Telehealth Access for Medicare Beneficiaries at Risk: Examining the Current State and Market Impact

Consensus around D.C. suggests Congress will extend flexibilities for two years

In case you missed it, telehealth access for Medicare beneficiaries is at risk of expiring in December 2024. It's hard to believe that after a pandemic and an overwhelmingly positive response from the general public, we might regress back to the dark age of waiting rooms, paper forms, and fax machines, but here we are. In this article from Health Tech Happy Hour, we will examine the current state of telehealth and discuss its impact on the market.

The COVID-19 pandemic brought about unprecedented changes in healthcare delivery, with telehealth finally receiving its due moment as a critical tool to ensure continuity of care while maintaining social distancing. As the official public health emergency (PHE) has long since ended, it's time to examine the future of telehealth and why Congress should make permanent the flexibilities that were temporarily implemented during the crisis.

Telehealth Policy Changes During the Pandemic

When the COVID-19 pandemic struck, the U.S. healthcare system faced an immediate challenge: how to provide care while minimizing in-person contact. In response, the Centers for Medicare & Medicaid Services (CMS) and other federal agencies rapidly expanded telehealth services through a series of temporary waivers and new rules.

Key policy changes included:

1. Expanding Medicare coverage for telehealth services, allowing beneficiaries to receive a wide range of services virtually, including primary care, mental health, and specialist consultations.

2. Waiving geographic restrictions, enabling patients to receive telehealth services from their homes, rather than being limited to certain rural areas or healthcare facilities.

3. Expanding the types of healthcare providers allowed to offer telehealth services, including physical therapists, occupational therapists, and speech language pathologists.

4. Allowing the use of everyday communication technologies like FaceTime and Skype for telehealth visits, temporarily relaxing HIPAA compliance requirements.

5. Permitting audio-only telehealth services for certain types of care, especially beneficial for patients without access to video technology.

These changes led to a dramatic increase in telehealth utilization. According to the Department of Health and Human Services, Medicare telehealth visits increased from approximately 840,000 in 2019 to over 52.7 million in 2020.

The Looming “Telehealth Cliff”

As the COVID-19 PHE came to an end, many of these telehealth flexibilities began to expire. Without congressional action, Medicare faces a potential "telehealth cliff” in December 2024, where millions of patients who have come to rely on virtual care may suddenly lose access.

Some key flexibilities set to expire include:

1. The ability for patients to receive telehealth services from their homes.

2. The expansion of telehealth services to urban and suburban areas.

3. The inclusion of audio-only services in telehealth coverage.

4. The ability of certain providers, such as physical therapists and occupational therapists, to offer telehealth services.

Impact on Telehealth Companies

Failure to pass permanent telehealth flexibilities could have significant repercussions for publicly traded telehealth companies like Teladoc Health or Amwell (American Well). Based on the stock performance since the peak of the pandemic, it seems the market is pricing in the risk.

These companies have invested heavily in expanding their services and infrastructure to meet the surge in demand during the pandemic. Without long-term certainty, they may face challenges in sustaining growth and continuing to innovate. This could lead to market volatility, potentially affecting not only these companies but also investor confidence in the broader private company digital health sector. Moreover, it could slow down the pace of innovation in telehealth technologies, ultimately impacting patient care and the modernization of healthcare delivery.

The Economic and Clinical Value of Telehealth

The rapid adoption of telehealth during the pandemic has demonstrated its significant economic and clinical value. From a financial perspective, telehealth has shown potential to reduce healthcare costs by decreasing the need for in-person visits, reducing no-show rates, and potentially lowering hospital readmissions.

A study published in the American Journal of Managed Care found that telehealth visits were associated with approximately $19-$121 lower costs per visit compared to in-person care. Additionally, by reducing travel time and wait times, telehealth can lead to increased productivity for patients and potentially their caregivers.

Clinically, telehealth has proven to be an effective tool for managing various health conditions. It has been particularly valuable in areas such as:

1. Chronic disease management: Regular virtual check-ins can help patients better manage conditions like diabetes, hypertension, and heart disease.

2. Mental health care: Telehealth has dramatically improved access to mental health services, reducing barriers such as stigma and transportation issues.

