CMS Finalizes Medicare Payment Model With Telehealth Implications


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Medicare will only reimburse for telehealth services under certain conditions. For example:

  • Office visits and consultations must be provided using an interactive, two-way telecommunications system with real-time audio and video;
  • The originating site (where the patient is) must be in a Health Professional Shortage Area or in a county that is outside of any Metropolitan Statistical Area; and
  • The originating site must be a medical facility, not the patient's home (Infantino, iHealthBeat, 9/21).

Details of Final Rule

In the final rule, CMS waives the geographic and originating site requirements that limit telehealth payments (AHA News, 11/16).

CMS wrote, "Any service on the list of Medicare approved telehealth services and reported on a claim" using an accurate ICD-10 code "could be furnished to a [joint replacement] beneficiary, regardless of the beneficiary's geographic location." 

CMS wrote that waiving the requirements will "allow the greatest degree of efficiency and communication between providers and suppliers and beneficiaries by allowing beneficiaries to receive telehealth services at their home or place of residence" (CMS final rule, 11/16).

Overall, the final rule aims to encourage hospitals to improve quality and lower costs. Under the rule providers will receive one flat fee for the procedures instead of multiple payments for each individual service they provide related to the replacements.

Hospitals that meet certain benchmarks for quality and cost measures will receive a bonus payment. Starting in year two of the program, hospitals can be penalized for a portion of their spending above a set target (CMS fact sheet, 11/16).

Tags: Telehealth

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