Telehealth may increase Medicare patient hospitalizations, costs

High telehealth use is associated with more clinician encounters, hospitalizations, and higher total healthcare costs for Medicare beneficiaries, according to new research.

The study published in JAMA Network Open aimed to better understand the association between telehealth use and healthcare outcomes among Medicare patients. The research team noted that understanding this association is critical as Congress mulls extending Medicare telehealth flexibilities by another two years.

A research team from the American Institutes for Research and Meta Platforms, Inc., used a population-based difference-in-differences (DID) method to test whether telehealth access expansion is associated with improved quality and care access and lower healthcare costs. For the study, the researchers compared Medicare patient outcomes in hospital service areas (HSAs) with different levels of telehealth use.

They ranked HSAs according to the number of telehealth visits per 1,000 beneficiaries, categorizing them as having low, medium, or high telehealth use. They gathered Medicare claims for 30 million beneficiaries within 3,436 HSAs with fee-for-service enrollment in Parts A and B. The second half of 2019 was designated as the baseline period before the expansion of telehealth flexibilities, and the second half of 2021 was labeled the treatment period after the expansion.

From the baseline to the treatment period, mean ambulatory care-sensitive (ACS) hospitalizations and emergency department (ED) visits declined sharply. ACS hospitalizations refer to conditions that “should be largely prevented if ambulatory care is provided in a timely and effective manner.”

Additionally, mean clinician encounters per beneficiary declined slightly during this period, but the mean total cost of care per beneficiary per semester increased slightly.

The average number of telehealth visits per 1,000 FFS Medicare beneficiaries was 174 in the low-intensity group, 311 in the medium-intensity group, and 679 in the high telehealth-intensity group.

Researchers found that the high telehealth-intensity group had 1.63 additional ACS hospitalizations per 1,000 beneficiaries, 0.30 additional clinician encounters per beneficiary per semester, and $164.99 higher cost per beneficiary per semester compared to the low telehealth-intensity group. There was no statistically significant difference in ED visits between the low and high telehealth-intensity groups.

However, researchers emphasized the need for nuance regarding the findings related to ACS hospitalization increases. They stated that the significant decline in ACS hospitalizations overall implies that ACS hospitalizations decreased in the high telehealth-intensity group but at a slower rate than in the low telehealth-intensity group.

Some of these study results were included in the June 2023 report to Congress by the Medicare Payment Advisory Commission (MedPAC).

Telehealth stakeholders have been mounting pressure on Congress to make permanent telehealth regulations enacted during the COVID-19 pandemic. Last month, the House Energy and Commerce Subcommittee on Health held a hearing on telehealth, during which they grilled healthcare leaders about telehealth’s effect on access, care quality, and costs.

The speakers offered varied insights. For instance, Lee Schwamm, MD, senior vice president and chief digital health officer at Yale New Haven Health System, noted how onerous telehealth licensure regulations are, proposing that lawmakers change the definition of ‘site of care’ to the location of the provider rather than the patient.

Meanwhile, Ateev Mehrotra, MD, professor of healthcare policy and medicine at Harvard Medical School and a hospitalist at Beth Israel Deaconess Medical Center, stated that paying less for telehealth services may be better than telehealth payment parity, wherein payers reimburse for telehealth services at the same rate as the equivalent in-person services.

During a markup session last week, the subcommittee passed a bill that extends various pandemic-era telehealth flexibilities for two years and the Acute Hospital Care at Home (AHCAH) waiver for five years. The House Ways and Means Committee advanced a similar bill earlier this month.