Should Payment Parity for Telehealth Continue?

In response to the COVID-19 pandemic, the Centers for Medicare and Medicaid Services issued rulemaking to require Medicare to pay the same rates for telehealth and in-person care for the duration of the public health emergency (PHE).  Now that the end of the pandemic may be in sight, stakeholders are debating whether Medicare should continue offering payment parity for telehealth services post-pandemic.  Since Medicare’s actions often inform what private payers do, stakeholders will be watching closely what the agency decides to do. 

Against Payment Parity

A chief argument against payment parity is that it could lead to overutilization and higher spending.  For patients with the right technology, accessing telehealth can be very convenient, leading health experts to suggest some patients may use telehealth more than necessary.  Corollary to this, some experts are worried about telehealth’s potential to create more opportunities for waste, fraud, and abuse.

Additionally, opponents to payment parity contend that telehealth requires fewer resources and less clinical effort than in-person visits.  For example, a 2017 study from Health Affairs found the average cost of a telehealth visit for an acute respiratory infection was $79 compared to $146 for in-person visits.  Simple virtual check-ins may also require less decision-making, time, and other factors considered “clinical effort” when compared to in-person appointments. 

Furthermore, some worry payment parity in telehealth may propagate low-value care.  For certain conditions, telehealth may prove limiting for providers, and there is no substitute for the type of evaluation physicians can provide through in-person visits.  Parity opponents argue that higher reimbursement rates tied to in-person visits will ensure patients can more regularly receive a full evaluation, thus preventing the likelihood symptoms missed during telehealth visits progress to become more expensive chronic conditions down the road.

For Payment Parity

Those in favor of continuing payment parity post PHE say there is no evidence that telehealth has resulted in overutilization.  Most instances of telehealth usage, parity proponents say, has been to substitute in-person to visits as a result of the COVID-19 pandemic.  According to data from electronic health record company Epic, the number of telehealth visits declined rapidly by summer 2020 following an initial increase in April 2020.  This data suggests that patients are so far not opting for more telehealth visits over in-person visits out of ease or convenience.  Additionally, some physicians argue some diagnoses can require as much clinical effort as in-person visits.  According to a 2020 study from the University of Michigan, surgeons reported spending more time on telehealth than in-person visits.   

Proponents of payment parity also say telehealth services utilize far more resources than patients realize.  While telehealth may not seem to require the same “brick and mortar costs” as in-person visits, providers assert that telehealth requires an investment in technology, both to set-up virtual visits and keep up with changes in technology.  For certain medical conditions, digital monitoring and home-based care products may require additional resources.  Providers also say that some diagnoses can involve just as must clinical effort as do in-person appointments.

Moreover, parity supporters contend that clinical guidelines about when telehealth and in-person care is appropriate can prevent low-value care.  For instance, the American College of Obstetricians and Gynecologists has issued guidance on when patients should require a physical examination. 

What Happens Next?

CMS can continue to pay the same rates or the agency could propose a differential payment rate.  Either way, the decision would be subject to the rulemaking with notice and comment.  For the part of Congress, the legislative branch hasn’t weighed in.  While legislators have introduced a slew of bills to permanently expand telehealth coverage and abolish pre-pandemic restrictions on telehealth, none address how telehealth should be paid for.  A lone exception is H.R. 8308, the Telehealth Coverage and Payment Parity Act.  Introduced by Rep. Dean Phillips (D-MN) in September 2020, the legislation would require commercial insurers to pay the same level for the same level for telehealth services as it would for in-person services.  However, this legislation does not affect Medicare, and as of this writing, the bill has yet to be reintroduced in the 118th Congress.

In their January 2021 public meeting, the members of the Medicare Payment Advisory Commission (MedPAC) suggested that Medicare continue telehealth payment parity for 1-2 years following the end of the PHE as a “pilot program” to evaluate how to telehealth services should be reimbursed permanently.  However, MedPAC’s comments have yet to be taken up in any legislative proposal.

The PHE Was Just Extended. What Does That Mean?

So, what exactly happens to those regulatory flexibilities and emergency measures when the pandemic ends?  On April 15, the Department of Health and Human Services (HHS) extended the PHE for a 90-day period beginning on April 21 and ending on July 19.  HHS won’t keep doing this forever – so what happens when the PHE is no longer renewed? 

