Health Care: Telehealth and Remote Patient Monitoring Use in Medicare and Selected Federal Programs
Published: 2017-04-14T00:00:00

Fast Facts:
Does Medicare pay when beneficiaries use two-way video visits to get care from their doctors?
It depends. Medicare pays for some two-way video visits—referred to as "telehealth"—if the patients connect from rural health facilities. Generally, Medicare doesn’t pay for telehealth in urban facilities or in the patient's home or office.
We talked to some health care associations, who believe that telehealth has the potential to maintain or improve quality of care and said that these rules create barriers to using telehealth.
Medicare is testing new ways to provide health care that allow telehealth coverage regardless of location.

Highlights:
section_title: Why GAO Did This Study
paragraphs: Telehealth and remote patient monitoring can provide alternatives to health care provided in person at a physician's office, particularly for patients who cannot easily travel long distances for care. Medicare pays for some telehealth services that are subject to statutory and regulatory requirements, such as requiring the patient be present at an originating site like a rural health clinic.
The Medicare Access and CHIP Reauthorization Act of 2015 includes a provision for GAO to study telehealth and remote patient monitoring. Among other reporting objectives, this report reviews (1) the factors that associations identified as affecting the use of telehealth and remote patient monitoring in Medicare and (2) emerging payment and delivery models that could affect the potential use of telehealth and remote patient monitoring in Medicare.
GAO reviewed agency documents and regulations and interviewed agency officials. GAO also selected nine general and medical specialty associations with expertise and interest in telehealth or remote patient monitoring—six provider, two patient, and one payer association—based on a review of relevant documents and literature and through background interviews. GAO interviewed representatives from each of the associations and collected information from the provider and patient associations through a data collection instrument.
GAO provided a draft of this report to HHS. In response, HHS provided technical comments, which were incorporated as appropriate.
section_title: What GAO Found
paragraphs: Selected associations representing providers and patients most often cited the potential to improve or maintain quality of care as a significant factor that encourages the use of telehealth (providing clinical care remotely by two-way video) and remote patient monitoring (monitoring of patients outside of conventional settings) in Medicare. For example, according to officials from a provider association, telehealth can improve patient outcomes by facilitating follow-up care, while remote patient monitoring is helpful for treating patients with chronic diseases. With regard to factors that create barriers, the selected associations most often cited concerns over payment and coverage restrictions. For example, officials from a provider association noted that Medicare telehealth coverage restrictions limit the geographic and practice settings in which beneficiaries may receive services. While not indicating how significant these factors are to Medicare, officials with a payer association told GAO that they considered these factors—also identified by the provider and patient associations—as either encouraging use or creating barriers to the use of telehealth and remote patient monitoring.
Medicare models, demonstrations, and a new payment program have the potential to expand the use of telehealth and remote patient monitoring. The Centers for Medicare & Medicaid Services, an agency within the Department of Health and Human Services (HHS), supports eight models and demonstrations in which certain Medicare telehealth requirements have been waived, such as requirements for the locations and facility types where beneficiaries can receive telehealth services. For example, the waivers allow beneficiaries to access telehealth in urban areas, or from their homes. Additionally, the use of telehealth and remote patient monitoring in Medicare may change depending on how many clinicians use them as a way to achieve the goals of the new Merit-based Incentive Payment System, which—starting in 2017—will pay clinicians based on quality and resource use, among other things. Under this payment program, clinicians can use telehealth and, in some instances, remote patient monitoring, to help meet the payment program's performance criteria. For example, clinicians could use telehealth to coordinate care or use remote patient monitoring to remotely gather information to determine a patient's proper dose of medication.

section_title: Letter
paragraphs: For certain individuals, such as those who live in remote areas or cannot  easily travel long distances, access to health care services can be  challenging. Telehealth and remote patient monitoring can provide an  alternative to health care provided in person at a physician’s office.  Telehealth can be used to provide clinical care remotely by two-way video  for services such as psychotherapy or the evaluation and management of  conditions. Remote patient monitoring can be used to monitor patients  with chronic conditions, such as those with congestive heart failure,  hypertension, diabetes, and chronic obstructive pulmonary disease, and it  can also be used as a diagnostic tool, such as for some heart conditions.  Although the literature is mixed on the effectiveness of telehealth and  remote patient monitoring, a 2016 review of studies by the Agency for  Healthcare Research and Quality—an agency within the Department of  Health and Human Services (HHS)—found that the most consistent  benefit of telehealth and remote patient monitoring occurs when the  technology is used for communication and counseling or to remotely  monitor chronic conditions such as cardiovascular and respiratory  disease, with improvements in outcomes such as mortality, quality of life,  and reductions in hospital admissions.
In recent years there have been efforts to increase the use of telehealth  and remote patient monitoring in federal health care programs. A federal  strategic plan prepared by the Office of the National Coordinator for  Health Information Technology within HHS calls for an increased use of  telehealth and remote patient monitoring in federal health care programs.  Additionally, in the 21st Century Cures Act, enacted in December 2016,  Congress expressed an interest in expanding the use of telehealth in  Medicare through increasing the types of sites where telehealth can  occur.
While Medicare currently uses telehealth primarily in rural areas or  regions designated as having a shortage of health professionals, in the  future emerging payment and delivery models may change the extent to  which telehealth and remote patient monitoring are available and used by  Medicare beneficiaries and providers in other areas. The Centers for  Medicare & Medicaid Services (CMS), another HHS agency, oversees  Medicare payments for telehealth services. According to the  Congressional Budget Office, the financial impact of expanding telehealth  and remote patient monitoring in Medicare is difficult to predict—it may  reduce federal spending if used in place of face-to-face visits, but it may  increase federal spending if used in addition to these visits. Beyond the  Medicare program, other federal programs, along with some private  insurers, also pay for—or provide—some telehealth and remote patient  monitoring services.
The Medicare Access and CHIP Reauthorization Act of 2015 included a  provision that we study telehealth and remote patient monitoring. In this  report we  1.  describe the extent to which telehealth and remote patient monitoring  are used by Medicare and other federal programs to provide health  care services;  2.  assess the extent to which CMS oversees telehealth payments in  Medicare;  3.  describe the factors associations representing providers and patients  rated—and payers cited—as affecting the use of telehealth and  remote patient monitoring in Medicare; and  4.  describe how emerging payment and delivery models could affect the  potential use of telehealth and remote patient monitoring in Medicare.
Our report also describes the use of remote patient monitoring by  selected health plans in the private insurance market (see app. I).
To describe the extent to which telehealth and remote patient monitoring  are used by Medicare and other federal programs, we reviewed available  data, statutes, regulations, and other relevant documentation related to  telehealth in Medicare, Medicaid, the Department of Defense (DOD), and  the Department of Veterans Affairs (VA). We interviewed agency officials  from CMS as well as officials from DOD and VA, because the latter two  departments operate federal programs outside of HHS that provide  telehealth to their beneficiaries. The work we performed for each program  included the following:
For Medicare, we reviewed a June 2016 Medicare Payment Advisory  Commission (MedPAC) report which, among other things, includes an  analysis of Medicare telehealth and remote patient monitoring claims  for calendar year 2014.
For Medicaid, we selected a sample of six states—Connecticut,  Illinois, Kansas, Mississippi, Montana, and Oregon—to include in our  review. We selected states that varied in geography, physical size,  percentage of rural population, and other factors related to coverage  and reimbursement for health care services. In particular, we  considered factors such as the extent to which the state’s Medicaid  program uses different payment systems, whether the state’s  Medicaid program reimburses for telehealth, the type of locations for  providing the services that were allowed, and the type and number of  eligible providers. We obtained information about telehealth and  remote patient monitoring use for the most recent state fiscal year  available from four of the six states that had the information and also  interviewed state officials from all six states about the use of  telehealth and remote patient monitoring in their state, including any  restrictions on and reimbursement for these services. Our findings  for these six states cannot be generalized to other states.
