CMS's Reason for Not Reimbursing for Telehealth Does Not Hold Water
Analysis by Tim Rowan, Editor
When CMS liberalized the use of telemedicine to accommodate COVID-19 related stay-at-home orders and recommendations, the rules specifically limited payments to physicians. State and national home health associations and advocacy groups called then-administrator Seema Verma to ask, "What about us?" They actually received an answer. NAHC president Bill Dombi related to us the rationale a CMS official gave him at the time:
"If we allow home health to count a virtual visit the same as an in-person visit, we know what they will do. They will do one telehealth visit for every episode that would otherwise end in a LUPA to push it over the threshold. We will wind up paying [roughly] $2,000 instead of [roughly] $300."
At first glance, CMS's justification for continuing to ask HHAs to absorb the costs of providing remote patient monitoring within their episode reimbursement rate sounds reasonable. If every HHA were to game the system and use telehealth to eliminate every LUPA, the cost to Medicare would be, let's say, conservatively, between $1,500 and $2,000 per episode. Let's also assume around 8 percent of episodes end in a LUPA. It was much higher in 2020, of course, but we should also assume COVID-induced LUPAs will not continue to skew the average forever and the percentage will soon return to normal.
Extrapolating, if every single LUPA were to be avoided by telehealth, that $1,500 to $2,000 per episode loss that CMS fears so much might end up adding somewhere around $900 million to the $18 billion HHA budget. I'll show my work:
- 6.1 million episodes in 2019, according to MedPAC
- 8% end in LUPA, (perhaps more during the height of the pandemic)
- Total: roughly 500,000 LUPA episodes (rounded up to make the math easier)
- Times $1,750 per gamed episode
- = $875 million
I grew curious about how this dollar amount, which struck such fear into the hearts of CMS staffers, might compare to other avoidable Medicare losses when I came across a September, 2020 report from the U.S. Department of Justice, "National Health Care Fraud and Opioid Takedown Results in Charges Against 345 Defendants Responsible for More than $6 Billion in Alleged Fraud Losses."1
The subtitle was even more impressive: "Largest Health Care Fraud and Opioid Enforcement Action in Department of Justice History." I scrolled through several section headings until I found this one:
Telemedicine Fraud Cases
The largest amount of alleged fraud loss charged in connection with the cases announced today – $4.5 billion in allegedly false and fraudulent claims submitted by more than 86 criminal defendants in 19 judicial districts – relates to schemes involving telemedicine: the use of telecommunications technology to provide health care services remotely. According to court documents, certain defendant telemedicine executives allegedly paid doctors and nurse practitioners to order unnecessary durable medical equipment, genetic and other diagnostic testing, and pain medications, either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen. Durable medical equipment companies, genetic testing laboratories, and pharmacies then purchased those orders in exchange for illegal kickbacks and bribes and submitted false and fraudulent claims to Medicare and other government insurers. In addition to the criminal charges announced today, CMS Center for Program Integrity separately announced that it has taken a record-breaking number of administrative actions related to telemedicine fraud, revoking the Medicare billing privileges of 256 additional medical professionals for their involvement in telemedicine schemes.
All 11,000 HHAs would have to game roughly 2.6 million LUPA episodes to cost Medicare as much as these 345 fraudsters did. At 500,000 LUPA episodes per year, therefore, home health would have to add a telehealth visit to 100 percent of them for over five years to steal as much as these physicians and telemedicine executives stole. Look at it another way and this one fraud takedown reported by DoJ represented about 40 percent of the entire annual Home Health Medicare budget.
Of course, the telehealth payment refusal occurred under the previous administration and there could be a change coming in anti-home health sentiment. However, changes in administrations only bring top-level changes in Federal Departments. The lifers, civil-servants who continue their day-to-day jobs regardless of who occupies the White House, will always be there, treating home health the same way they always have.
©2021 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Home Care Technology: The Rowan Report. homecaretechreport.com One copy may be printed for personal use; further reproduction by permission only. editor@homecaretechreport.com