The PHE So Far

HHS first declared the COVID-19 PHE on January 27, 2020, and HHS has since renewed the PHE four times, each for 90 days.  When Acting Health and Human Services Secretary Norris Cochran  sent a letter to state governors on January 21, 2021 estimating  the PHE will likely remain in place for the entirety of 2021,” many thought the current extension would run through the calendar year, but Secretary Xavier Becerra extended the PHE through July 19, following the pattern of 90-day renewals as stipulated by the Public Health Service Act.  The January 2021 letter indicated that when HHS decides to terminate the declaration and/or let the PHE expire, the Department will provide states with 60 days’ notice. 

When Will the PHE End?

Do you remember when President George W. Bush relayed the message that the war in Iraq was over during his famed aircraft carrier speech on May 1, 2003, and then the war continued for many years?  Is that what will happen with the PHE?

As it goes, there isn’t a requirement that  HHS outline any specific criteria to be met for the PHE to end.  The Health and Human Services Secretary has the option of declaring the PHE over, or he may simply not extend the current emergency.  For their part,  the American Health Care Association offered one suggestion – that the  PHE be lifted if roughly 70% of the population has been vaccinated, or less than 500 COVID-19 deaths have occurred for 14 consecutive days . 

Key Measures Linked to the PHE

Both Congress and the Administration have advanced key COVID-19 relief measures whose expiration dates are linked to the termination of the PHE.  Below is a list of pivotal relief measures and their central provisions.

  • Certain measures included in COVID-19 relief legislation.  Many policies tied to the PHE are included in the Families First Coronavirus Response Act, enacted March 18, 2020, the CARES Act, enacted March 27, 2020, and the American Rescue Plan Act, enacted March 11, 2021.  Some of these measures expire at the conclusion of the PHE, while others have a specific end date beyond the PHE, such as the one year or one calendar quarter after the termination of the PHE.  Key provisions include:
    • Enhanced coverage and no cost-sharing for COVID-19 testing and vaccines under Medicare, Medicare Advantage, Medicaid, CHIP, and TRICARE.
    • Waived or modified Medicare requirements for telehealth, such as the restriction on use of a telephone and the requirement for face-to-face visits between home dialysis patients and physicians.
    • Increased Medicaid federal match rate to 6.2%.
    • Waived site-neutral payment rate provisions for long-term care hospitals.
    • Continued payments to providers via the Medicare Hospital Accelerated Payment Program.
    • Recalculated Medicaid disproportionate share hospital allotment.
  • Temporary regulatory flexibilities under CMS.  In interim final rules published on March 31, May 8, September 2, and November 2, 2020, the Centers for Medicare and Medicaid Services (CMS) has relaxed numerous Medicare and Medicaid rules for the duration of the PHE.  Examples include testing and reporting requirements for long-term care facilities, enhanced Medicare reimbursement for certain COVID-19 treatments, and price transparency requirements for COVID-19 tests.  The interim final rules also include a number of telehealth provisions, with notable examples including:
    • Waived requirements on the types of practitioners that can furnish Medicare telehealth services to include all practitioners eligible for Medicare reimbursement, including physical therapists, occupational therapists, and speech language pathologists.   
    • Modified reporting requirements for remote physiological monitoring services.
    • Payment parity for audio-only telephone services.
    • Allowing hospitals to bill for services provided remotely by hospital-based practitioners to Medicare beneficiaries registered as outpatients.
    • Allowing teaching physicians to review services provided by resident physicians remotely via audio-visual communications technology.
  • Section 1135 Waivers.  Since the start of the pandemic, CMS has invoked Section 1135 waiver authority to issue a blanket waiver and a series of state-specific waivers that expand telehealth coverage, allow clinicians to practice across state lines, and suspend some reporting requirements.  All of these waivers are set to expire at the conclusion of the PHE.
  • HIPAA Enforcement.  The HHS Office of Civil Rights has relaxed certain HIPAA privacy rules for the duration of the PHE that apply to telehealth technologies, testing sites, and web-based scheduling platforms for COVID-19 vaccination appointments.  
  • Stark and Anti-Kickback Statute.  The HHS Office of the Inspector General has issued guidance discouraging enforcement of pandemic response activities until the end of the PHE that could be viewed as problematic under the anti-kickback statute and the Stark Laws. 
  • Controlled Substances. Both the Substance Abuse and Mental Health Services Administration and the Drug Enforcement Administration have issued guidance allowing more flexibility for providers and opioid treatment programs to prescribe controlled substances during the PHE.

