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2024: The Year of the Telehealth Cliff

What does December 31, 2024, mean to you? New Year’s Eve? Post-2024 election? Too far away to know?

Our answer: December 31, 2024, is when we will go over a “telehealth cliff” if Congress fails to act before that date, directly impacting care and access for Medicare beneficiaries. What is this telehealth cliff?

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Remote Monitoring and Digital Therapies: CMS Updates Coverage and Payment Policies

In recent years, the Centers for Medicare & Medicaid Services (CMS) has expanded payment for remote monitoring services in an effort to pay for non-face-to-face services that improve care coordination for Medicare beneficiaries. On November 2, 2023, CMS released the calendar year 2024 final rule for services reimbursed under the Medicare Physician Fee Schedule. In the final rule, CMS clarified certain guidance for remote monitoring services, finalized separate reimbursement for remote monitoring provided by rural health centers and federally qualified health centers, and discussed a recent request for information for digital therapies.

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Doctors Question Medicare Quality Program as More Face Steeper Penalties

A Medicare program designed to incentivize high-quality care via physician bonuses is in doubt as providers say it’s caused more trouble than it’s worth. According to this Axios article, the Merit-Based Incentive Payment System has created a disparity between bonus winners and losers, and this disparity is only expected to grow.

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Patients May Not Feel Benefits of Medicare Drug Price Negotiations

The Biden administration recently announced a list of Medicare-covered drugs that will be subject to price negotiations. The administration said the negotiations—a reality thanks to the Inflation Reduction Act—will benefit nearly nine million seniors.

However, according to this Insider article, some drug-policy analysts seem unconvinced by the administration’s claims.

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HHS OIG Develops Toolkit to Analyze Telehealth Claims to Assess Program Integrity Risks

The US Department of Health and Human Services Office of the Inspector General (HHS OIG) recently unveiled a new toolkit that seeks to help analyze telehealth claims for federal healthcare program integrity risks. It is based on methodologies highlighted in OIG’s September 2022 data brief; the data brief identified billing practices by Medicare providers that OIG was concerned posed a high risk to program integrity. OIG intends for the toolkit to be used by public and private parties—including Medicare Advantage plan sponsors, private health plans, State Medicaid Fraud Control Units and other federal healthcare agencies—to assess program integrity risks and identify providers whose billing may warrant further scrutiny.

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Drug Discount Plan Remains Target for Possible Legislation

Members of Congress could call for more transparency about how hospitals use their federal drug discount program savings. According to this Bloomberg Law article, a study found that the Health Resources and Services Administration’s oversight of the 340B program could be improved. McDermott Partner Emily Jane Cook said there is interest in Congress overseeing aspects of hospitals, including the 340B program.

“I wouldn’t be surprised to see a bill being introduced that imposes more explicit oversight requirements,” Cook said.

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Reproduced with permission. Published May 15, 2023. Copyright 2023 by Bloomberg Industry Group, Inc. (800-372-1033) http://www.bloombergindustry.com




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Ending Free COVID Tests Risks Worsening the Pandemic

The end of the COVID-19 public health emergency also means the end of coverage of self-administered, over-the-counter COVID tests. In this MedTech Dive opinion article, McDermott+Consulting’s Amy Kelbick and Eric Zimmerman argue that insurers, including Medicare, should continue to cover COVID tests at no cost and without requiring a prescription even after the public health emergency ends.

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Telehealth and the End of the COVID-19 Emergency

The Biden administration has announced its intent to end the COVID-19 National Emergency (NE) and the COVID-19 Public Health Emergency (PHE) on May 11, 2023 (read our prior article for more information). In response to the COVID-19 pandemic, lawmakers and agencies made legislative and regulatory changes to expand access to telehealth services for individuals. This article explores what will happen to these temporary telehealth benefits at the end of the PHE and NE.

Current flexibilities under the Affordable Care Act (ACA) allow applicable large employers (ALEs) to offer stand-alone telehealth and remote care services to employees who were not eligible for other employer coverage during the PHE.

In addition, the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act and IRS Notice 2020-29 established a temporary telehealth safe harbor, providing that a high-deductible health plan (HDHP) could cover telehealth and other remote care services on a pre-deductible basis without impacting an individual’s ability to contribute to an HSA. This relief applied to services provided on or after January 1, 2020, with respect to plan years beginning on or before December 31, 2021. Thus, for most calendar-year plans, this relief ended on December 31, 2021. The Consolidated Appropriations Act, 2022 (CAA 2022) renewed the relief under the CARES Act for months beginning after March 31, 2022, and before January 1, 2023—but it created a three-month gap in coverage from January 1, 2022, to March 31, 2022. The CAA 2022 also extended certain flexibilities related to Medicare coverage and payment for telehealth services through the end of 2024. The relief provided under the CAA 2022, however, was provided on a temporary basis and not tied to the PHE or NE.

