MedPAC Considers Future Policy Options for Expansion of Telehealth in Medicare

Manatt on Health

The Big Picture

Congress and CMS have historically limited coverage of Medicare telehealth services to beneficiaries residing in rural areas and primarily in clinical settings. During the COVID-19 public health emergency (PHE), coverage of telehealth services has been expanded significantly to include all geographic areas and sites of care, including the home. On November 9, 2020, MedPAC staff presented policy options for permanently expanding telehealth coverage after the PHE. MedPAC staff did not recommend a preferred option, but will continue its research, which will inform an upcoming report to Congress.

MedPAC materials for the November 9 session on “Expansion of telehealth in Medicare” can be found here.

Policy Options for Telehealth Coverage Post-PHE

MedPAC staff presented several policy options for coverage of telehealth services post-PHE:

Policy Option Pre-PHE Policy During PHE Policy Post-PHE Policy Option
Coverage for telehealth services provided in the home Only allowed for beneficiaries in rural areas and certain originating sites (but typically not the home) All beneficiaries and in beneficiaries’ homes All beneficiaries and in beneficiaries’ homes
Covered Medicare telehealth services Medicare covered about 100 telehealth services Medicare added about 140 additional services Maintain coverage for all pre-PHE covered services and add some temporarily covered services for which access is limited; Medicare would not cover high-touch services, where there are no major access concerns and/or there are quality concerns (e.g., physical and occupational therapy)
Coverage of audio-only services Limited to virtual check-ins and chronic care management Added coverage for certain types of visits (E&M, behavioral health) Revert to pre-PHE policy; no temporarily covered services would be continued
Payment rates for telehealth services Rate for facility-based services (less than non-facility rate) Rates the same as if furnished in person (facility or non-facility) Pay lower rates for telehealth services than in-person
HIPAA compliance requirements Telehealth services must be provided using HIPAA-compliant products No penalties against providers for noncompliance with HIPAA Telehealth services must be provided using HIPAA-compliant products
Required cost sharing for telehealth services Same cost-sharing liabilities for telehealth services as in-person services Clinicians permitted to reduce or waive cost sharing Same cost-sharing liabilities for telehealth services as in-person services


In addition, MedPAC staff outlined several potential safeguards to protect Medicare and beneficiaries from unnecessary spending and potential fraud, including:

  • Further study whether to set frequency limits for certain telehealth services.
  • Require clinicians to provide a face-to-face visit before they order high-cost durable medical equipment (DME) and clinical lab tests.
  • Prohibit “incident to” billing for telehealth services provided by any clinician who can bill Medicare directly.
  • Prohibit clinicians for billing “incident to” services if they provide direct supervision remotely.

Commissioners Largely Support Expansion of Telehealth Coverage in Medicare, Note the Need for Further Study in Certain Areas

In general, the Commissioners supported the policy options outlined by MedPAC staff to maintain on a permanent basis some of the temporary policy changes made during the PHE. The Commissioners noted several areas for further study:

  • Appropriate payment rates for telehealth services, most notably whether telehealth services should be paid at the same rate as the equivalent in-person service given that the costs are likely lower, and how telehealth payment rates should be considered in the context of a shift to value-based payment models.
  • Coverage for physical therapy (PT) and occupational therapy (OT) services, and whether PT and OT delivered via telehealth should be categorically excluded from coverage as suggested by MedPAC staff.
  • Coverage for services in rural areas and in particular whether rural areas should continue to have some form of expanded telehealth coverage given well-documented access issues.
  • Appropriate rates of cost-sharing for telehealth services and how to balance a desire to prevent unnecessary utilization with the desire to limit administrative burden on providers.

Commissioners Voice Disagreement With Policy Option to End Coverage for Audio-Only Telehealth

Several Commissioners voiced disagreement with the recommended policy option to suspend coverage for telehealth services delivered via audio-only at the end of the PHE, noting that there are many services that can be effectively delivered via audio-only (in particular behavioral health services) and also that there are significant access barriers to video visits, most notably access to broadband internet.

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