The annual report expressed the Trump administration’s worries over potential provider monopolies forming through healthcare consolidation, recommits efforts to lower consumer prices.
The White House released President Donald Trump’s economic reportWednesday, highlighting concerns about rising consumer prices due to the growing consolidation trend among healthcare providers.
The Trump administration views its recent actions removing “economically destructive regulations” created by the Affordable Care Act (ACA) as consistent with promoting competition among hospitals to lower prices and improve quality for patients.
In the report, the Trump administration argued that the mandated federal cuts in hospital payments in the ACA, coupled with over-regulation, created significant financial challenges for small physicians’ groups and solo providers. Hospital mergers have taken off in the face of these steep obstacles, with smaller providers either joining together to achieve competitive scale or were being acquired by larger health systems.
“Instead of relying on consumer choice and competition to control costs, the ACA encouraged healthcare providers to combine into larger health systems and to take on financial risk, based on the unproven assumption that this would incentivize providers to decrease unnecessary services, cut costs, and improve outcomes,” the report stated.
“However, excessive consolidation in the market may enable producers to use their market power to raise prices, lower quality and innovate less than they would in a competitive market.”
Between 2011 to 2015, there were nearly 98 hospital mergers and acquisitions per year, compared to nearly 59 mergers per year during the prior decade, according to the report. The Trump administration draws a correlation between the increased frequency of the mergers and acquisitions market,which is expected to remain active in 2018, to the implementation of new regulatory burdens introduced through the ACA.
The report cited a study on consolidation that found nearly 50% of hospital markets are “highly concentrated,” meaning only one or two hospital systems operate in a given region.
Hospital prices in monopoly markets are 15% higher than those in markets with four or more hospitals, according to one study, while another found that vertical integration “led to an increase in market share, which was associated with higher prices and increased spending.”
In addition to consolidation spurred by federal over-regulation, the administration argued that state regulations also create significant barriers to entry and competition for smaller providers. These regulations includecertificate-of-need laws and rules about scopes of practice.
The administration plans to release a report this spring identifying federal and state government regulations that “reduce competition and increase consolidation,” while offering recommendations to address these policies.
The White House says this upcoming report will serve as a follow-up to Trump’s October 12 executive order, which eased restrictions on association health plans in order to “free the market from these mandates and constraints on competition.”
The Maryland and Ohio health systems announced Wednesday their intention to merge. The joint venture would be the nation’s fifth-largest Catholic health system.
Bon Secours Health System and Mercy Health announced their intention Wednesday to merge, potentially forming the fifth-largest Catholic health system in the country.
The proposed merger would join Mercy, the largest health system in Ohio, with Bon Secours, a Maryland-based Catholic health system with locations throughout the East Coast.
If approved, the new system would operate 43 hospitals and more than 1,000 care sites across seven states, while generating close to $9 billion in annual operating revenues. Additionally, the new system would employ more than 2,100 physicians and advanced practice clinicians.
“Our decision to join forces with Bon Secours is rooted in our shared and very deep commitment to delivering compassionate, low-cost, high-quality health care to our communities,” said John M. Starcher Jr., president and CEO of Mercy Health, in a statement. “Working together, our strong faith-based heritage fuels our mutual focus to provide efficient and effective health care for each patient who comes through our doors.”
The proposed merger will need to gain approval from state and federal regulators as well as the Catholic Church, which oversees both systems. Leaders from Mercy and Bon Secours expect the deal to be completed by the end of the year.
“The mission, vision, values and geographic service areas of Bon Secours and Mercy Health are remarkably well-aligned and highly complementary,”said Richard J. Statuto, president and CEO of Bon Secours, in a statement. “This merger strengthens our shared commitment to improve population health, eliminate health disparities, build strength to address social determinants of health, and invest heavily in innovating our approaches to health care.”
A working paper from George Mason University argues the provider workforce needs to modernize medical school education, welcome foreign-trained physicians, hire more nonphysicians, and embrace emerging technology.
