CMS Proposes Changes to Medicare Telehealth Policies, Including Increased Payment Rates

On Thursday, July 13, 2023, the Centers for Medicaid & Medicaid Services (CMS) released the Calendar Year (CY) 2024 Physician Fee Schedule (PFS) Proposed Rule (hereinafter CY 2024 PFS Proposed Rule), which proposes policy changes to the PFS and other Medicare Part B issues, effective on or after January 1, 2024. As explained in this article, the CY 2024 PFS Proposed Rule includes several policy proposals that would change coverage of and access to telehealth services for Medicare beneficiaries.

The CY 2024 PFS Proposed Rule implements the telehealth flexibilities passed by the Consolidated Appropriations Act, 2023 (2023 CAA), enacted December 29, 2022. Section 1834(m) of the Social Security Act (the Act) specifies the requirements for Medicare coverage of telehealth services, many of which were waived during the COVID-19 Public Health Emergency (PHE). Section 4113 of the 2023 CAA amended section 1834(m) of the Act to extend several Medicare telehealth flexibilities established during the COVID-19 PHE through December 31, 2024. Specifically, for this period, section 4113 of the 2023 CAA:

• Waived geographic restrictions limiting coverage of telehealth services under Medicare to rural, underserved areas;
• Added a beneficiary’s home as an eligible originating site at which the beneficiary can access telehealth services;
• Expanded the types of practitioners who can bill for telehealth services, including qualified occupational therapists, qualified physical therapists, qualified speech-language pathologists, and qualified audiologists;
• Extended coverage of telehealth services furnished by Federally Qualified Health Centers and Rural Health Clinics;
• Delayed the in-person visit requirements for telemental health services that require a beneficiary to receive an in-person consult within 6 months prior to initiating a telemental health service, and at regular intervals (every 12 months, as specified by CMS in rulemaking) thereafter;
• Extended Medicare coverage of telehealth services included on the Medicare Telehealth Services List and of audio-only telehealth services.

II. Proposed Updates to the Process for Adding, Removing, or Changing Services on the Medicare Telehealth Services List

The CY 2024 PFS Proposed Rule also proposes to simplify CMS’s process for considering requests to add, remove, or change services on the Medicare Telehealth Services List. At present, CMS assesses whether services should be added to the Medicare Telehealth Services List by assigning them to one of three categories:

• Category 1: Services that are similar to professional consultations, office visits, and office psychiatry services that are currently on the Medicare Telehealth Services List.
• Category 2: Services that are not similar to those on the current Medicare Telehealth Services List. CMS’s review of these requests includes an assessment of whether the service is accurately described by the corresponding code when furnished via telehealth and whether the use of a telecommunications system to furnish the service produces demonstrated clinical benefit to the patient. (In 2020, in response to the COVID-19 PHE, CMS revised the criteria for adding or removing services on the Medicare Telehealth Services List using a combination of emergency waiver authority and interim final rule making, so that some services would be available for the duration of the PHE on a “temporary Category 2 basis.”)
• Category 3: Services that were added to the Medicare Telehealth Services List during the COVID-19 PHE, for which there is likely to be clinical benefit when furnished via telehealth, but there is not yet sufficient evidence available to consider the services for permanent addition under the Category 1 or Category 2 criteria. Services added on a temporary, Category 3 basis must ultimately meet the criteria under Category 1 or 2 in order to be permanently added to the Medicare Telehealth Services List.

In place of the Category 1-3 taxonomy that CMS currently uses, CMS proposes to simply classify and consider additions to the Medicare Telehealth Services List as either permanent or provisional. CMS “believe[s] that simplification toward a binary classification approach could address the confusion [CMS has] noticed from interested parties submitting requests during the PHE.” CMS intends to determine these designations (that is, “permanent” or “provisional”) at the conclusion of a new five-step process for considering requests to add services to, remove services from, or change the status of, services on the Medicare Telehealth Services List:

• Step 1. Determine whether the service is separately payable under the PFS.
  • If CMS finds that a service identified in a submission is not separately payable under the PFS, CMS would not conduct any further review of that service and would not propose it for addition to the Medicare Telehealth Services List.
• Step 2. Determine whether the service is subject to the provisions of section 1834(m) of the Act.
  • A service is subject to the provisions of section 1834(m) of the Act when at least some elements of the service, when delivered via telehealth, are a substitute for an in-person, face-to-face encounter, and all of those face-to-face elements of the service are furnished using an interactive telecommunications system as defined in 42 C.F.R. § 410.78(a)(3). The aim of this step would be to determine whether the service is, in whole or in part, inherently a face-to-face service.
• Step 3. Review the elements of the service as described by the Healthcare Common Procedure Coding System (HCPCS) code and determine whether each of them is capable of being furnished using an interactive telecommunications system as defined in 42 C.F.R. § 410.78(a)(3).
  • CMS would consider whether one or more face-to-face component(s) of the service, if furnished via audio-video communications technology, would be equivalent to the service being furnished in-person. CMS would seek evidence of substantial clinical improvement in different beneficiary populations that may benefit from the requested service when furnished via telehealth (e.g., rural populations); studies of patient satisfaction alone would not constitute sufficient evidence.
  • CMS notes that this step is integral to avoiding the possible unintended consequences of creating new gaps in care when telehealth is used as a substitute for in-person care.
• Step 4. Consider whether the service elements of the requested service map to the service elements of a service on the Medicare Telehealth Services List that has a permanent status described in previous final rulemaking.
  • If a code describes a service that maps to the service elements of a code that is already included on the Medicare Telehealth Services List on a permanent basis, CMS would add the code to the Medicare Telehealth Services List on a permanent basis.
• Step 5. Consider whether there is evidence of clinical benefit for the telehealth service analogous to the clinical benefit of the in-person service.
  • If there is enough evidence to suggest that further study may demonstrate that the service, when provided via telehealth, is of clinical benefit, CMS would assign the code a “provisional” status on the Medicare Telehealth Services List. After a code receives “provisional” status, as evidence generation builds, CMS could assign “permanent” status in a future year or remove the service from the Medicare Telehealth Services List in the interest of patient safety based on ongoing monitoring of telehealth services and publicly available information.
  • Where the clinical benefit of a service, when provided via telehealth, is clearly analogous to the clinical benefit of the service when provided in person, CMS would assign the code “permanent” status on the Medicare Telehealth Services List, even if the code’s service elements do not map to the service elements of a service that already has permanent status. 

CMS also proposes to consolidate Categories 1, 2, and 3, as explained above, for all services that are currently on the Medicare Telehealth Services List. For CY 2024, CMS proposes to re-designate any services that are currently on the Medicare Telehealth Services List on a Category 1 or 2 basis as the proposed new “permanent” category for CY 2024, while any services currently added on a “temporary Category 2” or Category 3 basis would be assigned to the “provisional” category.

For CY 2024, CMS proposes to add to the Medicare Telehealth Services List for CY 2024 health and well-being coaching services on a provisional basis and Social Determinants of Health Risk Assessments on a permanent basis.

III. Proposed Changes to the Payment Methodology for Medicare Telemental Health Services Furnished to Beneficiaries at Home

The CY 2024 PFS Proposed Rule proposes to fundamentally shift how Medicare reimburses mental and behavioral health services furnished via telehealth. CMS has historically paid clinicians furnishing telehealth services at the distant site (the site at which the clinician delivering the telehealth service is located) at the PFS’s lower, facility-based (i.e., hospital) payment rate instead of the higher, non-facility (i.e., physician office) rate. Thus, Medicare’s payment for a telehealth service is normally the same regardless of whether it is furnished by a provider located in a non-facility setting, such as a clinician’s office, or a facility setting, such as a hospital outpatient department. During the COVID-19 PHE, CMS has temporarily adopted a payment parity approach for telehealth services, paying the same PFS rate for a telehealth service that it would pay if the service were furnished in person, with the payment rate varying based on the location of the provider (i.e., either the facility or non-facility PFS rate). Pursuant to the CY 2023 PFS Final Rule, this temporary payment parity methodology was set to expire at the end of 2023.

By way of further background, section 1834(m) of the Act places restrictions on the types of facilities at which a beneficiary can receive telehealth services, known as “originating sites.” Prior to the COVID-19 PHE, these originating sites were generally required to be health care settings, such as physician’s office and hospitals; subject to limited exceptions, a beneficiary’s home could not qualify as an originating site. During the COVID-19 PHE, Congress amended section 1834(m) of the Act to allow beneficiaries to receive telemental health services at home, subject to in-person visit requirements. Unless Congress further amends section 1834(m) of the Act, beginning in CY 2024 (i.e., when the telehealth extension policies enacted by the 2023 CAA expire), mental health services will be among a few select telehealth services permitted by Medicare to be furnished to beneficiaries at home.

