The CMS slashes telehealth restrictions for Medicare Advantage members

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The Centers for Medicare and Medicaid Services (CMS) finalized a rule that will allow Medicare Advantage (MA) plans to to expand telehealth coverage for yet another set of specialties, including dermatology, psychiatry, cardiology, ophthalmology, and primary care. The CMS aims to encourage private insurance plans to widen their telehealth options for MA beneficiaries living in rural parts of the US. For context, MA plans are a category of health plans offered by private insurers in contract with Medicare. 

The US government has been knocking down telehealth barriers for Medicare enrollees since early March — and this move is the latest to ensure that seniors can access specialty care amid the pandemic. For example, Congress initially passed a $500 billion spending package for an emergency telehealth program to expand coverage for Medicare beneficiaries in the beginning of March.

One month later, the CMS followed up with an announcement that Medicare will be covering an additional 80 telehealth services. The CMS' latest initiative to widen the list of telehealth specialists that count toward meeting CMS network adequacy standards will likely protect seniors — a population that typically requires frequent monitoring and are at higher risk for developing severe illness from coronavirus — from coming into contact with infected people during an in-office visit. 

Adoption of telehealth among seniors has already increased as they warm to the concept of virtual care for primary care — and we think that MA beneficiaries will likely welcome telehealth offerings for specialty care, too. Seniors accounted for the largest spike in telehealth uptake of all age demographics in Massachusetts — with utilization rates jumping from 5% pre-pandemic to 27% in early April, for instance.

The jump in usage among seniors isn't surprising, considering that 80% of seniors endure at least one chronic condition compared with 40% of the general population — signifying that they require more frequent care coordination than younger cohorts. And we anticipate that if the second wave of coronavirus outbreaks this winter spurs stricter social distancing guidelines, the CMS' new rules for speciality care will drive uptake of telehealth even further among seniors.

Private insurers have expanded their telehealth offerings since the pandemic struck — and while we think they won't stop rolling out these services amid the pandemic, we don't think telehealth will fully supplant in-person specialty care. MA beneficiaries' ability to access telehealth hinges on the CMS' and private payers' decision to cover telehealth services. And we've already seen private insurers like Aetna, Cigna, Humana, and UnitedHealthcare expand virtual care offerings for MA patients amid the pandemic by slashing cost-sharing for coronavirus-related telehealth services. Now, the new CMS ruling permits patients to connect with specialists via telehealth.

This expansion will likely incentivize private insurers to contract with more telehealth providers as outbreaks continue. But the CMS' rule also states that its initiative is designed to maintain a balance between telehealth and in-person care. So, while we think that more insurers will offer telehealth visits for specialty care as the pandemic rages on, these services will likely serve to supplement — rather than permanently replace — in-office care with specialists in the foreseeable future. 

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