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Provider Impact of COVID-19 Telehealth Policies by Specialty

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Approximately ⅓ of physician services payments are eligible for telehealth reimbursement under Medicare (fee-for-service) FFS through existing Center for Medicare and Medicaid Services (CMS) guidance as of January 2020, in addition to temporary coding guidance specific to COVID-19 effective as of March 1, 2020. Avalere’s analysis highlights the immediate potential for specific physician specialties to utilize telehealth based on temporary flexibilities regarding which procedures are eligible for telehealth reimbursement.

Including existing and temporary guidance, 191 physician procedure codes are currently eligible for reimbursement via telehealth. These procedures comprise an estimated 33% of total Medicare FFS physician payments for the latest full year of data assessed, CY2018. For certain specialties, 90% or more of Medicare payments are eligible for reimbursement via telehealth, based on Avalere’s assessment of commonly performed services per specialty.

Additionally, major commercial payers are initiating coverage policy changes similar to Medicare, including adding codes to telehealth lists, expanding of telehealth partners, waiving originating site requirements, and waiving member cost sharing. Payers interviewed by Avalere generally expect a number of these flexibilities to continue into the future.

Table 1: CMS Telehealth Codes and Corresponding Medicare FFS Physician Payments
CMS Category # of Codes % of Medicare Payments
Existing 2020 Telehealth Codes 106 24%
Temporary COVID Guidance 85 9%
Total 191 33%

Source: CMS Covered Telehealth Services for PHE, Avalere Analysis of Medicare Provider/Supplier Procedure Summary File

Existing and Temporary COVID Guidance for Medicare Telehealth Codes

Annually, CMS updates the list of telehealth services allowed to be furnished as well as policies that govern telehealth.

As of March 30, CMS will now allow for more than 80 additional services to be furnished via telehealth. During public health emergencies, individuals can use interactive apps with audio and video capabilities to visit with their clinician for an even broader range of services. Providers can also evaluate beneficiaries who have audio phones only.

Table 2: Telehealth Guidance Under Existing and Temporary Flexibilities
Telehealth Requirements Existing Telehealth Telehealth Flexibilities Under COVID-19
Originating Site Requirements Within a rural health professional shortage area or in a county outside a metropolitan statistical area No limitations
Originating Place of Service Physician office, hospital, CAH, rural health clinic, FQHC, SNF, community mental health centers, renal dialysis facilities, mobile stroke units, patient’s home only for ESRD for home dialysis Adds patient’s home, nursing facilities, IRF, hospice, ER
Equipment Requirements HIPAA-complaint audio-visual equipment Any audio-visual equipment or application
Provider Type Physicians, NP, PA, Nurse-midwives, Clinical nurse specialists, CRNA, Clinical Psychologists, and Clinical Social Workers, Registered dietitians, Nutrition professionals Adds physical therapists, occupational therapists, speech-language pathologists
Patient Type Established patients New and established patients
Supervision N/A General supervision
Payment Methodology Facility payment rate Non-facility payment rate when appropriate

Source: CMS Interim Final Rule, Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency

Providers can bill for telehealth visits at the same rate as in-person visits. Telehealth visits include emergency department visits, initial nursing facility and discharge visits, home visits, and therapy services, which must be provided by a clinician that is allowed to provide telehealth. New as well as established patients may now stay at home and have a telehealth visit with their provider

CMS is allowing telehealth to fulfill many face-to-face visit requirements for clinicians to see their patients in inpatient rehabilitation facilities, hospice, and home health. CMS is making it clear that clinicians can provide remote patient monitoring services to patients with acute or chronic conditions, as well as patients with only 1 disease. For example, remote patient monitoring can be used to monitor a patient’s oxygen saturation levels using pulse oximetry.

Medicare Advantage plans have also been granted increased flexibility regarding telehealth benefits through CMS finalized policies regarding the use of telehealth diagnoses for purposes of risk adjustment calculations. CMS explained that COVID-19 related expanded use of virtual care made inclusion necessary.

In addition, CMS is allowing physicians to supervise their clinical staff using virtual technologies when appropriate, instead of requiring in-person presence.

