Lifting Barriers to Telehealth

NCHC Writer
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Technology has transformed our day-to-day interactions and allowed for efficient communication across long distances. We participate in virtual meetings with coworkers, instantly share photos with family through social media, and Skype friends overseas. Telehealth technologies promise to similarly revolutionize how we experience health care.

Telehealth includes an increasing variety of applications and services that use two-way video, email, smart phones, wireless tools, and other forms of communication technology. Demand for telehealth has been growing, as it offers many potential benefits including:

  • Broader access to providers: Telehealth services have been used for over 40 years to provide healthcare services to patients in faraway locations. Given the provider shortages now prevalent in both urban and rural areas, telehealth has a unique potential to allow patients to access healthcare professionals from a distance.
  • Increased cost efficiency: Telehealth has the potential to lower healthcare costs and increase efficiency through better management of chronic disease and reduced length or frequency of hospital stays.
  • Enhanced quality of care: In some cases—particularly in mental health care and ICU crises—more timely access to specialists through telehealth services  can be crucial to positive health outcomes.

Telehealth has the potential to break distance barriers to reshape the way care is delivered and coordinated. And this year, on Capitol Hill, bipartisan legislative initiatives are afoot to ensure that telehealth realizes that potential—through both the efforts of the Senate Finance Committee’s Chronic Care Working Group and the introduction of impressive stand-alone telehealth legislation, the CONNECT for Health Act, in the House and Senate last month.

This legislative focus on telehealth is sorely needed.  Despite significant technological developments, actual use of telehealth technologies has been limited—particularly among the Medicare population. Although telehealth options are becoming more common within commercial health plans, federal payment rules have largely prevented widespread use of the same services for Medicare beneficiaries. The Center for Medicare and Medicaid Services (CMS) restricts when telehealth services can be reimbursed; typically, the patient must be in another health clinic or physician’s office (an approved “originating site”), live in a rural area, and communicate via live, two-way video.  And only a small, defined set of 22 services—those that “mimic normal face-to-face interactions between patients and their health care providers”[i]—are covered, including office visits, consultations, pharmacological management, and individual and group self-management training services.[ii]  As a result, fewer than 1% of Medicare beneficiaries receive any care remotely.  Medicare spent just $14 million on telehealth services out of $614 billion total expenditures in 2014.[iii] Despite growing evidence suggesting that remote monitoring technologies improve patient outcomes, Medicare restricts approved technologies to real-time video and voice communications. Restrictions based on this limited conception of telemedicine obstruct the use of modern, potentially cost-saving services by patients who could certainly benefit from them.

Other payers have made more progress towards offering broader coverage and better reimbursement for telehealth services. For instance, the Veterans Health Administration (VHA) operates the world’s largest telehealth program, and has made several changes to expand access to telehealth. The VHA does not have a rural geographic requirement for coverage, and recently implemented a policy to eliminate copays for most telehealth services.

Coverage of telehealth services has also significantly increased among private insurers in recent years. While CMS introduced reimbursement for telehealth as a way to improve access to care for patients living in rural areas, private payers today are eagerly utilizing a broad range of telehealth services as a means of achieving savings while improving health outcomes. The nation’s largest insurer, United HealthCare, announced that it would cover telehealth consultations for most of its 26 million commercial members by the end of 2016. Another major insurer, Anthem, expects to cover virtual urgent care visits for 20 million members by the end of this year. Medicare significantly lags behind other payers in adopting telehealth technologies.

But this may soon change. In recent years, Congress has shown an interest in facilitating greater use of telehealth.  During the 113th Congress alone, more than 50 bills related to telehealth were introduced.[iv]

This year, Congress has focused on identifying meaningful and achievable legislative steps. In December 2015, the Senate Committee on Finance released a Bipartisan Chronic Care Working Group Policy Options Document.  And just last month the CONNECT (Creating Opportunities Now for Necessary and Effective Care Technologies) for Health Act of 2015 was introduced with bipartisan sponsorship in the House and Senate. Together, these legislative efforts reflect an emerging powerful consensus around the next steps on telehealth.

Changing Medicare Advantage Regulations:  Currently, Medicare Advantage plans must categorize most telehealth services as a supplemental benefit and are not allowed to include them as a part of their bid. Both the CCWG Policy Options Document and the CONNECT for Health bill propose including telehealth services as part of basic benefits in Medicare Advantage. Allowing plans to include telehealth in their bids may help them fund the utilization of telehealth services.

Loosening Geographic Restrictions: The CCWG Policy Options Document contains proposals that focus on lifting geographic restrictions on telehealth reimbursement for ACOs. The CONNECT for Health Act would provide similar flexibility for all alternative payment models approved under MACRA.

Adding Originating Sites:  Both legislative efforts expand the list of approved originating sites for Medicare. The CONNECT Act would add telestroke facilities for evaluation and management, Native American health services facilities, and facilities for home dialysis in certain cases to the list of originating sites. Similarly, the CCWG Policy Options Document focuses on changing originating site restrictions to provide more flexibility for patients suffering from end-stage renal disease and receiving home dialysis. The Working Group considers two possible changes: first, lifting geographic requirements for reimbursement so that dialysis facilities in non-rural areas would be considered acceptable originating sites, and, second, including dialysis patients’ homes as considered acceptable originating sites as well.

In addition to the proposals above, CONNECT establishes a “bridge” program that aims to help providers transition to the Merit-based Incentive Payment System and alternative payment models by allowing them to use telehealth and remote patient monitoring without many existing restrictions.

Whether these proposals advance as part of the CCWG effort, or through other legislation, they demonstrate that policymakers understand that updated telehealth policies are necessary for a better, more efficient healthcare system. Telehealth has great potential to improve access to quality health care and decrease costs, and make healthcare encounters more convenient and satisfying for both patients and providers. This recent push to lift Medicare restrictions on telehealth reimbursement reflects consumers’ growing demand for convenience and innovation and providers’ efforts to deliver cost-effective care with high-quality results.


[i] “What are the reimbursement issues for telehealth?” HRSA Health Information Technology. US Department of Health and Human Services.>

[ii] “Telemedicine and Telehealth Services” American Telemedicine Association.


[iii] “Medicare Reimbursements for Telehealth Totaled $14M in 2014.” IHealthBeat.>

12 May 2015.

[iv] See “Telehealth Bills Introduced in the 113th Congress.” ML Strategies.