What does COVID-19 mean for the future of telehealth and value-based care?

America is returning to a new normal. States are taking a stepwise approach to reopening, and medical group practices are welcoming patients back into the office. As we move past the most urgent stage of the public health crisis created by the COVID-19 pandemic — a stage that demanded an unprecedented, immediate and critical response — the country must begin to consider what the healthcare system will look like going forward.

Accelerating telehealth adoption

Like gasoline to a fire, the COVID-19 pandemic fueled the long-simmering embers of telehealth adoption. Providers who did not previously offer telehealth embraced technology as a means to remotely maintain patient access to care and attempt to make up for revenue lost from substantial reductions of in-person visits. By March 2020, 97% of healthcare leaders reported expanding telehealth access amid COVID-19.¹

Developing telehealth capabilities has required group practices to invest resources in new technology, training and infrastructure. In a matter of weeks, groups have transformed the way healthcare is delivered and paved the way toward new ways to receive care, benefiting both patients and providers.

Before the COVID-19 public health crisis, group practices faced longstanding barriers to telehealth implementation, including cumbersome billing policies, inadequate reimbursement, inconsistent state licensure rules, difficulties with equipment/technology procurement, lack of interoperability and gaps in rural broadband. Not surprisingly, only about 0.25% of traditional Medicare beneficiaries received any telehealth service in 2016.² Following the outbreak, regulatory roadblocks that may have taken years to remove were lifted over a few short weeks. As the virus continued to spread in March, Congress passed legislation enabling the Centers for Medicare & Medicaid Services (CMS) to temporarily lift many arcane regulations that constrained the growth of telehealth. As is often the case, many commercial insurers followed suit.

Before COVID-19: Barriers to telehealth

Telehealth services that may be separately paid under the Medicare Physician Fee Schedule (PFS) are defined under Section 1834(m) of the Social Security Act. The law restricts the availability of telehealth services to beneficiaries who are located at an “originating site,” which generally means a clinical or institutional site of service, such as another physician’s office, a skilled nursing facility (SNF) or a hospital. Furthermore, in addition to being located at an originating site, the beneficiary must be in a rural area. CMS requires that telehealth be furnished using certain technology; namely, an “interactive telecommunications system” with audio and video capabilities; telephones are specifically excluded from this definition, even if they have video capabilities.³ Medicare regulations also limit the type of provider who may furnish telehealth services and restrict payment to an enumerated list of covered codes that has grown very slowly since 2003 when CMS established the current process for adding new services.

During COVID-19: Accelerating adoption

In response to the COVID-19 outbreak, Congress and the Administration approved sweeping changes to federal telehealth policy by issuing a series of waivers to generally applicable restrictions. Under the waivers, beneficiaries can be at any location, such as their home, and in any geographic area, including an area classified as urban or metropolitan. Providers similarly may furnish telehealth services from their homes without significant burden, in contrast to generally applicable rules that require providers to update enrollment files when furnishing care outside their office. Regulatory waivers applicable during the public health emergency (PHE) also permit providers and patients to use telephones, but continue to require use of audio-video technology for most services. Additional flexibilities due to COVID-19 include relaxing HIPAA rules and the ability to waive patient cost sharing obligations without fear of beneficiary inducement allegations.

The move to accelerate telehealth usage included not only improvements to eligibility, but also improvements to the reimbursement landscape. Medicare and, in some cases, commercial payers, are reimbursing telehealth services at the same rate as in-office visits. Historically, telehealth visits were reimbursed at the typically lower facility rate.

The Secretary of Health & Human Services (HHS) declared a PHE on Jan. 31, 2020, which is the authority that allowed the Administration to implement these important changes. Absent renewal of this declaration, waivers around telehealth reimbursement, billing rules and other regulatory relief measures would not be possible unless Congress amends the implementing statute. Thus, rescinding the PHE declaration too soon risks moving practices and patients back to status quo too quickly, frustrating group practices’ abilities to furnish remote care to patients.

Patients, particularly vulnerable populations, may be hesitant to come into the office, and practices may wish to continue offering more robust remote care options. However, the Administration, and commercial payers for that matter, may hamper this approach if temporary coverage policies are removed. Furthermore, once the dust settles and it’s safe for most or all to go out, patients and practices may prefer telehealth, notwithstanding a public health crisis.

