July 27, 2023

CMS Annual Physician Fee Schedule Updates: Effects on Telehealth Services

At a Glance

  • CMS has explicitly implemented telehealth flexibility extensions through 2024 in accordance with the December 2023 omnibus: waiving the geographic site restrictions allowing patients to be seen wherever they are located; delaying the telemental health in-person requirement; expanding the providers eligible to offer telehealth, including federally qualified health centers and physical, speech, and occupational therapists; and continuing coverage for all temporary services. 
  • CMS has proposed to continue to pay the higher non-facility rate for telehealth services provided to a patient when they are at home.
  • This physician fee schedule proposes extending the ability to bill codes for remote patient monitoring to federally qualified health centers and rural health clinics, but does not address the requirement that 16 days of data be collected in a month in order to bill the service.

The annual Medicare physician payment rule is upon us, proposed July 13, 2023, for calendar year (CY) 2024 and open for public comment through September 11. Each year, the couple-of-thousand-page rule makes modifications to how Medicare pays physician and nonphysician providers for their services, including for telehealth services.

In recent years, the physician fee schedule (PFS) has gotten much more in the weeds on telehealth reimbursement policy, as the Centers for Medicare and Medicaid Services (CMS) has covered more telehealth services during the pandemic. Congress has intervened a number of times, most recently to extend the majority of Medicare telehealth flexibilities through CY24 in last December’s omnibus legislation, even though the COVID-19 public health emergency has now expired. 

However, it is up to CMS to implement the details of exactly which policies are extended, and in some cases it has jurisdiction to modify policies without new authority from Congress. For example, the geographic restriction on the originating site of a patient (where the patient is when they receive a service via telehealth) is in statute, meaning that Congress must change the statute before CMS can change that policy. On the flip side, CMS maintains the list of codes relating to specific telehealth services that Medicare will cover, and Congress does not need to legislate around each individual code.

Telehealth Flexibilities Extended Through CY24

So in this PFS, did CMS extend telehealth flexibilities through 2024 as Congress intended? The answer is yes. We had been waiting with somewhat bated breath as Medicare telehealth pandemic flexibilities have been updated in a variety of ways in both the rulemaking process and in subregulatory guidances from CMS. Last year’s December omnibus occurred after last year’s PFS, so last year’s PFS was largely focused on extending policies either through the end of the COVID-19 public health emergency or through CY23, and did not contemplate CY24 and beyond. Thus, we are pleased to see that CMS has indeed explicitly proposed extending flexibilities such as the geographic site restrictions, delaying the telemental health in-person requirement, and extending the temporary codes covered and the providers allowed to offer telehealth services during the pandemic through CY24. 

This includes the ability of federally qualified health centers (FQHCs) and rural health clinics (RHCs) — as well as physical, speech, and occupational therapists and audiologists — to offer telehealth despite pre-pandemic restrictions. CMS also added marriage and family therapists and mental health counselors as eligible providers.

Additionally, CMS has proposed to streamline the code-coverage process in the future — changing the confusing Category 1,2,3 system to a simpler permanent or provisional code status, and recognizing that evidence development for code coverage doesn’t happen on an annual timeline.

One outstanding topic that does not appear to be addressed by this PFS is whether or not providers must include their home address on box 32 of the billing form when they provide a service from their home. Via guidance updated most recently on July 20, 2023, the flexibility to not report the provider’s home address will only be allowed through CY23. Providers and stakeholders have expressed privacy and operational concerns with this requirement going forward. 

Payment Rates for CY24 and Beyond

The less expected headline on telehealth from this year’s PFS is that CMS has proposed to continue to pay the higher nonfacility rate for telehealth services provided to a patient when they are at home — the rationale being that many providers offer hybrid telehealth and in-person care, necessitating the maintenance of a physical office. Additionally, it can be argued that the value of the clinician’s time remains consistent for the same service, whether delivered in-person or virtually, even if the cost of the infrastructure utilized for the visit varies. This diverges from the Medicare Payment Advisory Commission (MedPAC) recommendation that CMS pay the lower rate for telehealth post-pandemic as it did pre-pandemic.

Remote Patient Monitoring

CMS has paid for remote patient monitoring, also known as remote physiologic monitoring and remote therapeutic monitoring (RPM and RTM), outside of the arbitrary statutory restrictions that must be applied to two-way audio/video visits since CY18. As this is a somewhat new development, CMS is still refining the codes and payment for RPM and RTM in each PFS. This PFS extended the ability to bill codes for this service to federally qualified health centers and rural health clinics, but did not address the concern many stakeholders have raised related to the requirement that 16 days of data be collected in a month in order to bill the service.

Summary of the Telehealth Provisions of the CMS CY24 PFS

The below table summarizes the telehealth topics proposed in the CY24 PFS. As they do every year, thousands of stakeholders will submit comments for CMS to review before it finalizes the rule in the fall. The American Telemedicine Association reacted positively to the changes, and tends to submit and publish its comments well in advance of the deadline, such that other organizations can echo reactions they are aligned with.

Topic CMS Proposal for CY24
Geographic and originating site waivers:
  •  Continues pandemic flexibilities through CY24.
Audio-only coverage:
  •  Continues coverage through CY24.
Telemental in-person requirement:
  •  Delayed implementation until after CY24.
Box 32 / provider address:
  •  Does not address.
  • 16-day data collection requirement remains.
  • RPM and RTM now reimbursable for FQHCs and RHCs.
  • Clarifies that RPM and RTM may not be billed together.
Payment rates/parity:
  • Beginning in CY24, claims billed with Place of Service (POS) code 10 (Telehealth Provided in Patient’s Home) will be paid at the higher nonfacility rate.
  • Beginning in CY24, claims billed with POS 02 (Telehealth Provided Other Than in Patient’s Home) will continue to be paid at the lower facility rate.
Codes/services covered:
  • Added codes for health and well-being coaching and social determinants of health (SDOH) assessments.
  • Refined code request process and simplified from categories to permanent or provisional.
  • Continues coverage through CY24.
  • Continues coverage through CY24.
Providers covered:
  •  Adds marriage and family therapists and mental health counselors as eligible providers.
Direct supervision:
  • Continues coverage through CY24, soliciting comments on whether to make this permanent.
OTP telehealth for MOUD:
  • CY2022 rule permanently allowed opioid treatment programs (OTPs) to use telehealth to initiate medication for opioid use disorder (MOUD), or buprenorphine.
  • Continues audio-only coverage through CY24.
  •  Allows Medicare Diabetes Prevention Program to be offered virtually through 2027.

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