Previewing a Post-PHE World

As vaccinations increase and jurisdictions gradually reopen, the fate of temporary policies that expire at the end of the PHE remains unclear.  Fortunately, recent actions by federal officials offer clues as to how some of temporary policies may be retained, particularly those relating to telehealth.  As expressed by then-CMS Administrator Seema Verma in December 2020, congressional action will be essential to ensuring expanded telehealth coverage and other flexibilities can be made permanent.  Since then, policymakers have been providing suggestions to lawmakers on what to do with telehealth after the PHE ends.  In its March 15, 2021 report to Congress, for example, the Medicare Payment Advisory Commission recommended continuing some telehealth flexibilities one to two years following the end of the PHE to evaluate whether the temporary policies should be adopted permanently.  The report also provided the following recommendations to Congress:

  • Continue Medicare coverage for telehealth services, regardless of a beneficiary’s location.
  • Discontinue allowing providers to reduce or waive cost-sharing for telehealth.
  • Continue coverage of audio-only services if there is a clinical benefit.

Additionally, members of Congress have put forth their own proposals to permanently expand telehealth.  Key legislation introduced so far includes:

  • H.R. 366, the “Protecting Access to Post-COVID–19 Telehealth Act of 2021,” introduced by Rep. Mike Thompson (D-CA), which would eliminate most geographic and originating site restrictions on the use of telehealth in Medicare and authorize CMS to continue reimbursement for telehealth for 90 days beyond the end of the PHE.
  • H.R. 787, the “Expanding Student Access to Mental Health Services Act,” introduced by Rep. Rick Allen (R-GA), which would permanently expand telehealth services for students.
  • H.R. 937, the “Tech to Save Moms Act,” introduced by Rep. Eddie Bernie Johnson (D-TX), which would integrate telehealth models into maternity care services.

While the federal government may not yet have a specific plan on how it intends to handle temporary regulatory flexibilities once the pandemic expires, recent action from legislators and policymakers suggest a desire to keep at least some policies around permanently. 

The Government’s Ambitions Plans to Grow Broadband Access

A major barrier to widespread telehealth adoption in the United States is lack of access to broadband internet.  While telehealth utilization has surged since the start of the COVID-19 pandemic, telehealth’s potential for growth is limited by lack of high-speed internet connections for both patients and providers.

However, not all Americans have access to broadband.  A 2019 Federal Communications Commission (FCC) report found 21.3 million Americans, or 6.5% of the population, currently lack access to broadband.  Furthermore, a 2021 survey by BroadbandNow found 42 million Americans are unable to afford broadband without any assistance.  According to the Office of the National Coordinator for Health Information Technology, broadband service provides a higher-level speed of data transmission, which is particular important for live videoconferencing with health care practitioners.  Additionally, broadband allows health care providers to meaningfully use patient information, such as electronic health records, to improve patient outcomes. 

Fortunately, the federal government has taken some steps to boost broadband access. To help patients afford broadband access, the Consolidated Omnibus Appropriations Act, 2021 (P.L. 116-260) provided $3.5 billion to the FCC to establish a program to help low-income Americans get or stay connected to broadband.  The program is required to provide a $50 subsidy for qualified households who must include at least one individual who is eligible for the Lifeline Program, the Supplemental Nutrition Assistance Program, or a Pell Grant.

Providing direct government subsidies to individuals to access broadband looks likely to be part of an upcoming legislative effort to address the nation’s infrastructure needs.  The American Jobs Plan, the Biden Administration’s highly anticipated $2 trillion infrastructure proposal, high-speed broadband to every American, including the 35% of rural Americans who lack high-speed broadband.  Among the ways the Administration plans to achieve this include:

  • Providing individual subsidies to cover internet costs in the short-term and reducing costs through widespread adoption in the long-term.
  • Prioritizing support for broadband networks owned or operated by local governments, non-profits, and cooperatives.
  • Promoting transparency and competition among internet providers and requiring providers to publicly disclose prices their charge.