Telehealth: Fanning the flames

The COVID-19 pandemic allowed easier patient access to telehealth services and accelerated adoption among group practices, showing promise for telehealth’s use in the future. However, to maintain momentum, policymakers must take certain steps to avoid backtracking this progress. Steps could include:

• Collecting data on telehealth usage during the PHE to analyze clinical efficacy and utilization trends. In the past, some policymakers and advisors have been hesitant to embrace expanded telehealth coverage, citing over-utilization or cost concerns.⁴ For example, if telehealth services supplement, rather than substitute, in-person visits for the same condition without improving outcomes, then increasing telehealth services will increase costs for the program without improving quality. In contrast, it would be persuasive if data show that telehealth services expand access to care, improve quality, reduce costs, substitute for in-person visits and/or reduce the use of high-cost care such as hospitalizations. Telehealth data during COVID-19 present a unique research opportunity for CMS and commercial payers to build upon for future policies.
• Modifying telehealth regulations to be as flexible as possible. Lifting telehealth flexibilities too quickly risks cutting off patient access to care and wasting group practice resources. Policymakers must take this opportunity to evaluate telehealth data in order to look to the future of telehealth and take action to removed unnecessary restrictions permanently.
• Striving for uniformity across all payers. While the federal government has the authority to implement policies around Medicare reimbursement, its authority over commercial payers and state-run plans such as Medicaid is limited. There is a clear lack of uniformity across payers, with telehealth coverage varying in the scope of services and rules for how it is administered. To the extent possible, Congress should work to implement or encourage uniform policies across all payers to decrease administrative burden and encourage continued telehealth adoption among providers.

Value-based care and COVID-19

A significant concern for groups participating in value-based contracts or alternative payment models (APMs) is uncertainty regarding spending, such as potentially increased utilization and expenses from COVID-19 cases, non-reimbursable infrastructure costs, increased expenditures on personal protective equipment (PPE) and cash flow problems for smaller entities resulting from reduced revenue in elective procedures or visits. In risk-based arrangements, hitting financial targets is critical to achieving financial incentives, such as shared savings in accountable care organizations (ACOs).

With patients sheltering in place, elective procedures and appointments were virtually halted for many group practices during the first few months of the PHE. While this may have resulted in a temporary reduction in utilization, suspending necessary treatment could result in higher acuity problems for patients who wait to come into the office, or worse, end up in the hospital. Spending trends post-pandemic could vary significantly across the country, potentially spiking in areas designated as COVID-19 “hot spots” and creating geographic differences in spending for APMs. In addition to geographic variation, the health of an APM’s attributed population will impact costs for 2020. The takeaway for APMs is that COVID-19 has the potential to have a significant impact on financial reconciliation, giving rise to uncertainty for participants and challenging the desire to stay in a risk-based program.

The state of payment reform after COVID-19

Despite significant attention from policymakers promoting value-based care, growth in new APMs has been dismal, and results from existing models have been mixed. Group practices understandably continue to find it challenging to invest resources in Medicare’s value-based programs. COVID-19 has thrown predictability out the window, which places a new strain on the future of value-based care.

CMS has addressed some COVID-19-related concerns for participants in the Medicare Shared Savings Program (MSSP), the largest value-based payment program within Medicare. For ACOs in two-sided risk tracks (approximately 40% of MSSP ACOs in 2020), CMS will reduce financial losses for the months the PHE declaration is in effect during the 2020 performance year. CMS is also removing payment amounts for episodes of inpatient care for coronavirus treatment from MSSP performance year expenditures, while making updates to the historic benchmarks and revenue calculations for determining loss sharing limits for certain ACOs.

Despite the protections implemented so far, those participating in APMs may remain concerned about the unpredictability resulting from the public health emergency and potential for disastrous losses for the 2020 performance year. The move toward value-based care won’t come to a screeching halt, but participation in downside risk could certainly stall.

CMS should take further action to prevent APM participants from quitting and allowing them to retain any savings they generate for Medicare. Specifically, CMS should:

• Allow ACOs the option to be protected from financial losses in 2020, in exchange for a reduced shared savings rate.
• Reduce the quality measure reporting burden for all APM participants.
• Release 2018 Advanced APM bonuses as soon as possible.

Conclusion

The coronavirus pandemic will inevitably have long-lasting effects on the economy, healthcare and society. It is important for practices to begin considering the lessons learned from this crisis to better manage health emergencies in the future and to ensure the ongoing betterment of our healthcare system.

Notes:

1. MGMA. “Medical practices innovate care delivery, increase telehealth access amid COVID-19.” April 2, 2020. Available from: mgma.com/stat-040220.
2. CMS. “Information on Medicare Telehealth.” Nov. 15, 2018. p. 2. Available from: go.cms.gov/36fEH5g.
3. 42 CFR 410.78(a)(1).
4. “Mandated report: Telehealth services and the Medicare program.” MedPAC. Report to Congress: Medicare Payment Policy. March 2018. Available from: bit.ly/2TFCgUy.

Additional resources

• MGMA COVID-19 Recovery Center