Effective December 29, 2022, the Consolidated Appropriations Act, 2023 (CAA 2023) provided a two-year extension allowing first-dollar coverage of telehealth under an HDHP so that individuals can access services without needing to meet a deductible first. The CAA 2023 extends telehealth relief for plan years beginning after December 31, 2022, and before January 1, 2025. Most calendar year plans should therefore have coverage of pre-deductible telehealth services without affecting HSA eligibility for all of 2023 and 2024. When the PHE ends, stand-alone telehealth offerings must cease, but telehealth offerings on a pre-deductible basis can continue.

The stand-alone telehealth relief under the ACA is available until the end of the latest plan year that begins on or before the last day of the PHE. For calendar-year plans, this relief would last until December 31, 2023. When an employer ends its stand-alone telehealth benefit, it may need to provide participants a 60-day notice of a material reduction in benefits.

Employers offering telehealth coverage on a pre-deductible basis with HDHPs have been provided statutory relief through December 31, 2024, through the CAA 2023. However, employers should continue to watch for legislative updates regarding telehealth. Lawmakers have proposed multiple other bills in Congress to extend or make permanent telehealth flexibilities.

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GOP Calls Biden’s Medicare Plans a Tax Hike on Small Businesses

Republican lawmakers are calling the Biden administration’s plan to extend the Medicare trust fund’s solvency a tax hike on small businesses. According to this InsideHealthPolicy article, US House Committee on Ways and Means Republicans say their own legislation would protect Medicare benefits if the country runs against its spending limit.

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Coverage of COVID-19 Testing and the End of the COVID-19 Emergency

A key feature of the COVID-19 National Emergency (NE) and the COVID-19 Public Health Emergency (PHE) was the government’s ability to provide access and coverage of COVID-19 tests. This resulted in overlapping legislation targeted at providing tests to benefit plan participants for free.

With the end of the NE and PHE set for May 11, 2023, there is confusion about what will happen to COVID-19 testing.

Starting on March 18, 2020, the Families First Coronavirus Response Act (FFCRA) required all public and private insurance coverage, including self-funded plans, to cover COVID-19 tests and costs associated with diagnostic testing with no cost-sharing for the duration of the PHE. The Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted shortly after expanded this requirement to cover out-of-network tests during the PHE. The Consolidated Appropriations Act of 2021 (CAA) then took a new approach and applied the requirement to over-the-counter (OTC) COVID-19 tests and added additional obligations. Under guidance issued by the US Departments of Labor, Health and Human Services, and Treasury, effective January 15, 2022, health plans were required to cover up to eight free OTC at-home tests per covered individual per month. Health plans could limit the reimbursement of these tests to the lesser of the actual or negotiated price or $12 per test. Health plans could also provide tests through participating network providers, such as pharmacies or retailers.

When the PHE ends, health plans will no longer be required to cover COVID-19 tests, either diagnostic or OTC, or testing-related services with no cost-sharing.

Employers should consider whether they want to continue to cover COVID-19 tests as required by a doctor or OTC without cost sharing. There is no requirement to stop doing this after the PHE but doing so may have some implications on group health plans. Importantly, if an employer decides to continue covering testing at no cost, they should consider how this affects any employer-sponsored high-deductible health plan (HDHP). IRS Notice 2020-15 permitted HDHP coverage of COVID-19 testing with no cost-sharing without conflicting with HSA eligibility (see our article here). This relief continues until further guidance is issued. Though COVID-19 testing could be considered preventative care under Section 223 of the Internal Revenue Code, the US Department of Treasury will need to provide further clarification. Employers should also consider whether they want to continue to apply a $12 reimbursement cap on COVID-19 or some other limitation.

After the PHE, employers who choose to continue to cover COVID-19 tests at no cost or apply a reimbursement cap may need to amend their plans or summary plan descriptions for these practices. They will also need to coordinate with any insurer or third-party administrator of the employer’s group health plan to ensure proper administration. Depending on the timing of these amendments, they may also need to provide a summary of material modifications to participants. Employers who decide not to continue coverage of COVID-19 tests or apply a reimbursement cap may need to amend their plans, depending on whether [...]

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