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What is Holding Back ACO Telehealth Use, Reimbursement?

By Kyle Murphy, PhD

ACO telehealth use would enable these risk-based organizations to improve healthcare costs, quality, and access, but regulation restricts its use to rural areas.

Telehealth continues to show its ability to improve healthcare costs, quality, and access, but regulatory restrictions still hinder the use of this health information technology among accountable care organizations whose goal is to achieve those improvements, according to the author of an article published in this month’s edition of the American Journal of Accountable Care.

“Telehealth can only be used in facilities in rural areas, which limits the ability of medical providers to reach patients in their homes and communities. As a result, the number of Medicare beneficiaries accessing telehealth is miniscule,” writes Krista Drobac, Executive Director of the Alliance for Connected Care and Partner at Sirona Strategies.

“According to CMS data analyzed by the Center for Telehealth and eHealth Law, in 2011, CMS spent less than $5 million on telehealth services for seniors,” she continues. “This is out of an overall budget of more than $500 billion.”

The limited impact of telehealth is the direct result of a provision in the Social Security Act that places restrictions on Medicare reimbursements, specifically to Medicare Part services delivered using telecommunication systems in rural areas or counties outside major metropolitan areas.

According to Drobac, the consequences of these restrictions affect most ACOs based on geography:

The 1834(m) restrictions create a disincentive for the vast majority of ACO providers — many of whom are located in urban and suburban areas — to use this type of technology, and exclude a broad swath of Medicare beneficiaries from being able to access the benefits of telehealth. ACOs that do not receive reimbursement for telehealth services are faced with the difficult decision of assuming financial risk by providing the care for free. For many physician-led and smaller ACOs, assuming that risk is not financially feasible.

Moreover, these restrictions on telehealth use by ACOs is becoming visible in the lack of technical infrastructure reported by these risk-based organizations to succeed at, let alone support, connected care.

Drobac points to a proposed rule published in the Federal Register earlier this month as the means of driving ACO telehealth use. A major component of the bill is to “encourage and promote” the use of EHR and health IT tools, telehealth, health information exchange, and patient engagement technologies.

For Drobac, the key component of the bill is the revelation that the Centers for Medicare & Medicaid Services (CMS) is considering providing a waiver of the originating site requirements in 1834(m) to help ACOs in the Medicare Shared Savings Program “realize cost savings and improve care coordination, such that they would more willing to take on two-sided risk.”

“Telehealth can and will help ACOs achieve the cost, quality, access, and patient engagement goals they are striving for,” the author maintains. “It is time to lift the section 1834(m) restrictions on the coverage and reimbursement of telehealth services so ACO providers can have another important tool in realizing the new care delivery models envisioned.”

To achieve that end, Drobac is calling on industry stakeholders to respond to CMS’s request for comments, a period closing on February 6. Currently, Regulations.gov shows the receipt of only two comments.

With ACOs striving to improve patient outcomes and the cost of care through well-coordinated care, their aims are well aligned with the grand vision of telehealth and telemedicine. That regulation stands in the way of ACOs using telehealth services is a sign of legislation not adapting as rapidly as innovation.

Read the full article here.

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