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CONNECT for Health Act Would Expand Medicare Reimbursement for Telehealth Services

on Friday, 25 March 2016 in Health Law Advisory: Zachary J. Buxton, Editor

On February 2, 2016, Senate Bill S. 2484 was introduced, entitled “Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act.” The stated purpose of the Bill is to “promote cost savings and quality care under the Medicare program through the use of telehealth and remote patient monitoring services, and for other purposes.” It is mirrored by H.R. 4442, introduced in the House of Representatives. Both sponsoring groups are bi-partisan.

The Act proposes to expand current Medicare standards for reimbursement of telehealth services, which include the following restrictions and limitations:

  • Originating sites (where the beneficiary is located) are restricted to:
    • The office of a physician or practitioner
    • A critical access hospital
    • A rural health clinic
    • A Federally qualified health center
    • A hospital
    • A hospital-based or critical access hospital-based renal dialysis center (including satellites)
    • A skilled nursing facility
    • A community mental health center
  • Geographic limitations:
    • In a rural health professional shortage area
    • In a county that is not included in a Metropolitan Statistical Area or
    • From an entity that participates in a Federal telemedicine demonstration project that has been approved as of December 31, 2000
  • Store-and-Forward Technologies (asynchronous transfer of medical data for analysis and care) are permitted only in Hawaii and Alaska
  • Distant Site Providers are limited to “physicians and “practitioners,” excluding other enrolled Medicare providers

All of these restrictions would be waived as a result of enactment of S. 2484 and H.R. 4442, as introduced. Further, remote patient monitoring (RPM) would be encouraged; the use of telecommunications tools to monitor high risk, chronic patients at home.

In addition, the Act would create a bridge program allowing providers to rely upon telemedicine and RPM in order to transition to the goals of the Medicare Access and CHIP Reauthorization Act and the Merit-based Incentive Payment System (MIPS).

The definition of originating sites would be expanded to include telestroke evaluation and management sites, Native American health service facilities, and dialysis facilities for home dialysis patients in certain cases.

Alternative payment models under Medicare would allow qualifying participants to use telehealth and RPM without the listed restrictions. Further, telehealth services would be covered as basic benefits under the Medicare Advantage program without most of the restrictions listed above.

Finally, the Act would clarify that the provision of services by telehealth (as opposed to face-to-face) does not constitute remuneration so as to implicate anti-kickback and beneficiary inducement laws.

Proponents of the bill promise government savings of $1.8B over ten years. Avalere Health estimated that the three major changes proposed by S. 2484 would initially cause short-term increases of $500B in 2017 and 2018 in Federal health spending, as telehealth office visits and consultations increased under the current fee-for-service payment model. But savings would be realized by 2020 as hospitalizations were reduced as a result of better patient monitoring. In July, the Congressional Budget Office reiterated its earlier opinion that expanded telehealth would increase Medicare spending overall.

The sponsors of the Bill are convinced that there is wide, bi-partisan support for the Act in Congress.

More than 50 industry organizations have endorsed the Bill, including AARP, the App Association, the American Medical Association, the Healthcare Information and Management Systems Society and Intel Corp.

Barbara E. Person

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