Public Policy

New telehealth legislation would provide for testing, expansion


A bipartisan bill introduced in the U.S. Senate in late March 2017 would authorize the Center for Medicare & Medicaid Innovation (CMMI) to test expanded telehealth services provided to Medicare beneficiaries.

The Telehealth Innovation and Improvement Act (S.787), currently in the Senate Finance Committee, was introduced by Sen. Gary Peters (D-Mich.) and Sen. Cory Gardner (R-Colo.). A similar bill they introduced in 2015 was never enacted.

However, there are physicians hoping to see this bill or others like it granted consideration. Currently, the Centers for Medicare & Medicaid Services reimburses only for certain telemedicine services provided in rural or underserved geographic areas, but the new bill would apply in suburban and urban areas as well, based on pilot testing of models and evaluating them for cost, quality, and effectiveness. Successful models would be covered by Medicare.

“Medicare has made some provisions for specific rural sites and niche areas, but writ large, there’s no prescribed way for people to just open a telemedicine shop and begin to bill,” said Bradley Flansbaum, DO, MPH, MHM, a member of the SHM Public Policy Committee.

With the exception of telestroke and critical care, “evidence is needed for the type of setting and type of clinical problems addressed by telemedicine. It’s not been tested enough,” added Dr. Flansbaum, who holds a dual appointment in hospital medicine and population health at Geisinger Medical Center in Danville, Penn. “How does it work for routine inpatient problems and how do hospitalists use it? We haven’t seen data there and that’s where a pilot comes in.”

Dr. Talbot McCormick, Eagle telemedicine, Atlanta

Dr. Talbot McCormick

Talbot McCormick, MD, or “Dr. Mac,” is a hospitalist and CEO of Eagle Telemedicine in Atlanta, a physician group whose employees provide a variety of telehealth services to hospitals around the country, from 5-bed critical access facilities to larger, urban hospitals with 300-400 beds. At present, the company contracts with hospitals and compensates its physicians based on their level of experience, availability, hours worked, and the services they provide each hospital. Eagle’s business model relies on the additional value it provides hospitals that may not be able to staff certain specialties or keep hospitalists on at night.

Dr. Mac believes it inconsistent that, in many circumstances, physicians providing services via telemedicine technology are not reimbursed by Medicare and other payers.

“The expansion and ability to provide care in more unique ways – more specialties and in more environments – has expanded more quickly than the systems of reimbursement for professional fees have and it really is a bit of a hodgepodge now,” he said. “We certainly are pleased that this is getting attention and that we have leaders pushing for this in Congress. We don’t know for sure how the final legislation (on this bill) may look but hopefully there will be some form of this that will come to fruition.”

Whether telemedicine can reduce costs while improving outcomes, or improve outcomes without increasing costs, remains unsettled. A study published in Health Affairs in March 2017 indicates that while telehealth can improve access to care, it results in greater utilization, thereby increasing costs.1

The study relied on claims data for more than 300,000 patients in the California Public Employees’ Retirement System during 2011-2013. It looked at utilization of direct-to-consumer telehealth and spending for acute respiratory illness, one of the most common reasons patients seek telehealth services. While, per episode, telehealth visits cost 50% less than did an outpatient visit and less than 5% of an emergency department visit, annual spending per individual for acute respiratory illness went up $45 because, as the authors estimated, 88% of direct-to-consumer telehealth visits represented new utilization.

Whether this would be the case for hospitalist patients remains to be tested.

“It gets back to whether or not you’re adding a necessary service or substituting a less expensive one for a more expensive one,” said Dr. Flansbaum. “Are physicians providing a needed service or adding unnecessary visits to the system?”

Jayne Lee, MD, has been a hospitalist with Eagle for nearly a decade. Before making the transition from an in-hospital physician to one treating patients from behind a robot – with assistance at the point of service from a nurse – she was working 10 shifts in a row at her home in the United States before traveling to her home in Paris. Dr. Mac offered her the opportunity to practice full time as a telehospitalist from overseas. Today, she is also the company’s chief medical officer and estimates she’s had more than 7,000 patient encounters using telemedicine technology.

Dr. Jayne Lee

Dr. Jayne Lee

“I was skeptical at first,” she said, “but the more I worked in telemedicine, the more I liked it, and I found that working remotely was pretty similar to working on the ground. The physical exam is different, but given technology, we have easily been able to listen to the heart and lungs as easily as at the bedside.”

Dr. Lee is licensed in multiple states – a barrier that plagues many would-be telehealth providers, but which Eagle has solved with its licensing and credentialing staff – and because she is often providing services at night to urban and rural areas, she sees a broad range of patients.

“We see things from coronary artery disease, COPD [chronic obstructive pulmonary disease] exacerbations, and diabetes-related conditions to drug overdoses and alcohol abuse,” she said. “I enjoy seeing the variety of patients I encounter every night.”

Dr. Lee has to navigate each health system’s electronic medical records and triage systems but, she says, patient care has remained the same. And she’s providing services for hospitals that may not have another hospitalist to assign.

“Our practices keep growing, a sign that hospitals are needing our services now more than ever, given that there is a physician shortage and given the financial constraints we’re seeing in the healthcare system.” she said.


1. Ashwood JS, Mehrota A, Cowling D, et al. Direct-to-consumer telehealth may increase access to care but does not decrease spending. Health Affairs. 2017; 36(3):485-491. doi: 10.1377/hlthaff.2016.1130.

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