On Friday, April 5, 2019, the Centers for Medicare and Medicaid Services (“CMS”) announced that it had finalized policies allowing Medicare Advantage plans (“MA Plans”) to include additional telehealth benefits in their basic benefit packages starting in 2020.  The final rule implementing the changes (the “Final Rule”) will be published in the Federal Register on April 16, 2019. An advance copy of the Final Rule is available here.

Historically, MA Plans have been able to offer certain telehealth services as part of their supplemental benefits. The Final Rule further expands the ability of MA Plans to offer and reimburse for telehealth services by allowing MA Plans to offer telehealth services outside of supplemental benefits, which CMS contends will expand patients’ access to telehealth services from more providers in both rural and urban settings throughout the United States.

To make these changes, CMS leveraged new authorities provided to it in the Bipartisan Budget Act of 2018 (the “BBA”). Specifically, Section 50323 of the BBA created a new section 1852(m) of the Social Security Act (the “SSA”), which allows MA Plans to provide “additional telehealth benefits” (referred to as “MA additional telehealth benefits” in the Final Rule) to enrollees starting in plan year 2020 and to treat them as basic benefits. The SSA limits these MA additional telehealth benefits to the following:

  • Services for which benefits are available under Medicare Part B, but that are not payable under section 1834(m) of the SSA (which currently limits payment to telehealth benefits provided to patients in rural areas and does not allow patients to be in their homes when receiving such telehealth benefits); and
  • Services that have been identified for the applicable year as clinically appropriate to furnish through electronic information and telecommunications technology (referred to as “electronic exchange” in the Final Rule).

Therefore, under the Final Rule, MA Plans will be permitted to offer – as part of the basic benefit package – MA additional telehealth benefits beyond what is currently allowable under the fee for service Medicare telehealth benefit (referred to as “Medicare telehealth services” in the Final Rule).

In addition, MA Plans will continue to be able to offer MA supplemental benefits (that is, benefits not covered by fee for service Medicare) via remote access technologies and/or telemonitoring (referred to as “MA supplemental telehealth benefits” in the Final Rule) for those services that do not meet the requirements for coverage under fee for service Medicare or the requirements for MA additional telehealth benefits (such as the requirement of being covered by Medicare Part B when provided in-person). For instance, an MA Plan may offer, as an MA supplemental telehealth benefit, a videoconference dental visit to assess dental needs because services primarily provided for the care, treatment, removal, or replacement of teeth or structures directly supporting teeth are not currently covered Part B benefits, and thus would not be allowable as MA additional telehealth benefits.

It is worth noting that CMS did not adopt specific regulatory text that defines or provides examples of electronic information and telecommunications technology.  CMS indicated this is because the technology needed and used to provide MA additional telehealth benefits would vary based on the service being offered. According to CMS, examples of electronic information and telecommunications technology (or “electronic exchange”) may include, but are not limited to, the following:  secure messaging, store and forward technologies, telephone, videoconferencing, other internet-enabled technologies, and other evolving technologies as appropriate for non-face-to-face communication.  CMS stated that it “believes this broad and encompassing approach will allow for technological advances that may develop in the future and avoid tying the authority in the regulation to specific information formats or technologies that permit non-face-to-face interactions for furnishing clinically appropriate services.”

It is clear that CMS intends for these changes to incentivize more MA Plans to offer more telehealth services and to increase access to patient-centered care by giving enrollees more control to determine when, where, and how they access benefits. According to CMS, the MA additional telehealth benefits are expected to produce $557 million in savings for enrollees over 10 years from reduced travel time to and from providers. The impact of paying for MA additional telehealth benefits out of the Medicare Trust Fund (as basic benefits) versus out of the rebates (as supplemental benefits) will result, according to CMS, in a transfer of $80 million from the Medicare Trust Fund to enrollees over 10 years.

For more information about the Final Rule or other matters relating to telehealth, contact Matthew Shatzkes at 212-634-3062 or by email at mshatzkes@sheppardmullin.com or Susan Ingargiola at 212-896-0624 or by email at singargiola@sheppardmullin.com.