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On August 9, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would set a new direction for the Medicare Shared Savings Program (Shared Savings Program).  Referred to as “Pathways to Success,” this proposed new direction for the Shared Savings Program would redesign the participation options available under the program to encourage Accountable Care Organizations (ACOs) to transition to two-sided models (in which they may share in savings and are accountable for repaying shared losses), increase savings for the Trust Funds and mitigate losses, reduce gaming opportunity and increase program integrity, and promote regulatory flexibility and free-market principles. This proposed rule would also strengthen beneficiary engagement, ensure rigorous benchmarking, and help improve care for Medicare beneficiaries, with an emphasis on combatting opioid addiction and expanding the use of interoperable electronic health record technology among ACO providers/suppliers.  The proposed policies also include changes to address the additional tools and flexibilities for ACOs established by the Bipartisan Budget Act of 2018 (BBA of 2018), specifically in the areas of new beneficiary incentives, telehealth services, choice of beneficiary assignment methodology, and voluntary alignment refinements.

In connection with the proposed program redesign, CMS does not intend to offer an application cycle during 2018 for new agreement periods that would start on January 1, 2019, and instead proposes to offer an application cycle for a one-time new agreement period start date of July 1, 2019.  To avoid an interruption in their participation, if the proposed policies are finalized, ACOs with a participation agreement ending on December 31, 2018, would have an opportunity to extend their current agreement period for an additional 6-month performance year and may apply for a new agreement beginning on July 1, 2019. This would provide ACOs time to review new policies, make business and investment decisions, obtain buy-in from their governing bodies and executives, and complete and submit a Shared Savings Program application for a performance year beginning July 1, 2019.  CMS would resume the usual annual application cycle for the performance year starting on January 1, 2020 and subsequent years.

This fact sheet summarizes the major proposed changes that are included in this proposed rule, and select issues on which we seek comment. There will be a 60-day public comment period on this proposed rule. CMS encourages all interested members of the public, including ACOs, providers, suppliers, and Medicare beneficiaries to submit comments so that CMS can consider them as we develop the final rule. The 60-day comment period closes on October 16, 2018. Comments can be submitted at: https://www.regulations.gov/ (in commenting please refer to file code CMS-1701-P).

Background

Currently, 561 Shared Savings Program ACOs serve over 10.5 million Medicare fee-for-service (FFS) beneficiaries. ACOs are an important tool for moving CMS’s payment systems away from paying for volume and towards paying for value and outcomes, as ACOs are held accountable for the total cost of care (spending in relation to a historical benchmark) and quality outcomes for the assigned beneficiary patient population they serve. ACOs receive a share of any savings under the benchmark if they meet quality performance and program participation requirements, and ACOs participating in a two-sided model must also pay CMS back if spending exceeds the benchmark. ACOs facilitate coordination and cooperation among health care providers to improve the quality of care for Medicare FFS beneficiaries and reduce the rate of growth in expenditures under Medicare Parts A and B.

The Shared Savings Program currently includes three Tracks and is structured to allow ACOs to gain experience with the program before transitioning to performance-based risk.  The vast majority of Shared Savings Program ACOs have chosen to enter and maximize the allowed time under Track 1, the one-sided shared savings-only model, under which eligible ACOs receive a share of any savings under their benchmark but are not required to pay back a share of spending over the benchmark. Some Track 1 ACOs are generating losses (and therefore increasing Medicare spending) while having access to waivers of certain federal requirements in connection with their participation in the program. These ACOs may be encouraging consolidation in the market place, reducing competition and choice for Medicare FFS beneficiaries.

Overall, the ACOs in two‑sided models (Track 2 and Track 3), under which eligible ACOs share in a larger portion of any savings under their benchmark but can be required to share losses if spending exceeds the benchmark, have shown significant savings to the Medicare program and are improving quality. Further, we have observed that low revenue ACOs (which are typically composed of physician practices and rural ACOs) outperform high revenue ACOs (typically ACOs that include hospitals). However, participation in current performance-based risk Tracks remains modest, and some low revenue ACOs lack a pathway to transition from a one-sided model to more modest levels of performance-based risk that recognize their having less control over the Medicare FFS expenditures for their assigned beneficiaries. Our early experience with the Medicare Track 1+ ACO Model, a time-limited Center for Medicare and Medicaid Innovation (Innovation Center) model which began January 1, 2018, demonstrates that the availability of a lower-risk, two-sided model is an effective way to rapidly progress to performance-based risk.

The proposed redesign of the Shared Savings Program would put the program on a path towards achieving a more measureable move to value, demonstrate savings to the Medicare program, and promote a competitive and accountable marketplace.

Promoting accountability by accelerating the move to two-sided risk while promoting competition by encouraging participation by low revenue ACOs

New BASIC and ENHANCED Tracks and 5 Year Agreement Periods

We propose to redesign the program’s participation options by offering, for agreement periods beginning on July 1, 2019 and in subsequent years, two tracks that eligible ACOs would enter into for an agreement period of not less than 5 years: (1) BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk that, at the highest level, would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program, and (2) ENHANCED track, based on the program’s existing Track 3, providing additional tools and flexibility for ACOs that take on the highest level of risk and potential reward. Appendix A summarizes the characteristics of the proposed participation options.

We would streamline the program by discontinuing Track 1 and Track 2 and the deferred renewal option such that these participation options would no longer be available to ACOs applying to enter or renew their participation in the program. Further, the Innovation Center would discontinue future application cycles for the Track 1+ Model.

The BASIC track’s glide path would offer an incremental approach to transitioning eligible ACOs to higher levels of risk and potential reward. The glide path includes 5 levels:  a one-sided model available only for the first two years to eligible ACOs (ACOs identified as having previously participated in the program under Track 1 would be restricted to a single year under a one-sided model); and three levels of progressively higher risk and potential reward in years 3 through 5 of the agreement period. Under the one-sided model years of the glide path, an ACO’s maximum shared savings rate would be 25 percent based on quality performance, applicable to first dollar shared savings after the ACO meets the minimum savings rate. The glide path concludes with a maximum 50 percent sharing rate, based on quality performance, and a maximum level of risk which qualifies as an Advanced APM for purposes of the Quality Payment Program.

ACOs in the BASIC track glide path would be automatically advanced at the start of each performance year along the progression of risk/reward levels, or could elect to move more quickly to a higher level of risk/reward, over the course of their agreement period. While the typical agreement period under the proposed rule would be 5 years in duration, with 12-month performance years based on calendar years, ACOs entering an agreement period beginning on July 1, 2019, would participate in a first performance year of 6 months for the period from July 2019 – December 2019. ACOs entering the BASIC track’s glide path for an agreement period beginning on July 1, 2019, would have at most 2 ½ years under a one-sided model (with ACOs identified as having previously participated in the program under Track 1 restricted to 1 ½ years) and their first automatic advancement would occur at the start of performance year 2021.

