Medicare ordinarily pays for telehealth furnished while the patient is in their home under very limited circumstances. In response to the COVID-19 public health emergency (PHE), however, Congress and CMS have significantly relaxed many of these requirements for the duration of the PHE.
Medicaid, on the other hand, is not as federally restricted in its offering of telehealth. The Federal Medicaid statute and implementing regulations do not specifically recognize telehealth as a distinct service. Instead state Medicaid programs are generally afforded broad flexibility to cover telehealth services in the same manner in which state Medicaid programs cover face-to-face services under their existing state plan, Medicaid waiver, or state demonstration projects. States also have flexibility in setting payment rates for services provided through telehealth to Medicaid enrollees. And as we will see, CMS has recently clarified for states that they have greater flexibility to offer telehealth to Medicaid beneficiaries than is available to Medicare beneficiaries in the Medicare program.
Recent CMS Guidance
On April 2, 2020, the Center for Medicaid and CHIP Services (CMCS) issued an informational bulletin (Guidance) clarifying that states may set payment methodologies for telehealth services that reimburse for the time spent by the provider at a distant site, the installation of equipment needed to perform the telehealth service, or the telehealth equipment itself. In the Guidance, CMS recognizes that there are generally four types of methods to furnish “telehealth”:
When state Medicaid programs pay for services provided via telehealth, reimbursement is typically set only to cover the provider’s time providing the covered service. Many states require the provider to bill using the same code applicable to the service as if it were provided face-to-face, with a modifier indicating that the service was provided via telehealth. Payment is generally set based on the rates for the face-to-face service. While CMCS indicates that states may reimburse for the underlying telecommunications equipment that providers utilize in performing telehealth services, we are not aware of any state that currently does so.
COVID-19 Pandemic and Telehealth
In the Guidance, CMCS recognizes that the use of telehealth was rapidly proliferating across the country even prior to the onset of the COVID-19 pandemic. In Medicaid, this is in part because leveraging telehealth is administratively less burdensome than other coverage/payment reforms since a state Medicaid program does not need to submit a State Plan Amendment (“SPA”) to incorporate telehealth if there are no changes to the underlying benefit descriptions, limitations, or payment methodologies otherwise applicable to face-to-face services. Medicaid managed care organizations (MCOs) have similar flexibility to implement telehealth services as a covered benefit.
Given the accelerating effects that the COVID-19 pandemic has had on expanding the utilization of various telehealth modalities, we expect that state Medicaid programs’ increased familiarity with telehealth will result in permanent adoptions of telehealth policies across the country. Indeed, patients really like telehealth. A survey conducted by Sage Growth Partners and Black Book Market found that 25% of 500 consumers responded that they had used telehealth previously, but that 59% are more likely to use telehealth services now than previously. As more patients are exposed to healthcare furnished via telehealth, telehealth will increasingly become “validated” in the eyes of patients and physicians who may otherwise have been skeptical of its use.
In summary, Congress and CMCS have ensured that from a regulatory perspective, state Medicaid programs have wide flexibility to adopt telehealth as a central component to their delivery of care with minimal administrative cost. Whether the supply of telehealth will meet demand will depend on state Medicaid programs’ nimbleness in recognizing the value of telehealth and their willingness to ensure adequate payment for the wide range of telehealth modalities.