In the CY 2024 PFS Proposed Rule, CMS proposes that, beginning in CY 2024, telehealth services furnished to beneficiaries in their homes be permanently paid at the higher, non-facility PFS rate. CMS proposes to modify the Place of Service (POS) modifiers that clinicians use to bill for telehealth services and stagger the payment rate for telehealth services provided to beneficiaries at home versus at other originating sites. If finalized, POS 10 would be used to bill for telehealth services furnished to a beneficiary in their home, at the higher, non-facility PFS rate. POS 02 would be used to bill for telehealth services when a patient is not in their home at the lower, facility PFS rate. CMS justifies this proposed change in payment policy as “protecting access to mental health and other telehealth services by aligning with telehealth-related flexibilities that were extended via the [2023] CAA[] as [CMS] will be more accurately recognizing the resource costs of behavioral health providers, given shifting practice models.” Specifically, CMS expects that behavioral health providers will maintain telehealth services and in-person services going forward, incurring roughly the same practice expenses when furnishing behavioral health services to a patient at home via telehealth as they do for services furnished in-person.

IV. Proposed Extension of Direct Supervision via Use of Two-way Audio/Video Communications Technology

The CY 2024 PFS Proposed Rule proposes to continue to define direct supervision to permit the presence and immediate availability of the supervising clinician through real-time audio and video interactive telecommunications through December 31, 2024. Under Medicare Part B, most services furnished by auxiliary personnel incident to the services of the billing physician or practitioner, many diagnostic tests, and other services are required to be furnished under direct supervision by a physician or practitioner. Outside the circumstances of the COVID-19 PHE, direct supervision generally requires the immediate availability of the supervising physician or other practitioner. CMS has established this “immediate availability” requirement to mean in-person, physical—not virtual—availability. However, CMS changed the definition of “direct supervision” during the COVID-19 PHE as it pertains to supervision of diagnostic tests, physicians’ services, and some hospital outpatient services, to allow the supervising professional to be immediately available through virtual presence using two-way, real-time audio/video technology, instead of requiring their physical presence. Although this policy was set to expire at the end of 2023, CMS expresses concern in the CY 2024 PFS Proposed Rule “that an immediate reversion to the pre-PHE definition of direct supervision would prohibit virtual direct supervision, which may present a barrier to access to many services, such as those furnished incident-to a physician’s service” and states the belief that clinicians “will need time to reorganize their practice patterns established during the PHE to reimplement the pre-PHE approach to direct supervision without the use of audio/video technology.” Accordingly, CMS proposes to continue to define direct supervision to permit the presence and “immediate availability” of the supervising clinician through real-time audio and visual interactive telecommunications through December 31, 2024, and is soliciting comment on whether CMS should consider extending the definition of direct supervision to permit virtual presence beyond December 31, 2024.

To be consistent with the telehealth policies that were extended under the 2023 CAA, CMS also proposes to allow teaching physicians to use audio/video real-time communications technology when a resident furnishes Medicare telehealth services in all residency training locations through the end of 2024.

V. Other Proposed Policies

• CMS proposes to continue to assign an active payment status to Current Procedural Terminology (CPT) codes 98966-68—describing telephone assessment and management services provided by a qualified non-physician healthcare professional (not telehealth services)—for CY 2024 to align with audio-only telehealth-related flexibilities that were extended via the 2023 CAA.
• CMS proposes to increase the payment amount for the telehealth originating site facility fee according to the Medicare Economic Index. For CY 2024, the proposed payment amount for the telehealth originating site facility fee (HCPCS code Q3014) is $29.92.
• CMS proposes to remove the telehealth frequency limitations for CPT codes 99231-33, 99307-10 that pay for telehealth services in skilled nursing facilities and for critical care consultation services until the end of 2024.
• CMS proposes to codify billing rules for Diabetes Self-Management Training (DSMT) services furnished through telehealth, allowing distant site practitioners who can appropriately report DSMT services furnished in person (e.g., registered dietitians, nutrition professionals, physicians, nurse practitioners, physician assistants, and clinical nurse specialists), to bill DSMT services furnished via telehealth, including when the DSMT services are performed by others as part of the DSMT entity who do not qualify as telehealth providers under section 1834(m) of the Act.

VI. Comment Period

Interested stakeholders have 60 days to submit comments on the CY 2024 PFS Proposed Rule, with comments due to CMS by 5 p.m. on September 11, 2023.

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