The proposed eligibility criteria for the BASIC track and ENHANCED track recognize differences in ACO participants’ Medicare FFS revenue and the experience of the ACO and its ACO participants with performance-based risk Medicare ACO initiatives. Under the proposed approach, ACOs inexperienced with performance-based Medicare ACO initiatives may enter an agreement period under the BASIC track’s glide path. ACOs identified as experienced with performance-based risk Medicare ACO initiatives, such as ACOs identified as having previously participated in the program under Track 2, Track 3 or the Track 1+ Model, are restricted to participating in either the BASIC track’s highest level of risk and reward (if the ACO is identified as a low revenue ACO) or the ENHANCED track.

ACOs identified as low revenue could participate in the BASIC track for up to two agreement periods.  For instance, a low revenue ACO that participates in the BASIC track’s glide path could renew under the BASIC track, at the highest level of risk and reward, for a second agreement period. ACOs identified as high revenue would be required to transition to the ENHANCED track more quickly, after no more than a single agreement period under the BASIC track.

Six-Month Agreement Period Extension & Mid-year 2019 Start Date Allow ACOs to Prepare

In order to facilitate ACOs’ transition to the new BASIC track or ENHANCED track, a special one-time July 1, 2019 agreement period start date is proposed in lieu of a January 1, 2019 agreement period start date. We propose to allow ACOs with participation agreements ending December 31, 2018 the opportunity to elect to extend their agreement period by a 6-month performance year from January 1, 2019, to June 30, 2019. We propose an approach to reconcile ACOs’ performance for the first half of 2019, and second half of 2019 for ACOs entering agreements beginning on July 1, 2019, by considering financial and quality performance on a calendar year basis, and then pro-rating savings and losses for one-half of the year.

Updates to Repayment Mechanism Requirements for Two-sided Model ACOs

We are proposing modifications to the repayment mechanism arrangement requirements for ACOs in performance-based risk tracks to reduce burden.  Under our proposal, certain BASIC track ACOs may have a lower repayment mechanism amount to reflect the potentially lower levels of loss liability under the proposed BASIC track.  In addition, we propose to permit renewing ACOs to maintain a single, existing repayment mechanism arrangement to support its ability to repay shared losses in the new agreement period.  We also propose to establish new requirements regarding the issuing institutions for a repayment mechanism arrangement.

Ensuring rigorous benchmarking by using regional benchmarks for all agreement periods

For each performance year, the ACO’s spending is compared to its benchmark to determine if the ACO receives shared savings from CMS or owes shared losses to CMS. The current benchmarking methodology uses differing amounts of ACO historical experience and regional performance depending on the ACO’s agreement period.  Under the proposed redesign of the program, we would provide for more accurate benchmarks for ACOs.  These benchmarks would protect the Trust Funds by ensuring that ACOs do not unduly benefit from any one aspect of the benchmark calculations, while also helping to ensure the program continues to remain attractive to ACOs, especially those caring for the most complex and highest risk patients who could benefit from high-quality, coordinated care from an ACO.

The revised benchmarking methodology described in the proposed rule would incorporate factors based on regional FFS expenditures in establishing the ACO’s historical benchmark beginning with the ACO’s first agreement period, rather than applying this approach starting in the ACO’s second or subsequent agreement period. More generally, we propose to mitigate the effects of excessive positive or negative regional adjustments used to establish and reset the benchmark by: (1) reducing the maximum weight used in calculating the regional adjustment from 70 percent to 50 percent, and (2) capping the regional adjustment amount using a flat dollar amount equal to 5 percent of national Medicare FFS per capita expenditures. The proposed approach would also replace the current methodology for annually risk adjusting the benchmark for newly assigned and continuously assigned populations of beneficiaries with an approach that would allow for adjustments to reflect changes in health status of up to positive or negative 3 percent over the length of the agreement period.

In calculating the regional trend and update factors, we propose to use a blend of regional and national growth rates based on Medicare FFS expenditures with increasing weight placed on the national component of the blend as the ACO’s penetration in its regional service area increases. This proposed approach is anticipated to result in more favorable trend factors for ACOs with high penetration in their regional service area with lower spending growth compared to the nation and less favorable trend factors for ACOs with high penetration in their regional service area with higher spending growth compared to the nation. This approach would have little impact on ACOs with low to medium penetration in their regional service area.

Use of factors based on regional FFS expenditures in establishing the benchmark starting in an ACO’s first agreement period would allow the benchmark to be a more accurate representation of the ACO’s costs in relation to its localized market (or regional service area), and could strengthen the incentives of the program to drive meaningful change by ACOs.  Further, allowing agreement periods of at least 5 years, as opposed to the current 3-year agreement periods, would provide greater predictability for benchmarks by reducing the frequency of benchmark rebasing, and therefore provide greater opportunity for ACOs to achieve savings against these benchmarks.  In combination, these policies would be protective of the Trust Funds, provide more accurate and predictable benchmarks, while creating incentives for ACOs to transition to performance-based risk.

Finally, we also propose to extend the policies to address determination of shared losses owed by ACOs participating under performance-based risk in the event of extreme or uncontrollable circumstances and quality performance scoring that were adopted for performance year 2017 to apply for performance year 2018 and subsequent years.

Promote program integrity by reducing opportunities for gaming

We propose a combination of policies to strengthen the integrity of the program: using past participation in performance-based risk Medicare ACO initiatives by the ACO legal entity and by its ACO participants to determine available participation options; monitoring for financial performance and permitting termination of ACOs with multiple years of poor financial performance; modifying application review criteria to permit CMS to consider the ACO’s per capita expenditures and failure to meet quality performance standards in multiple years of the previous agreement period; and holding terminated ACOs in two-sided models accountable for pro-rated shared losses. ACOs that voluntarily terminate their participation would be accountable for pro-rated shared losses if they terminate after June 30 of a 12-month performance year. We would hold involuntarily terminated ACOs accountable for pro-rated shared losses incurred during the portion of the performance year prior to their termination.

Promote regulatory flexibility to allow ACOs to innovate and be successful in coordinating care

Annual Choice of Assignment:  To implement a provision of the BBA of 2018, to provide ACOs with greater choice of beneficiary assignment methodology, BASIC track and ENHANCED track ACOs would have the flexibility to elect prospective assignment or preliminary prospective assignment with retrospective reconciliation prior to the start of each agreement period, and to change that selection for each subsequent performance year.