In the face of a worsening nationwide physician shortage, health providers should look to developing more avenues for doctors to join the workforce, according to a new study from the Mercatus Center at George Mason University.
Jeffrey Flier, MD, of Harvard Medical School, and Jared Rhoads, MPH, MS, of Dartmouth Institute for Health Policy and Clinical Practice, released a working paper Tuesday entitled “The US Health Provider Workforce: Determinants and Potential Paths to Enhancement.”
The authors argue that over-regulation for medical practitioner credentialing by state government organizations has resulted in significant protections from local and international competition for members. This creates a challenge to instituting reforms, though the study suggests four steps can affect change outside of the regulatory system.
The study includes several recommendations to address the core issues surrounding the severe physician shortage facing providers. These include a call to remove barriers to create more medical schools in the U.S., hire more foreign-trained physicians, utilize nonphysician providers, and embrace innovative technological options.
Below are four recommendations for health providers to consider as practical reforms to improve quality and reduce cost.
1. Minimize barriers to license doctors
The authors argue that problems persist with the accreditation process conducted by the Liaison Committee on Medical Education (LCME), which is in charge of accrediting U.S. medical schools. While accreditation is voluntary for schools, individuals are not able to obtain a physician’s license without taking the United States Medical Licensing Examination, which requires an LCME-accredited school graduation, the authors state.
U.S. medical schools, however, lack available openings for applicants, charge high prices for attendance, and are unlikely to pursue meaningful medical experimentation and innovation due to the high-stakes nature of the accreditation process.
The authors suggest the answer to these problems might be the development of future medical schools that are attached to integrated health systems (IHS) rather than universities. Mirroring what Kaiser Permanente has pursued, the study states that such an approach has the potential to provide better efficiencies, education and delivery of healthcare.
Though the study admits that critics believe future medical schools attached to IHSs could create a two-tiered medical school system, the authors argue the current system is no better.
2. Hire foreign-trained physicians
A commitment to recruiting international medical graduates (IMGs) is another recommendation for staffing issues faced by providers.
Currently, IMGs make up 25% of the physician workforce, providing care “as good as or better” than that of U.S. medical graduates, according to the study. IMGs are more likely to work in rural, low-income communities and are overrepresented as primary care physicians, which helps address the physician shortage, the authors state.
The study offers suggestions for the Educational Commission for Foreign Medical Graduates (ECFMG), which oversees foreign medical school graduates entering the U.S. healthcare workforce, to revise its policies.
Most importantly, the authors argue that ECFMG should reduce retraining licenses for IMGs, which are often times repetitive to foreign programs. The study highlights a program developed by the Minnesota Department of Health, which implemented “new approaches for IMGs to be licensed to practice, especially in primary care and in rural areas, without current barriers to licensure.”
3. Hire more nonphysician providers
Though nurse practitioners (NPs) and physician assistants (PAs) may operate under “reduced practice” or “restricted practice” limits, the study states both professions offer an opportunity to deliver quality care to consumers at a reduced cost.
The authors said NPs and PAs are inexpensive investments for providers seeking to mitigate shortage issues, adding that they are proven to be just as safe and effective as physicians in similar services.
They also acknowledge the challenges to scope-of-practice decisions for NPs by medical societies across the country, though they note that NPs have certification procedures in place through the American Association of Nurse Practitioners while PAs are usually licensed by state boards.
And while they do not have the same range of available services as physicians, NPs currently operate without physician oversight in 21 states, and can write prescriptions in all 50 states.
4. Look to transformative technology
Noting the growth of medical technology options in recent years, the authors suggest that providers embrace new opportunities in telemedicine, physiologic sensors, and mobile health apps.
The potential impact of technological opportunities in healthcare range from clinical applications to revised payment options for consumers, all with the goal of increasing access and lowering costs.
However, the study acknowledges that governmental regulations and industry hesitation toward innovative technologies could suppress potential medical advancements.
A recent data analysis of more than 3,000 hospitals found that chemo infusion and radiation treatment often cost between twofold and sixfold above what Medicare pays.
