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Senate bill to expand reimbursement for telemedicine would cost $380 million over a decade, CBO says

The cost of the Senate Finance Committee bipartisan bill to modernize Medicare would be offset by $455 million in savings.

Susan Morse, Senior Editor

Healthcare experts testifying at the Senate Finance Committee’s Chronic Health Conditions hearing  (from left): Katherine Hayes, Bipartisan Policy Center; Dr. Lee Schwamm, MGH Stroke Services; John Lovelace, UPMC For You; Stephen Rosenthal, Montefiore Health SystemHealthcare experts testifying at the Senate Finance Committee’s Chronic Health Conditions hearing (from left): Katherine Hayes, Bipartisan Policy Center; Dr. Lee Schwamm, MGH Stroke Services; John Lovelace, UPMC For You; Stephen Rosenthal, Montefiore Health System

A proposed Senate bill to modernize Medicare's treatment of chronic conditions by allowing for greater reimbursement of telehealth would cost $150 million over 10 years, according to a Congressional Budget Office estimate released Tuesday.

Through 2027, the bill would add another $50 million for providing accountable care organizations the ability to expand telehealth, and $180 million to expand the use of telemedicine for the treatment of strokes.

These expenses would be offset by a savings of $80 million due to telehealth increasing the convenience for Medicare Advantage enrollees. Another $375 million would be saved by cutting funding in the Medicare Improvement Fund, which was established to make improvements to the original Medicare fee-for-service program.

The Senate Finance Committee is expected to markup the bill on Thursday.

The bill came out of the Senate Finance Committee's Chronic Care Working Group. The group reintroduced the bill called Creating High-Quality Results and Outcomes Necessary to Improve Chronic, or CHRONIC Care Act, after it did not go forward last year. But some of its policies are included in the 21st Century Cures Act, which President Obama signed into law in December. 

The Senate Committee on Finance on Tuesday spoke to healthcare experts to get input into the bill's ability to give providers more flexibility in addressing the costliest of conditions.

Chronic conditions account for 90 percent of Medicare spending for senior citizens.

"The Finance Committee is now beginning to tackle the premier challenge of American health policy," Finance Committee Ranking Democratic Ron Wyden said Tuesday, "specifically by updating the guarantee of Medicare to better serve seniors with chronic illness."

Since personal behavior affects the risk and outcomes of healthcare, committee members asked the experts how to affect change. 

People who drink a diet soda daily have three times the risk of stroke and dementia, said Lee H. Schwamm, MD, professor of Neurology at Harvard Medical School.

Schwamm may have referring to a recent Framingham Heart Study published by the American Heart Association that shows sugar- and artificially-sweetened beverages linked to an increased risk of cerebrovascular disease and dementia. 

Schwamm said the bill would redefine what practicing medicine means in telehealth. Currently, if a patient from New Hampshire calls him in Massachusetts, Schwamm said he can't tell him what's going on over the phone.

Schwamm is division chief of Acute Stroke Services and TeleStroke Services for Massachusetts General Hospital.

The cost of dialysis can be reduced through telehealth, he said, by allowing for home dialysis and for follow-up visits over the phone.

But the best way to reduce cost is to pinpoint risk upstream before a disease manifests itself, Schwamm said.

Experts on the panel were asked about how to control obesity, a factor in some chronic diseases such as Type 2 diabetes.

Healthy eating and exercise habits begin in school, said Stephen Rosenthal, senior vice president, Population Health Management, for the Montefiore Health System in Yonkers, New York.

John G. Lovelace, president of UPMC Insurance Services Division in Pittsburgh, said it's not as though people don't know they shouldn't smoke or eat cheeseburgers for breakfast. Good habits need to be ingrained so people aren't suddenly being asked to change what they do, he said.

Katherine Hayes, director of Health Policy for the Bipartisan Policy Center in Washington, D.C., said people get confusing messages. Patients such as her mother, who has heart disease, are told to eat less salt, but since her mom doesn't cook she buys prepackaged meals that have a lot of salt. Healthier foods need to be more conveniently available, Hayes said.

The Chronic Care Act would improve the flexibility in Medicare Advantage plans to serve the chronically ill through value-based insurance design. This would allow MA plans in each state to tailor benefits to special patient groups, rather than present uniform benefits as is now required.

It would offer providers more flexibility in care, such as buying an air conditioner for a patient with a chronic condition if that would perhaps save a visit to the hospital.

It could cover a service such as dog-walking if that would prevent an elderly person from going out in the snow and risking a fall, Hayes said.

"It allows benchmarks under capitation to anything reasonably related to healthcare status," Hayes said. "This allows providers to sit down with patients and family caregivers, based on what they need, rather than what the Medicare program covers."

For dual eligibles under the bill, states could negotiate a contract with the Medicare and Medicaid programs to allow the rules for both to align in a way they don't currently do now.

The Chronic Care Act is a bipartisan effort.

Other CBO estimates for spending through 2027 include $16 million for extending the Independence at Home demonstration program, $123 million for providing continued access to Medicare Advantage special needs plans for vulnerable populations, and $90 million for adapting benefits to meet the needs of chronically ill MA enrollees.

Twitter: @SusanJMorse

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