Expand Use of Telehealth for Practitioners in ACOs in Performance-Based Risk Arrangements:  To support ACOs’ coordination of care across settings, we propose regulations to govern the use of telehealth services by certain ACOs under performance-based risk, consistent with the requirements of the BBA of 2018. Under this approach, beginning in January 1, 2020, eligible physicians and practitioners in applicable ACOs in performance-based risk tracks could receive payment for telehealth services furnished to prospectively assigned beneficiaries even if the otherwise applicable geographic limitations are not met, including when the beneficiary’s home is the originating site. This policy would apply to ACOs entering the BASIC track (under a two-sided model) and ENHANCED track, when the ACO elects prospective assignment, as well as Track 3 ACOs and Track 1+ Model ACOs. We also seek comment on an approach that could allow for expansion of this policy to ACOs under performance-based risk that have selected preliminary prospective assignment with retrospective reconciliation, instead of prospective assignment, as their assignment methodology.

Expand Skilled Nursing Facility (SNF) 3-day Rule Waiver Eligibility:  We propose to allow eligible ACOs in performance-based risk within the BASIC track’s glide path and the ENHANCED track use of the existing SNF 3-day rule waiver, regardless of their choice of prospective assignment or preliminary prospective assignment with retrospective reconciliation, to support ACO efforts to increase quality and decrease costs. We also propose amending the existing SNF 3-day rule waiver to allow critical access hospitals and other small, rural hospitals operating under a swing bed agreement to be eligible to partner with eligible ACOs as SNF affiliates for purposes of the SNF 3-day rule waiver.

Promoting beneficiary engagement by incentivizing beneficiaries to achieve and maintain good health

Beneficiary Incentive Programs:  To encourage patient engagement, we propose to allow eligible ACOs in certain two-sided models the opportunity to apply to establish a beneficiary incentive program.  Consistent with the BBA of 2018, the proposal would allow such ACOs to provide an incentive payment of up to $20 to an assigned beneficiary for each qualifying primary care service that the beneficiary receives from certain ACO professionals, or from a Federally Qualified Health Center or Rural Health Clinic.  Further, we clarify that under the program’s existing regulations, we consider vouchers, which can be used only for particular goods or services (including certain gift cards in the nature of a voucher), to be “in-kind items or services” that may be provided to beneficiaries so long as the vouchers meet all other program requirements.  This means that the items and services accessible through use of the voucher must have a reasonable connection to the beneficiary’s medical care and be preventive care items or services or advance a clinical goal for the beneficiary, including adherence to a treatment or drug regime, adherence to a follow-up care plan, or management of a chronic disease or condition.

Beneficiary Notification:  To further empower beneficiary choice, we are proposing to strengthen requirements regarding beneficiary notifications.  We propose that ACO participants must notify beneficiaries at the point of care of a beneficiary’s ability to, and the process by which, a beneficiary may identify or change identification of a primary care provider for purposes of voluntary alignment.  We also propose to require that each ACO participant provide a standardized notice developed by CMS to each of its Medicare FFS beneficiaries at each beneficiary’s first primary care visit of the performance year, in addition to having the same information also available upon request (as currently required).  To mitigate the burden of this additional notification, we propose to develop a template notice.

Updates to Beneficiary Assignment: We propose to expand the definition of primary care services used in beneficiary assignment to add new codes, and revise how we determine whether evaluation and management services were furnished in a SNF.

Voluntary Alignment:  We also propose modifications to the program’s existing policies on voluntary alignment in order to comply with the BBA of 2018, by allowing beneficiaries to designate a physician regardless of specialty or a nurse practitioner, physician assistant or clinical nurse specialist as their “primary clinician” responsible for coordinating their overall care.  We propose to continue to use a beneficiary’s designation to align the beneficiary to the ACO in which their primary clinician participates even if the beneficiary does not continue to receive primary care services from an ACO professional in that ACO.

Supplementing Claims-based Assignment with Beneficiary Opt-in:  We also seek comment on an alternative beneficiary assignment methodology to make the assignment methodology more patient-centered, and strengthen the engagement of beneficiaries in their health care, under which we would allow ACOs to elect an “opt-in” methodology. Under this approach, a beneficiary would be assigned to an ACO if the beneficiary “opted-in” to the ACO.  A hybrid approach is discussed that would supplement an “opt in” approach with  a modified claims-based assignment approach that focuses on the most complex patients, such as high risk patients or those receiving care for chronic conditions.

Promoting interoperability, combatting opioid addiction, and improving quality of care and coordination of pharmacy care for ACO beneficiaries

We propose to establish new program requirements related to the adoption of certified electronic health record technology (CEHRT) by eligible clinicians participating in ACOs.  Specifically, we propose to use an interoperability criterion regarding the use of CEHRT to determine eligibility for initial program participation and as part of an ACO’s annual certification of compliance with program requirements.  We also propose to discontinue the use of the meaningful use electronic health record quality measure and to require instead that ACOs attest that a specified percentage of their eligible clinicians use CEHRT in order to be eligible for the program and certify annually thereafter.  ACOs that are participating in a track or a payment model within a track that is not an Advanced APM would be required to attest that at least 50 percent of their eligible clinicians use CEHRT.  ACOs that are participating in a Track or payment model within a Track that is an Advanced APM would be required to attest to the higher of 50 percent or the CEHRT threshold required for Advanced APMs.

We seek comment on approaches to developing the program’s quality measure set in response to the agency’s Meaningful Measures initiative as well as to support ACOs and their ACO providers/suppliers in addressing opioid utilization within the FFS population.  We describe existing sources of program data that may be useful for ACOs to monitor trends in opioid utilization, and solicit comment on suggestions for providing additional Parts A, B and D data and aggregate statistics to ACOs.  We also seek comment on quality measures that could be used to assess factors related to opioid utilization.

Lastly, we seek comment on how Medicare ACOs and the sponsors of stand-alone Part D prescription drug plans (Part D sponsors) could be encouraged to collaborate so as to improve the coordination of pharmacy care for Medicare FFS beneficiaries.

APPENDIX A: COMPARISON OF BASIC TRACK AND ENHANCED TRACK CHARACTERISTICS

BASIC Track’s Glide Path :

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Today, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would overhaul the Medicare Shared Savings Program, which is the program established by the Affordable Care Act and launched in 2012 under which the vast majority of Medicare’s Accountable Care Organizations (ACOs) operate.  The redesigned program is called “Pathways to Success.”

ACOs are groups of health care providers that agree to take responsibility for the total cost and quality of care for their patients.  In return, ACOs receive a portion of the savings they achieve, and CMS provides them with waivers to provide the regulatory relief needed to innovate. 10.5 million beneficiaries in Fee-for-Service Medicare (of the 38 million total Fee-for-Service beneficiaries) are in a Shared Savings Program ACO.

