News & Commentary

Medicare Advantage Underutilizes Telehealth's Potential


There’s a lot of support and momentum behind telemedicine, as the cover story in Managed Care’s July issue well documented. Videoconferencing, text messaging, and email mean that the treatment option might soon become common practice. Maybe.

There are still significant roadblocks, as Kaiser Health News pointed out last month. For instance, the population that’s most homebound and physically impaired—the demographic that could really benefit from this technology—lacks access.

Fewer than 1% of Medicare beneficiaries get care remotely. There are many reasons for that, but restrictions imposed by Congress and CMS are among them. One worry is that telehealth could encourage overutilization and actually add to costs.

Harvard expert Ateev Mehrotra, MD, MPH, says that’s a legitimate concern. Mehrotra, who is a member of Managed Care’s editorial board, told Congress last year that telemedicine could lead to overutilization of Medicare benefits. “The very advantage of telehealth, its ability to make care convenient, is also potentially its Achilles’ heel,” he said. “Telehealth may be ‘too convenient.’”

To no one’s surprise, the American Telemedicine Association (ATA) disagrees. “Currently, Medicare is failing its beneficiaries by its very restrictive rules,” Jonathan Linkous, the ATA’s leader, wrote to CMS in February. The ATA is gaining allies. The AARP, American Academy of Family Physicians, American Hospital Association, and the American Medical Association all want Medicare beneficiaries to tune in. Of course, the doctors also want to make sure that they’re fairly compensated for virtual care.

As of now, Medicare can offer telemedicine only in rural areas and only if the patient goes to a clinic. Medicare Advantage plans, on the other hand, avoid those restrictions because capitation means, in essence, that the insurer picks up the tab for the services. So far, though, only Anthem and the University of Pittsburgh Medical Center Health Plan offer telemedicine to Medicare Advantage beneficiaries.

Mehrotra tells Managed Care that “In a Medicare Advantage plan, the plan has an incentive to ensure appropriate use of care. If a MA plan set up restrictions on when/where telemedicine is used to try to focus the care on patients who will most benefit, then that would be great. However, I have not seen MA plans act in this manner. They have relatively limited market power and, therefore, impact on provider behavior.”

Anthem officials insist that its program pays off in quality, patient satisfaction, and cost reduction. The insurer offers telemedicine to about 350,000 MA beneficiaries in 12 states. John Jesser, the general manager of Anthem’s LiveHealth Online (launched in the beginning of the year) tells Managed Care that “based on six months of experience, we have not seen overutilization. Our current challenge is actually the opposite—to make seniors more aware of telemedicine as an option. We recognize that it will take more education and an increased comfort level with telemedicine for seniors to adopt the technology.”

Jesser argues that if CMS lifts telemedicine restraints on all Medicare beneficiaries, more physicians would make telemedicine a routine part of their practice. “The basic value proposition of telehealth should be even more compelling to seniors, some of whom have to rely on friends, family or caregivers to provide them transportation to health care providers,” says Jesser. “As more seniors use smartphones and gain more comfort with this technology, we believe that adoption rates will steadily increase, just as we’ve seen in our under-65 membership.”