On April 5, 2019, the Centers for Medicare & Medicaid Services (“CMS”) issued a final rule that will allow Medicare Advantage plans, beginning in 2020, to offer to their enrollees telehealth services as basic benefits beyond those covered by traditional Medicare (i.e., Medicare Part A and Part B). The final rule implements Section 50323 of the Bipartisan Budget Act of 2018 (Public Law 115-123), which allows Medicare Advantage plans to offer such additional telehealth benefits as part of the government-funded basic benefits rather than as supplemental benefits. CMS expects that by allowing Medicare Advantage plans to offer telehealth services to enrollees as basic benefits, the coverage of telehealth services by the plans will increase and the utilization of these telehealth services by enrollees will also increase.

These additional Medicare Advantage telehealth services will not be subject to the originating site restrictions under 42 C.F.R. § 410.78 that apply to telehealth services provided under traditional Medicare. Such restrictions limit what types of originating sites Medicare will cover. For instance, Medicare will not reimburse providers under Part B for telehealth services provided to a patient located in his or her home; however, Medicare will reimburse providers for services provided to patients located in a physician’s office, hospital, or skilled nursing facility, which are all considered qualifying originating sites. The originating site restrictions also limit the geographical location of the site; to be covered, the site where the patient is located must be within a rural Health Professional Shortage Area or non-Metropolitan Statistical Area. Importantly, under the new final rule, Medicare Advantage enrollees will be able to receive telehealth services in their homes and will not need to be located in a rural or underserved area.

The adoption of this final rule follows CMS’s recent trend of expanding coverage and reimbursement of telehealth services under traditional Medicare. On November 23, 2018, CMS issued a final rule that included the following Medicare coverage expansions:

  • Providing for separate payment for communication technology based-services
  • Effective January 1, 2019, CMS began reimbursing providers for the following communication-based technology services: virtual check-ins, store-and-forward communication, interprofessional consults and remote patient monitoring.
  • These services are also not limited by the originating site restrictions or other restrictions under 42 C.F.R. § 410.78.
  • However, as detailed in the final rule, these services are subject to other requirements such as patient consent requirements and restrictions on the type of patient to whom the services may be provided.
  • Loosening restrictions for certain acute stroke telehealth services, telehealth services provided to beneficiaries with end-stage renal disease receiving home dialysis, and telehealth services to treat substance abuse disorders
  • Effective January 1, 2019, certain acute stroke telehealth services and certain telehealth services provided to beneficiaries with end-stage renal disease receiving home dialysis are not subject to the originating site restrictions.
  • Effective July 1, 2019, certain telehealth services provided to beneficiaries to treat substance abuse disorders will not be subject to the originating site restrictions.
  • Expanding the list of telehealth services reimbursed by Medicare
  • For calendar year 2019, CMS added add two new HCPCS codes related to prolonged preventive services in an office or outpatient setting to the list of Medicare telehealth services.
  • These services are subject to the restrictions under 42 C.F.R. § 410.78.

For further information regarding Medicare reimbursement of telehealth services, visit https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/TelehealthSrvcsfctsht.pdf