3. Rural healthcare: Telehealth has bridged the gap in healthcare access for rural communities, connecting patients with specialists who may be hours away.

4. Preventive care: Virtual visits make it easier for patients to receive regular check-ups and screenings, potentially catching health issues earlier.

Moreover, patient satisfaction with telehealth has been consistently high. A survey by J.D. Power found that 36% of patients used telehealth services in 2022, up from just 9% in 2020, with high levels of satisfaction reported.

The Case for Permanent Telehealth Flexibilities

While the two-year extension passed by the House Energy and Commerce Committee is a step in the right direction, it falls short of providing the long-term stability and certainty that the healthcare system needs. This report by the Congressional Budget Office provides a good overview of the issues being discussed on The Hill related to telehealth flexibility. There are several compelling reasons why Congress should act to make telehealth flexibilities permanent:

1. Continuity of Care: Patients and providers have integrated telehealth into their care routines. A permanent solution would prevent disruptions in care and allow for long-term care planning. This study provides some evidence that continuity of care is enhanced.

2. Healthcare Access: Telehealth has significantly improved access to care, especially for rural, elderly, and mobility-impaired patients. Making these flexibilities permanent would ensure continued access for these vulnerable populations. This review is a good resource to look at access and quality of care.

3. Innovation and Investment: Healthcare providers and technology companies need regulatory certainty to invest in and develop new telehealth technologies and services. A permanent solution would encourage innovation in this space. The use of wearables, connected medical devices, and remote patient monitoring care models in conjunction with telehealth can solve major well-established problems in care delivery.

4. Health Equity: Telehealth has the potential to address longstanding disparities in healthcare access. By making these services permanently available, we can continue to work towards a more equitable healthcare system. In particular, populations in rural areas, areas with low health resources, and for people with transportation barriers, telehealth is critical. In Medicare, many individuals are homebound or live with conditions that limit mobility, so telehealth in the home is a critical flexibility and delivery mechanism that should be extended by Congress. This is a great resource to discuss equity in a world where internet access has rapidly expanded but is not 100% accessible.

5. Preparedness for Future Crises: The pandemic showed us the importance of a flexible healthcare system. Permanent telehealth flexibilities would better prepare our healthcare infrastructure for future public health emergencies. It is hard to believe that after the recent pandemic experience that we are not seeking to improve the resilience of the care delivery system. We should expect and prepare for a future pandemic event.

6. Cost Savings: With proper implementation and oversight, telehealth could lead to significant cost savings for the healthcare system and patients alike in certain use cases. My position on telehealth as a general concept is that the “details matter.” It is not accurate to generalize cost- or clinical- effectiveness to the entire category of telehealth services. Specific programs, services, or care pathways that leverage telehealth as a medium can demonstrate favorable clinical and cost outcomes. However, it is logically clear that patients can save money from reduced transportation expense and a more efficient scheduling process. The system could save money in the short term from better access to care resulting in fewer emergency department visits and hospitalizations.

7. Patient Preference: Many patients have come to prefer the convenience and accessibility of telehealth for certain types of care. Permanent flexibilities would allow for a patient-centered approach to healthcare delivery. Patients are generally very satisfied with telehealth, but certain circumstances do merit in-person services and relationships.

Addressing Concerns around Cost, Fraud, and Quality of Care

While concerns about fraud, overutilization, and quality of care are valid, these can be addressed through proper regulations and oversight without completely rolling back telehealth flexibilities.

Conclusion

This is just a basic overview of telehealth and Medicare. The general consensus around Washington, D.C. is that Congress will pass a two year telehealth extension thus kicking the can down the road.

To learn more about Medicare and Telehealth, this report by Kaiser Family Foundation is an excellent resource.

In conclusion, the temporary telehealth measures implemented during the COVID-19 pandemic have demonstrated the immense potential of virtual care to improve healthcare access, quality, and efficiency. Rather than reverting to pre-pandemic restrictions or relying on short-term extensions, Congress should seize this opportunity to permanently modernize our healthcare system. By making telehealth flexibilities permanent, we can ensure that the lessons learned and progress made during the pandemic continue to benefit patients and the healthcare system long into the future. The time for congressional action is now – to secure a more accessible, efficient, and resilient healthcare system for all Americans.