Plans, Providers Pursue Lasting Change to MA Telehealth Policy

  • Before a pandemic forced the rapid adoption of telehealth in the U.S., the Trump administration had already implemented or was taking steps to support the use of telehealth in the Medicare Advantage program. But one remaining barrier for plan adoption of telehealth was the inability to collect diagnosis codes for risk adjustment purposes. CMS temporarily addressed this issue during the pandemic, but as providers anticipate telehealth to play a more permanent role in health care delivery, they are joining with plans to advocate for a permanent shift in MA telehealth policy.

    CMS in an April 10 memo to plans stated that MA “organizations and other organizations that submit diagnoses for risk adjusted payment are able to submit diagnoses for risk adjustment that are from telehealth visits when those visits meet all criteria for risk adjustment eligibility, which include being from an allowable inpatient, outpatient, or professional service, and from a face-to-face encounter” (RMA 4/16/20, p. 3). The document said little else, other than specifying that such diagnoses would count only when the services are provided using an interactive audio and video telecommunications system that allows for “real-time interactive communication.”

    Prior to this, CMS had required that all International Classification of Diseases diagnoses submitted for risk adjustment purposes must come from a face-to-face encounter with an acceptable provider type.

    Telehealth already got a major boost in the MA program when CMS in 2019 implemented CHRONIC Care Act provisions allowing plans in 2020 to begin offering “additional telehealth benefits” beyond what is available to Medicare fee-for-service (FFS) beneficiaries as part of the basic benefit package (RMA 4/18/19, p. 1). More recently, CMS finalized a proposal to count telehealth providers in certain specialty areas toward meeting CMS network adequacy standards (RMA 6/4/20, p. 6).

    But as plans were rolling out their benefits for 2020, it appeared that they weren’t fully embracing and adopting telehealth, observes Megan Herber, a director with Faegre Drinker Consulting and a former legislative director in the office of U.S. Rep. Doris Matsui (D-Calif.). “I was on the Hill before I joined the firm and helped work on the policy that allowed MA plans to include telehealth in the base bid rather than as a supplemental benefit and I was kind of looking at plans [last fall] asking, ‘Why aren’t you implementing this? What’s going on?’” she recalls. Granted, they had other new things to consider adopting like Special Supplemental Benefits for the Chronically Ill, but a major issue Herber identified was the risk adjustment policy, she tells AIS Health.

    “It’s a huge disincentive if you all of a sudden fully adopt and conduct more telehealth and you end up getting a bunch of your diagnoses over telehealth visits, and it’s not going to count toward your risk adjustment,” says Herber. “That’s a significant reason not to more fully adopt telehealth visits for a lot of different services. CMS has done a number of things to encourage telehealth, but I feel like this is the one big, outstanding barrier that they could and should address on a more permanent basis to make sure the MA plans can fully adopt.”

    As a result, Faegre Drinker has convened a small group of industry players around advocacy on the issue. That includes telehealth provider Doctor On Demand, CVS Health Corp. and its Aetna subsidiary, Humana Inc., and Ochsner Health.

    The latter is Louisiana’s largest nonprofit, academic health system, which serves patients across the state through a network of 40 hospitals and more than 100 health centers and urgent care centers. Executives tell AIS Health that the health system is interested in the issue of telehealth and risk adjustment primarily to ensure that program policies align with patient care goals.

    “From a care perspective, [telehealth has] become a liberating access point that has made it easier to take care of folks, especially seniors who have complex needs and potentially transportation challenges,” says Ochsner Health Network President David Carmouche, M.D., who oversees the health system’s primary care, urgent care and population health programs. “And we’re in a rural state, so extending our care into those markets has been great and I think has become part of our care model and will continue to be.”

    Ochsner Saw Major Telehealth Uptake

    Ochsner already had a well-established, comprehensive telehealth program called CareConnect 360 that helps partner hospitals provide personalized, on-site coverage for patients requiring access to specialty services. While much of that existed to serve rural patients, “what we really in earnest were building over the last couple of years was that direct to consumer model…where we could see patients in their homes, places of work, assisted living facilities, post-acute care centers…meeting them where they are to bring that access and convenience and ultimately provide a higher level of quality care at a lower price point, which when you are at risk is so critical,” explains David Houghton, M.D., medical director for telehealth and digital medicine.

    As a result, Ochsner was prepared for the public health emergency and saw home-based telehealth visits rise from about several thousand per year to an anticipated 250,000 in 2020. When the risk adjustment memo came out from CMS in mid-April, Ochsner’s telehealth program also saw peak utilization and accounted for nearly 70% of all visits conducted. And from a value-based contracting perspective, the application of diagnoses gathered during those visits is important to Ochsner, which works with multiple MA plans but does not sponsor its own.

    Risk-Bearing Provider Supports Change

    “We take full capitated risk in our Medicare Advantage program, so to the degree that the premium is tied to the complexity of the illness burden of the patients we take care of — and because that risk has been delegated from the insurance plans to us, the provider — we obviously want to make sure that we have the right resources to take care of these patients,” explains Carmouche.

    “If our model has evolved to where it is now increasingly virtual and we’re going to continue to bear the risk for our Medicare beneficiaries, then I think the risk adjustment methodology tied to the premium reimbursement based on an illness burden has to come alongside, or else you’ll have a mismatch of how we take care of patients and the rules that govern the economics of Medicare Advantage,” he continues.

    Given that face-to-face utilization will eventually return to normal levels, the “remarkable growth pattern” in telehealth isn’t expected to continue at the same rate, but Ochsner is now projecting that at least 15% to 20% of its visits going forward will be done virtually, adds Houghton. “And it may even go beyond that when we find new use cases and new opportunities to really bring the care to the patients where they are,” he says. While usage will vary across specialties and subspecialties, Houghton says telehealth presents “opportunities that we can’t ignore…and nobody wants to go back.”

    When submitting comments on the 900-plus page rule that CMS finalized in May, several insurers recommended the agency allow diagnoses gathered through telehealth visits to apply to MA risk adjustment. HealthPartners, a Minnesota integrated health care organization and MA plan sponsor that is not working with Faegre Drinker and Ochsner, at the time urged the agency to update the MA risk adjustment models “on a permanent basis,” given the expanded role of telehealth in the government’s response to COVID-19 and CMS’s recognition of telehealth as an “appropriate care delivery option for MA enrollees.”

    Organizations Are Preparing a Letter

    Alongside other organizations, Ochsner and Faegre Drinker are compiling a letter to CMS requesting the permanent policy change, which would likely be accomplished via a second memo. Unlike other Medicare telehealth policies enacted during the pandemic that would require congressional authorization to continue, “We believe CMS has the authority to do this immediately through subregulatory guidance, as they already did for the April 10 memo,” says Herber. “Our most ideal outcome would be a second memo (plus updates to technical guides/manuals) that says the policy from [the] April 10, 2020, memo counts for all dates of service going forward rather than just 2019 and 2020.”

    Contact Carmouche and Houghton via Giselle Hecker at and Herber at

    Click here for a pdf of the full issue

  • Lauren Flynn Kelly

    Lauren has been covering health business issues, including drug benefits and specialty pharmacy, for more than a decade. She served as editor of Drug Benefit News (the predecessor to Radar on Drug Benefits) from 2004 to 2005 and again from 2011 to 2016, and now manages Radar on Medicare Advantage. Lauren graduated from Vassar College with a B.A. in English.

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