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House Bill Repealing the Medicare SGR Includes Telehealth Provisions

Late last month, the U.S. House of Representatives passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) with broad bipartisan support. MACRA would permanently repeal the Sustainable Growth Rate (SGR) for Medicare physician reimbursement and extend federal funding for the Children’s Health Insurance Program for two additional years. The legislation also includes three telehealth provisions.

  1. Physician Payment Incentives for the Use of Telehealth to Coordinate Care. MACRA would require CMS to implement the “Merit-Based Incentive Payment System” (MIPS), under which physicians may receive a payment adjustment based in part on a composite score in four performance categories: quality, resource use, clinical practice improvement activities, and meaningful use of certified Electronic Health Records. The legislation specifies that “clinical practice improvement activities” will include a subcategory of “care coordination, such as timely communication of test results, timely exchange of clinical information to patients and other providers, and use of remote monitoring or telehealth.” This provision holds the potential for physicians and other practitioners to be rewarded for coordinating care through remote monitoring or other telehealth technology, even when direct reimbursement is not available for that activity.

  2. Reimbursement for Telemedicine in Alternative Payment Models. Medicare Part B generally reimburses for remote patient visits only when the patient’s originating site is a health care facility (not a home) in a Health Professional Shortage Area or in a county outside of a metropolitan statistical area. MACRA would clarify that reimbursement for telehealth services is nonetheless available through an “alternative payment model” under Section 1115A of the Social Security Act, which authorizes CMS (through the Center for Medicare and Medicaid Innovation) to test the impact of various alternative payment models on Medicare or Medicaid expenditures and quality of care.

  3. Government Accountability Office (GAO) Reports on Telehealth. MACRA instructs GAO to complete studies and issue reports on telehealth services in Medicaid and Medicare and on remote patient monitoring technology within two years of the legislation’s enactment.

It is not clear whether MACRA will pass the Senate in its current form. The broad bipartisan support in the House for MACRA places significant pressure on the Senate to pass MACRA, particularly since the legislation permanently repeals the SGR, which Congress has long struggled to address. Nonetheless, several Senators have expressed concern about parts of MACRA.

If MACRA passes the Senate, President Obama has indicated that he will sign the legislation into law.

© 2018 Covington & Burling LLP

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About this Author

Philip Peisch, Covington, Healthcare attorney
Special Counsel

Phil Peisch helps clients navigate complex issues and disputes arising out of government-sponsored health care programs. Mr. Peisch has particular expertise regarding Medicaid, the Children Health Insurance Program (CHIP), and the Affordable Care Act’s regulation of private insurance (ACA). He also counsels clients with respect to Medicare reimbursement; certification of and reimbursement issues relating to Electronic Health Records; state regulation of private health insurance; and other state and federal rules and policies governing the health care industry.

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