On May 3, 2017, the Creating Opportunities Now for Necessary and Effective Care Technologies for Health Act of 2017 (S. 1016) (CONNECT Act of 2017) was reintroduced by the same six senators who had initially introduced the legislation in early 2016 and referred to the Senate Committee on Finance. As we previously reported on February 29, 2016, this iteration of the proposed bill also focuses on promoting cost savings and quality care under the Medicare program through the use of telehealth and remote patient monitoring (RPM) services, and incentivizing such digital health technologies by expanding coverage for them under the Medicare program—albeit using different terminology. Chiefly, the CONNECT Act of 2017 serves as a way to expand telehealth and RPM for Medicare beneficiaries, makes it easier for patients to connect with their health care providers and helps reduce costs for patients and providers. As with the previous iteration, the CONNECT Act of 2017 has received statements of support from over 50 organizations, including the American Medical Association, American Telemedicine Association, Healthcare Information and Management Systems Society, Connected Health Initiative, Federation of State Medical Boards, National Coalition on Health Care and an array of vendors and health systems.

Telehealth Expansion in Accountable Care Organizations

New in this iteration of the proposed bill, the CONNECT Act of 2017 takes steps to expand telehealth services delivered by two-sided risk accountable care organizations (ACOs) (42 USC 1315a; 42 CFR § 425.600(a)). Specifically, the CONNECT Act of 2017 removes the restrictions applicable to the coverage of telehealth services relating to qualifications for an originating site, any geographic limitations, any limitation on the use of store-and-forward technologies, any limitation on the type of health care provider who may furnish such services or any limitation on specific codes designated as telehealth services. The CONNECT Act of 2017 would require an applicable ACO to annually submit to the Secretary of Health and Human Services (Secretary) information on utilization and expenditure for telehealth and data on any applicable quality measures. Based on the information collected from applicable ACOs, the Secretary is required to evaluate and analyze utilization of—and expenditure for—telehealth services and submit a report to Congress no later than January 2025.

Medicare Advantage Changes

Medicare Advantage (MA) plans may still elect to provide telehealth or RPM services under the original Medicare fee-for-service program option. However, the latest iteration of the bill departs from the 2016 version in its use of the phrase “additional telehealth benefits” (ATB) to describe telehealth services. ATBs will not be subject to certain restrictions under section 1834(m) of the Social Security Act and may not include related capital and infrastructure costs and investments. The Secretary must solicit public comments to determine which telehealth services meet the definition of ATB no later than November 30, 2017. The Secretary must also establish requirements for the provision and furnishing of the ATBs, including: (i) physician, practitioner and other healthcare provider licensure; (ii) the factors necessary to ensure coordination of benefits with items and services furnished in-person; and (iii) other areas not yet specified by the Secretary. A mandate of particular licensure requirements for the provision of telehealth services could signal to states that such services should be held to the same standards as in-person treatment—a theory already supported by the Federal Trade Commission and the Department of Justice (a topic on which we previously reported). The bill explicitly states that RPM treatment may not increase the bid amount attributable to such benefits. Notably, MA enrollees may choose whether to receive services as ATBs.

Remote Patient Monitoring Telehealth Services

Consistent with the previous iteration of the proposed bill, the CONNECT Act of 2017 creates a Medicare RPM benefit for certain high-risk/high-cost patients beginning January 1, 2018. Specifically, the CONNECT Act of 2017 requires coverage for RPM in addition to coverage for chronic or transitional care management services. Such services may be provided for an individual (i) receiving chronic care management services or transitional care management services; (ii) who is in the top five percent of Medicare cost utilization and has two or more chronic diseases, as determined on a yearly basis by the Secretary; or (iii) who has any other condition or, with respect to an episode of care that the Secretary may specify, so long as the Chief Actuary of the Centers for Medicare & Medicaid Services certifies that providing coverage for RPM to such individuals would reduce spending under this title without reducing the quality of care or improve the quality of patient care without increasing spending. Payment for RPM services may be included in bundled and global payments by lifting requirements relating to qualifications for an originating site, any geographic limitations, any limitation on the use of store-and-forward technologies, any limitation on the type of health care provider who may furnish services, any items and services for which payment would otherwise be made that are furnished using telehealth or any limitation on specific codes designated as telehealth services.

Further, the Secretary must conduct an evaluation and submit a report to Congress on the use of telehealth and remote patient monitoring under all programs and pilots under the Medicare program with a waiver for telehealth restrictions no later than two years after the enactment of the CONNECT Act of 2017. The evaluation must include: (i) an analysis of the number of providers and payers using telehealth and remote patient monitoring under such programs and pilots; (ii) an analysis of the cost impact among the beneficiaries receiving telehealth and remote patient monitoring under such programs and pilots, including with respect to preventable hospitalizations, hospital readmissions, and emergency room visits, and the total cost of items and services under the Medicare and Medicaid programs; (iii) an analysis of beneficiary and family caregiver satisfaction with the use of telehealth and remote patient monitoring under such programs and pilots; and (iv) a comparison of the same services’ utilization and expenditures furnished under the Medicare and Medicaid programs in the office setting.

Telehealth Waivers

The CONNECT Act of 2017 provides the Secretary broader waiver authority with respect to telehealth services than what was contemplated in the previous iteration of the bill. The CONNECT Act of 2017 may waive any restriction applicable to the coverage of telehealth services with respect to certain providers of services, suppliers, provider groups, sites of care, services, conditions, individuals receiving the services, or States, so long as certain requirements are met with respect to the waiver. Chiefly, the CONNECT Act of 2017 gives the Secretary the authority to waive restrictions applicable to the coverage of telehealth services, including requirements relating to qualifications for an originating site, any geographic limitations (other than applicable State law requirements, including State licensure requirements), any limitation on the use of store-and-forward technologies, any limitation on the type of health care provider who may furnish such services, or any limitation on specific codes designated as telehealth services. Further, the CONNECT Act of 2017 expands beyond the previous iteration in providing that the Secretary may lift the same restrictions with respect to mental health services furnished via telehealth.

Stroke Evaluation Sites and Native American Health Service Facilities Remain as Sites Eligible for Telehealth Reimbursement

Medicare reimbursement for telehealth services is currently limited to a narrow list of originating sites in specific geographic areas. Under the bill, any site (without geographic restriction) may serve as the originating site for the purposes of acute stroke evaluation. Stroke coverage under the 2016 version used broader language and included “the evaluation or management of an acute stroke for the purpose of determining optimal acute stroke therapy,” while this bill is limited to services provided “for purposes of evaluation of an acute stroke.” Further, the CONNECT Act of 2017 adds home and renal dialysis sites as originating sites for patients with end-stage renal disease.

Consistent with the 2016 version of the bill, the Connect Act of 2017 also permits any site to be reimbursed if it is a facility of the Indian Health Service, tribal organization or a facility of the Native Hawaiian health care systems—regardless of geography.

The bill excludes newly permitted originating sites from receiving a facility fee if the services provided would not have been covered as of the bill’s enactment date.

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The latest iteration of the CONNECT Act of 2017 does not eliminate all of the barriers to Medicare reimbursement. But, similar to its predecessor, this still represents a significant step by the government away from broadly restrictive Medicare reimbursement requirements under certain circumstances with an ultimate goal of expanding access to telehealth services. The CONNECT Act of 2017 does not mandate provision of telehealth services without adherence to the reimbursement restrictions and gives the Centers for Medicare & Medicaid Services, MA plans and ACOs significant latitude to choose how to provide telehealth and RPM services. The incorporation of APM participants is a reflection of the potential value that digital health tools bring to population health management and value-based purchasing strategies.