The Looming Telehealth Flexibilities Deadline
Congress faces a number of deadlines prior to the end of the year, including the question of whether or not to extend Medicare’s flexible telehealth authorities initially permitted during the pandemic.
As we have written before, telehealth can play an important role in the continuum of care and it likely makes sense to extend the flexibilities. However, Congress should pay for any extension and use the opportunity to establish ongoing safeguards against fraud and abuse while preventing misaligned payment incentives and monitor for inefficient increases in utilization.
There are currently two bills in the House of Representatives that would extend telehealth flexibilities and provide guardrails, though only one currently has offsets to pay for the extension. The Ways and Means Committee advanced the Preserving Telehealth, Hospital, and Ambulance Act in early May, which extends telehealth access through calendar year 2026, provides guardrails for durable medical equipment to curb fraud, and utilizes pharmacy benefit manager (PBM) reforms to pay for the bill.
The Energy and Commerce Committee has a similar bill, introduced in March, that has been cleared by the Subcommittee on Health but has not yet been reported by the full committee, the Telehealth Modernization Act (TMA). This bill adds a few provisions governing new billing modifiers for certain uses of telehealth in order to give the Centers for Medicare & Medicaid Services (CMS) and Congress more information to monitor proper and improper usage of telehealth over time. Press reports indicate that the TMA has been preliminarily scored by the Congressional Budget Office at a cost of around $4 billion for its two years.
Recent publications from the Bipartisan Policy Center (BPC) and the Niskanen Center provide important suggestions to policymakers to improve telehealth policies. BPC recommends that CMS study telehealth costs and design new reimbursement models incorporating both virtual and in-person care. This is important because telehealth is currently reimbursed at the same rates as in-person care despite telehealth having lower overhead costs and different use cases; keeping this “payment parity” in place permanently could lead to wasteful payment incentives.
BPC also notes that there should be adequate funding for the federal government to monitor and eliminate waste, fraud, and abuse in the telehealth space. They propose a permanent extension of telehealth policies where it is clear that patients would benefit without substantial cost increases. The authors also suggest establishing a long-term solution to telehealth where licensing rules align with the new delivery model, and clinicians, such as physical therapists, (who lose any ability to provide telehealth services when authorities lapse), stay covered in the future.
The Niskanen Center identifies three key issues to consider when extending telehealth flexibilities: (1) misaligned incentives for telehealth reimbursement, (2) fraud and abuse in telehealth services, and (3) modifications to licensing rules. Niskanen recommends lower reimbursement rates for telehealth visits; careful monitoring of waste, fraud, and abuse by “outlier physicians;” and pushing states to recognize health licenses and credentials approved by other states.
Telehealth is a integral part of our health care system, especially in a post-pandemic landscape. However, as emphasized by both BPC and Niskanen Center, there is a need for policymakers to continually think about safeguards and improvements to implementation over time. Over the near term, we urge lawmakers to offset any short-term extensions – there are a number of policies available to do so, including the PBM reforms currently being considered and site-neutral payment legislation.