“President Trump has promised the American people better healthcare at a lower cost, and delivering this kind of value is a key priority for HHS,” said HHS Secretary Alex Azar.  “One piece of our vision for value-based transformation is pioneering bold new payment models. Having more Accountable Care Organizations take on real risk, while offering them the flexibility they need to generate savings, is an important step forward in how Medicare pays for value.”

“After six years of experience, the time has come to put real ‘accountability’ in Accountable Care Organizations.  Medicare cannot afford to support programs with weak incentives that do not deliver value,” said CMS Administrator Seema Verma.  “ACOs can be an important component of a system that increases the quality of care while decreasing costs; however, most Medicare ACOs do not currently face any financial consequences when costs go up, and this has to change.”

CMS recognizes the timing issues associated with the implementation of any final policies and the need for organizations to make decisions about participation in an ACO track.  To that end, CMS proposes a 6-month extension for current ACOs whose agreements expire at the end of 2018, along with a special one-time July 1, 2019 start date that will have a spring 2019 application period for the new participation options.

Pathways to Success was developed based on a comprehensive analysis of the performance of ACOs to date.  Despite the program’s intent, the Shared Savings Program has shown increases in net spending for CMS and taxpayers, in part because the majority of ACOs – 460 of the 561 or 82% of all ACOs in the Shared Savings Program in 2018 – are not taking on risk for increases in costs.  Data on ACO performance to date has shown that ACOs that are not at risk for cost increases end up increasing Medicare spending in aggregate.  Pathways to Success is designed to move in a new direction and advance five goals:  Accountability, Competition, Engagement, Integrity, and Quality.  The projected financial impact of the proposal would be savings to Medicare of $2.2 billion over ten years.

Accountability and Competition

Under the current Shared Savings Program, ACOs have up to six years without taking on risk, while being granted waivers from certain federal requirements.  These ACOs receive a shared savings payment from CMS when they keep costs down, but they do not have to pay taxpayers back when costs are high.

This opportunity for bonus payments if spending is low without any risk of losses if spending goes up – along with the provision of waivers – may be encouraging market consolidation.  Such consolidation reduces choices for patients and can ultimately increase costs.  Therefore, in response to President Trump’s Executive Order Promoting Healthcare Choice and Competition and in order to drive value, CMS proposes reducing the amount of time that an ACO can remain in the program without taking on risk down to, at most, two years.

CMS will continue to provide technical assistance to ACOs and support the sharing of best practices through collaboratives.  But after six years of experience, the program must evolve to deliver value.

Beneficiary Engagement

CMS’s proposal puts the patient in the driver’s seat and provides them with the information they need to make decisions about their care.  In Pathways to Success, CMS proposes to require that beneficiaries receive a notification at their first primary care visit of a performance year informing them that they are in an ACO and explaining what that means for their care.  To bolster beneficiary engagement, CMS proposes to allow certain ACOs under performance-based risk to provide incentive payments to patients for taking steps to achieve good health.

Quality

As providers take on increasing accountability, CMS intends to reward them by increasing flexibility.  Pathways to Success includes proposed changes which would leverage new CMS authorities under the Bipartisan Budget Act of 2018, such as allowing physicians in ACOs that take on risk to receive payment for telehealth services provided to patients regardless of the patient’s location – including at their place of residence.  This new flexibility will expand access to high-quality services in a manner that is convenient for patients.

As part of the Administration’s broader MyHealthEData initiative, this proposed rule promotes interoperability and patient control of their medical data by proposing a new requirement around ACO adoption of the 2015 edition of Certified EHR Technology (CEHRT).  And as part of the Administration’s broader Meaningful Measures initiative to reduce burden, the proposal aims to streamline the measures that ACOs are required to report, to ensure that all measures have a meaningful impact on patient care.

Integrity

CMS intends to ensure that ACO spending targets accurately reflect spending levels and growth rates in their local market.  Therefore, Pathways to Success proposes incorporating regional spending into ACO targets earlier, starting during an ACO’s first agreement period.  In addition, the proposal would authorize termination of ACOs with multiple years of poor financial performance.

For more information regarding Medicare Shared Savings Program Notice of Proposed Rulemaking (CMS-1701-P), “Accountable Care Organizations‑‑Pathways to Success,” please visit https://www.federalregister.gov/public-inspection/ and https://www.cms.gov/newsroom/fact-sheets/proposed-pathways-success-medicare-shared-savings-program.

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Monday, July 30, 2018

Where Things Stood

Understanding the impact of what we have seen so far this year first requires an understanding of where we were at the end of 2017, with respect to both Medicare reimbursement and provider adoption of telehealth solutions.

Hospitals and health systems have long understood that digital health technologies allow patients to be active participants in their health while also allowing health care providers to intervene before costs and complications escalate. At the close of 2017, direct-to-consumer telehealth companies had matured and were working closely with commercial payors to deliver telehealth services to plan beneficiaries. Reports on digital therapeutic tools, artificial intelligence applications and other digital health tools were in the media daily, and use cases continued to create evidence of both the efficacy and efficiency of digital health tools.

Under value-based reimbursement models, health care providers are penalized when patient care, particularly for chronic conditions, is not effectively managed. In order to manage the population now considered within their scope of care, and in anticipation of the rising care needs of the retiring baby boomer population, in 2017 providers were actively leveraging tools to help them succeed. In fact, a 2017 study reported that 73 percent of health care organizations use technology for monitoring and maintenance, with the most common use being patient monitoring at 64 percent.

Provider action tends to follow reimbursement dollars, however, and while Medicare has reimbursed for telehealth services for many years, the rules and restrictions associated with telehealth reimbursement have resulted in very limited utilization and actual Medicare reimbursement.

Prior to 2018, Medicare covered only real-time, audiovisual consultations with patients for a limited number of Medicare Part B services, and only when certain geographic, provider type and facility type criteria were met, with the exception of federal demonstration programs.  The biggest challenge was that reimbursement could only occur when the originating site (i.e., the patient’s location) was located either in a federal demonstration program, a rural Health Professional Shortage Area or a county outside of any Metropolitan Statistical Area, as defined by the Health Resources and Services Administration and the US Census Bureau.  This geographic restriction limited Medicare reimbursement to services provided to patients of health care facilities located in rural areas, and prevented reimbursement of services to patients outside of a medical facility (e.g., at home or at a workplace) or located in urban areas.  The restriction also undermined the broader implementation of telehealth programs because health systems could only develop programs for these specific use cases.

Indeed, the diversity of telehealth and digital health solutions continues to be one of the most difficult practical challenges associated with broad adoption. So while there is a patient care incentive to utilize digital health tools, there has been very little Medicare reimbursement incentive to provide services using digital health solutions—until now.