Large-scale medical centers have inflated outpatient oncology treatment costs substantially above what Medicare typically pays, and their markups vary wildly, according to an American Journal of Managed Care(AJMC) report released over the weekend.
AJMC investigated the widespread practice by prestigious medical institutions of marking up oncology treatment prices at the financial detriment of patients paying out-of-pocket or with private health insurance.
The study reviewed billing records from more than 3,000 hospitals in 2014 to calculate a markup ratio compared to the Medicare allowable amount. The ratio was based against every $100 spent by Medicare for the same specialty service.
Of the data collected at nonprofit medical centers, pathology had the highest ratio at 4.1:1, or a markup of $310, followed by radiology and radiation oncology at 3.7:1 and 3.6:1, respectively. Due to these markup prices and specialty services, the study estimates cancer treatment costs can vary from $50,000 to $500,000.
“Unwarranted price markups contribute to the skyrocketing cost of health insurance and out-of-pocket costs to patients,” said Martin Makary, MD, MPH, the paper’s senior author who also serves as a cancer surgeon and professor of health policy at the Johns Hopkins University School of Medicine. “We found some cancer centers bill fairly while others engage in outright price gouging of insurers, patients and their employers. Hospital differences in quality or charity care do not account for these dramatic price differences.”
Large-scale hospitals “use higher chargemaster pricing to ‘anchor’ negotiations and gain higher reimbursement from insurers,” the AJMC report states. This pervasive activity ultimately leads to higher out-of-pocket healthcare costs for patients and affects their decision-making process when seeking treatment, according to the authors.
A growing trend of markup prices has been further compounded by narrower insurance network options and high deductibles faced by consumers, according to the report. As many as 8% of patients see out-of-network oncology specialists, facing them with significantly higher treatment costs.
The authors stated that, in their opinion, it is “unethical” for nonprofit health systems to put cancer patients into “household bankruptcy” due to overinflated costs above the Medicare allowable amount. The study’s authors called for transparent pricing legislation to ensure protections for cancer patients seeking treatment.
A Chicago hospital shares insights into a study on how to reduce catheter use, lower acquired infection rates, and engage staff on an interdisciplinary level.
The implementation of a “hospital-wide huddle” at Saint Anthony Hospital successfully reduced the facility’s duration of catheter use and hospital-acquired infections (HAIs) while also earning plaudits from the local medical community.
The Chicago-based hospital was recently recognized by the Illinois Health and Hospital Association (IHA) for its “Innovation Challenge: Partners in Progress Award,” after conducting a study into the reduction of catheter use through hospital-wide participation in a pre-morning meeting.
Alfredo Mena Lora, MD, medical director of infection control at Saint Anthony, told HealthLeaders Media that the study focused on expanding the scope of the huddle, a common medical practice, to bring everyone on board with the goal of reducing HAIs.
“Ultimately, what’s innovative is that [the study] is hospital-wide, it has infection control variables that can intervene and cause reductions in catheter use, and it’s very cost-effective,” Mena Lora said. “At the end of the day, we’re not buying new equipment, we’re not doing anything other than improving the communication of our existing team members and promoting the reduction of catheters. Because ultimately, if you don’t have catheters, you won’t have infections.”
The study questioned the reliance on central venous and indwelling urinary catheters, and used the daily interdisciplinary safety huddle (DISH) to lower HAI rates. DISH is a 15-minute meeting held in the morning to incorporate participation from a swath of hospital employees ranging from security to nurse managers, emergency services, and infection control.
The hospital instituted a policy for nurse managers to report catheter usage, while an infection control practitioner reviewed indications, duration, and plans for device removal. Any barriers to catheter removal were required to be addressed within 24 hours.
Mena Lora said the accepted definition for HAIs has changed over time, but device utilization rates (DUR) still remain a constant variable for measuring the effects of medical intervention. Using DURs as a stable determinant in the study, Saint Anthony implemented the new policy in late 2014.
