Medicare has been slow to adopt telehealth services such as videoconferencing with a physician, remote patient monitoring, or the sharing of digital medical images with a specialist located miles away. But that’s about to change for some 20 million Medicare beneficiaries who are enrolled in the program’s private plans, known as Medicare Advantage (MA) plans.
The reason? The Bipartisan Budget Act of 2018, which overhauled the way Medicare pays private plans for telehealth services, takes effect in 2020. With this new policy, MA enrollees could soon have much greater access to remote health care services. Yet, the change also raises some potential concerns.
Here’s a look at the new policy and its implications, starting with how things work now.
Limited telehealth benefits under Medicare Advantage before 2020
Medicare pays private plans to cover the same set of basic benefits as those offered under traditional Medicare. Today, this includes only a very limited number of telehealth services. What’s more, telehealth benefits in MA plans’ basic package are subject to the same restrictions as under traditional Medicare: people who get remote health services must be in a medical facility located in a rural area.
In theory, under current rules, MA plans can also offer additional telehealth services that traditional Medicare doesn’t cover. But, in practice, MA plans have offered few telehealth services. That’s because, to pay for such extra telehealth services, insurers need to charge enrollees an additional premium, or use savings (“rebate dollars”) from offering health coverage that is less costly than traditional Medicare.
A new way to finance additional telehealth benefits
The number of telehealth services available in MA plans could balloon once provisions of the Bipartisan Budget Act are implemented in 2020. The reason is that, under the new law, MA plans will have more flexibility to offer additional telehealth benefits. Specifically, Medicare will cover the cost of extra telehealth services that traditional Medicare does not offer as part of its payment to MA plans—in addition to paying for telehealth services that traditional Medicare allows.
New telehealth benefits and greater access
In rules to implement these changes in the law, the Centers for Medicare & Medicaid Services (CMS) recently proposed to give MA insurers broad discretion in determining which telehealth services to offer under the new funding arrangement—as long as they are clinically appropriate. Combined with changes to how Medicare pays for extra telehealth benefits, these new guidelines could encourage MA plans to offer many more telehealth benefits starting this fall, during Medicare’s next open enrollment period. The proposed rules would also allow consumers to use the new connected health services regardless of whether they live in a rural or urban area, and from their home rather than having to travel to a health care facility. But people who prefer seeing their health care provider face-to-face could still do so.
Why this matters
Expanding access to telehealth has significant implications for the Medicare program and Medicare beneficiaries. Policymakers need to monitor how greater telehealth access is implemented to ensure people are getting the right care for the best possible value.
Wider use of telehealth under Medicare Advantage could result in more timely and efficient care as well as easier access to certain health care providers. On the other hand, greater availability of telehealth services could lead to more visits. Expanded use of telehealth should be closely monitored to ensure that it improves health care quality without unnecessarily increasing costs to the Medicare program.
Consumers should be made fully aware of new telehealth benefits available to them, but in a way that does not worsen the already daunting task of shopping for and navigating MA plans’ benefits. Especially since Medicare’s private insurers have started rolling out a number of other new benefits.
Finally, it is important to remember that MA enrollees make up only one-third of all Medicare beneficiaries. The majority of beneficiaries, who are in traditional Medicare, should not be left out of an expansion of telehealth services. Policymakers should ensure that any potential benefits and improvements are also available to them.
Jane Sung is a senior strategic policy adviser with AARP Public Policy Institute, where she focuses on health insurance coverage among adults age 50 and older, private health insurance market reforms, Medicare Advantage, Medigap, and employer and retiree health coverage.
Claire Noel-Miller is a senior strategic policy adviser for the AARP Public Policy Institute. Her work focuses on Medicare and healthcare quality. She also provides expertise in quantitative research methods applied to a variety of other health policy issues affecting older adults.