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

Letter

Background

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.

Medicare Telehealth and Remote Patient Monitoring Requirements

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.)

Medicaid, DOD, and VA Telehealth and Remote Patient Monitoring Requirements

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.

Available Data Show Low Proportions of Beneficiaries Accessing Telehealth; Limited Data Are Available on Remote Patient Monitoring

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.

Medicare

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.

Medicaid

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).

CMS Uses Routine Claims Review Processes for Telehealth Payments and Is Examining Some Questionable Claims Identified by MedPAC

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.

Selected Associations Report Telehealth and Remote Patient Monitoring May Improve Care for Medicare Beneficiaries, but Cited Coverage and Payment Restrictions as Barriers

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.

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

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.

Selected Associations Cited Payment and Coverage Restrictions as Barriers to the Use of Telehealth and Remote Patient Monitoring in Medicare

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.

CMS Has Various Efforts Underway That Have the Potential to Expand the Use of Telehealth and Remote Patient Monitoring in Medicare

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.

CMS Models and Demonstrations

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.

Merit-based Incentive Payment System

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.

Agency and Third- Party Comments

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.

Appendix I: Use of Remote Patient Monitoring by Selected Private Payers

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.

Appendix II: Scope and Methodology for Identifying Factors Affecting the Use of Telehealth and Remote Patient Monitoring

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.

Appendix III: Medicare Telehealth Services Added and Denied by the Centers for Medicare & Medicaid Services, 2011-2016

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.

Appendix IV: Telehealth and Remote Patient Monitoring Reimbursement and Use in Selected State Medicaid Plans

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.

Appendix V: Selected Associations’ Rating of the Significance of Factors that Affect Telehealth and Remote Patient Monitoring

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.

Appendix VI: Medicare Valuation of Remote Patient Monitoring

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.

Appendix VII: Examples of Telehealth and Remote Patient Monitoring in Medicare Models and Demonstrations

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.

Appendix VIII: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

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.