New CMS Medicare Advantage Rule Creates Incentives for Providers to Invest in Telehealth

The Centers for Medicare & Medicaid Services (CMS) announced Friday it has finalized changes to Medicare Advantage (MA) and Medicare Part D. The changes — detailed in a final rule for 2021 — partly seek to strengthen access to telehealth services, an increasingly important component of the health care system amid the ongoing coronavirus emergency.

While the changes included in the rule do not directly focus on home health care providers, they could encourage greater telehealth adoption as a way of building more MA relationships, experts say.

Specifically, Friday’s rule gives MA plans more flexibility to count telehealth providers in certain specialty areas toward meeting CMS network adequacy standards. Examples of those specialty areas include dermatology, psychiatry, cardiology, primary care and more.


Additionally, the rule supports more MA options for rural residents and reduces the percentage of beneficiaries that have to reside within the maximum time and distance standards from 90% to 85%.

“Telehealth has emerged as a critical means to delivering services during COVID-19, and we were happy to see CMS today recognize this importance by codifying the ability for Medicare Advantage plans to use telehealth to meet network adequacy standards,” Allison Rizer, principal at ATI Advisory, told Home Health Care News.

Virtual care visits are projected to exceed 1 billion this year in the U.S. alone, according to market research firm Forrester. Of those, 900 million visits are projected to be due to the COVID-19 virus, with 200 million visits related to general care and 80 million visits related to mental health.


“CMS’s rapid changes to telehealth are a godsend to patients and providers and allows people to be treated in the safety of their home,” CMS Administrator Seema Verma said in a statement. “The changes we are making will help make telehealth more widely available in Medicare Advantage and are part of larger efforts to advance telehealth.”

Friday’s rule is one of its latest telehealth efforts. But while the vast majority of health care practitioners have been able to join the telehealth boom, home health providers have been handcuffed somewhat.

Currently, home health providers cannot seek reimbursement for visits delivered via telehealth under fee-for-service Medicare. Many have been able to make inroads by working with MA plans, however.

The new rule may accelerate those working relationships.

“It … creates incentives for providers to invest in telehealth if they haven’t already because it becomes a bargaining chip with Medicare Advantage plans,” Rizer said. “And importantly, it could improve access to individuals unable or unwilling to travel to a provider’s office.”

Additionally, telehealth flexibilities during the public health emergency have decreased “no-shows,” according to Rizer, which means that providers and plans that embrace the convenience of virtual care and in-home care could be the frontrunners when the COVID-19 dust settles.

The terms of the final rule may also leave room for home health providers to collaborate with specialty care providers and lean into coordinated care models, she noted.

The Better Medicare Alliance is among those who have voiced support for the new MA rule.

“This final rule takes important strides to preserve and strengthen the Medicare Advantage coverage that 24.4 million beneficiaries rely on today,” Allyson Y. Schwartz, president and CEO of the Better Medicare Alliance, said in a statement. “The added flexibility to address the needs of all beneficiaries, with particular attention to those with complex chronic conditions, provides the opportunity for Medicare Advantage to offer greater access to care, new innovations in care delivery, and lower costs for millions of Americans.”

In 2019, 22 million people were enrolled in Medicare Advantage plans, according to statistics from the Kaiser Family Foundation.

Looking ahead, the changes that are happening as a result of the public health emergency may usher in a permanent shift in policies.

“We’ve seen a lot of flexibility in both the Medicare and Medicaid programs during COVID that’s resulted in telehealth and virtual service delivery across the medical and non-medical spectrum,” Rizer said. “It’s hard to walk back from these policy flexibilities if we find out they’ve preserved, or increased quality and access, and individuals realize how much they appreciate the convenience. The CMS final rule contributes to that momentum.”

Aside from the expansions to telehealth, CMS also finalized an adjustment to the Special Supplemental Benefits for the Chronically Ill (SSBCI) program. This change will allow plans to target chronic conditions that were not originally eligible under SSBCI in 2021.

With the expanded telehealth flexibilities, changes to SSBCI and the rule’s other details, CMS expects to save billions of dollars over the next decade.

“The provisions in this final rule result in an estimated $3.65 billion net reduction in spending by the federal government over [10 years] due to a finalized change to the Part C and D Star Rating methodology to remove outliers before calculating Star Ratings cut points, which offsets costs arising from the Medical Loss Ratio (MLR) provisions and other refinements to the MA and Part D Quality Star Ratings system,” the agency stated.”

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