2018 and Beyond: A New Era?

In 2018 Medicare reimbursement has undergone massive expansion through a series of rules and laws, including a proposed rule promulgated in July 2018.

Unbundling of CPT Code 9901

CMS took a major step towards aligning patient care expectations with provider reimbursement in the revisions to the Physician Fee Schedule and Other Revisions to Part B for CY 2018; Medicare Shared Savings Program Requirements; and Medicare Diabetes Prevention Program Final Rule (published on November 15, 2017) (Final Rule).  The Final Rule began taking effect January 1, 2018.

Of particular note, CMS unbundled CPT code 99091, which allows providers to bill for remote patient monitoring (RPM), fundamentally changing the scope of Medicare reimbursement for remote care. As the Connected Health Initiative stated, “[u]ntil now, connected health technologies have been effectively locked out of the most important part of America’s healthcare system, Medicare and Medicaid.” With this change, CMS not only provided an added incentive for providers to take advantage of digital health tools to benefit patients, but improved the business case for providers who have already invested in those tools to leverage them for patient care via RPM.

Prior to the adoption of the Final Rule, CMS rules prohibited billing certain remote care tasks for a patient during the same service period as many of the treatments that commonly use RPM services. Specifically, this category includes chronic care management (CCM) codes 99487, 99489 and 99490 (which include management of cardiovascular disease, chronic obstructive pulmonary disease (COPD), diabetes and hypertension, among others); transitional care management (TCM) codes 99495 and 99469 (which include services for the time between a patient’s discharge from the hospital, rehab, nursing or similar facility and the patient’s return home or admission to an assisted living facility); and general behavioral health integration (BHI) code 99484.  Thus, if a provider used RPM for a patient with COPD receiving services billable under any of the above CCM codes, then the provider would receive no reimbursement for the RPM services. However, with the adoption of the Final Rule, RPM services that are billable under 99091 can be billed once during the same 30-day service period as any CCM,  TCM or BHI  codes discussed.

The Final Rule states that CPT code 99091 is for “collection and interpretation of physiologic data (e.g., ECG, blood pressure, glucose monitoring) digitally stored and/or transmitted by the patient and/or caregiver to the physician or other qualified health care professional, qualified by education, training, licensure/regulation (when applicable) requiring a minimum of 30 minutes of time.” Providers can use the code for time spent accessing data, reviewing or interpreting the data, and making any necessary modifications to the care plan that result, including communication with the patient and caregiver and any associated documentation.

CPT code 99091 is payable in both facility and non-facility settings, but there are other specific eligibility requirements. In addition to the requirement that the code be billed once per 30-day service period per patient, the provider must obtain advance beneficiary consent for the service and document the consent in the patient medical record. For new patients or patients who have not been seen by the billing provider within one year, the provider and patient must also have a face-to-face consultation. The unbundled code is applicable to physicians, physician assistants, nurse practitioners, certified nurse midwives, clinical nurse specialists and their teams. The services are ineligible if provided via subcontractor, however, which has discouraged collaborations between health care providers and RPM technology companies that desire to offer remote monitoring services. While providers can take advantage of digital health tools to support their RPM services, the analytic tasks must be provided by the clinical care team. Comments submitted to CMS expressed concern that the current code may not optimally describe the services furnished using current technology. However, CMS indicated that the unbundling of 99091 is an interim measure for reimbursement of RPM services while new, more specific RPM codes are developed. As CMS stated, “separate payment for this code will not mitigate the need for coding revisions.”

Other Notable 2018 Fee Schedule Final Rule Changes

In addition to unbundling code 99091, the Final Rule also expands allowable telehealth reimbursement and permits virtual sessions in certain circumstances under the Medicare Diabetes Prevention Program Expanded Model (MDPP), as we reported here.

New and add-on services

CMS evaluates requests for the addition of telehealth services on the basis of two categories: (1) services that are similar to services already on the list, and (2) services that are not similar to services already on the list. An evaluation of a category 2 service requires CMS to assess, based on the submission of evidence, whether the use of a telecommunications system to furnish the service “produces demonstrated clinical benefit to the patient.”

Upon review of several public requests, CMS determined that the following services met the category 1 requirement:

• Healthcare Common Procedure Coding System (HCPCS) code G0296 – counseling visit to discuss the need for lung cancer screening
• Current Procedural Technology (CPT) codes 90839 and 90840 – psychotherapy for crisis

Payment for these services is conditioned upon the distant site practitioner having the ability to mobilize originating site resources to diffuse a crisis and restore safety, when applicable.

The following four add-on (category 2) CPT and HCPCS codes were also added:

• CPT code 90785 – interactive complexity
• CPT codes 96160 and 96161 – administration of patient-focused health risk assessment instrument, and administration of caregiver-focused health risk assessment instrument
• HCPCS code G0506 – comprehensive assessment or/and care planning for patients requiring CCM services

In instances where CMS is unable to confirm whether all components of a service may be performed via telehealth, an explicit condition of payment may be added alongside the code to ensure that all CPT (or other) prefatory requirements are met.

Medicare diabetes prevention program virtual sessions

MDPP is a “structured behavior change intervention” designed to prevent type 2 diabetes among Medicare beneficiaries with an indication of prediabetes. MDPP consists of 16 sessions that integrate a Centers for Disease Control and Prevention-approved curriculum in an in-person, “group-based, classroom-style setting.” The curriculum provides practical training in dietary changes, increased physical activity and strategies to control weight. Under the Final Rule, MDPP beneficiaries may make up a limited number of sessions “virtually” at the request of the individual beneficiary. The virtual sessions may include furnishing behavioral change programs online (e.g., via a connected smart phone, tablet, computer, laptop); furnishing coaching programs online with other means of support by the coach (e.g., via telecommunications, video conferencing); or distance learning that does not require online connectivity (e.g., via phone). The sessions will be billed using a modifier for CMS’s tracking purposes. MDPP services that are exclusively furnished virtually or using remote technologies (without in-person attendance) will not be reimbursed.

2018 Quality Payment Program Final Rule

In tandem with the Final Rule, CMS released the 2018 Quality Payment Program Final Rule. Physicians and other eligible practitioners who participate in the Merit-Based Incentive Payment System must attest to their participation in two “High” weighted activities and four “Medium” weighted activities, or a combination, to obtain the maximum performance score. By changing the classification of the Improvement Activity Performance Category called “Engage Patients and Families to Guide Improvement in the System of Care” from Medium to High, CMS incentivized providers to use RPM technologies that provide real-time feedback to patients and their care team. The updates require providers to leverage platforms and devices using an active feedback loop to provide real-time, or near real-time, patient-generated health data to the care team or clinically endorsed feedback from the provider to patients.

