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Could Telehealth Help Reform the SGR?

By Ryan Mcaskill

A new Sustainable Growth Rate reform plan has a heavy focus on telehealth services.

With every technological innovation there is a proof of concept phase that needs to be accomplished before it is widely embraced by the enterprise. During this time, the device, software or service can be tested in different environments and tweaked as feedback starts to come in. Telehealth has moved out of the concept phase and is now making its push to become a standard tool in healthcare.

- Since 1997, there has been a yearly threat to the sustainable growth rate (SGR) in the form of cuts to Medicare payments. Each time, however, Congress has stepped in and put a temporary patch in place to keep reimbursement numbers from being slashed. At the end of March, the current patch ends and physicians face a potential 25 percent cut in payments.

Last week, Representative Michael Burgess, M.D. (R-TX) and Senate Finance Committee Chairman Orrin Hatch (R-UT) announced a bipartisan plan that would repeal and replace the SGR and telehealth is a major component to it.

In a release on his website, Burgess said that as a doctor, he has seen how bad the SGR formula can be how a long-term plan is needed.

“Permanently repealing the SGR puts medical experts back in charge of measuring quality care, stamps out unnecessary barriers between seniors and their doctors, and begins to address the single largest driver of our debt,” Burgess said. “This is a clear opportunity to do what is right for the American people, and a paramount first step toward accomplishing real – meaningful – entitlement reforms.”

Telehealth will play into this in several ways. First, under “Clinical Practice Improvement Activities,” and the Merit Based Incentive payments telehealth can be used to communicate test results, exchange clinical information to patients or providers, and use remote monitoring or telecommunication to coordinate care in a timely fashion.

Second, the “Incentive Payments for Eligible Payment Models,” limits reimbursement for telehealth services. The new plan would add greater flexibility around the Medicare telehealth rules and could open the door for CMS to experiment with telehealth payments in more models.

The final piece of the plan that focuses on telehealth is a GAO study that would examine the use of telehealth on federal programs. There will be four areas of study. These include:

  • Defining telehealth across various programs and how it impacts them
  • Issues that facilitate or inhibit telehealth under Medicare including oversight and professional licensure, changing technology, privacy and security, infrastructure requirements and varying needs across urban and rural areas
  • Implication of increased use of telehealth when it comes to payment and delivery system
  • How CMS monitors Medicare payments for services rendered through telehealth.


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