Dive Brief:
- The group that advises Congress on Medicare policy released a new report Thursday with recommendations on telehealth, overpayments to Medicare Advantage plans and site-neutral payments across some outpatient care settings.
- The Medicare Payment Advisory Commission, or MedPAC, included telehealth in the report to satisfy a mandate from Congress after virtual care surged during the COVID-19 pandemic. Telehealth coverage under Medicare was limited before the public health emergency, and it was expanded to preserve access to care.
- The report found fee-for-service Medicare spending for telehealth care was $4.8 billion in 2020 and $4.1 billion in 2021, more than 30 times greater than 2019. Early findings show more telehealth use was associated with little change in quality, slightly improved access to care for some beneficiaries and slightly increased costs to Medicare.
Dive Insight:
MedPAC noted it’s difficult to assess telehealth’s impact because available claims data is from 2021, and policymakers should continue to monitor to see how such care affects access, quality and costs in the long-term.
Though telehealth use has generally declined from its pandemic highs, virtual care still remains elevated. Quality is one major concern for the industry, especially for audio-only telehealth, as some people lack high-speed internet that makes video more accessible.
Though the CMS paid the same rate for telehealth services as in-person care during the public health emergency, MedPAC recommended switching back to the lower facility rate “as soon as practicable after the PHE.”
The commission also examined favorable selection of beneficiaries in Medicare Advantage, where private insurers receive set payments to manage Medicare plans. According to research released earlier this week from the USC Schaeffer Center for Health Policy & Economics, overpayments to Medicare Advantage plans could reach more than $75 billion this year as beneficiaries who leave traditional Medicare for MA have lower expenditures than those who stay.
MedPAC estimated MA beneficiaries’ spending in 2019 was about 11% lower than traditional enrollees’ spending with the same health risk scores.
“These findings raise major concerns about the appropriateness of continuing to base MA benchmarks exclusively on Medicare FFS spending data. Those concerns are heightened as more beneficiaries enroll in MA and the share of Medicare beneficiaries enrolled in FFS declines,” the commission wrote. “If the number of FFS beneficiaries in a county becomes too small, Medicare’s estimates of FFS spending for the county could become unstable, as small changes in enrollment or health service delivery can cause large shifts in average spending.”
MedPAC also recommended setting similar payment rates for some services across outpatient settings, like hospital outpatient departments, ambulatory surgical centers and freestanding physician offices.
Lawmakers have recently shown support for site-neutral payments, though hospitals generally oppose them. The American Hospital Association said MedPAC’s recommendation “would redistribute $7.5 billion in Medicare spending for certain services performed in outpatient departments and ambulatory surgical centers,” particularly harming rural hospitals.
In the report, MedPAC argued more closely aligning payments for outpatient services would impact hospitals differently and concerns about specific groups should be dealt with through targeted assistance, rather than keeping higher rates.
