Medicare’s Telehealth Payment This Year Compared to 2016 As Market Finally Shifts

For those in telehealth, and for those who celebrate its victories, 2017 seems to be the year of its growth, as CMS reported a 28 percent increase over total 2016 payments for telehealth services under the Medicare program. What this means is that providers have adopted the technology and continue to successfully integrate telehealth services into their traditional healthcare delivery approaches, and are realizing payment opportunities both within the Medicare program and in other sources of revenue. 

Taking a look to the past, in 2016 Medicare paid a total of $28,748,210 for telehealth services, spread across a total of 496,396 claims, including payments to distant site providers and originating site payments. Compared to this point in 2017 (August), Medicare has paid a total of $22,449,968 for telehealth services, spread across a total of 372,518 claims, POLITICO Pro Morning eHealth Reporter reported. Last year, 2016 saw a 33 percent increase in the number of Medicare telehealth claims submitted and a 28 percent increase in total payments.

As pointed out by The National Law Review, before 2015, about half of all distant site claims did not have a corresponding originating site claim; “a gap has closed in the last two years, and in 2016, 66 percent of all distant site claims had a corresponding originating site claim. The remaining gap could be because providers not bothering to bill for the $25 originating site facility fee, or it could be that some claims were billed when the patient was located at home (a different site of service for which a facility would not bill).” 

Let’s point out the obvious: Medicare’s $28.7 million telehealth payments in 2016 is only a pittance of the more than $600 billion overall Medicare program budget.

While the uptick in payments for telehealth services is promising, there are still limitations that are keeping the movement from overwhelming growth. As has been discussed in detail by several organizations (including this one) there are many bills pending in Congress to remove some of the limitations, but those changes are slow to come, despite the obvious interest in the technology and its increasing use.

As such, currently there are five main conditions for coverage for telehealth services under Medicare:

  1. The beneficiary is located in a qualifying rural area
  2. The beneficiary is located at one of eight qualifying originating sites
  3. The services are provided by one of 10 distant site practitioners eligible to furnish and receive Medicare payment for telehealth services
  4. The beneficiary and distant site practitioner communicate via an interactive audio and video telecommunications system that permits real-time communication between them; and
  5. The CPT/HCPCS (Current Procedural Terminology/Healthcare Common Procedure Coding System) code for the service itself is named on the current year list of covered Medicare telehealth services.

Continued expansions in reimbursement mean providers should make enhancements to telehealth programs now, both for the immediate cost savings and growing opportunities for revenue generation, to say nothing of patient quality and satisfaction.

According to a Reach Health survey, 36 percent of hospitals and integrated health systems reported having an enterprise approach to telehealth and 25 percent said they are transitioning from a departmental to enterprise approach. HHS wants more payments tied to alternative payment models by the end of 2018, so providers want to find ways to enhance patient care and access. Telehealth seems to be the answer.

Scott Rupp's picture

Scott Rupp


Scott E. Rupp is a writer and an award-winning journalist focused on healthcare technology. He has worked as a public relations executive for a major electronic health record/practice management vendor, and he currently manages his own agency, millerrupp. In addition to writing for a variety of publications, Scott also offers his insights on healthcare technology and its leaders on his site, Electronic Health Reporter.

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