Last spring, Saint Anthony reviewed the data from before and after DISH was implemented, which showed a significant decrease in central venous and indwelling urinary catheter use in non-ICU settings.
Prior to the study, there were 12 reported instances of central line-associated bloodstream infections. After DISH was implemented, that number dropped to one case. Similarly, catheter associated urinary tract infections dropped from five reported cases to only one after DISH’s implementation.
Declining DURs led Saint Anthony to see a 90% reduction in HAIs, which resulted in a cost savings of nearly $500,000.
Mena Lora said the experiment displayed clear evidence that without the catheter removal measures put into place, HAI rates would not have declined as precipitously as they did, especially in non-ICU units.
“What that tells us is we did reduce catheter rates across the hospital, and it was statistically significant outside of the ICU,” Mena Lora said. “There were probably a lot of these patients, had there not been DISH, would’ve continued to have these catheters in place without those checks and balances.”
With approvals from Illinois regulators and the FTC, the two Midwestern health systems just need clearance from Wisconsin regulators and a final plan for administrative restructuring.
Advocate Health Care and Aurora Health Care are closing in on finalizing their mega-merger after receiving approval from Illinois state regulators and the Federal Trade Commission.
The two systems are waiting on clearance from Wisconsin regulators, who oversee Milwaukee-based Aurora. Chicago-based Advocate secured approval from its home state regulators and the FTC, which had blocked its prior proposed merger with NorthShore University Health System last spring.
“We are excited to move one step closer to bringing our two great organizations together to reimagine the possibilities of health for those we serve,” Aurora spokesperson Tami Kou said in a joint Advocate-Aurora statement this week to HealthLeaders Media.
The merger, which will be based on a “50-50” structure, is intended to allow both systems to retain their respective CEOs and forgo layoffs. In total, the joint company will employ 70,000 people across hundreds of facilities and 27 hospitals.
If approved, Advocate-Aurora would have a projected operating revenue of $11 billion, making it one of the 10 largest health systems in the country.
“Advancing through the FTC’s review process was a key milestone in addition to securing regulatory approval in Illinois,” Kou said. “We look forward to the final step of receiving approval in Wisconsin before our anticipated closing this spring.”
Top Trump health official testified to the House Ways and Means Committee on lowering prescription drug prices, increasing healthcare access, and strengthening Medicare.
Department of Health and Human Services (HHS) Secretary Alex Azar reiterated the Trump administration’s commitment Wednesday to providing affordable healthcare access, two days after the White House’s budgetproposed a 21% cut to the department.
Azar told the House Ways and Means Committee that HHS holds a “deep commitment” to keeping Medicare solvent and accessible.
“We want people to have access to affordable health care,” Azar said. “Making our programs work for today’s Americans, sustaining them for future generations, and keeping our country safe is a sound vision for HHS, and I’m proud to support it.”
Azar laid out his main priorities for HHS, including increased access and affordability to health insurance, shifting Medicare toward a more value-based operation, lowering prescription drug costs, and embracing telehealth services.
Strengthening Medicare, changing ACA requirements
Referring to Medicare as a “bedrock of our society,” Azar said he is determined to keep the program solvent by driving out waste, fraud, and abuse. He said the recent White House budget proposal continues the shift toward value-based and outcome-based care, adding that “the future of Medicare must be driven by value.”
Azar supported the budget’s inclusion of the Graham-Cassidy proposal, which would maintain certain aspects of the Affordable Care Act, such as allowing individuals to stay on their parents’ plan until they turn 26, while also allowing states the flexibility to alter the health plans offered through block granting.
This would shift the power to address certain outstanding healthcare issues like risk-sharing and rising deductibles to the states, Azar said, while moving away from a “one-size-fits-all” approach from the federal government.
However, when asked about HHS’ response to Idaho’s decision to permit health plans that ignore some ACA requirements, Azar said the agency has not received a waiver request from the state or a solicitation for opinion.
