New Medicare Advantage Telehealth Rules Signal Growing Skilled Nursing Opportunity

New guidelines that could open up telehealth coverage under Medicare Advantage represent a serious opportunity for the industry, according to multiple technology providers — especially as the moves signal growing support for remote care from key federal officials.

Under a proposed rule released late last month, the Centers for Medicare & Medicaid Services (CMS) would include telehealth services as part of the basic, core offerings for which Medicare Advantage plans can receive government reimbursements.

The current structure forces Medicare Advantage plans to budget internally for telehealth services, according to Timothy Peck, co-founder and CEO of Call9, a platform that “embeds” emergency medical technicians in skilled nursing facilities and enables direct communication with remote doctors. So even if a plan determines that the use of Call9 or other telehealth technologies can produce savings in the short term, it’s forced to take on all of the financial risk.


But the new rule, set to take effect in calendar year 2020, would provide for the direct reimbursement of telehealth services under Medicare Advantage regardless of location; currently, traditional Medicare only covers remote health tech in rural facilities.

“It just cuts a whole bunch of red tape away to enable telemedicine to be used in nursing,” Peck said.

Medicare Advantage plans have gobbled up an increasing share of the overall marketplace: About one-third of all seniors who receive Medicare benefits are enrolled in one of the public-private supplementary insurance plans, and many experts expect that figure to grow several percentage points a year as the population ages and seniors look to add onto their basic government benefits.


The fast growth of MA penetration has caused headaches for skilled nursing providers. The privately run insurance plans have a sharper focus on cost savings than the traditional Medicare program, with significantly lower per-day reimbursements for skilled care and intense pressure to keep lengths of stay short. Telehealth thus represents a potential way for nursing facilities to reduce costs amid tighter reimbursements, but providers may actually have to wait until the proportion of MA residents in certain markets reaches a tipping point to see the benefit.

“It depends on each plan,” Mordy Eisenberg, chief operating officer of Tapestry Telehealth, said of potential adoption of telehealth coverage among insurance providers. “It’s probably not going to change all that much yet on the nursing home side, because it’s still a little too small.”

Eisenberg sees immense potential in the Medicare Advantage ruling for his company’s home health initiatives, saying that the move from CMS immediately changed the dynamic of his company’s negotiations with a managed care payor to provide in-home telemedicine coverage for certain residents.

Still, Eisenberg predicted that the Medicare Advantage expansion will be the precursor to coverage under traditional Medicare.

“They’ve let the commercial markets sort out the rules [before] applying it to traditional Medicare,” he said.

Peck agreed, noting that the federal government had not enacted any new telehealth-related policies since 2000 until this year, when it unveiled a slew of new rules regarding the technology — from the Medicare Advantage announcement to a law governing the use of telemedicine in curbing the opioid epidemic.

“The big piece here is that the dam has been broken. Other bills can be introduced now. Congress is bullish on telemedicine — Congress and CMS as well,” Peck said. “This is the beginning of a lot of reform to happen. CMS has shown, and this administration has shown, that it’s willing and wanting to do that.”

Peck expressed optimism about the fate of the RUSH Act, legislation introduced earlier this year that would expand Medicare coverage of emergency telehealth services in nursing homes — with the goal of reducing hospitalizations.

“There still is the 60% of nursing home patients that are Medicare patients that aren’t privy, necessarily, to these services,” Peck said.  “And that’s why the RUSH Act exists, and it’s an opportunity for the patients to receive the benefits that MA patients are now going to be getting.”

The bill was introduced by a bipartisan group of U.S. representatives, and Peck said the outcome of Tuesday’s midterm elections will likely not have an effect on its chances of passage; the legislation could be up for a vote during the lame-duck session in December.

CMS still must finalize the Medicare Advantage rule, and the agency will accept comment from all interested stakeholders through New Year’s Eve.

Written by Alex Spanko

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