For Entrepreneurs3/10/16

What digital health should know about the CONNECT Act’s effect on telemedicine

Guest Contributor

Mark Weideman and Jonathan Nelson, Weideman Group

Add digital health to the list of what is already a complicated 2016 legislative agenda. A group of six bipartisan Senators recently introduced federal bill S 2484 that attempts to make it easier for Medicare providers to utilize telemedicine. A similar bill has been introduced in the House. The Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act represents an increasing awareness within the beltway of the value of digital health—and, just as importantly, the need to address policy barriers that currently discourage or even prevent greater use of digital health services and technologies. So what do entrepreneurs need to know?

First, here’s some background
While the rate of healthcare inflation has slowed somewhat since the passage of the Affordable Care Act, healthcare costs continue to grow—2015 was the first year ever that the US government has spent more on healthcare than Social Security. Digital health technologies offer up an attractive proposition around expanding health access while reducing costs. However, a variety of restrictions related to the use of telemedicine within Medicare persist, limiting the ability of providers to utilize digital health technologies. These restrictions include limits on originating sites, the use of asynchronous store-and-forward technology, inadequate reimbursement codes for digital health services, and more.

What does the CONNECT Act aim to do?
The CONNECT Act seeks to address some of these barriers in an attempt to expand the use of digital health (or telemedicine) within Medicare. The CONNECT Act includes a number of provisions with this goal in mind, including:

Creating a bridge program that removes certain restrictions to telemedicine and remote patient monitoring (RPM) services in order to assist providers in the transition to the Medicare Access and CHIP Reauthorization Act (MACRA) and those participating in the Merit-based Incentive Payment System (MIPS).
Allowing telestroke evaluation and management sites, Native American health service facilities, and dialysis facilities for home dialysis patients in certain cases to serve as originating sites, as well as permitting further telehealth and RPM use in community health centers and rural health clinics.
Including telehealth and RPM services as basic benefits within Medicare Advantage.

Proponents of the CONNECT Act state these and other provisions in the bill will lead to $1.8 billion in savings to the system over 10 years.

How does it affect digital health sector?
Digital health offers an enticing answer to the big questions of how to provide healthcare to an expanding population while reducing healthcare costs. If parts of the CONNECT Act get passed and signed by the President, it will unlock new doors of opportunities for digital health companies seeking to do business with Medicare providers. For example, the law allows for the use of remote patient monitoring for certain patients with chronic conditions, which should open up new markets for digital health providers with RPM products/technologies. Beyond the increase in business opportunities themselves, a side benefit of the CONNECT Act is that it will help increase awareness and understanding of digital health within Congress as larger conversations around how to provide good care while seeking ways to reduce runaway healthcare costs continue to be hotly debated. Finally, it’s worth noting the broad coalition in support of the legislation, which includes the American Medical Association, America’s Health Insurance Plans, Federation of State Medical Boards, Anthem, Kaiser and other major players in the healthcare world. For now – stay tuned!

The roadmap forward
For starters, it is very likely that the CONNECT Act itself will not move forward through the legislative process. However, it’s likely that some provisions of the CONNECT Act will be incorporated into a larger policy vehicle that could include multiple other provisions not directly related to telemedicine. For example, the Senate Finance Committee may introduce a bill package later this year that seeks to address chronic care. Portions of the CONNECT Act may be included in that larger vehicle. A key factor that will determine to what extent provisions from the CONNECT Act are included in a larger legislative vehicle is how the Congressional Budget Office (CBO) scores the costs of the bill. If the CBO determines that elements within the CONNECT Act save the federal government money in the long run, that will positively influence the likelihood of inclusion into a larger legislative vehicle. Conversely, if CBO determines that elements of the CONNECT Act will add to the federal deficit, that will greatly diminish the likelihood of elements from the Act moving forward. The CBO may score the legislation as early as March. There will be greater clarity on the future of the CONNECT Act once that has occurred.

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