The Centers for Medicare and Medicaid Services (CMS) released its CY2017 Physician Fee Schedule Proposed Rule on July 17 - after receiving requests from various stakeholders to add telehealth services as Medicare-covered services effective for CY 2017, CMS responded by proposing to expand the list of telehealth services eligible for Medicare reimbursement. Additionally, CMS proposed modifications to current policies on Place of Service (POS) coding. Comments on the proposed rule are due on September 6, 2016.

In Depth

The Centers for Medicare and Medicaid Services (CMS) released its CY2017 Physician Fee Schedule Proposed Rule on July 17 (the Proposed Rule). After receiving requests from various stakeholders to add telehealth services as Medicare-covered services effective for CY 2017, CMS responded by proposing to expand the list of telehealth services eligible for Medicare reimbursement. Additionally, CMS proposed modifications to current policies on Place of Service (POS) coding. Comments on the proposed rule are due on September 6, 2016.

Expansion of Medicare Telehealth Services

Pursuant to Section 1834(m) of the Social Security Act (the Act), for Medicare to reimburse providers for telehealth services under the Physician Fee Schedule, the service must be (a) on the list of Medicare telehealth services as a defined set of services, including consultations, office visits, pharmacological management, and individual and group diabetes self-management training services; (b) provided at an approved “originating site” (e.g., physician offices, hospitals, skilled nursing facilities); (c) provided by an approved provider (e.g., physicians, nurse practitioners, clinical psychologists); and (d) provided using certain telecommunications technologies. As telehealth has grown in popularity as a means of delivering healthcare to patients, CMS has recognized its value by continuing to add related services to the list of services eligible for Medicare reimbursement. In the Proposed Rule, CMS proposes to add the following services to the list of telehealth services eligible for Medicare reimbursement beginning CY2017:

• End-stage Renal Disease (ESRD) Related Services

• Advance Care Planning Services

• Critical Care Consultations

CMS also received requests to add services to the telehealth list that it determined did not meet CMS’s criteria for reimbursable telehealth services. CMS considered, but rejected, adding the following procedures for Medicare reimbursement: observation codes; emergency department services; psychological testing; physical therapy, occupational therapy and speech-language pathology services. CMS cited to its CY2005 Physician Fee Schedule for its reasoning for rejecting observation services, emergency department services and psychological testing services as reimbursable under Medicare, namely providing that there is insufficient evidence that illustrates that the use of a telehealth produces similar diagnoses or therapeutic interventions as would the face-to-face delivery of these services. Additionally, CMS stated that because physical therapists, occupational therapists and speech language pathologists are not authorized practitioners of telehealth under section 1834(m)(4)(E) of the Act, as defined in section 1842(b)(18)(C), such services provided by these providers should not be added to the list of Medicare-reimbursable telehealth services.

Place of Service (POS) Code Policies

POS codes impact practitioner reimbursement and are used on professional claims to specify the location where services are rendered. Currently, there is not a POS code specific for telehealth services; however, CMS received several requests to establish a POS code specifically for telehealth services. The process for establishing POS codes is managed by the POS Workgroup within CMS and is not contingent upon Medicare Physician Fee Schedule rulemaking. CMS noted, however, that if such a POS code were to be created, CMS would have to determine the appropriate payment rules associated with the code to make it valid for use under Medicare. CMS instead proposed modifications to existing POS code policies to serve as guideposts for possible future POS Workgroup decisions governing appropriate telehealth coding. Specifically, CMS proposed to require providers furnishing telehealth services to report the POS code it would use if the services were furnished as a telehealth service from a distant site. CMS also proposed to use the facility practice expense relative value units (PE RVUs) to reimburse for the telehealth services reported. Additionally, CMS suggested that POS code usage for the originating site remain unchanged—the originating site should continue to bill for the facility fee and continue to use the POS Code applicable to the patient’s location (facility or non-facility) so as to receive the correct reimbursement rate (either facility PE RVU or non-facility PE RVU).

CMS’s proposed expansion of telehealth services reimbursable under Medicare and the proposed POS code policies outlined in the Proposed Rule do not represent a marked change from CMS’s historical policies regarding telehealth reimbursement. However, the Proposed Rule, especially in conjunction with other proposed legislature (e.g., the CONNECT for Health Act and MACRA), show CMS’s continued careful accommodation and encouragement of the use of telehealth technologies as a method of delivering healthcare services to patients.