For DOD, we obtained data on the use of telehealth for fiscal year  2015, the most recent fiscal year available, and we interviewed  officials about the use of telehealth and remote patient monitoring in  DOD’s health care program.
For VA, we reviewed documentation, interviewed officials, and  received data on the use of telehealth and remote patient monitoring  for fiscal year 2016, the most recent fiscal year available.
To assess the reliability of the program data we used, we interviewed  MedPAC officials on how they collected and analyzed Medicare data for  their report; we obtained information from DOD and VA on the controls  used by the programs to ensure that the data were accurate and  complete. Based on these steps we determined that these data were  sufficiently reliable for our purposes.
To assess the extent to which CMS oversees telehealth payments in  Medicare, we reviewed related agency documentation and interviewed  knowledgeable officials about the procedures used to review claims for  telehealth services. Additionally, we reviewed MedPAC’s report on  Medicare telehealth claims for calendar year 2014 and interviewed  MedPAC officials to understand the basis for their findings. We  assessed CMS’s oversight procedures and the agency’s response to  MedPAC’s findings using federal standards for internal controls.
To describe the factors associations representing providers and patients  rated—and payers cited—as affecting the use of telehealth and remote  patient monitoring in Medicare, we developed a data collection instrument  for three groups of selected associations—six associations that represent  providers, two associations that represent patients, and one association  that represents payers. The associations representing providers and  patients completed our data collection instrument; the payer association  did not. To identify these associations, we reviewed relevant documents  and literature and conducted interviews to identify relevant general and  specialty associations. In the data collection instrument, we requested  that the associations rate the significance of potential factors that may  encourage the use of telehealth and remote patient monitoring and  potential factors that may create barriers to their use. We identified these  factors based on background research and initial interviews with two  groups with an interest in telehealth. In addition to having the provider  and patient associations rate the factors and having the payer association  identify them, we also reviewed relevant documentation and interviewed  officials from each provider, patient, and payer association using a  structured question set to obtain examples, from their perspective, of how  these factors can encourage the use of telehealth and remote patient  monitoring in Medicare or create barriers to their use. The perspectives  we obtained using the data collection instrument, from our document  reviews, and during our interviews with association officials provided  insights regarding the officials’ views on factors that encourage the use of  telehealth and remote patient monitoring and factors that are barriers to  their use. These perspectives cannot be generalized. See appendix II for  more information on our data collection instrument and on our scope and  methodology for identifying relevant associations and the factors,  including the significance of the factors as rated by the associations.
To describe how emerging payment and delivery models could affect the  potential use of telehealth and remote patient monitoring in Medicare, we  reviewed CMS documents describing and evaluating the models  developed by the Center for Medicare & Medicaid Innovation (Innovation  Center) to support alternative approaches to health care payment and  delivery. We also studied implementation plans created by participants  in one of the models, which outlined how the participants planned to use  telehealth. We also interviewed knowledgeable agency officials about  how telehealth was used in the models and how the models might affect  telehealth and remote patient monitoring use in Medicare in the future.  Additionally, we examined documents and interviewed CMS officials  regarding a new Medicare payment program that allows the use of  telehealth—and to some extent remote patient monitoring—to help  achieve some of the goals of the payment program.
We conducted this work from March 2016 to April 2017 in accordance  with generally accepted government auditing standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our audit objectives. We believe that the evidence obtained  provides a reasonable basis for our findings and conclusions based on  our audit objectives.
subsections: section_title: Background
paragraphs: The federal government uses telehealth and remote patient monitoring in  various health care programs, including the following:
Medicare, which provides health care coverage for people age 65 or  older, certain individuals with disabilities, and individuals with end- stage renal disease;
Medicaid, a joint federal-state health care financing program for  certain low-income and medically needy individuals;
DOD, which provides services through its regionally structured health  care program to active duty personnel and their dependents,  medically eligible Reserve and National Guard personnel and their  dependents, and retirees and their dependents and survivors; and
VA, which delivers medical services to veterans primarily through an  integrated health care delivery system.
Other federal agencies—within and outside of HHS—also provide grants  to promote the use of telehealth.
subsections: section_title: Medicare Telehealth and Remote Patient Monitoring Requirements
paragraphs: Medicare began paying separately for certain telehealth services after the  passage of the Balanced Budget Act of 1997. The statute requires that  Medicare, which covers over 50 million beneficiaries, pay for certain  telehealth services, including consultations, office visits, and office  psychiatry services, that are furnished through a telecommunications  system with audio and video equipment permitting two-way, real-time  interactive communication between the patient and distant site provider.  According to CMS officials, Medicare fee-for-service does not have an  explicit definition of remote patient monitoring. Rather, Medicare pays  separately for some services that are used to remotely monitor patients,  as well as for other remote monitoring bundled with other services. For  example, separate payment may be made for services used to remotely  monitor patients’ conditions, such as services that use devices to monitor,  record, and relay data on a patient’s heart activity to a provider for  analysis. Additionally, Medicare pays for remote services as bundled  parts of other services, such as elements of monthly care management  services.
While telehealth visits with providers are conducted from a separate site,  Medicare requires that the patient be physically present at a medical  facility such as a hospital, rural health clinic, or skilled nursing facility— referred to as the originating site—during the telehealth service. Eligible  providers who are furnishing Medicare telehealth services are located at a  separate site, known as the distant site, and these providers submit  claims in the service area where their distant site is located. The  originating site is paid a facility fee—about $25 in calendar year 2017— under the Medicare Physician Fee Schedule for each telehealth service,  and the distant site provider is paid the same rate for services delivered  via telehealth as they would be paid for the in-person service, as required  by statute. (See fig. 1.)
section_title: Medicaid, DOD, and VA Telehealth and Remote Patient Monitoring Requirements
paragraphs: CMS does not limit the use of telehealth and remote patient monitoring in  Medicaid, which has around 70 million enrollees. Therefore, individual  states determine any restrictions and limitations. For example, states  have the option to determine whether to cover telehealth; what types of telehealth to cover; how it is provided or covered; which types of telehealth providers may be covered or reimbursed, as  long as such providers are recognized and qualified according to  Medicaid statute and regulation; and how much to reimburse for telehealth services, as long as such  payments do not exceed other requirements.
States are not required to submit a separate state plan amendment to  CMS for coverage or reimbursement of telehealth services if they decide  to reimburse for telehealth services the same way that they pay for face- to-face services. However, states must submit a separate  reimbursement state plan amendment if they want to reimburse for  telehealth services or components of telehealth differently than they  reimburse for face-to-face services.
DOD, which serves around 9.4 million beneficiaries, allows telehealth  through live videoconferencing between the provider and patient at  different locations. DOD does not have restrictions on the services that  can be provided through its direct care component. Broad types of  allowable services include health assessments, treatments, diagnoses,  interventions, and consultations. Different categories of providers are  allowed to use telehealth and are not required to be individually licensed  in the state where the patient—or originating site—is located. These  providers include members of the Armed Forces, other DOD uniformed  providers, civilian DOD employees, personal services contractors, and  National Guard providers who are performing training or duty in response  to an actual or potential disaster.
DOD allows a range of eligible originating sites for telehealth. In addition  to military treatment facilities, eligible originating sites include VA medical  centers and clinics; installations, armories, or other non-medical fixed  DOD locations; DOD mobile telehealth platforms; civilian sector hospitals  and clinics; and contracted provider offices. In February 2016, DOD  approved the patient’s home as an originating site for telehealth services  from providers located in a military treatment facility or other designated  facility in DOD’s direct care component.