In combination with the Fee Schedule changes, including changes to CPT code 99091, this change further demonstrates that CMS is getting behind digital health initiatives in a real way.

The Bipartisan Budget Act of 2018

The Bipartisan Budget Act of 2018 passed in February includes significant expansion of direct reimbursement for telehealth services by incorporating provisions of the CHRONIC Care Act, which had, in different forms, passed both houses of Congress in 2016. These provisions represent the first significant legal expansion of Medicare reimbursement of telehealth services since Medicare first started to reimburse telehealth services.

Expanded access to telehealth stroke services

Beginning in 2019, Medicare will reimburse telehealth consultations with neurologists with respect to patients presenting with stroke symptoms at hospitals or mobile stroke units. The provision eliminates the current geographic restriction that limits originating sites to rural areas. This allows distant site providers delivering telestroke services to receive a professional fee for delivering the consultation to patients located anywhere in the United States, provided that the other Medicare telehealth coverage requirements are satisfied (e.g., type of provider, type of technology).

Expanded telehealth services for chronically ill Medicare Advantage enrollees

Beginning in plan year 2020, Medicare Advantage (MA) plans can offer expanded telehealth services as a basic benefit to chronically ill enrollees. MA enrollees would have the option to receive these additional benefits through telehealth or in person. However, a plan that fails to provide in-person access to a certain type of physician specialist cannot meet network adequacy requirements by providing solely telehealth access to such providers. HHS is required to solicit public comment before November 30, 2018, with respect to the types of telehealth services that should be considered and the requirements for providing those services.

Expanded telehealth opportunities for Accountable Care Organizations (ACOS)

Beginning in 2020, certain ACOs will have an increased opportunity to provide Medicare reimbursable telehealth services with the removal various barriers. The changes allow a beneficiary’s home to qualify as an originating site, and eliminate the geographic component of the originating site requirement. Not surprisingly, the provision eliminates the originating site fee if the service is furnished in the patient’s home. This additional telehealth flexibility is available for Next Generation ACOs and for additional ACOs, including MSSP Track II (if the ACO remains at two-sided risk and chooses prospective assignment), MSSP Track III, and two-sided risk ACO models with prospective assignment tested or expanded through the Innovation Center.

The Secretary was asked to study the implementation of this provision and report to Congress before January 1, 2026 with an analysis of the utilization of and expenditures for telehealth services under this section and recommendations for any appropriate legislation and administrative action.

CMS Proposed Rule (Physician Fee Schedule) Released July 12, 2018

CMS’s Notice of Proposed Rulemaking, Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2019 (Proposed Rule) would expand reimbursement for physicians and other qualified health care providers under a variety of specific circumstances. Comments on the Proposed Rule may be submitted until September 10, 2018.

Brief (5–10 minute) virtual visits by qualified providers with existing patients

The Proposed Rule would reimburse virtual care services between visits to determine whether a patient’s condition requires an office visit. Reimbursement for virtual visits would be billed using HCPCS code GVCI1 at a rate of $14 per visit, which is much lower than the cost of an E/M visit, and would be available only with respect to existing patients of the practitioner. This change could potentially result in cost savings to Medicare if it effectively reduces unnecessary office visits by allowing providers to use technology to communicate with their patients to assess their patients’ needs (in a rather common-sense way). Currently, CMS does not separately cover these types of check-ins between providers and patients, but dedicated providers across the country have offered this type of assistance regardless.

If the virtual care service originates from a related E/M service delivered at some point within the prior seven days, the virtual care service would not be separately reimbursable, as the follow-up visit would be “bundled” into the Medicare payment for the previous E/M service. Similarly, if the virtual care service leads to an E/M service with the same physician, the virtual care service would be “bundled” into that E/M service and would not be separately reimbursable.

CMS believes that this approach could be beneficial in a variety of ways. For example, it notes that this could assist in the treatment of opioid use disorders and other substance use disorders “since there are several components of Medication Assisted Therapy (MAT) that could be done virtually, or to assess whether the patient’s condition requires an office visit.” At the same time, CMS recognizes that it may need to address a few concerns. Specifically, CMS is seeking comments on whether a frequency limitation should be imposed and also what sort of documentation regarding medical necessity would be appropriate, among other things.

Review of patient images or video (store and forward)

The Proposed Rule provided that HCPCS GRAS1 code (Remote Evaluation of Pre-Recorded Patient Information) be used for reimbursement for reviewing “recorded video and/or images captured by a patient in order to evaluate the patient’s condition” and to determine whether the patient requires an in-person office visit. This proposed change would apply to all providers, which would be significant given that “store and forward” telehealth services are currently only reimbursed by Medicare in very limited circumstances.

As with the virtual visits described above, this service would not be separately reimbursable if it results from an E/M service provided within seven days prior, or leads to E/M services. CMS is seeking comment on whether this service should be limited to existing patients “or whether there are certain cases, like dermatological or ophthalmological services, where it might be appropriate for a new patient to receive these services.”

Provider-to-provider consultations

Codes 994X6, 994X0, 99446, 99447, 99448 and 94449 may be used to reimburse provider-to-provider consults in the context of care management or care coordination activities. These codes may be used for “assessment and management services conducted through telephone, internet, or electronic health record consultations furnished when a patient’s treating physician or other qualified healthcare professional requests the opinion and/or treatment advice of a consulting physician or qualified healthcare professional with specific specialty expertise to assist with the diagnosis and/or management of the patient’s problem without the need for the patient’s face-to-face contact with the consulting physician or qualified healthcare professional.”

This expansion of reimbursement (away from a service that would otherwise be bundled through face-to-face encounters) is derived from CMS’s recognition that current coding does not accurately reflect trends in medical practice. Specifically, CMS believes that “making separate payment for interprofessional consultations undertaken for the benefit of treating a patient will contribute to payment accuracy for primary care and care management services.” Nonetheless, CMS is concerned about program integrity and is seeking comments on how CMS might be able to evaluate whether the services are reasonable and necessary under the circumstances.

Cost

Crucially, CMS is cognizant of the impacts these changes may have on Medicare cost with respect to utilization and avoidable utilization of other services. Its analysis is that because reimbursement is generally low for these services, utilization will be fairly low, but could increase to upwards of 19 million visits per year. CMS also expects that the number of additional services resulting from these new services will outweigh avoided utilization. Accordingly, CMS expects that the financial impact of paying for the communication-technology-based services will be an increase in Medicare costs. Unfortunately, this does not bode well for reimbursement generally: “In order to maintain budget neutrality in setting proposed rates for CY 2019, we assumed the number of services that would result in a 0.2 percent reduction in the proposed conversion factor.”