Lower prescription drug costs, expanded telemedicine
Rep. Lloyd Doggett, D-Texas, asked Azar if the Trump administration had abandoned its mission to lower prescription drug costs for consumers, adding that former Secretary Tom Price did not respond to questions about what specific steps HHS planned to take.
Azar said bringing down prescription drug costs remains a primary objective for the Trump administration, noting the increase in generic prescription drug approvals by the FDA last year. He added that HHS would continue to work on restructuring the government’s negotiating power on Part B prescription drugs, though he did not expand on what changes Part D would face.
In addition to existing CMS initiatives lifting the burden on rural providers, Azar pledged his support to expanding telehealth services, praising the inclusion of language in the budget that increases the convenience of telemedicine for Medicare Advantage plans.
Azar also said he has not chosen a candidate yet to lead the CDC after the sudden resignation of Brenda Fitzgerald following media reports that she traded tobacco stocks while leading the agency’s anti-smoking efforts. He praised interim director Anne Schuchat, MD, (RADM, USPHS), referring to her as a “career professional.”
Democratic criticism in the hearing, afterward
Azar received criticism from Democrats on the committee over the proposed cuts to HHS funding in the White House budget plan, despite his counterargument that the department received an 11% increase in discretionary spending.
Democratic lawmakers said the cuts are significant and endanger the long-term viability of Medicaid, with Rep. John Lewis, D-Ga., calling the budget proposal an “affront to the average American.”
Following the hearing, 178 House Democrats authored a letter criticizing Azar’s support of the Trump administration’s proposed Medicaid work requirements. The letter stated the policy will “undermine access to health care” and contradict Congress’ “longstanding intent for the Medicaid program.”
To address federal healthcare cuts, the New York state FY 2019 budget proposal seeks to apply surcharges to the sales of nonprofit health plans to for-profit systems.
New York state lawmakers are aiming to create a “health care shortfall fund” to compensate for unexpected reductions in federal funding. Most of the fund's revenue would be derived from taxing the proceeds from converting nonprofit health plans to for-profit systems.
The fiscal year 2019 Executive Budget proposed by Gov. Andrew Cuomo would collect an estimated $750 million annually over the next four years by taxing the proceeds from the sale of nonprofit health companies to for-profit health companies.
“The budget establishes a fund to ensure the continued availability and expansion of funding for quality health services to New York State residents and to mitigate risks associated with the loss of federal funds,” an outline of the budget proposal read. “This fund will be initially populated with funds from any insurer conversion or similar transaction.”
Many regard this proposal as a way to capitalize on the pending acquisition of Fidelis Care, a nonprofit health plan owned by the state’s Roman Catholic bishops, by Centene Corporation, a Massachusetts for-profit health system.
The $3.75 billion deal was announced in September, and the enactment of such legislation would likely generate $250 million in annual state revenue from Fidelis alone. Cardinal Timothy Dolan, however, has already indicated that the Catholic Church plans to use the proceeds from the Fidelis sale to create a charitable foundation that provides health services to the needy in New York.
Bill Hammond, health policy director at the Empire Center for Public Policy, testified Monday before the Joint Legislative Fiscal Committees about the proposal and how it would affect Fidelis. In his testimony, Hammond said the state’s tax collection would redirect funds to the government instead of those in need, “effectively swiping from the collection basket.”
“The deal is not something the state should want to discourage,” Hammond said. “It would add a major new tax-paying business to the state’s economy, and the proposed foundation would become a source of charitable giving in perpetuity.”
Following precedent
The state has supported the policy by citing the actions taken by Empire Blue Cross Blue Shield, which converted from nonprofit status to for-profit in 2002. The conversion was approved, but since the company conducted its business with the state on a tax-exempt basis for years, New York ultimately collected 95% of the proceeds from the deal.
Hammond countered that the Blue Cross case was an anomaly, considering most conversions occur as a result of a state law that requires the court-approved transfer of charitable assets to a private foundation. However, since Fidelis qualifies as a health maintenance organization, the current statute would have to be revised for the proposed shortfall fund to collect the proceeds.
