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On April 5, 2019, CMS issued final rules (the Final Rule) implementing various provisions of the 2018 Bipartisan Budget Act (the 2018 Budget).  The 2018 Budget includes provisions allowing Medicare Advantage plans to provide telehealth benefits as basic benefits, which are paid for by the Medicare program, rather than solely as supplemental benefits, which are paid for by the Medicare Advantage plans using savings the program achieves versus traditional Medicare fee-for-service.

Section 50323 of the 2018 Budget (Public Law 115-123) created section 1852(m) of the Social Security Act, allowing Medicare Advantage Plans to offer “additional telehealth benefits” to members as basic benefits.  Before this provision, Medicare Advantage plans have generally been able to offer telehealth services as “supplemental” benefits but could not substitute telehealth services for any of the services required to be covered as basic Medicare benefits. Under this Final Rule, effective January 1, 2020, a Medicare Advantage plan may treat telehealth benefits as basic benefits provided that the following requirements are met:

  • The Medicare Advantage plan has identified such telehealth benefits as clinically appropriate to furnish through electronic means with the practitioner providing the service in a different location than the enrollee;
  • The Medicare Advantage plan continues to furnish in-person access to practitioners to provide the benefits that are otherwise offered through telehealth;
  • The enrollee maintains the choice of whether to access the benefits via telehealth or via an in-person visit;
  • The Medicare Advantage plan complies with all applicable federal provider selection and credentialing requirements applicable to in-person practitioners and ensures through its contracting that the telehealth providers comply with all state licensing requirements and other applicable laws; and
  • The Medicare Advantage plan makes information about coverage of such telehealth benefits available to CMS upon request.

Importantly, CMS’s Final Rule gives Medicare Advantage plans the discretion to determine what services that are otherwise payable under Medicare Part B are appropriately delivered through telehealth providers.  The Final Rule also allows Medicare Advantage Plans to maintain different cost-sharing for services provided via telehealth versus services provided through an in-person visit with a provider, which would permit the plans to offer enrollees a lower co-pay for services provided via telehealth to encourage the use of telehealth services that may be a lower-cost option.  The Medicare Advantage plans may also include the additional telehealth benefits offered under this Final Rule in its bid for basic benefits submitted to CMS.  Telehealth services paid for as basic benefits under new Section 1834(m) of the Social Security Act must be provided by contracted providers; telehealth services provided by out-of-network providers may only be paid for as supplemental benefits.

CMS anticipates that this Final Rule will result in $557 million in savings over ten years for enrollees from reduced travel time to and from providers, and $80 million over ten years in increased costs to the Medicare Trust Fund as telehealth services will now be paid for as basic benefits rather than solely as supplemental benefits.

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