CMS Proposed Rule (Home Health) Released July 2, 2018

In an effort to encourage more home health agencies (HHAs) to adopt RPM, the CMS Proposed Changes to the Home Health Prospective Payment System released July 2, 2018, propose the inclusion of RPM costs on the HHA cost report as an allowable cost. Allowing HHAs to report the costs of RPM on the HHA cost report as part of their operating expenses means these costs would then be factored into the costs per visit, which has important implications for purposes of assessing HHA costs relevant to payment, including HHA Medicare margin calculations. CMS is soliciting comments on the proposed definition of remote patient monitoring under the Home Health Agency Prospective Payment System to describe the telecommunication services that are used by HHAs to augment the patient’s plan of care during a home health episode. In addition, CMS has requested comments regarding additional opportunities to use telehealth technologies for consideration in future rulemaking, which further evidences CMS attention to how telehealth can improve the delivery of home health services.

CMS Proposed Rule (Outpatient Hospital Services) Released July 25, 2018

In the CMS Proposed Changes to Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs released on July 25, 2018, CMS has asked members of the public to submit their ideas on ways to promote the interoperability and electronic information exchange, and potential revisions to CMS patient health and safety requirements for hospitals and other Medicare- and Medicaid-participating providers and suppliers “to fully understand all of these health IT interoperability issues, initiatives, and innovations through the lens of its regulatory authority.” CMS is “particularly interested in identifying fundamental barriers to interoperability and health information exchange, including those specific barriers that prevent patients from being able to access and control their medical records.”

Don’t Get Too Excited

Reimbursement for services delivered via digital health solutions should continue to improve beyond 2018, based on Congress’ and CMS’s desire to identify additional appropriate uses of telehealth and to reevaluate the current Medicare coverage requirements, CMS’s recent expansions of and proposed changes to the list of covered services, and the fact that Medicare and Medicaid payments for telehealth services are at an all-time high. However, this must be understood in context.

First, it is important to note that although Congress has significantly improved the financial environment for telehealth through the Bipartisan Budget Act, it has not altered in any fundamental way the very restrictive structure for telehealth reimbursement. With the exception of broadening the flexibility for MA Plans, the Bipartisan Budget Act essentially creates very specific exceptions to that structure by waiving certain, but not all, of its requirements, and then only under specific circumstances. This seems to be consistent with the approach suggested by the Medicare Payment Advisory Commission in its report to Congress on telehealth issued as required by the 21st Century Cures Act: “[P]olicymakers should take a measured approach to further incorporating telehealth into Medicare by evaluating individual telehealth services to assess their capacity to address the Commission’s three principles of cost reduction, access expansion, and quality improvement.” Accordingly, we should not expect significant or unbridled congressional efforts to expand telehealth coverage under Medicare.

Second, as demonstrated by the reference to a likely fee schedule offset in the Proposed Rule, we should recognize that even though CMS is interested in expanding telehealth reimbursement, it remains focused on the bottom line of Medicare reimbursement as a whole. Accordingly, while digital health reimbursement expansion may be more likely in the future, broad support for these efforts may be tempered by the possibility of financial offset in other reimbursement areas.

Finally, the OIG’s addition of Medicaid and Medicare telehealth payment audits to the 2018 Work Plan and recent reports indicating high billing errors demand that telehealth providers fully understand and develop procedures for complying with the associated regulatory and compliance requirements in advance. One key step in this process requires that providers review and update their corporate compliance programs—particularly billing, coding and documentation policies—to confirm that the provider and any partners properly bill for services, and that the compliance program effectively prevents, identifies and offers pathways for addressing billing compliance issues. With the changes in 2018, this task has simply gotten harder.

Although these comments may reflect a tempering of expectations and a word of caution relative to enforcement, they are also indicative of a very positive trend for telehealth. The Medicare reimbursement regime’s efforts to expand reimbursement for certain telehealth services, focus on its role within larger policy goals and concerns related to fraud also reflect the government’s perspective that these services are no longer a novelty and deserve attention.

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Included among one of the five primary goals in the 32-page bill of the (CONNECT) for Health Act of 2017 is to expand the use of remote patient monitoring programs for chronic care and underserved populations.

May 25, 2017 by Carrie A. Roll

Last week, the Congressional Budget Office (CBO) concluded that a key piece of telehealth legislation, the CHRONIC Care Act of 2017, would not, overall, increase or decrease Medicare spending. This score is significant as it marks the first time that CBO has concluded that providing enhanced Medicare coverage for telehealth services would be budget neutral and clears the path for Congress to pass the legislation in a tough political climate.

The CHRONIC Care Act was developed by the Senate Finance Committee’s Bipartisan Chronic Care Working Group. If enacted, the bill would expand Medicare coverage of telehealth services in four ways:

• Nationwide Coverage for Telestroke –Currently, Medicare will pay a physician for consulting on a patient experiencing acute stroke symptoms via telehealth only if the hospital where the patient is located is in a rural Health Professional Shortage Area (HPSA) or a county outside a Metropolitan Statistical Area (MSA). Under the CHRONIC Care Act, beginning in 2019, the geographic restriction would be eliminated and physicians would receive payment for telestroke consultations regardless of the hospital location.
• Home Remote Patient Monitoring for Dialysis Therapy –Medicare requires that beneficiaries receiving home dialysis treatments have a monthly clinical assessment from their health care provider. Under current law, beneficiaries can only use telehealth to satisfy the clinical assessment requirement if the patient is at an authorized originating site (e.g., a physician office) located in a rural HPSA or a county outside an MSA. Beginning in 2019, beneficiaries could receive the required monthly clinical assessment from a freestanding dialysis facility or the patient’s home without geographic restriction.
• Enhanced Telehealth Coverage for ACOs –The CHRONIC Care Act would apply the Next Generation ACO telehealth waiver criterion to the Medicare Shared Savings Program (MSSP) Track II, MSSP Track III, and the Pioneer ACO program. Specifically, the legislation would (i) eliminate the geographic component of the originating site requirement, and (ii) allow beneficiaries assigned to the approved MSSP and ACO programs to receive telehealth services in the home.
• Increased Flexibility for Telehealth Coverage under Medicare Advantage Plans –Under current law, a Medicare Advantage (MA) plan may provide telehealth benefits beyond those that are currently reimbursed by Medicare. However, these enhanced telehealth services are not separately paid for by Medicare and MA plans must use their rebate dollars to pay for those services as a supplemental benefit. The CHRONIC Care Act would allow an MA plan to offer additional, clinically appropriate, telehealth benefits in its annual bid amount beginning in 2020.

