Top 5 Ways Telehealth Will Change Under the New Federal Funding Bill

The telemedicine industry has been abuzz upon learning that provider-friendly legislation was included in the new federal Bipartisan Budget Act of 2018, signed into law by the President on February 9, 2018.  But telehealth providers, hospitals, and entrepreneurs need to cut through the hype and understand what the provisions will really do for telehealth.  This article summarizes the key takeaways and insights on how the recent legislation will benefit the telehealth industry.

Significant Changes for Medicare and Telehealth Services

The bill introduces some of “the most significant changes ever made to Medicare law to use telehealth,” according to Senator Brian Schatz, a longtime sponsor and proponent of federal telehealth legislation.  Key elements of the bill include: (1) expanding stroke telemedicine coverage; (2) improving access to telehealth-enabled home dialysis oversight; (3) enabling patients to be provided with  free at-home telehealth dialysis technology without the provider violating the Civil Monetary Penalties Law; (4) allowing Medicare Advantage (MA) plans to include delivery of telehealth services in a plan’s basic benefits; and (5) giving Accountable Care Organizations (ACOs) the ability to expand the use of telehealth services.

No More Originating Site Restrictions for Telestroke?

Historically, only Medicare patients located in rural areas at qualifying originating sites were eligible for reimbursement for telestroke services.  Under Section 50325 of the new bill, beginning Jan. 1, 2019, the geographic and facility-type requirements on originating sites will no longer apply for purposes of diagnosis, evaluation, or treatment of symptoms of an acute stroke when delivered at certain originating sites.  These are 1) hospitals, 2) critical access hospitals, 3) any mobile stroke unit as defined by the Secretary of Health and Human Services (HHS), or 4) any other site determined appropriate by HHS, at which the eligible telehealth individual is located at the time the service is furnished via telehealth. One potential site that HHS could approve is the patient’s home

The full extent to which telemedicine providers and Medicare beneficiaries will benefit from expanded telestroke reimbursement largely depends on the sites that HHS will permit as qualified originating sites.

Allowing more qualified originating sites, such as the patient’s home, ambulances, and mobile stroke units, will provide broader  options for healthcare systems that do not have constant access to a neurologist and allow institutions with established stroke programs opportunities for destination medicine and new patients.

Now is the time to make your voice heard and inform HHS as to what you believe should be included among the new eligible originating sites for telestroke.

Note, the new reimbursement applies only to the distant site practitioner’s professional fee.  Originating sites qualifying for reimbursement under this provision that do not meet the historical originating site facility-type and rural geographic requirements will not be eligible for a facility fee.

Medicare Will Reimburse for Telehealth Dialysis Services at the Patient’s Home and at Independent Facilities

The new law also extends telehealth reimbursement to dialysis services provided remotely to patients located at home or at independent renal dialysis facilities (neither of which have historically been eligible originating sites under Medicare).  Under Section 50302 and effective January 1, 2019, an individual with end stage renal disease (ESRD) receiving home dialysis may choose to receive monthly ESRD-related oversight visits from their home via telehealth if the patient receives a “face-to-face” visit (in this context, meaning in-person) at least once a month during the initial 3 months of home dialysis and then, after the initial 3 months, at least once every 3 consecutive months.

These two new originating sites, along with hospital-based or critical access hospital-based renal dialysis centers, are also be exempt from the rural geographic are requirement for the monthly telehealth visits.  Keep in mind, however, that no facility fee payment is available when a patient is located at home.

Providers Can Give Free Telehealth Technology/Equipment for At-Home Dialysis Patients

Under the bill, the provision of free telehealth technologies by a provider of services or a renal dialysis facility to an individual with ESRD who is receiving home dialysis for which Medicare payment is received will not constitute illegal remuneration under the Civil Monetary Penalties Law if three factors are met:

  1. The telehealth technologies are not offered as part of any advertisement or solicitation;
  2. The telehealth technologies are provided for the purpose of furnishing telehealth services related to the individual’s ESRD; and
  3. The provision of the telehealth technologies meets any other requirements set forth in regulations promulgated by CMS.

This means telehealth dialysis providers are allowed to provide at-home telehealth technology/equipment at no charge to patients if the above requirements are met.  It is a patient (and provider) –friendly change to the definition of “remuneration” as it relates to patient inducements and  the Civil Monetary Penalties Law.  Providers can benefit from the improved outcomes and cost-effectiveness of delivering services remotely while simultaneously providing comfort for ESRD patients to know that someone is available when concerns arise without requiring that patients travel to the dialysis center.

Medicare Advantage Plans Can Finally Include Telehealth Services as a Basic Benefit

Medicare Advantage (MA) plans will be allowed to offer additional, clinically appropriate telehealth benefits in their annual bid amounts beyond the services that currently receive payment under Medicare Part B.  This has been a major sticking point and a reason why, historically, MA plans have not been as quick to cover telehealth services compared to Medicaid managed care plans.

Section 50323 of the bill gives MA plans the ability to offer telehealth services as part of their basic benefit package (i.e., as if the telehealth services were benefits under the original Medicare fee-for-service program option).  However, exactly what telehealth services will qualify as a “basic benefit” have not been fully defined.  HHS will solicit public comments before November 30, 2018 to determine what types of telehealth items and services (e.g., remote patient monitoring, secure messaging, store and forward technologies, and other non-face-to-face services) should be considered to be an “additional telehealth benefit” (meaning, eligible to be counted as part of the basic benefit package).  HHS will also solicit comments on the requirements for providing and furnishing such telehealth services (e.g., training and coordination rules).  An expansive list of eligible telehealth services by HHS likely would stimulate a big uptick in telehealth service coverage by MA plans.

These new provisions go into effect in 2020, so now is a smart time for hospitals and telehealth providers to engage their MA plan partners in discussions on how to amend their participation agreement and cover telehealth services.

The Patient’s Home is an Eligible Originating Site for Accountable Care Organizations

Accountable Care Organizations (ACOs) have even more flexibility to use telehealth services.  Beginning January 1, 2020, the patient’s home qualifies as an eligible originating site for telehealth services provided by a physician or practitioner participating in certain ACOs (Next Generation, MSSP Track II, MSSP Track III, and certain two-sided risk models).  No payment may be made for telehealth services CMS deems to be inappropriate to furnish in the home setting (e.g., inpatient hospital services).  Additionally, the law eliminates the rural geographic area requirements for ACOs (i.e., the originating site need not be located in a rural health professional shortage area or a non-metropolitan statistical area).  As with many of the other changes introduced by the new law, the patient’s home is not eligible for a facility fee.


The 2018 Act represents federal lawmakers’ continued and increasing support for expanding Medicare telehealth reimbursement.  Telehealth providers should embrace the Act and use it as an opportunity to contribute to and develop meaningful telehealth reimbursement policies.

We will continue to monitor the law’s progress as CMS begins to promulgate regulations, so please check back for updates.  For more information on telemedicine, telehealth, and virtual care innovations, including the team, publications, and other materials, visit Foley’s Telemedicine Practice.