Table 3: CMS Permanent and Temporary Telehealth Codes by Category
Category Existing Codes
Jan 2020
Mar 2020
Total Codes
Speech, physical, occupational therapy 0 20 20
Home visit, new and established patients 0 15 15
Observation and hospital care 0 12 12
Pediatric and neonatal care 0 11 11
Psychiatry and psychotherapy 14 9 23
Emergency department visit, critical care 0 7 7
Nursing facility care 4 5 9
ESRD services 18 3 21
Health and behavior assessment, intervention 12 2 14
Radiation therapy 0 1 1
Patient risk assessments 2 0 2
Nutrition counseling 4 0 4
E&M Codes 10 0 10
Subsequent observation care 3 0 3
Subsequent hospital care 3 0 3
Prolonged service codes 6 0 6
Smoking, alcohol, opioid treatment 11 0 11
Care planning and management 8 0 8
Telehealth consultation (various) 9 0 9
Observation or hospital care 2 0 2
Total 106 85 191

Source: CMS Covered Telehealth Services for PHE

Impact by Specialty Varies in Terms of Procedures Utilized

Avalere analysis of Medicare data illustrates that, for certain specialties, 90% or more of historic Medicare FFS payment would be eligible for telehealth payment based on new COVID telehealth flexibilities.

  • Avalere assessed the top 50 Medicare FFS Current Procedural Terminology (CPT) codes utilized by physicians billing under relevant specialty types to assess the existing and recently granted telehealth coverage by each specialty type.
  • The top 50 CPT codes generally represent 85%–95% of total Medicare payments to each specialty and serve as a rough proxy for average Medicare FFS practice revenue.

The figures below highlight the number of CPT codes out of the top 50 CPT codes which are billable via telehealth under existing or recently added telehealth codes, as well as the corresponding Medicare FFS payments (as a percentage of total payments) represented by each.

Table 4: Percent of Estimated Medicare FFS Payments Eligible for Telehealth Reimbursement
Specialty Existing Codes
Jan 2020
Existing Codes
% of Payments
Mar 2020
% of Payments
Primary Care 21 77% 15 19% 96%
Endocrinology 19 88% 5 5% 93%
Pediatrics 17 73% 9 18% 91%
Neurology 11 51% 6 12% 63%
Pulmonology 15 49% 7 14% 63%
Urology 12 51% 3 3% 54%
OB/GYN 13 50% 0 0% 50%
Cardiology 11 38% 5 7% 45%
Orthopedic Surgery 8 40% 5 3% 43%
Dermatology 7 30% 0 0% 30%
Gastroenterology 11 24% 3 5% 29%

Source: Avalere Analysis of 5% Standard Analytical File, CY2018 Claims

Commercial Payer Policies Have Generally Followed CMS Guidance to Date

Historically, payers have been more likely to cover telehealth benefits where opportunity for cost savings or quality of care improvements exist. Many people with chronic conditions are susceptible to 1 or more comorbidities, and patients with comorbidities are often costly. Multiple studies have illustrated that telehealth consultations may produce improved or equal outcomes compared to traditional settings. Payers have generally covered procedures in line with CMS guidance, though policies may vary in terms of OOP costs, provider partnerships, preventive services, and benefit design. The commercial payer response continues to develop on a daily basis. Payers interviewed by Avalere have illustrated new coverage policies, with an expectation that flexibilities may further expand during the period of COVID-19 concern.

For example, several commercial payers, including UnitedHealthcare, Aetna, Anthem, and Excellus, have recently made public announcements of changes to their telehealth policies. Policy changes include:

  • Addition of codes to the covered telehealth list
  • Designated telehealth partners
  • Expansion of provider telehealth access
  • Waiving of CMS originating site restrictions
  • Waiving of member cost-sharing

Key Questions for Physician Practices and Investors

In assessing the applicability of new and evolving telehealth guidance for provider practices, several key questions will provide further granularity on the impact and applicability of telehealth guidance to individual practices and specialties:

  1. To what extent can a given provider practice or specialty shift patient and procedure volume to telehealth? How may this vary in the short and long term?
  2. What are the reimbursement implications of shifting volume to telehealth, including potential rate differences for telehealth delivery vs. in-person procedures?
  3. Are there novel procedure opportunities via telehealth that a provider practice or specialty is not offering today that they should be?
  4. What are the potential barriers to telehealth implementation, both from a provider and supervisory standpoint and a patient access and technology standpoint?
  5. For in-person or elective procedures that are being delayed due to COVID-19, to what extent are different practices and specialties impacted, and on what timeline and intensity is the expected return in volume?

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