House committee gives its approval to Medicare Advantage telehealth bill

A bill—The Increasing Telehealth Access in Medicare (ITAM)—aimed at improving access to Medicare Advantage telehealth services received approval from the House Ways and Means Committee on September 13, 2017. The unanimous approval came alongside the committee’s unanimous passage of a bill (H.R. 3726) to simply physician self-referral prohibitions and a bill (H.R. 3729) to continue Medicare add-on payments for ambulance services.


The bipartisan bill, Increasing Telehealth Access in Medicare (ITAM) (H.R. 3727), introduced by Representatives Diane Black (R-Tenn) and Mike Thompson (D-Calif), seeks to encourage the use of telehealth by making it a basic benefit—rather than a supplemental service—for Medicare Advantage beneficiaries. Although critics of telehealth warn that the service presents a risk of overutilization in a fee-for-service reimbursement model, proponents of the new ITAM bill note that by pairing telehealth with Medicare advantage, that concern is “flipped on its head.”


A related bill, in the Senate, known as the Furthering Access to Stroke Telemedicine Act (S. 431), would permit any site exclusively administering acute care stroke treatment to be included in the list of eligible Medicare sites for telemedicine services, without regard for the site’s geographic location. In May of 2017, the Senate Finance Committee unanimously passed the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act (S. 870), a bill designed to expand telehealth access for Medicare beneficiaries with chronic conditions while increasing the incentives for accountable care organizations (ACOs) to provide those services.

Hearing addresses protecting Medicare from a ‘tsunami of aging baby boomers’

Lawmakers and experts discussed potential reforms to preserve and sustain the Medicare program amidst significant growth in the number of eligible beneficiaries at a House Ways and Means Health Subcommittee on March 16, 2016. Proposals included plans for greater reliance on the Medicare Advantage (MA) program and to raise the age of Medicare eligibility.

Opening statements

Subcommittee Chairman Pat Tiberi (R-Ohio) explained that Medicare has barreled forward for 50 years on the same struggling path. He noted that the hearing was designed to ensure that, as lawmakers look for a new path, the patient remains at the center of those Medicare reforms. He started by encouraging policymakers to repeal what he called onerous Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) policies and he suggested that steps be taken to expand on value-based care ideas like MA. Other recommendations made by Tiberi included a plan to combine the Part A and Part B deductibles.

In his opening statement, Senator McDermott (D-Wash) noted that the hearing was the first on the subject since November of 2015. He countered many of Tiberi’s positions and warned that the Republican party’s core proposal to “end Medicare as we know it” would be devastating for seniors. McDermott explained that seniors want a clearly defined benefit, not a voucher program with undefined outcomes and a Medicare program with a stronger benefits and a limit on out of pocket costs. The senator also warned that prescription drug costs are out of control, costing Medicare $120 billion in 2015. To remedy the problem, he recommended that Medicare be able to negotiate drug prices like the Veterans Administration.


Katherine Baicker, a professor of health economics in the Department of Health Policy and Management at the Harvard School of Public Health focused her testimony on the importance of value to the Medicare program. She noted that high value means the right care to the right patient at the right time. She explained that high value insurance makes sure that such care is provided in a way that the program can afford. She testified that MA reforms are doing a better job, than other aspects of the program, at moving away from the waste of fee-for-service care and towards high value care. When considering the move away from wasteful spending, she clarified that the goal should not just be to spend less on Medicare but to spend less on care that is only minimally helpful. To reach those goals, she pointed to a lack of coordination as a primary cause of law quality and inefficient care. Baicker also noted that Medicare is designed not just to provide care but to serve as an economic protection so that seniors are not bankrupted when high cost care episodes arise. She said that Medicare has only done a “moderate job” of meeting that secondary program goal.


Robert Moffit, a senior fellow at The Heritage Foundation’s Center for Health Policy Studies, testified that Medicare is the greatest challenge of all federal entitlements and a necessary focus of any workable economic recovery policy. He asked that Congress reconsider structural changes to the Medicare program, specifically: (1) combining Medicare Part A and Part B, (2) limiting Medicare subsidies to wealthy enrollees, and (3) raising the age of eligibility to 68. He explained that none of the proposals are novel and all have, at different times, “generated genuine bipartisan support.” He explained that a simplification of the Medicare program should include an addition of catastrophic coverage because it is the single greatest need of Medicare beneficiaries.

Aging population

Stuart Guterman, the senior scholar in residence at AcademyHealth, warned that when considering reforms it is important to “not throw the Medicare beneficiary out with the bathwater.” He said that policymakers should expect to spend more on Medicare as the “tsunami of aging baby boomers starts to hit.” He also echoed the earlier witnesses calls for more comprehensive and catastrophic care coverage.

House committee requests justification for Medicare Advantage policy changes

The House Ways and Means committee is concerned that CMS’ proposed changes to encounter data, employer group waiver plans (EGWPs), and risk adjustments are not “appropriately targeted.” The committee requested additional information about these changes from the CMS acting administrator following the 2017 Medicare Advantage and Part D Advance Notice of Payment Policies and Draft Call Letter (see CMS proposes 2017 Medicare Advantage and Part D program changes, Health Law Daily, February 22, 2016). The letter expressed the committee’s appreciation for CMS’ attention to key issues, such as providing better care for those dually eligible for both Medicare and Medicaid.

Encounter data

When CMS first proposed adopting 10 percent of encounter data for risk adjustment, the Government Accountability Office (GAO) and the Medicare Payment Advisory Commission (MedPAC) found that the agency needed to make operational changes in order to use the data effectively. The committee requested a summary of how the policy will impact plans, if available, or at least an explanation of the rationale for the change. It also asked how the agency has responded to GAO and MedPAC concerns, and requested information about how CMS plans to monitor the quality and utility of encounter data.

EGWPs and risk adjustments

MA-based managed care benefits are often provided to retirees by their former employers, but the committee believed that the proposed policy changes for EGWPs should not be finalized as written. The members noted that the changes may hamper employers’ ability to provide retiree benefits, and requested a summary of any analysis CMS has done on the impact of the policy change on plants and beneficiaries. It also wondered what authority CMS is using to propose such payment changes, and asked how CMS plans to handle implementing policy changes for multi-year contracts to avoid disrupting plan stability.

While the committee was pleased with CMS’ efforts to reduce the impact of social determinants on the MA plan star rating system, it believed that plans should be offered a reasonable amount of time to make changes as new risk adjustment policies are implemented. It requested a summary of the agency’s methodology and analysis that resulted in claims that the proposed risk adjustment policy would have a small net negative impact on plans. The committee also asked why the agency did not propose policies for addressing care given to low-income beneficiaries who are not dual eligible but have multiple chronic conditions.