Medicare Heads Up: September 4, 2020

A round-up of recent state and national headlines that matter to Medicare beneficiaries

CMS is proposing to pare back coverage of many telehealth services – including physical and occupational therapy – after the COVID-19 public emergency ends. | Image: Nattakom /

Welcome to Medicare Heads Up, a regular round-up to deliver state and national Medicare-related headlines that will keep consumers abreast of developments that affect their coverage and costs. This week:

CMS proposes to pare back coverage of telehealth, audio-only visits after public emergency ends

On August 4, 2020, the Centers for Medicare and Medicaid Services (CMS) released proposed changes to Medicare physician payment rules for 2021. The proposed rule prepares to pare back Medicare’s coverage for telehealth and audio-only (e.g. telephone) visits once the public health emergency ends.

Due to concerns about contagion in medical settings, Medicare began covering 80 additional telehealth services and paying for audio-only medical visits in changes announced March 31, 2020.

Medicare will stop paying for audio-only medical visits when the public health emergency ends, but CMS is asking whether it should begin covering a new type of audio-based visit that is similar to Medicare’s existing “virtual check-in” – but long enough to replace some in-person visits.

CMS says Medicare will cover certain recently added telehealth services – including some emergency department visits and home visits – through the end of the year the public health emergency ends. The agency is also proposing for Medicare to permanently cover other telehealth services, including group psychotherapy and some home visits for established patients.

But Medicare’s coverage for many telehealth services – including physical and occupational therapy – would end at the same time as the public health emergency.

Medicare had required an in-person medical visit to occur before any beneficiary could be admitted to a skilled nursing facility (SNF) – but has allowed exams to occur via telehealth due to the coronavirus. CMS is asking whether this policy should be maintained after the public health emergency ends.

Medicare will cover more surgeries in outpatient settings starting in 2021

CMS proposed in early August to end Medicare’s requirement that many surgeries occur as inpatient procedures – known as the ‘inpatient only list’ – by 2024. Medicare would begin by removing 300 musculoskeletal procedures from this list in 2021.

Medicare beneficiaries could still receive one of the impacted procedures as a hospital inpatient if that was medically indicated, but under the proposal, Medicare would also cover these surgeries for outpatients.

CMS also wants Medicare to begin covering 270 surgical procedures – including total hip arthroplasty – when received at ambulatory surgical centers (ASCs). Those surgeries previously had to occur at hospitals.

Overall costs for medical procedures are lower for hospital outpatients than for inpatients, and costs are usually lowest when performed at an ASC. This is because Medicare reimburses ASCs at 53 percent of the rate it pays for procedures at hospital outpatient departments.

Original Medicare beneficiaries pay a 20 percent coinsurance for Part B services after meeting a $198 deductible – and pay a $1,408 Part A deductible for each period of inpatient hospital care (the deductible amounts are indexed each year, but the Part B coinsurance is always 20 percent). And the most popular Medigap plan available to new enrollees – Plan G – covers these costs other than the Part B deductible.

CMS proposes automatic Medicare coverage for FDA ‘breakthrough’ device approvals

CMS is also proposing that Medicare automatically cover medical devices once they are FDA approved if they have been designated by the Food and Drug Administration (FDA) as having ‘breakthrough’ status. These ‘breakthrough’ medical devices receive faster consideration by the FDA because they offer an improved treatment option for a serious condition and meet a second criteria such as offering a treatment option when none currently exists.

Sixteen different regional contractors currently decide whether Medicare covers new treatments and devices, which means coverage rules often vary geographically. CMS sometimes also grants Medicare coverage on a nationwide basis – by issuing a National Coverage Determination (NCD).

Because the legal process for issuing an NCD can take nine to 12 months, Medicare is proposing to issue NCDs automatically for all newly FDA approved ‘breakthrough’ devices. Medicare’s coverage policy for a device would last four years.

Medicare would also cover any ‘breakthrough’ medical devices approved in 2019 and 2020 under the proposed rule.

CMS wants to consider commercial insurance coverage when making Medicare payment decisions

CMS is proposing in the same rule for Medicare to begin considering whether commercial insurers cover a service or treatment when deciding if it will be covered by Medicare. The agency would implement this policy in a regulation formalizing longstanding criteria for whether Medicare considers medical services “reasonable and necessary” for the treatment of an illness or injury – and therefore eligible for coverage.

Both CMS and regional Medicare contractors would use the new criteria – which differs somewhat from the existing standard – when establishing Medicare’s national and local coverage rules.

Medicare’s current standard for granting medical coverage requires any medical item or service to be safe and effective, not experimental or investigational, and appropriate for Medicare patients. The proposed regulation would consider commercial insurance coverage for an item or service as evidence it is appropriate for Medicare patients. (This rule would not apply if there were clinically relevant differences between Medicare beneficiaries and commercially insured individuals.)

CMS says this change is consistent with President Trump’s 2019 Executive Order – “Protecting and Improving Medicare for Our Nation’s Seniors” – which directed CMS to make technologies “widely available, consistent with the principles of patient safety, market-based policies, and value for patients.”

Josh Schultz has a strong background in Medicare and the Affordable Care Act. He coordinated a Medicare technical assistance contract at the Medicare Rights Center in New York City, and represented clients in extensive Medicare claims and appeals. In addition to advocacy work, Josh helped implement federal and state health insurance exchanges at the technology firm hCentive. He also has held consulting roles, including as an associate at Sachs Policy Group, where he worked with insurer, hospital and technology clients on Medicare and Medicaid issues.

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