DOD also utilizes remote patient monitoring devices to provide care for  eligible beneficiaries for a range of services. These services include the  diagnosis and treatment of cardiac conditions, including ambulatory blood  pressure monitoring and pacemakers, and continuous glucose monitoring  for patients with diabetes. According to DOD officials, the department  does not have policies that specifically govern the use of remote patient  monitoring devices, but instead DOD leaves the determination of use to  clinical practice guidelines or to professional society guidance or  recommendations.
VA, which serves about 6.7 million patients, allows the use of telehealth  via videoconferencing technologies to enable providers to assess, treat,  and provide care to a patient remotely. VA also allows remote patient  monitoring using mobile and in-home technologies assigned to veterans  based on individual needs. According to officials, VA does not restrict  the use of telehealth or remote patient monitoring by type of service,  provider, or location. Telehealth in VA can take place in various  originating and distant site locations throughout the country, such as  between two VA medical centers; a VA medical center and a community- based outpatient clinic; two community-based outpatient clinics; from the  provider’s site and the veteran’s home, a community living center, or a  contract nursing home; and a provider’s home and sites such as a VA  medical center or community-based outpatient clinic. In recent years, VA  has taken steps to increase the use of telehealth. As part of VA’s fiscal  year 2009 to fiscal year 2013 telehealth transformational initiative, VA  recruited over 970 telehealth clinical technicians and purchased  equipment for over 900 sites of care.
Table 1 summarizes the use of telehealth and remote patient monitoring  in Medicare, Medicaid, DOD, and VA health programs.
section_title: Available Data Show Low Proportions of Beneficiaries Accessing Telehealth; Limited Data Are Available on Remote Patient Monitoring
paragraphs: Our review of available data shows that low proportions of beneficiaries  received care through telehealth in Medicare, Medicaid, VA, and DOD— from less than 1 percent of beneficiaries in Medicare and DOD to 12  percent in VA—while the types of services available through these  technologies varies. Data on use of remote patient monitoring are not  aggregated for analysis in Medicare and are not available in selected  Medicaid states, and limited data are available for DOD and VA.
subsections: section_title: Medicare
paragraphs: Available calendar year 2014 data show that Medicare providers used  telehealth services for a small proportion of beneficiaries and relatively  few services. An analysis of Medicare claims data by MedPAC shows that  about 68,000 Medicare beneficiaries—0.2 percent of Medicare Part B fee- for-service beneficiaries—accessed services using telehealth. MedPAC  also found that 10 states accounted for 42 percent of all Medicare  telehealth visits, with South Dakota, followed by Iowa and North Dakota,  accounting for the highest use—more than 20 telehealth services were  provided per 1,000 fee-for-service beneficiaries. As of 2016, Medicare  pays for 81 telehealth services. (See app. III for a list of health care  services CMS has added or denied for inclusion on the Medicare list of  telehealth services.)
According to MedPAC, beneficiaries accessing telehealth averaged about  three telehealth visits per person per year in calendar year 2014, and  Medicare spent an average of $182 per beneficiary, for a total of about  $14 million. The majority of telehealth visits—62 percent—were for  beneficiaries younger than 65 years old. The most common telehealth  visits in calendar year 2014 were for evaluation and management  services (66 percent), followed by psychiatric visits (19 percent).
MedPAC reported that physicians and nurse practitioners were the most  common providers participating in telehealth visits in calendar year 2014  and, of all providers, behavioral health clinicians, including psychiatrists,  made up 62 percent of providers at distant sites. According to MedPAC,  a small proportion of providers accounted for the majority of telehealth  visits in calendar year 2014. Ten percent of distant sites providers  accounted for 69 percent of telehealth claims.
According to officials, because CMS does not have a separate category  for remote patient monitoring services, as it does with telehealth, and  these services may be bundled with other services, CMS has not  conducted a separate analysis of remote patient monitoring services.  Therefore, the number of Medicare beneficiaries who use this service is  unknown. While the number of beneficiaries who use remote patient  monitoring is not identified, MedPAC reported information on Medicare  spending on remote patient monitoring for selected services. Specifically,  MedPAC reported that Medicare spent $119 million on remote cardiac  monitoring services for 265,000 beneficiaries in calendar year 2014.  MedPAC also reported that in calendar year 2014, Medicare spent $70  million on remote patient monitoring for 639,000 beneficiaries to remotely  monitor heart rhythms through implantable cardiac devices, such as  pacemakers, and to evaluate the function of these devices.
section_title: Medicaid
paragraphs: In Medicaid, the use of telehealth and remote patient monitoring varies by  state. We interviewed officials from six states and among these officials,  the ones from states that were generally more rural than urban said they  used telehealth and remote patient monitoring more frequently than  officials from more urban states. Officials from four states provided the  following information on the use of telehealth and remote patient  monitoring in their Medicaid program.
A Connecticut official said that in the state, which has medical centers  in-state and is close to multiple medical centers in other states,  Medicaid uses telehealth in a limited capacity by only allowing  provider-to-provider consults via secure messaging in federally  qualified health centers. According to this official, Connecticut  Medicaid data show that the state spent $89,053 on 817 provider-to- provider consults in 2015. The official told us that Connecticut officials  needed to be convinced that the use of telehealth would not lead to  unnecessary utilization of services in order to expand telehealth  reimbursement beyond these consults.
In Illinois, officials told us that telehealth represented a very small  portion of the overall Medicaid budget and was used primarily to  provide psychiatric services. According to officials, less than $500,000  of Illinois’ $20 billion in Medicaid spending in the state fiscal year 2015  was for telehealth.
Mississippi began reimbursing for telehealth and remote patient  monitoring in January 2015. Mississippi telehealth data show that  from January 2015 through June 2015 Medicaid expenditures were  about $9,360 for 210 claims for 172 managed care patients and  $13,218 for 222 claims for 184 fee-for-service patients. For remote  patient monitoring during the same period, Mississippi Medicaid  expenditures were about $27,634 for 292 claims for 158 managed  care patients and $4,969 for 99 claims for 68 fee-for-service patients.
Montana officials told us they have used telehealth as a tool to help  patients see both in-state and out-of-state specialists remotely, as  there is limited access to specialists in the state. According to state  officials, Montana’s Medicaid spending on telehealth increased from  state fiscal years 2013 through 2015. Specifically, according to  officials, Montana’s Medicaid program spent about $284,675 for 3,218  telehealth distant site claims related to telehealth services provided in  state fiscal year 2015, which is an increase from about $132,194 for  1,841 distant site claims in state fiscal year 2013. According to  officials, Montana’s Medicaid program reimbursed the site where the  patient is located about $3,438 for 260 originating site claims in state  fiscal year 2015, with psychiatric services accounting for the largest  share of the state’s Medicaid telehealth expenditures that year.
For more details on telehealth and remote patient monitoring use in  Medicaid in the six selected states, see appendix IV.
Fiscal year 2015 data show 25,389 DOD beneficiaries—or about 0.3  percent—received care through telehealth. The most commonly offered  telehealth services were behavioral health/psychiatry services, which  accounted for approximately 80 percent of all telehealth encounters in  fiscal year 2015, followed by dermatology, cardiology, and pediatric  services. According to officials, DOD data also show that the top five  locations in fiscal year 2015 for the provision of telehealth services were  San Antonio, Texas; Fort Shafter, Hawaii; Fort Meade, Maryland; Joint  Base Lewis-McChord, Washington; and Landstuhl, Germany. According  to DOD officials, of these locations, the surrounding areas of San Antonio,  Fort Shafter, and Joint Base Lewis-McChord include zip codes that are  considered rural or have an area serviced by a sole community hospital.  DOD has also used provider-to-provider e-consultations, which, according  to a DOD official, allow providers to give consults to other providers who  are deployed or stationed in remote areas, making it easier for providers  to consult with one another even when separated by distance. According  to officials, DOD also uses remote patient monitoring devices—such as  remote pacemaker monitoring and sleep study monitors—to varying  degrees across military treatment facilities. DOD officials noted that the  agency conducted an Army pilot program using remote patient monitoring  for 51 soldiers with known or newly diagnosed Type 1 Diabetes.  According to DOD officials, DOD is currently developing additional pilot  programs for remote patient monitoring.
