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Medicare Telehealth Reimbursement for Home-Based Care? The Next Generation ACO Has Arrived

Next Generation Accountable Care Organization

Home-based care is approved? Yes, indeed. Responsible for administering the Medicare and Medicaid systems in the United States, the Centers for Medicare and Medicaid Services (CMS) has released a decision to allow Accountable Care Organizations (ACOs) to use telehealth services. Dated March 10, 2015, the CMS decision extends coverage for telehealth services to millions of Medicare beneficiaries. The decision was made as part of the release of a new payment and care delivery model called  the Next Generation Accountable Care Organization (ACO).  It extends reimbursement for Medicare-funded telehealth services by waiving requirements that a beneficiary be located in a rural area and served at a health facility. Telehealth coverage then, will be extended to the 80% of Medicare beneficiaries living in cities and from newly included service sites such as their homes. The recent CMS decision gives Next Generation ACOs the ability to provide services and collect reimbursement for telehealth services using processes similar to current Medicare Advantage (managed care) plans.

CMS Makes “Waivers” for the Next Generation ACO

According to the Next Generation Request for Applications, CMS will is making “a waiver” available to the  current rules that limit Medicare telehealth reimbursement to services provided to beneficiaries at designated, rural “originating sites.” To date, rural patients served in Health Provider Shortage Areas or “HSPAs” were the primary recipients of Medicare-funded telehealth services. A further barrier to the widespread delivery of telehealth was the obligation that patients could only be served if they traveled to a local designated provider’s location, such a physician or psychologist’s office or Federally Qualified Health Center (FQHC). With the exception of a few carved out services, this new decision will allow beneficiaries served by the Next Generation ACO to receive telehealth services from their homes and other locations, whether that is in a city, in a rural area or in-between.  Telehealth services need to meet other criteria. For example, covered services must be in accord with other Medicare payment and coverage criteria. Other reimbursement restrictions will include CMS technology acquisition, set-up, training, and other expenses.  Additionally, an ACO seeking Next Generation reimbursement will be required to provide other information, such as rationales for how the increased telehealth flexibility will help them “to reduce total Medicare expenditures and improve care integration, quality assurance and patient safety.”

The National Law Review posting on February 1, 2015 also detailed other ways in which legislation released in January of 2015, and known as the 21st Century CURES, would also permit a waiver of geographic and originating site restrictions on telehealth. 

Advocacy by the American Telemedicine Association

As a leader advancing telehealth policy, the American Telemedicine Association has been a strong advocate for this change. “For nearly four years, ATA has urged CMS to waive all the Medicare restrictions for all ACOs,” said Jonathan Linkous, CEO of ATA. “This is an important change in CMS policy and attitude. We hope it will encourage CMS and Congress to further open up all value-based payment plans to telehealth.”

About the American Telemedicine Association

The American Telemedicine Association is the leading international resource and advocate promoting the use of advanced remote medical technologies. ATA and its diverse membership work to fully integrate telemedicine into healthcare systems to improve quality, equity and affordability of healthcare throughout the world. Established in 1993, ATA is headquartered in Washington, DC.  

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