CMS’ Proposal to Expand Telehealth Coverage

Sheppard Mullin Richter & Hampton LLP
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Sheppard Mullin Richter & Hampton LLP

[co-author: Gabriela Garcia-Bou*]

On July 13, 2021, the Centers for Medicare & Medicaid Services (“CMS”) unveiled a proposal to temporarily extend Medicare coverage for particular telehealth services granted during the COVID-19 public health emergency (the “Pandemic”), in order to evaluate which services should be covered permanently. Through the 2022 Physician Fee Schedule (“PFS”), CMS is allowing certain services to remain on the telehealth list until the end of December 31, 2023.

If the Pandemic has done anything, it has exacerbated the disparities within the U.S. health care system, by pointing out the lack of access to many services such as physical and behavioral health services. However, the Pandemic also served as a medium for telehealth’s expansion, by giving access to health services, either through virtual or audio-only visits. CMS recognizes the value of learning lessons from the Pandemic and moving forward into a system that focuses on access to quality health services.

This temporary extension of Medicare covered telehealth services will also see additional services added to the coverage list, allowing more data to be collected on the efficacy of these services. CMS has noted however, that it does not intend to permanently add these proposals as they do not meet the criteria for Medicare coverage that are currently on the books.

The PFS proposal provides key developments for the expansion of telehealth coverage, including but not limited to:

  1. Allowing some telemental health services to be provided via audio-only calls;
  2. Removing geographic restriction for diagnosis, evaluation, or treatment of a mental health disorder;
  3. Allowing a patient’s home to serve as a site for telehealth visits; however, restrictions still require the patient to have an in-person visit within six months prior to the virtual visit;
  4. Proposing a wait on a transition in the Medicare Shared Saving Programs to electronic quality measure reporting;
  5. Changing the Quality Payment Program, improving health equity by seeking feedback on data gathering from providers, and including a 3.75% reduction to the conversion factor; and
  6. Drafting a modest rule that will have a positive impact on telehealth stakeholders, who can comment on the proposed rule through September 13, 2021.

The PFS also delays the enforcement of the Appropriate Use Criteria program (the “AUC Program”) that mandates clinical support mechanisms for certain diagnostic imaging tests. The enforcement was meant to go into effect in January 2022, but the yearlong extension will enable hospitals and other providers to maintain their ongoing response to the COVID-19 crisis while allowing essential education and operation testing of the AUC Program to occur.

Though telehealth use has declined due to increased vaccination rates causing more people feeling comfortable with in-person visits, telehealth visit rates are still much higher than before the Pandemic. Most stakeholders expects the telehealth visit rates to remain at their current levels.

This response from CMS is in anticipation of a future in which demand for telehealth is stable and useful to a greater number of individuals. Though unable to permanently add coverage to Medicare, the current extension will lay the groundwork for more inclusive coverage that enables benefits for telehealth stakeholders and patients.

*Gabriela Garcia-Bou is a law clerk in Sheppard Mullin’s New York office.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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