According to VA officials, VA provided telehealth services to more than  702,000 veterans during fiscal year 2016, or approximately 12 percent of  veterans enrolled in VA’s health care system. Of these veterans,  approximately 45 percent were veterans living in rural areas with limited  access to VA health care. Of these 702,000 veterans using telehealth,  150,600 veterans used remote patient monitoring services at least once  from October 2015 to September 2016.
VA documents show that VA uses telehealth and remote patient  monitoring for a wide range of services. These services include mental  health services, such as services for post-traumatic stress disorder; primary care; rehabilitation; speech and audiology services; eye care;  dermatology services; specialty care; critical care; and care for chronic  conditions such as diabetes, chronic heart failure, chronic obstructive  pulmonary disease, hypertension, and depression. According to VA  officials, providers from over 50 different specialties are using telehealth.  VA officials noted that as of May 2016, the most common conditions for  veterans using remote patient monitoring were hypertension (almost  19,000 veterans) and diabetes (about 14,000 veterans).
section_title: CMS Uses Routine Claims Review Processes for Telehealth Payments and Is Examining Some Questionable Claims Identified by MedPAC
paragraphs: CMS oversees telehealth payments as a part of its general efforts to  prevent improper payments in Medicare. CMS relies on Medicare  Administrative Contractors (MAC), which process and pay Medicare  claims in specific geographic jurisdictions. The MACs review claims to,  among other things, identify and prevent improper payments for Medicare  services, including telehealth. According to CMS officials, similar to other  services, CMS has directed the MACs to only approve and pay claims  with a telehealth modifier if the claims meet the statutory and regulatory  criteria for covered telehealth services.
According to CMS officials, CMS does not conduct any enhanced  oversight or fraud prevention specific to telehealth payments, though  officials told us that if there were indications of inappropriate payments or  fraud schemes related to telehealth payments, CMS would provide  additional oversight for these claims. Telehealth represents a very small  percentage of all Medicare claims. CMS requires the MACs to focus their efforts on areas that pose the greatest financial risk to the Medicare  program and where their efforts are likely to produce the best return on  investment, which is consistent with federal internal controls.
CMS officials told us that there are no payment incentives for a provider  to put a telehealth modifier on a non-approved telehealth service,  because the provider could receive payment for that service if it did not  include the modifier and the service is payable under Medicare’s  Physician Fee Schedule. That is, the payment to a distant site provider for  a service on the approved telehealth list would be the same amount as  the payment for the service if it were furnished in person. Adding a  telehealth modifier incorrectly also increases the possibility that claim  would be examined, CMS officials said, reducing the incentive to  incorrectly add the telehealth modifier. CMS officials also said that for  2017 Medicare is using a new place of service code to describe services  furnished via telehealth. According to officials, the code is intended to  better identify telehealth services.
However, MedPAC’s 2016 report, which examined Medicare telehealth  claims, identified potential improper telehealth payments. Specifically,  MedPAC reported that among the 175,000 Medicare telehealth claims  paid in calendar year 2014, 55 percent, or about 95,000 claims, did not  have a corresponding originating site claim. Because there was no  originating site claim, it is unclear whether these beneficiaries received  telehealth services in a location not permitted under the Medicare statute,  such as the home, an originating site located in an urban area, or whether  the claims were paid under a demonstration project or model. The  Medicare statute requires beneficiaries to receive telehealth services in  an originating site located in a rural area, as defined by Medicare for  telehealth purposes, unless the site is part of a demonstration project or is  participating in a Medicare model where telehealth location requirements  are waived.
The absence of a corresponding originating site claim does not  definitively indicate that the telehealth claims are improper, though it  warrants further review. As a possible explanation for the difference in the  number of originating site claims relative to distant site claims, CMS  officials suggested that if a facility does not frequently serve as an  originating site, it may not find it worthwhile to submit a claim for the  approximately $25 originating site fee. Additionally, there may be cases  where a beneficiary receives multiple telehealth services in a single day,  and in such cases, the telehealth encounter might include several  services that are appropriately billed with several claims from the distant  site provider, but only have a single originating site claim.
However, according to MedPAC, the absence of originating site claims  may have occurred because some patients may have inappropriately  received services in their homes or other locations not permitted under  the Medicare statute. MedPAC also found that among the telehealth  claims without corresponding originating site claims, 44 percent—or  almost one-quarter of all telehealth claims made in calendar year 2014— were associated with beneficiaries living in urban areas, which could  indicate that the patients were receiving telehealth services at  inappropriate originating sites. MedPAC officials told us that they  identified one provider who conducted 2,000 telehealth visits in a single  year, and all of those claims originated from an urban area.
When asked about MedPAC’s findings, CMS officials told us that as of  January 2017, they are reviewing the MedPAC report. They further stated  that the agency will take action on MedPAC’s findings, as warranted. This  is consistent with federal standards for internal controls related to  monitoring that call for managers to promptly evaluate findings from  audits and other reviews—including those showing deficiencies—and  determine and complete appropriate corrective actions.
section_title: Selected Associations Report Telehealth and Remote Patient Monitoring May Improve Care for Medicare Beneficiaries, but Cited Coverage and Payment Restrictions as Barriers
paragraphs: Officials from selected associations representing providers and patients  rated the significance of certain factors that encourage the use of  telehealth and remote patient monitoring in Medicare as well as factors  that create barriers to their use. The officials reported that both telehealth  and remote patient monitoring may improve or maintain quality of care in  Medicare, but they rated concerns regarding payment and coverage  restrictions as potential barriers. Officials with a payer association we  selected generally agreed with the assessments of the selected provider  and patient associations.
subsections: section_title: Selected Associations Cited the Potential to Improve or Maintain Quality of Care as a Significant Factor Encouraging the Use of Telehealth and Remote Patient Monitoring in Medicare
paragraphs: Among the factors presented as potentially encouraging both telehealth  and remote patient monitoring use in Medicare, officials from selected  provider and patient associations most often rated the potential to  improve or maintain quality of care as very or somewhat significant. (See  fig. 2.) Officials from a provider association told us that telehealth can  improve patient outcomes by facilitating follow-up to care. Additionally, an  official from a patient association stated that remote patient monitoring is  a helpful tool for treating patients with chronic disease.
Furthermore, officials from selected provider and patient associations  more often rated alleviating provider shortages, convenience to patients,  and coverage of services as very significant or somewhat significant  factors that encourage both telehealth and remote patient monitoring use  in Medicare. For example, officials from one provider association noted  that provider and regional medical specialty shortages can be addressed  through telehealth, potentially increasing productivity and ensuring on- time scheduling of appointments. Officials from another provider  association reported that telehealth can increase convenience by  shortening or eliminating travel times—which may lead to better  adherence to recommended treatments and to patient satisfaction.  Regarding remote patient monitoring, officials from a provider association  explained that it can be an important tool for emergency department  physicians to provide expertise to rural areas remotely, which could  alleviate provider shortages.
Less frequently identified factors cited by association officials that  encourage telehealth and remote patient monitoring use are described in  the following examples, and in appendix V.
