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Telehealth Legislation Would Provide Financial Incentives for Adoption, Increased Use

Posted in Legislation, Telehealth/Telemedicine

Many thanks to our colleague, Sylvia Brown, for submitting the following guest post.

Healthcare providers will be able to receive financial incentives under Medicare and Medicaid for providing telehealth services to patients if recently proposed federal legislation becomes law.  The Telehealth Enhancement Act of 2013, H.R. 3600, contains financial incentives tied to some of the Medicare and Medicaid programs’ most costly services, such as hospital readmissions and labor and delivery services.

The bi-partisan group sponsoring the legislation includes Reps. Gregg Harper (R-MS), Mike Thompson (D-CA), Devin Nunes (R-CA) and Peter Welch (D-VT).  The sponsors’ stated goal is to reduce unnecessary costs and achieve better health outcomes through promoting and expanding the application of telehealth under both Medicare and Medicaid.

Many of the legislation’s financial incentives are built on existing payment models found in the Medicare and Medicaid programs.

Under the proposed Medicare program changes, certain hospitals will be able to share in the savings produced if the hospital’s readmissions ratio (risk adjusted, expected readmissions in relation to its actual readmissions) is positive.  In addition, Medicare accountable care organizations will be permitted to cover telehealth and remote patient monitoring services as supplemental health care benefits to the same extent as a Medicare Advantage plan.  Telehealth and remote patient services also will be added to the list of applicable services available through the Bundled Payments for Care Improvement initiative, the Affordable Care Act’s national pilot program on payment bundling.

Changes to the Medicaid program would include permitting states to change their existing programs to include payments to health care professionals that operate as a “birthing network.”  Payments to “birthing networks” that provide medical assistance for maternal-fetal and neonatal care can be made up of bundled payments, performance incentives and shared savings.

If the bill is enacted, these new financial incentives will make it easier for Medicare and Medicaid telehealth providers to create innovative service delivery lines for existing and new patients.  The ability to secure these federal incentives will be critical to furthering the growth in the remote delivery of healthcare services.

We will continue to monitor the legislation, and provide any updates as they occur.