Currently, New York faces a $4 billion budget deficit and dwindling federal payments for cost-sharing reductions and the Medicaid Disproportionate Share Hospital program.
Hammond said the shortfall fund would be unable to adequately address growing long-term Medicaid costs, calling the approach a “fiscally unsound practice.” Additionally, Hammond said the federal cuts are being slowly phased in, allowing the state a reasonable amount of time to adjust in the interim.
The Citizens Budget Commission (CBC), a nonpartisan advocacy group, echoed Hammond’s point, saying the state budget deficits were not being addressed through legislative reforms to Medicaid. Rather, the CBC said the state budget gaps relied on “one-time resources” as fixes, including “speculative revenues from possible health insurance company conversions to for-profit entities.”
The measure is expected to be part of omnibus budget negotiations ahead of the April 1 deadline.
The White House calls for an increase in funding for veterans healthcare services, while proposing cuts to HHS and a repeal of the Affordable Care Act.
President Donald Trump released his budget proposal Monday for fiscal year 2019. It includes overall reductions in nondefense spending while also increasing funding for veterans healthcare services.
The White House’s $4.4 trillion budget request to Congress comes days after a two-year, $300 billion bipartisan budget deal was signed into law following the second government shutdown in as many months.
Though Congress is unlikely to vote on a singular budget, the various provisions listed in the executive proposal outline the legislative agenda the Trump administration would like to pursue in 2018.
“I applaud President Trump for laying out his vision for the country in today’s budget request and welcome his partnership as the Energy and Commerce Committee works to tackle several shared priorities," said Rep. Greg Walden, R-Ore., chairman of the House Committee on Energy and Commerce in a statement. "Many of the administration’s other proposals to lower health care costs complement our continued commitment to addressing the cost drivers across every facet of our nation’s health care system."
Below is a breakdown of the proposals affecting the healthcare world, including cuts to the Department of Health and Human Services (HHS), Medicare, a repeal-and-replace plan for the Affordable Care Act (ACA), and more money for veterans healthcare.
Major cuts to HHS
The proposal features a $68.4 billion budgetary line for HHS, a 21% reduction in funding compared to FY 2017. The budget also proposes a $451 million cut to training programs for health professionals, arguing the initiatives “lack evidence that they significantly improve the nation’s health workforce.”
If adopted, the policies would extend Medicare’s solvency by eight years, according to the budget proposal. Current projections estimate Medicare will become insolvent by 2029. The Trump administration also proposed a limit on Medicaid reimbursements to federal providers at no more than the cost of providing services to beneficiaries.
“The President’s budget makes investments and reforms that are vital to making our health and human services programs work for Americans and to sustaining them for future generations," said HHS Secretary Alex Azar in a statement. "In particular, it supports our four priorities here at HHS: addressing the opioid crisis, bringing down the high price of prescription drugs, increasing the affordability and accessibility of health insurance, and improving Medicare in ways that push our health system toward paying for value rather than volume."
Bundled payments for community-based medication-assisted treatment would see an opportunity to expand through the budget proposal, with the White House highlighting a new Medicare reimbursement for methadone treatment.
Medicare beneficiaries would also be able to save for out-of-pocket costs by allowing tax deductible contributions to health savings accounts associated with high deductible health plans offered by employers or Medicare Advantage.
The budget proposes a ‘$5 returned for every $1 spent’ policy for the Medicare Health Care Fraud and Abuse Control, a $45 million increase compared to FY 2017 which totals $770 million,. The White House believes the additional funding will bolster the program’s efforts to “identify and prevent fraudulent or improper payments from being paid in the first place.”
Two-part ACA repeal
Arguing that “national healthcare spending trends are unsustainable,” the budget offers a solution in the form a two-part repeal of the Affordable Care Act.
Modeled on the Graham-Cassidy proposal, the first step would focus on providing block grants to states for healthcare spending plans.
The Market-Based Health Care Grant Program, the new block grant program, would offer states and consumers with options outside of the ACA’s “insurance rules and pricing restrictions.” The administration believes this will address high premium costs and rising deductibles.