Officials from two selected provider associations told us that emerging  Medicare payment structures—such as accountable care  organizations (ACO)—could alleviate concerns about overutilization in  Medicare’s fee-for-service payment system. The concern is that  telehealth would be used in addition to, instead of in place of, face-to- face visits.
Officials from one selected provider association stated that remote  patient monitoring use shows promise in lowering health care costs  and avoiding unneeded emergency room visits, because it allows a  provider to identify subtle changes in a patient’s condition and  schedule an office visit before the patient’s condition deteriorates.
Officials from a selected patient association said that remote patient  monitoring can help patients and their caregivers save on  transportation costs and help them avoid having to miss work.
Although officials from the payer association we selected did not rate the  significance of the factors, they confirmed that improving or maintaining  quality of care was a factor in encouraging the use of both telehealth and  remote patient monitoring. For example, officials stated that telehealth  has the potential to decrease hospital readmissions and use of intensive  care units. These officials also identified alleviating provider shortages  and providing convenience for the patient as encouraging the use of  telehealth. Additionally, these officials noted that the ability of patients to  use their own electronic devices—such as home computers or  smartphones—could facilitate broader use of remote patient monitoring  services.
section_title: Selected Associations Cited Payment and Coverage Restrictions as Barriers to the Use of Telehealth and Remote Patient Monitoring in Medicare
paragraphs: Among the factors presented as potential barriers to the use of both  telehealth and remote patient monitoring in Medicare, selected patient  and provider associations most often rated cost increases or inadequate  payment and coverage restrictions as very significant or somewhat  significant. (See fig. 3.) Officials often linked their comments on payment  with those regarding coverage restrictions. For example, officials from a  provider association reported that Medicare’s telehealth policies for  payment and coverage lag behind other payers due to the program’s  statutory and regulatory restrictions. In particular, these restrictions limit  the geographic and practice settings in which beneficiaries may receive  services, as well as the types of services that may be provided via  telehealth and the types of technology that may be used.
Additionally, officials from another provider association described  coverage as the single greatest barrier to the use of telehealth, adding  that Medicare’s restrictions on the types of services covered by the  program have prohibited its broader use. Regarding remote patient  monitoring, officials from another provider association stated that  Medicare’s valuation methodology for services results in low payment  rates for remote patient monitoring, which these officials said remains a  principal barrier to the use of these services. For more information on  Medicare’s valuation of remote patient monitoring, see appendix VI.
Officials from selected provider and patient associations more often rated  infrastructure requirements as a very significant or somewhat significant  barrier to the use of both telehealth and remote patient monitoring in  Medicare. For example, officials from one provider association and both  patient associations we selected described access to sufficiently reliable  broadband internet service as a barrier to telehealth use. Officials from  both of the patient associations also mentioned the ability to access the  technology necessary to use telehealth as a potential barrier to its use.  Officials from two of these provider associations also described  uncertainty around which remote patient monitoring products and  services are most effective.
Less frequently identified barriers to telehealth and remote patient  monitoring use cited by selected provider and patient association officials  are shown in the following examples, and in appendix V.
Officials from both selected patient associations rated provider and  patient training requirements as very significant barriers to the use of  both telehealth and remote patient monitoring. Officials from one of  these patient associations noted that training is important for patients,  providers, and caregivers to help them understand the technology  involved in using telehealth and remote patient monitoring.
Officials from both selected patient associations also rated cultural  factors, such as language and technological literacy, as very  significant barriers to the use of both telehealth and remote patient  monitoring.
Officials from four selected provider associations rated professional  licensure issues as a very or somewhat significant barrier to the use  of telehealth. Officials from one association mentioned states’  participation in the Interstate Medical Licensure Compact as a  potential strategy to overcome telehealth licensure barriers.
Although officials from the payer association we selected did not rate the  significance of barriers to telehealth or remote patient monitoring use,  they confirmed that cost increases and inadequate payment, as well as  infrastructure requirements, are barriers to the use of these technologies.  For example, officials cited as barriers equipment costs and the  distribution of equipment to patients. Additionally, they discussed  concerns about problems with the interoperability of platforms and  devices used for telehealth.
section_title: CMS Has Various Efforts Underway That Have the Potential to Expand the Use of Telehealth and Remote Patient Monitoring in Medicare
paragraphs: CMS has efforts underway that have the potential to expand the use of  telehealth and remote patient monitoring in Medicare. First, CMS  supports models and demonstrations that offer alternative approaches to  health care payment and delivery. Second, CMS’s new Medicare  payment program allows participating clinicians to use telehealth, and to  some extent remote patient monitoring, to help them achieve some of the  goals of the payment program.
subsections: section_title: CMS Models and Demonstrations
paragraphs: The Patient Protection and Affordable Care Act created the Innovation  Center within CMS to test innovative payment and service delivery  models to reduce Medicare, Medicaid, and state Children’s Health  Insurance Program expenditures while preserving or enhancing the  quality of care for beneficiaries of the programs. The Innovation Center  also supports Medicare demonstration projects, which study the likely  impact of new methods of service delivery, coverage of new types of  services, and new payment approaches on beneficiaries, providers,  health plans, states, and the Medicare trust funds. The Innovation Center  has the authority to waive Medicare telehealth requirements as part of its  efforts to implement and test these models and, as allowed by other  statutory authorities, as part of testing demonstrations.
According to CMS, telehealth waivers may broaden access to telehealth  services, and CMS’s Innovation Center has used its authority, and other  statutory authorities as applicable, to waive Medicare telehealth  requirements for eight models and demonstrations in certain  circumstances. Specifically, CMS’s Innovation Center waived certain  requirements regarding the geographic location or types of permitted sites  at which beneficiaries can receive telehealth services for four models:
Next Generation ACOs are groups of doctors, hospitals, and other  health care providers and suppliers who come together voluntarily to  provide coordinated, high-quality care at lower costs to their Medicare  patients.
Two Bundled Payments for Care Improvement models link payments  for the multiple services beneficiaries receive during an episode of  care. Under this initiative, organizations enter into payment  arrangements that include financial and performance accountability  for episodes of care.
The Comprehensive Care for Joint Replacement Model aims to  support better and more efficient care for beneficiaries undergoing hip  and knee replacements, which are the most common inpatient  surgeries for Medicare beneficiaries.
Additionally, CMS officials told us that three Episode Payment Models will  have telehealth waivers removing Medicare’s geographic and permitted  site telehealth requirements beginning sometime in calendar year 2017  and will pay providers for care based on the following conditions treated: acute myocardial infarction,  coronary artery bypass grafts, and  surgical hip and femur fractures.
Furthermore, in one demonstration that aims to develop and test new  models of integrated health care in sparsely populated rural counties—the  Frontier Community Health Integration Project Demonstration—CMS  allows participants to receive cost-based payments for telehealth when  their location serves as the originating site, rather than the approximately  $25 fixed fee that CMS otherwise pays originating sites. See table 2 for  more information on the Medicare telehealth requirements waived for  these models and demonstrations.
CMS officials told us that the Innovation Center also has the authority to  waive requirements regarding payment for telehealth services for  payment and delivery service models, but that the Innovation Center  identified waiving requirements regarding the originating site as the best  way to provide broader access to telehealth. The Innovation Center  could potentially waive other telehealth requirements if it decided to do so  in the future.
In calendar year 2015, 15 Next Generation ACOs submitted  implementation plans that detailed their proposed strategies to implement  the telehealth waiver. Eleven out of the 15 expected to use telehealth to  provide increased access to specialty providers. For example, one  participant reported that it would use telehealth to establish a virtual  network of specialists who could provide telehealth consultations to  patients in areas such as cardiology, rheumatology, and psychiatry. In  addition, 8 out of 15 Next Generation ACOs included plans to use  telehealth to improve care for patients with chronic conditions. For  example, one participant planned to use telehealth to connect  beneficiaries who have chronic diseases—such as congestive heart  failure, diabetes, and pulmonary diseases—with their care team, including  specialty providers.
