Five National Policy Developments that Advance Telemedicine

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This year was a busy year for telemedicine at the state level. State legislatures and medical boards across the country considered dozens of measures, most of them aimed at improving the policy environment for telemedicine. In the flurry of activity, you may have missed some major developments at the national level that are going to continue to propel telemedicine into the mainstream of health care tools. I will elaborate on these developments in future blog posts, but here is a summary.

1. Network Adequacy

The National Association of Insurance Commissioners (NAIC) establishes model guidelines for network adequacy, which defines the sufficient number of medical providers and hospitals a health plan must have to adequately treat patients. On September 1st, the NAIC released a draft Network Adequacy Plan for legislators across the country to consider in 2016. The plan adds telemedicine to the list of criteria an insurance commissioner can take into consideration in determining the sufficiency of networks. This development, if finalized in its current form, means that health plans will be able to use telemedicine as a factor in determining whether plan members have adequate access to providers. In areas with provider shortages, this means that telemedicine will officially be able to fill gaps in access to care.

2. The Medicare Access and CHIP Reauthorization Act (MACRA)

Signed into law in April, the legislation fundamentally changes the way physicians, nurses and other practitioners will be paid by Medicare. Starting in 2019, providers will no longer receive automatic annual payment updates. For the first time, pay increases will depend on performance. Providers can achieve reimbursement growth through one of two paths – participation in an alternative payment model, or positive results as part of the Merit-based Incentive Performance System (MIPS). MIPS will measure performance in four areas: 1) quality; 2) resource utilization; 3) investment in clinical improvement activities; 4) electronic health records usage. Telemedicine will be helpful in either route because providers will be required to reach outside the four walls of their office to ensure holistic, quality care that avoids costly and unnecessary services.
If providers choose MIPS, part of their performance score will be related to improving clinical practice or care delivery. Categories include: (1) expanded practice access; (2) population health management; (3) care coordination, “including use of remote monitoring or telehealth”; (4) beneficiary engagement; (5) patient safety and practice assessment; and, (6) participation in an alternative payment model. Telemedicine was specifically mentioned in the statute, and the other categories of MIPS, such as expanded practice access, population health management, care coordination and beneficiary engagement are significantly advanced by telemedicine tools.

3. Medicare Physician Fee Schedule (MPFS)

In the 2016 MPFS proposed rule published by Centers for Medicare and Medicaid Services (CMS) in July, the agency, for the first time proposed reimbursement for telemedicine services provided in the home setting. They propose adding payment for telemedicine services related to End-Stage Renal Disease (ESRD) counseling in a patient’s home. While the codes are narrow and the patient still has to be connected to an “originating site,” the proposal is a positive step toward telemedicine access in the home for Medicare patients.

4. Comprehensive Care for Joint Replacement Payment Model (CCJR)

In July, CMS and the Centers for Medicare and Medicaid Innovation (CMMI) released a new payment demonstration model aimed at reducing Medicare costs for lower extremity joint replacement. The CCJR creates a mandatory bundled payment for the most common surgeries in Medicare, hip and knee replacements. According to the agency, in 2013, there were more than 400,000 inpatient primary procedures in Medicare, costing more than $7 billion for hospitalization alone. The new payment model will “hold hospitals financially accountable for the quality and cost of a model episode of care and incentivize increased coordination of care among hospitals, physicians, and post-acute care providers.” In order to facilitate improved coordinated care delivery, CMS is lifting Medicare restrictions on telemedicine for CCJR participants. The agency says “the use of remote access technologies may improve the accessibility and timeliness of needed care, increase communication between providers and patients, enhance care coordination and improve the efficiency of care.”

5. U.S. Senate Chronic Care Working Group

In May, a powerful group of bipartisan U.S. Senators, including Finance Committee Chairman Orrin Hatch, Ranking Member Ron Wyden, Senator Johnny Isakson and Senator Mark Warner released a request for information from stakeholders on how to improve chronic care for Medicare beneficiaries. The letter stated, “developing and implementing policies designed to improve disease management, streamline care coordination, improve quality and reduce Medicare costs is a daunting challenge. But we are committed to tackling this urgent matter head on and finding ways to provide high quality care at greater value and lower cost…” The letter went on to specifically ask about “ideas to effectively use or improve the use of telehealth and remote patient monitoring technology.” An implicit recognition that telemedicine and remote monitoring are part of the value equation for chronically ill Medicare patients.