The CHRONIC Care Act has been widely heralded by health care providers as a first step in removing barriers to providing telehealth services to Medicare beneficiaries. In a recent Senate Finance Committee hearing, health care providers voiced their support for greater coverage of telemedicine services. The Senate Finance Committee is in the process of marking up the bill.

©1994-2017 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

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CMS encourages ACO participants, radiology facilities, group of hospitals, specialty providers to take advantage of the shared cost associated with remote monitoring technology as per federal guidelines of the Medicare Shared Savings Program (MSSP) to enhance care coordination.

By Vera Gruessner on November 05, 2015

What type of healthcare delivery models benefit most from remote monitoring tools and physician telehealth services? C. Frederick Geilfuss II, Healthcare Lawyer and Partner at Foley & Lardner LLP, wrote for The National Law Review how physician telehealth services and remote monitoring technology can be advantageous for Accountable Care Organizations.

Specifically, the group of hospitals, radiology facilities, specialty providers, and other ACO participants could split the costs associated with using remote patient monitoring and telemedicine technology, as specified in the federal guidelines of the Medicare Shared Savings Program.

When developing Accountable Care Organizations and other healthcare delivery models, the federal government understood the need to reduce Medicare costs, which is why it’s vital to adopt remote monitoring and physician telehealth services as a way to cut overall medical spending.

The Accountable Care Organization (ACO) was developed in order to improve communication channels between multiple providers and specialists treating the same patients, create a team-based healthcare environment, and enhance care coordination throughout the medical care continuum.

As such, telehealth technology is a clear way toward strengthening care coordination among medical providers, according to mHealthIntelligence.com. In fact, the Centers for Medicare & Medicaid Services (CMS) wrote in the Medicare Shared Savings Program (MSSP) regulatory guidance that ACOs are capable of “coordinating care, such as through the use of telehealth, remote patient monitoring, and other enabling technologies.”

ACOs were initially developed under the Shared Savings Program platform in order to reduce unnecessary and redundant healthcare services as well as cut skyrocketing costs from Medicare. Physician telehealth services and remote monitoring tools among ACOs are also protected under the MSSP fraud and abuse waivers, Geilfuss wrote.

While Accountable Care Organizations did reduce Medicare spending by $600 million in 2014, only 27 percent actually received financial incentives from the Shared Savings Program. This means that more than 70 percent of ACOs did not meet the quality and cost savings measures set by CMS.

In order for more ACOs to receive these incentives, changing general infrastructure and work processes may not be enough. With the implementation of remote monitoring technology and telehealth capabilities, ACOs may be able to reach the cost savings standards set forth by the federal agency.

The Partner at Foley & Lardner also mentioned how the low rates of ACOs meeting the CMS standards for cost savings may have to do with the small number of Accountable Care Organizations actually using telemedicine. A study released recently found that only 20 percent of ACOs are currently utilizing telehealth systems in their practice.

“Telemedicine had a relatively low rate of use at 23 percent of responding organizations,” Alex Kontur, Manager of Research and Projects at eHealth Initiative, mentioned the limited use of telemedicine among ACOs during a webinar. “We’re also seeing extensive work on the part of ACOs to get their patients engaged in care and really drive patient-centricity that ACOs are supposed to be all about.”

Through the fraud and abuse waivers, CMS is offering ACOs a new solution to reducing healthcare costs – telehealth implementation. Additionally, CMS is moving further toward adopting new healthcare payment models with a focus on value-based care instead of fee-for-service.

“Increasing the quality of ACO performance by increasing quality will only become more important as CMS expands its Medicare alternative payment models,” C. Frederick Geilfuss II wrote in The National Law Review.

“CMS intends for 30 percent of Medicare payments to be made in alternative payment models by the end of 2016. That number increases to 50 percent by the end of 2018. Additionally, CMS seeks to have 85 percent of Medicare fee-for-service payments in certain value-based purchasing categories by 2016 and up to 90 percent by 2018.”

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The medical cost associated with providing Medicare beneficiaries the use of telehealth technologies and remote patient monitoring services can be shared among ACO’s according to federal regulations under the Medical Shared Savings Program (MSSP) waivers. The financial impact revealed by CMS was a saving of nearly $600 million in 2014.

by Frederick Geifuss II and Nathaniel M. Lacktman, November 2, 2015

Accountable Care Organizations (ACOs) can share costs of telehealth and remote patient monitoring services among their hospitals, providers/suppliers, and other ACO participants, according to federal regulations under the Medicare Shared Savings Program (MSSP) fraud and abuse waivers. In protecting these arrangements, CMS and OIG recognize how telehealth technologies and innovative care processes can help reduce costs for the Medicare program. If 2015 was the year that brought telehealth to the consumer (and stock) market, 2016 may be the year of telehealth and ACOs.

Telehealth Enjoys MSSP ACO Fraud and Abuse Waivers

The MSSP ACOs are a key component of the Medicare delivery system reform initiative designed to reduce fragmented or unnecessary care and excessive costs for health care services furnished to Medicare fee-for-service beneficiaries. The mention of telehealth services among the waivers in the regulations confirms CMS’ and OIG’s belief that “coordinating care, such as through the use of telehealth, remote patient monitoring, and other enabling technologies” is an activity reasonably related to the purposes of the Medicare Shared Savings Program and therefore is eligible for protection under one or more of the fraud and abuse waivers. One example CMS and OIG gave was a hypertensive patient using home telehealth monitoring of blood pressure.

Only 27% of ACOs Received Incentive Payments Last Year

The fraud waivers and their reference to telehealth come at a perfect time for ACOs. CMS’ report on ACO quality and financial performance results in 2014 revealed that, while ACOs saved the Medicare program nearly $600 million and notably improved quality, only 27% of the 353 ACOs participating in the MSSP received any shared savings incentive payments from the government. That means, while CMS concluded ACOs did a good job in 2014, most ACOs did not perform well enough to reach their quality and cost savings benchmarks. Despite making significant investments in infrastructure and operations to create an ACO (whether Pioneer or MSSP), the majority of ACOs still need to move the needle further in order to enjoy the financial incentives of these programs.

Increasing the quality of ACO performance by increasing quality will only become more important as CMS expands its Medicare alternative payment models. CMS intends for 30 percent of Medicare payments to be made in alternative payment models by the end of 2016. That number increases to 50 percent by the end of 2018. Additionally, CMS seeks to have 85 percent of Medicare fee-for-service payments in certain value-based purchasing categories by 2016 and up to 90 percent by 2018.

Only 20% of ACOs Use Telehealth

The low rate of incentive payments may come as no surprise to some, as a recent study revealed only 20% of ACOs currently use telehealth or telemedicine technologies in their operations. Are the 20% of telemedicine-using ACOs among the 27% who received incentive monies?

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