As table 3 shows, the Innovation Center models and demonstration with  waivers are in various stages of implementation, and their participants are  using telehealth to varying degrees.
In addition to the models and demonstrations in which CMS waives  certain telehealth requirements, other models and demonstrations may  affect the use of telehealth, as described in the following examples.
Under its Health Care Innovation Award program, CMS funds  cooperative agreements that the agency identifies as the most  compelling new ideas to deliver better health, improve care, and lower  costs to Medicare, Medicaid, and state Children’s Health Insurance  Program beneficiaries. Some of these projects include initiatives  focused on telehealth and remote patient monitoring. For example,  one award supported efforts to use telehealth and remote patient  monitoring to provide care for urban and rural Medicare patients  receiving intensive care. An evaluation of this awardee found the  effort was associated with a reduction in hospital readmissions.
According to CMS documents, in the Initiative to Reduce Avoidable  Hospitalizations among Nursing Facility Residents—which aims to  improve the quality of care for individuals residing in long-term care  facilities by reducing avoidable hospitalizations—a participant plans to  use telehealth to evaluate nursing home residents whose conditions  worsen at night when physicians are not present.
The Independence at Home Demonstration, which tests a payment  incentive and service delivery model that uses primary care teams to  provide in-home primary care to Medicare beneficiaries with multiple  chronic conditions, includes practices that have the ability to use  remote monitoring and mobile diagnostic technology with their  patients.
For more examples of how telehealth and remote patient monitoring may  be used in models and demonstrations, see appendix VII.
section_title: Merit-based Incentive Payment System
paragraphs: Beginning in 2017, CMS will implement the Quality Payment Program,  which will include a new Medicare payment program—the Merit-based  Incentive Payment System—for physicians and other clinicians. The  Merit-based Incentive Payment System will consolidate components of  programs currently used to tie payments to quality and provide incentives  for quality, resource use, clinical practice improvement activities, and  advancing care information through the meaningful use of electronic  health record technology. Under this payment program, clinicians can  use telehealth in certain ways to meet the criteria in the program’s  improvement activities performance category, which can help clinicians  improve their performance under the payment program. For example,  clinicians could use telehealth to coordinate care and, in some cases, to  reach patients in remote locations. Additionally, there are some instances  when clinicians can use remote patient monitoring to meet Merit-based  Incentive Payment System goals—for example, using home monitoring to  remotely gather information to determine a patient’s proper dose of blood  thinning medication. According to CMS officials, clinicians using  telehealth and remote patient monitoring for these purposes do not have  to bill Medicare for the service in order to receive credit for it under the  Merit-based Incentive Payment System, and these services can count for  credit under the improvement activities performance category regardless  of whether they meet the statutory telehealth requirements. However, if  clinicians want to bill Medicare for these services, the service must meet  Medicare’s statutory requirements for payment.
section_title: Agency and Third- Party Comments
paragraphs: We provided a draft of this report to HHS, DOD, and VA for review and  comment. These departments provided technical comments, which we  incorporated as appropriate.
We also provided relevant draft portions of this report to stakeholders we  interviewed. Specifically, we provided these excerpts to state Medicaid  program officials for Connecticut, Illinois, Kansas, Mississippi, Montana,  and Oregon; representatives of selected provider, patient, and payer  associations; and officials from selected private payers. Not all of the  stakeholders responded. One state and one association confirmed that  the information we provided was accurate. In addition, three states, four  associations, and three private payers provided technical comments,  which we incorporated as appropriate.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Health and Human Services, Secretary of  the Department of Defense, Secretary of the Department of Veterans  Affairs, and to other interested parties. In addition, the report is available  at no charge on the GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-7114 or YocomC@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix VIII.
section_title: Appendix I: Use of Remote Patient Monitoring by Selected Private Payers
paragraphs: As part of our work, we interviewed officials from health plans in the  private insurance market (private payers) about the use of remote patient  monitoring. This appendix provides the results of those interviews.  Officials from three of the top private payers (based on market share) told  us that providers can use remote patient monitoring in their health care  systems when it is indicated for a patient’s condition.
Officials from the three private payers told us they have limited data on  the extent to which remote patient monitoring is used. They told us they  did not have data available because, for example, remote patient  monitoring services are usually part of a care management program in  which charges are bundled and not billed and detailed separately. It is  therefore difficult to distinguish remote patient monitoring services from  services provided via telehealth, officials explained. Some of the health  plans of these three private payers reimburse for remote patient  monitoring on a fee-for-service basis, while others include it as part of the  services offered through integrated delivery systems that do not  reimburse for separate services.
Officials from one private payer explained that they want physicians to  decide which patients, conditions, problems, and circumstances are most  suited to remote patient monitoring. This private payer does not  reimburse physicians on a fee-for-service basis, noting that incentives,  such as payment, can drive behavior. As an example, if the provider  receives reimbursement based on the amount of monitoring, the provider  may file more claims for monitoring, regardless of whether the use is  driven by evidence-based care processes. Instead, officials from this  private payer stated that their incentives focus on the care outcomes of  physicians’ patients, and they pay physicians based on the quality of the  outcomes by disease population. Officials explained that they are  currently rolling out programs to track diabetic patients’ blood sugar by  monitoring what they eat, the exercise they get, and how they live.  Additionally, this private payer has been using remote patient monitoring  for patients with heart failure for some time, and officials told us that data  gathered through monitoring of weight and blood pressure are good  predictors of early deterioration of heart conditions. Similarly, this private  payer has a program for patients with hypertension that monitors a  patient’s stress level.
Officials from a second private payer stated that they reimburse for  remote patient monitoring in a manner that is appropriate for the specific  condition being treated. For example, they reimburse for cardiologic  remote patient monitoring if the patient has symptoms that are indications  for the use of monitoring. If the condition does not indicate cardiologic  monitoring, the private payer does not reimburse for this monitoring.  Officials from this second private payer said they are reimbursing for  remote patient monitoring that is used in real time to monitor patients with  one or more chronic conditions and for high-risk patients. For example,  the service is used to monitor blood pressure for hypertension, weight  changes for congestive heart failure, and real-time blood sugar for  diabetes. According to these private payer officials, providers typically use  remote patient monitoring in the short-term and episodically, or to  retrospectively look at monitoring results to make a clinical decision.  Remote patient monitoring is also used to connect health plan members  with their care managers, and these managers can notify providers to  intervene if the monitoring indicates a need. This private payer also has  various pilot programs related to remote patient monitoring, including a  program for its members with varying levels of congestive heart failure.
Officials from the third private payer told us that if remote patient  monitoring is indicated by a patient’s condition, then the provider can  order its use. Some of the payer’s private plans are integrated delivery  systems for overall care, and in these plans providers are not paid  separately for remote patient monitoring. According to officials, their  agreements with providers are designed to encourage providers to use  data from all sources, such as claims information, electronic medical  records, and remote patient monitoring. The private payer also contracts  with accountable care organizations and enters into payment  arrangements with provider groups. Those entities use remote patient  monitoring and the information obtained through monitoring as part of  their care management of patients. This private payer’s fee-for-service  plans reimburse for remote patient monitoring services, including cardiac  services.
