Skip to content Skip to navigation

AHA Brief: Coverage for Telehealth Services Not Keeping Pace with Care Delivery Innovations

April 26, 2016
by Heather Landi
| Reprints
Click To View Gallery

There is a growing body of evidence that telehealth can not only expand access to services but also create cost savings, yet limited coverage impedes the expansion of telehealth services, the American Hospital Association wrote in a recent brief on telemedicine.

According to the AHA, coverage for telehealth services, especially in Medicare, has not kept pace with technological and care delivery innovations.

“Private payers have made more progress in recognizing the benefits of telehealth services through their coverage and reimbursement guidelines, while retail clinics are incorporating telehealth to increase convenience and patient access to doctors. As telehealth technologies evolve, it will be important for policymakers to understand the prospective benefits and embrace a framework that allows patients, providers and payers to incorporate technological innovations in care delivery,” the AHA issue brief stated.

The brief specifically focuses on the Veterans Health Administration (VHA), which began introducing telehealth programs in the 1990s and pioneered the use of telehealth in the U.S. The VHA has served more than 150,000 beneficiaries with telehealth services since 2012.

And, the AHA brief notes that as the VHA’s program matured, it created substantial efficiencies. “The annual cost to deploy the telehealth program in 2012 was $1,600 per patient per year, compared to over $13,000 for traditional home-based care and over $77,000 for nursing home care. Telehealth also was associated with a 25 percent reduction in number of bed days of care and a 19 percent reduction in hospital admissions across all VHA patients utilizing telehealth,” the AHA issue brief stated.

And, the VHA achieved significant reductions in hospitalizations with more than 40 percent for mental health patients; 25 to 30 percent for patients with heart failure and hypertension and around 20 percent for patients with diabetes and chronic obstructive pulmonary disease (COPD).

“Overall the VHA estimated average annual savings of $6,500 for each patients that participated in the telehealth program in 2012. This equates to nearly $1 billion in system-wide savings associated with the use of telehealth in 2012.”

There is evidence that other organizations are seeing savings as well. The Agency for Healthcare Research and Quality (AHRQ) has noted studies that have reinforced the value of telehealth interventions for treatment of stroke, management of chronic conditions and behavioral health, and for counseling and monitoring.

The issue brief cites research indicating that fewer follow-up visits are required after telehealth visits, in comparison to physician offices and emergency departments, and access to physician visits through telehealth could substitute for more costly emergency department visits. And, the brief cites another study that found that telehealth physician visits reduce admissions from nursing homes and that tele-emergency specialty consults improve outcomes and reduce need for transfers.

The issue brief also highlights St. Louis-based Mercy Health’s telehealth and telemonitoring programs, including its Virtual Care Center. Through these programs, expected inpatient length of stay and mortality rates have declined 40 percent, while the average cost of care has declined, according to the AHA.

The issue brief also urges policymakers and regulators to look at the private sector with private insurers and retail clinics making investments in telehealth. Many private insurers are rapidly incorporating telehealth into their Medicare Advantage, commercial and individual benefit packages, including physician telehealth visits in both urban and rural areas.

However, among public payers, AHA argues, Medicare offers the most limited coverage of telehealth, “paying for a narrow set of services and only in rural areas.” And, the issue brief notes that the Centers for Medicare & Medicaid Services (CMS) has recently allowed for expanded use of telehealth by waiving the geographic and practice setting limitations for providers participating in certain experimental Medicare payment initiatives, such as the Bundled Payments for Care Improvement Initiative (BPCI) and the Next Generation Accountable Care Organization (ACO) model.

According to the Congressional Budget Office (CBO), expanding access to telehealth would increase spending due to higher utilization, the AHA issues brief states. However, the AHA argues that the CBO has “significantly overestimated the cost of adopting telehealth in previous bills that became law.”

In 2001, Congress authorized the use current limited guidelines on telehealth coverage for Medicare. At that time, CBO predicted telemedicine would cost Medicare $150 million in the first five years after the law was passed. In practice, the program has spent only $57 million on telehealth services over 14 years.

The AHA also says that additional research into telehealth is needed to advance care delivery and enhance the patient experience. Specifically, the AHA issue brief states that additional research “using larger samples sizes, diverse geographies and a broader range of conditions and services, can help policymakers better understand the full range of benefits that telehealth can yield in providing care in more efficient and cost-effective ways.”

“Additionally, the inclusion of telehealth in value-based payment models can help assess the value of telehealth in situations where financial incentives promote quality improvement and cost savings. Finally, geographic limitations on telehealth use should be lifted, as patients regardless of care setting or physical location can benefit from increased access to expert physicians that can promote adherence to treatment plans that reflect the latest clinical best practices,” the AHA states.

“In conclusion, by modernizing Medicare coverage of telehealth, including telehealth services in innovative payment models and committing additional resources to understanding the patient and cost benefits of telehealth, policymakers can advance the delivery of care and benefit patients,” the issue brief stated.





ONC National Coordinator Gets Live Look at Carequality Data Exchange

Officials from Carequality have stated that there are now more than 150,000 clinicians across 11,000 clinics and 500 hospitals live on its network. These participants are also able to share health data records with one another, regardless of technology vendor.

American Red Cross, Teladoc to Provide Telehealth Services to Disaster Victims

The American Red Cross announced a partnership with Teladoc to deliver remote medical care to communities in the United States that are significantly affected by disasters.

Report: The Business of Cybercrime in Healthcare is Growing

While stolen financial data still has a higher market value than stolen medical records, as financial data can be monetized faster, there are indications that there is ongoing development of a market for stolen medical data, according to an Intel Security McAfee Labs report.

Phishing Attack at Baystate Health Potentially Exposes Data of 13K Patients

A phishing scam at Baystate Health in Springfield, Mass. has potentially exposed the personal data of 13,000 patients, according to a privacy statement from the patient care organization and a report from MassLive.

New Use Cases Driving Growth in Health Data Exchange through Direct

In an update, DirectTrust reported significant growth in Direct exchange of health information and the number of trusted Direct addressed enabled to share personal health information (PHI) in the third quarter of 2016.

Insurers to CBO: Consider Private Insurers’ Data in Evaluations of Telemedicine

Eleven private insurers, including Aetna, Humana and Anthem, are urging the Congressional Budget Office (CBO) to consider the experience of commercial insurers when evaluating the impact of telemedicine coverage in Medicare.