Expanded use of telehealth during the COVID-19 pandemic was associated with “little change in measured quality, slightly improved access to care for some beneficiaries, and slightly increased costs to the Medicare program,” according to a MedPAC report.1
The report concluded that CMS “should resume paying the lower facility rate for telehealth services as soon as practicable after the [public health emergency].”1
MedPAC found that risk-adjusted rates of ambulatory care-sensitive hospitalizations were lower for hospital service area groups with low and high telehealth use in the second half of 2021.3 However, rates decreased more slowly, on average, in hospital service areas that saw a higher level of telehealth use. The report also found that:
- Risk-adjusted rates of ACS emergency department visits were lower during 2021 compared with 2019 for HSAs with low and high telehealth usage rates.
- Total clinician encounters per beneficiary were lower in the second half of 2021 than in the second half of 2019 across HSAs. However, HSAs with high telehealth use saw slower declines, on average, than those with low use.
- The total cost of care per beneficiary increased in 2021, compared with 2019, in HSAs with high use and with low use, but costs increased more in those with high usage.
Historically, CMS has been cautious about broad Medicare coverage of telehealth services because of concerns over quality and cost.1 But at the beginning of the pandemic, the agency cited “an urgency to expand the use of technology” to help people obtain routine care and limit exposure of vulnerable populations to COVID-19.2
During the PHE, Congress provided regulatory flexibilities for telehealth, including eliminating originating site restrictions for telehealth services, expanding the types of providers allowed to offer telehealth and allowing broader coverage of audio-only services.3
Fee-for-service Medicare spending for telehealth services grew from $130 million in 2019 to a peak of $1.9 billion in the second quarter of 2020.1 While still much higher than during the beginning of the pandemic, telehealth spending had dropped to $827 million by the fourth quarter of 2021.
MedPAC found that mental, behavioral and neurodevelopmental disorders accounted for the highest share of spending for telehealth in 2021 — 34.4% — up from 25.4% the prior year.1 One of the permanent changes to telehealth to come out of the pandemic is that CMS will pay for telehealth behavioral services, and beneficiaries can still access that care from home.1
Many of the other flexibilities granted by CMS during the pandemic have been extended through Dec. 31, 2024.3 After December 2024, Medicare Advantage plans must cover the telehealth benefits allowed by Medicare and may offer additional telehealth benefits.4 Meanwhile, a bill introduced in Congress the same day MedPAC released its report would expand coverage of telehealth services through Medicare and make permanent COVID-19 telehealth flexibilities.5
MedPAC recommends lawmakers continue monitoring telehealth’s impact on healthcare access, quality and costs and consider that information in any additional permanent policy changes.
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- June 2023 Report to the Congress: Medicare and the Health Care Delivery System — MedPAC. June 15, 2023. https://www.medpac.gov/document/june-2023-report-to-the-congress-medicare-and-the-health-care-delivery-system/
- Centers for Medicare & Medicaid services. Medicare Telemedicine Health Care Provider Fact Sheet. March 17, 2020. www.cms.gov/newsroom/fact-sheets/medicare-telemedicine-health-care-provider-fact-sheet
- Vaidya, A. Lower Telehealth Payments to Pre-Pandemic Facility Rates. MHealthIntelligence, MedPAC. June 20, 2023.
- U.S. Department of Health and Human Services. Telehealth Flexibilities and Resources and the COVID-19 Public Health Emergency. May 10, 2023. www.hhs.gov/about/news/2023/05/10/hhs-fact-sheet-telehealth-flexibilities-resources-covid-19-public-health-emergency.html
- O’Reilly, K. Near supermajority in Senate backs telehealth’s future. American Medical Association. June 21, 2023.