Officials from all three private payers told us that there are challenges to  using remote patient monitoring in the private sector. For example,  officials from one private payer said that barriers to the use of remote  patient monitoring can include the need to set up equipment in the  patient’s home, interact with members with cognitive and physical  disabilities and their caregivers, and address technical difficulties with the  equipment.
section_title: Appendix II: Scope and Methodology for Identifying Factors Affecting the Use of Telehealth and Remote Patient Monitoring
paragraphs: We administered a data collection instrument to selected associations  representing providers, patients, and payers to obtain information on the  factors that encourage the use of telehealth and remote patient  monitoring in Medicare or are barriers to their use. To develop the data  collection instrument, we identified a list of potential factors and barriers  based on background research and initial interviews with two groups with  an interest in telehealth. Table 4 displays the list of factors that encourage  use or are barriers to use as they appeared in the data collection  instrument. For the purposes of the data collection instrument, we  defined telehealth as clinical services that are provided remotely via  telecommunications technologies, and we defined remote patient  monitoring as a technology to enable monitoring of patients outside of  conventional clinical settings, such as in the home.
To identify associations that might have an interest in telehealth and  remote patient monitoring, we conducted background research,  interviewed two groups with an interest in telehealth, and used knowledge  from our previous engagements to judgmentally select associations  based on their relevance and expertise. We chose associations that  represented three health care perspectives—providers, patients, and  payers. In addition, we chose medical specialty associations that  represent common conditions for which telehealth or remote patient  monitoring may be used, or could be beneficial, during the course of  treatment, such as stroke, heart disease and congestive heart failure, and  mental health. We included nine associations in our review: six  associations that represent providers, two associations that represent  patients, and one association representing payers.
A representative of the payer association we spoke with told us that it did  not have sufficient time to survey its members and could not complete our  data collection instrument without doing so. Therefore, we reported  separately the payer association’s views on factors that encourage the  use of, or are barriers to, telehealth and remote patient monitoring. For  the payer association, we interviewed officials to identify factors that  encourage use or are barriers to the use of telehealth and remote patient  monitoring in Medicare. We used professional judgment based on  information obtained throughout the course of our engagement to match  the payer association officials’ statements on factors that encourage use  or are barriers to use with corresponding data collection instrument  factors that encourage use or are barriers to use.
After identifying the associations, we administered the data collection  instrument and requested that officials from each association rate each  factor that encourages the use of telehealth and remote patient  monitoring and each barrier to use. We requested that officials rate  factors that encourage telehealth use, factors that encourage remote  patient monitoring use, barriers to telehealth use, and barriers to remote  patient monitoring use. For example, if an official identified a factor as  encouraging the use of telehealth, we requested that the official rate the  factor as not significant, somewhat significant, or very significant.
To identify the factors that encourage use or are barriers to use that were  rated either most often or more often “very significant” or “somewhat  significant” by the associations who completed our data collection  instrument, we developed the following scoring system.
Highest points (5) were assigned to an individual factor when an  association rated it very significant for both telehealth and remote  patient monitoring.
Next highest points (3) were assigned to an individual factor when an  association rated it very significant for either telehealth or remote  patient monitoring and somewhat significant for either telehealth or  remote patient monitoring.
Lowest points (1) were assigned to an individual factor when an  association rated it somewhat significant for both telehealth and  remote patient monitoring.
No points were assigned for any other rating combinations.
We used this scoring system to separately calculate total points assigned  to (1) each individual factor that encouraged use, and (2) each factor  considered to be a barrier to use. Within either group (either among those  that encouraged use or among those that were considered barriers to  use), if any one or two factors had measurably greater scores than the  other factors, those factors were reported as rated most often very  significant or somewhat significant. Additionally, we determined whether  any other factor or several factors had obviously higher scores than the  remaining factors that either encourage use or are a barrier to use, and  we reported those factors as rated more often very significant or  somewhat significant.
We also interviewed officials from each association using a structured  question set to obtain examples of how these factors can encourage or  create barriers to the use of telehealth and remote patient monitoring in  Medicare. Finally, we obtained and reviewed any relevant documentation  from these associations. The perspectives we obtained using the data  collection instrument, from our document reviews, and during our  interviews with association officials provided insights regarding officials’  views about the factors that encourage the use of telehealth and remote  patient monitoring and the factors that are barriers to their use. These  perspectives cannot be generalized to other associations or officials.
section_title: Appendix III: Medicare Telehealth Services Added and Denied by the Centers for Medicare & Medicaid Services, 2011-2016
paragraphs: The Centers for Medicare & Medicaid Service (CMS)—an agency within  the Department of Health and Human Services—has a process for adding  or denying proposed services to the list of Medicare telehealth services.  This process provides the public with an ongoing opportunity to submit  requests for adding services. Under this process, CMS assigns requests  to one of two categories:  1.  services that are similar to professional consultations, office visits, and  office psychiatry services that are currently on the list of telehealth  services; and  2.  services that are not similar to the current list of telehealth services. In  reviewing these requests, CMS looks for evidence indicating that the  use of a telecommunications system in furnishing the requested  telehealth service produces clinical benefit for the patient.
The most common reason a proposed service was added for payment  from calendar years 2011 through 2016 was similarity to a service already  on the list of telehealth services. See table 5 for the Current Procedural  Terminology and Healthcare Common Procedure Coding System codes  that were approved by CMS, including the reason for adding the service,  from calendar year 2011 through calendar year 2016.
There are several reasons that CMS denied proposed services for its  approved telehealth list for calendar years 2011 through 2016. These  reasons are, for example, that  the service was not like any other on the telehealth list, and the  requester could not prove to CMS that the service is effective when  furnished through telehealth;  the service was furnished by a provider or in a location that is not  allowed under Medicare;  the service was not face-to-face when not provided via telehealth; and  the service required face-to-face care because of patient acuity or  another factor.
See table 6 for the Current Procedural Terminology and Healthcare  Common Procedure Coding System codes that were denied by CMS and  the reasons for denial, from calendar year 2011 through calendar year  2016.
section_title: Appendix IV: Telehealth and Remote Patient Monitoring Reimbursement and Use in Selected State Medicaid Plans
paragraphs: To better understand how telehealth and remote patient monitoring are  used in Medicaid plans, we selected a sample of six states—Connecticut,  Illinois, Kansas, Mississippi, Montana, and Oregon—to include in our  review, and interviewed Medicaid officials from each of those states. We  selected states that provide variation in geography, physical size,  percentage of rural population, and other factors related to coverage and  reimbursement for health care services.
The Centers for Medicare & Medicaid Services does not limit telehealth  and remote patient monitoring use in Medicaid, thus reimbursement and  use vary by state. The six states had a range of restrictions for the use of  telehealth. For example, Illinois requires a medical professional be  present with the patient receiving care at the originating site, while  Oregon does not require anyone to be with the patient who is receiving  care, at what is known as the originating site. More details on the use of  telehealth and remote patient monitoring by selected state are included in  table 7.
section_title: Appendix V: Selected Associations’ Rating of the Significance of Factors that Affect Telehealth and Remote Patient Monitoring
paragraphs: Through an administered data collection instrument, officials from six  associations representing providers and two associations representing  patients identified, and rated the significance of, factors that encourage— and barriers that limit—the use of telehealth and remote patient  monitoring in Medicare. Officials were asked to respond from the  perspective of their association, specifically from a provider or patient  perspective, depending on the association.
Figures 4 and 5 show how provider and patient associations rated the  significance of factors that encourage the use of telehealth and remote  patient monitoring in Medicare. Figures 6 and 7 show how provider and  patient associations rated the significance of barriers to the use of  telehealth and remote patient monitoring in Medicare.
section_title: Appendix VI: Medicare Valuation of Remote Patient Monitoring
paragraphs: Remote patient monitoring refers to a coordinated system that uses one  or more home-based or mobile monitoring devices that transmit vital sign  data or information on activities of daily living that are subsequently  reviewed by a health care professional. This process can enable  providers to closely track a patient’s condition and provide earlier  intervention to potential problems. According to a report by the Agency  for Healthcare Research and Quality, remote patient monitoring has been  shown to produce positive outcomes, such as reduced hospitalization,  when used as a part of care management for chronic conditions such as  diabetes and congestive heart failure.
