Congress Should Proceed with Caution on Telehealth Extensions

On July 27, the House of Representatives passed the Advancing Telehealth Beyond COVID-19 Act, HR 4040, to extend telehealth flexibilities in Medicare through 2024. CBO estimates the legislation would increase Medicare spending by almost $2.5 billion and would use funds from the Medicare Improvement Fund to offset the cost.

Telehealth is likely to remain an important part of the health care system going forward. However, the rush into a broad two-year extension of telehealth authorities is fiscally imprudent given the lack of fiscal guardrails in the legislation and that current law already provides broad authority for telehealth usage for 151 days beyond the end of the just extended public health emergency (which places the soonest expiration sometime in the Spring).

Prior congressional legislation mandated studies by MedPAC and the HHS Office of Inspector General on telehealth utilization and costs, and on preventing waste, fraud, and abuse, and they are all due next summer. The evidence from those studies will provide important data and analysis for policymakers, especially given that coverage in Medicare would likely cost around $25 billion over a decade, and likely more than that when looking at overall national health expenditures. As we wrote in an issue brief earlier this year:

"Telehealth is likely to increase health care costs overall, especially if policymakers don’t pay special attention and care to its design. With federal and overall health care costs continuing to grow faster than the economy, these cost increases should be of particular concern."

There are already legislative proposals to put safeguards in place to ensure program integrity. In one example, the Telehealth Extension Act (HR 6202) introduced by Congressman Lloyd Doggett (D-TX), suggested guardrails include a requirement for occasional in-person visits for high-cost medical equipment and tests, along with tracking and auditing of outlier providers. Just in the last month, the Department of Justice announced $1.2 billion in telehealth fraud charges against health care providers, so any efforts to temporarily extend authorities should include a focus on prevention.

Reporting has indicated that there is a push for Congress to extend the current exemption telehealth services have from deductibles in high-deductible health plans tied to health savings accounts. This policy counteracts the core purpose of these plans and their tax break -- to reduce health care spending by incentivizing lower utilization. Extending this exemption would lead to increases in insurance premiums and unjustifiably gives a financial advantage to telehealth over in-person care.

As the Senate turns to the issues, lawmakers should take their time to develop and consider sound and long-term legislation, that provides necessary coverage without contributing to higher costs and allows for persistent waste, fraud, and abuse.