Direct subsidies are also included in the Leading Infrastructure for Tomorrow’s (LIFT) American Act.  Co-sponsored by all 32 Democrats on the House Energy and Commerce Committee, this proposal will provide a basis for House Democrats’ action on energy and broadband in the Congressional infrastructure bill.  The bill would grow high-speed internet access by:

  • Authorizing an additional $6 billion for the FCC program that provides a discount of up to $50 off the cost of monthly broadband service for eligible households. 
  • Providing $80 billion to develop secure broadband nationwide by funding connections to underserved rural, suburban, and urban communities.
  • Allocating $5 billion in federal funding for low-interest financing of broadband deployment.

While health care providers are already advocating for making permanent some of the Medicare and Medicaid flexibilities for telehealth enacted into law as the result of the coronavirus pandemic, they should be keen to keep an eye out for additional discussion and debate on broadband access.  Both the government’s recent actions to expand broadband and Democratic proposals to boost broadband even further suggest a strong desire to build out an infrastructure that will allow telehealth to flourish in a post-pandemic world.

Amazon Moves to Disrupt Health, Influence Policy

Amazon is primed to disrupt primary care just like the tech giant has done to retail, cloud computing, and package delivery services.  This time, it’s telehealth. 

On March 17, 2021, Amazon took a major step forward in expanding its health care reach by announcing  plans to make Amazon Care, its virtual health service benefit, available to all of its US employees this summer.  Furthermore, Amazon announced its telehealth service will be available to other companies.  Over the next few months, the company also intends to expand its Amazon Care in-person health centers to Washington, DC, Baltimore, and several other cities. 

In September 2019, the company launched Amazon Care for employees and their families in the Seattle metropolitan area.  Amazon Care offers telehealth as well as in-person primary care visits at patients’ homes or in-office.  Additionally, the service incorporates Amazon Pharmacy, the company’s prescription drug delivery service that launched in November 2018

Amazon Care is not the company’s first foray into health care.  In addition to Amazon Pharmacy, the tech giant teamed up with primary care group Crossover Health in 2020 to launch health care centers near its operations facilities and fulfillment centers in Phoenix, Louisville, and Dallas-Fort Worth, with more facilities planned in 2021.  Notably, the company joined forces with JPMorgan Chase and Berkshire Hathaway in January 2018 to launch a new non-profit venture called Haven.  The new venture was intended to utilize the vast resources of its founding companies to address the complexity of health care coverage and rising health care costs. However, Haven was eventually scuttled in January 2021, with lack of a strategy, leadership turnover, and the enormous scale of problems facing the US health care industry cited as likely culprits. 

As illustrated by Haven, Amazon Care’s success is far from guaranteed.  The service faces stiff competition from other well-funded telehealth services, including Doctor on Demand and PlushCare.  Additionally, there has yet to be any data posted on whether Amazon Care has been successful in reducing costs, which was one of Haven’s initial goals.  However, Amazon Care stands out from its competitors by offering integrated pharmacy services and a potential built-in customer base from the over 150 million Amazon Prime subscribers. 

Through its recent ventures into the health care industry, Amazon may be signaling a desire to use its growing health care clout to influence health care policy.  In March 2021, Amazon Care joined with Intermountain Healthcare, Ascension, and several other providers to launch Moving Health Home, a new coalition aimed at changing the way “policymakers think about the home as a site of clinical service.”

Amazon’s desire to impact home health care policy is reflective its overall efforts to enhance its advocacy capabilities in recent years.  In 2020, the company logged $18.7 million in lobbying expenditures, including on health care matters, a nearly two-fold increase from its $9.4 million total expenditures in 2015.  Amazon also boasts 17 registered lobbyists in addition to the 24 lobbying firms on its retainer.  Former Obama Administration White Press Secretary Jay Carney has served as the company’s Senior Vice President of Global Corporate Affairs since 2015, and the company notably chose the Washington, DC metropolitan area for the site of its highly anticipated second headquarters.

By growing its influence in Washington and demonstrating a wiliness to shape home health and other policy areas, Amazon may be using its newfound efforts in telehealth and primary care as another means to sway health policy and achieve its goal of disrupting health care in America.