A June 2016 report by the Medicare Payment Advisory Commission  (MedPAC) found that Medicare covers some services through its  Physician Fee Schedule that involve remote monitoring of a patient. For  example, MedPAC’s analysis of 2014 Medicare data found that the  agency spent $119 million on remote cardiac monitoring services for  265,000 beneficiaries. While remote patient monitoring is used in  Medicare, there are concerns about how to establish accurate valuations  for some of these services’ Medicare payment rates in the Physician Fee  Schedule. To identify these concerns, we collected documentation from  and interviewed associations representing provider, patient, and payer  associations. We also reviewed documentation and conducted  interviews with Centers for Medicare & Medicaid Services (CMS) officials.
CMS—the agency within the Department of Health and Human Services  that administers the Medicare program—values remote patient monitoring  services in the same way it values other physician services—by setting  payment rates primarily as a result of underlying relative values that CMS  assigns to each service. These relative values largely reflect estimates of  the level of physician work and the amount of practice expenses needed  to provide one service relative to other services. Physician work relative  values are based on the estimate of two main inputs: (1) the time the  physician needs to perform the service (including pre- and post-service  activities, or work performed before and after the service), and (2) the  intensity of the service (including the physician’s mental effort and  judgment, technical skill and physical effort, and psychological stress).  Practice expense relative values are based primarily on estimates of (1)  direct practice expense inputs, which reflect the clinical labor, medical  equipment, and disposable supplies needed to provide a specific service  as well as the amount of time for which labor is required and equipment is  used, and (2) indirect practice expenses, which generally reflect overhead  expenses not associated with a specific service.
Several characteristics of remote patient monitoring services have been  identified by some of the selected associations we interviewed as raising  challenges to valuation within CMS’s methodology, such as the services’  personnel and technology, and the operating hours and location of where  certain remote patient monitoring services are delivered. Additionally,  officials from one provider association noted that some parts of CMS’s  process for developing Medicare valuation may not consider input from  stakeholders most knowledgeable about the technical components of the  services.
Personnel. Officials from an association representing certain providers of  remote patient monitoring services told us that Independent Diagnostic  Testing Facilities frequently perform remote patient monitoring services  that include patient diagnostic testing, but some personnel costs may not  be recognized in the Medicare valuation methodology because these  personnel are not considered clinical staff. For example, personnel  involved in remote cardiac monitoring at Independent Diagnostic Testing  Facilities include non-clinical administrative staff who the association  officials noted are not adequately accounted for in the CMS methodology.
Technology. Officials from this same association also noted that the  costs of technology associated with remote patient monitoring may not be  fully captured by CMS’s valuation methodology. For example, while  wearable remote devices only monitor one patient at a time, wireless  communication systems—with their hardware and software costs—that  can be used to remotely monitor multiple patients at a time are not  attributed to an individual patient when considering the direct practice  expense inputs. Therefore, this type of equipment is classified within the  indirect cost category (with overhead costs), resulting in lower payment  rates than if these costs were considered direct costs, according to  association officials. Additionally, other unique costs for remote patient  monitoring related to technology include such things as the cost of  delivering the monitoring device to the patient and the cost of the patient  returning the device after the monitoring period has ended.
In addition, technology used to provide remote patient monitoring services  can vary among service providers and is evolving, contributing to  difficulties in developing valuation for the services. Officials with a payer  association said there is variation among the type of devices the patient  or provider must possess or that must be installed in the patient’s home to  carry out remote patient monitoring, such as motion sensors to determine  if a patient has fallen or the components that transmit biometric  information such as blood pressure or weight back to the monitoring site.  Officials with a second provider association noted that remote patient  monitoring technology continues to evolve, and for such newly-developed  technology there is not a consensus in how to use and charge for the  multiplicity of delivery models, including the range of services and  procedures.
Hours of operation and location. Some remote patient monitoring may  require a monitoring facility to operate 24 hours a day, 7 days per week.  An association representing certain providers of remote patient  monitoring services noted that Medicare’s valuation methodology, which  CMS officials stated was designed for and primarily applies to services  furnished in standard physician offices during business hours, may not  fully incorporate costs associated with maintaining operations outside of  standard business hours and in non-physician office settings, such as at  Independent Diagnostic Testing Facilities or other types of remote  monitoring centers.
Knowledgeable stakeholders. CMS works with a committee established  by the American Medical Association (AMA)—the AMA/Specialty Society  Relative Value Scale Update Committee (RUC)—three times a year  annually to review a subset of physicians’ services, identified in part by  CMS and in part by the RUC, to develop recommendations to CMS on  the resources needed to provide those specific services. RUC members  generally represent physician specialty societies, such as those for  cardiology, family medicine, and internal medicine. However, for services  such as the cardiac monitoring services that are widely provided by  Independent Diagnostic Testing Facilities, representatives from  Independent Diagnostic Testing Facilities do not serve on the RUC and  do not officially participate in the RUC process as advisors regarding  these services, according to officials with the association representing  certain providers of remote patient monitoring services.
CMS response to cited concerns. CMS officials agreed that the  payment rates that result from the application of the current Medicare  methodology may reflect relative resources for services furnished in the  typical physician office rather than other locations. Officials said that they  use CMS’s annual rulemaking process for setting payment rates for the  Physician Fee Schedule to address services, such as remote patient  monitoring, that vary from the usual service delivery model. CMS  officials said this process affords members of the public an opportunity to  recommend codes to be considered for revaluation if they believe the  services are inappropriately valued. Some examples CMS officials cited  include the following:  In revisions to the Physician Fee Schedule for calendar year 2016,  CMS increased the input price for patient worn telemetry system  equipment, which is a factor in establishing the payment rate for  cardiovascular telemetry transmitted to a remote attended  surveillance center for up to 30 days. In response to a request  received in a public comment period during the annual Physician Fee  Schedule rulemaking, CMS increased the price from $21,575 to  $23,537 to account for the unique properties of the equipment,  including its use 24 hours per day and 7 days per week for an  individual patient over several weeks and its use primarily outside of a  health care setting.
CMS has developed codes within the Physician Fee Schedule that  describe the non-face-to-face care management services that include  interactions furnished through communication technology. These non- face-to-face services are associated with managing the particular  needs of patients and are furnished over the course of a calendar  month.
section_title: Appendix VII: Examples of Telehealth and Remote Patient Monitoring in Medicare Models and Demonstrations
paragraphs: The Patient Protection and Affordable Care Act created the Center for  Medicare & Medicaid Innovation (Innovation Center) within the Centers  for Medicare & Medicaid Services to test innovative payment and service  delivery models to reduce Medicare, Medicaid, and state Children’s  Health Insurance Program expenditures while preserving or enhancing  the quality of care. The Innovation Center also supports Medicare  demonstration projects, which study the likely impact of new methods of  service delivery, coverage of new types of services, and new payment  approaches on beneficiaries, providers, health plans, states, and the  Medicare trust funds. The Innovation Center has organized the models  and demonstrations into seven categories. Table 8 shows the seven  categories and for each provides a description and an example of how a  model or demonstration within that category may use telehealth or remote  patient monitoring.
section_title: Appendix VIII: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Karen Doran, Assistant Director;  Sarah Resavy, Analyst-in-Charge; Luke Baron; Muriel Brown; Krister  Friday; Monica Perez-Nelson; and Helen Sauer made key contributions to  this report.