The second part of the plan focuses on Medicaid reform, specifically the repeal of Medicaid expansion spurred on by the ACA, as well as reducing “state gimmicks” like provider taxes. This move would shift federal authority over healthcare access to states, which could in turn design individualized plans.
Major increase for veterans healthcare
Continuing with a campaign promise to address issues facing veterans, Trump’s budget proposal includes an increase in spending for veterans healthcare programs over the next three fiscal years.
For FY 2019, the Veterans Health Administration would receive $70.7 billion, a 9.6% increase compared to FY 2017. By 2020, that number rises to $75.6 billion in advance appropriations for VA medical care program costs.
This covers 9.3 million enrollees in the Veterans Affairs health system.
Additionally, the budget provides $8.6 billion for veterans mental health and suicide prevention programs, and $11.9 billion would be used to enhance and expand veterans’ access to high-quality community care.
The administration proposes the consolidation of the Veterans Choice Program and other community care programs into a new, unified program: the Veteran Coordinated Access & Rewarding Experiences program.
Medicare Advantage plans, ACOs, and physicians offering telehealth services stand to benefit from provisions set forth in the omnibus package.
In addition to providing several funding measures to federal healthcare programs, the bipartisan budget deal signed into law Friday by President Donald Trump also approved new regulations that could expand telehealth.
The two-year budget agreement widens telehealth options for Medicare Advantage plans and Accountable Care Organizations (ACOs), and it authorizes payments to physicians who furnish telehealth services starting in 2021.
"This legislation represents the first time physician payment has been enabled for the broad Medicare population and, we believe, marks the beginning of a shift in policy supportive of telehealth as a means to improve access and lower cost,” said Joseph M. DeVivo, CEO of InTouch Health, in a statement.
Currently, telehealth services are offered as separate items to patients visiting physicians who use the technology for treatment options. Under the new law, telehealth services covered by Medicare Advantage plans will change from being considered “additional telehealth benefits,” and instead be classified as benefits provided to patients at in-person visits.
This would bring the service in line with the original Medicare fee-for-service methodology.
The change to in-person telehealth benefits, which remains the patient’s choice of whether to accept, will take effect in 2020. According to the bill text, specifications for requirements on coordination of in-person telehealth benefits, physician qualification and training remains the duty of Secretary of Health and Human Services Alex Azar.
Additionally, the legislation clarifies the geographic definition for ACOs, including the home setting as a location for telehealth services to take place. Previously, ACOs had faced geographic limitations to the coverage of certain services provided, including telehealth.
Stroke patients are expected to benefit from the increased convenience of telehealth coverage, considering more than half a million strokes occur to Medicare enrollees per year. Telemedicine services are widely regarded as quick ways to administer potentially life-saving care for patients with severe medical conditions, including strokes.
The omnibus package incorporated several provisions of the CHRONIC Care Act, a bill to expand telehealth services that was passed in the Senate in September. It did not receive a floor vote in the House.
The inclusion of telemedicine language in the legislation was praised by telehealth advocates and a national physicians organization.
Better Medicare Alliance, an advocacy organization, has been working to expand service options for Medicare Advantage plans and views this budget deal as a win for enrollees in the program.
“Due to actions taken by Congress, Medicare Advantage plans now have greater flexibility to offer a wider array of supplemental benefits to address chronic conditions,” BMA President and CEO Allyson Y. Schwartz said in the statement. “There is greater opportunity for Medicare Advantage plans to include innovative technologies in telemedicine, and Medicare Advantage Special Needs Plans designed to provide team-based care for dual-eligible, chronically ill, and institutionalized beneficiaries now have the promise of stability to grow.”
Jack Ende, MD, MACP, President of the American College of Physicians, said the organization supports the inclusion of “provisions that will better facilitate chronic care management.”
In a statement, Ende said the legislation will lift geographic restrictions facing physicians furnishing telehealth consultation services while expanding coverage options for Medicare Advantage Plans and ACOs.