12 December 2021 |

Medicare Telehealth Balloons

By workweek


Medicare Telehealth Balloons

Telehealth use among Medicare Part B beneficiaries ballooned 63-fold from around 840,000 virtual visits in 2019 to 52.7 million in 2020. The burning question: is telehealth here to stay?  

Loosen Up a Bit, Will Ya? 
At the pandemic’s onset, the Centers for Medicare and Medicaid Services (CMS) loosened restrictions on Medicare fee-for-service telehealth regulations. This included allowing urban areas to use telehealth (before it was restricted to rural areas), patients to be in their home instead of going to a healthcare facility, other providers to use telehealth and use of audio-only interactions. At the same time, CMS enabled providers to be reimbursed for telehealth at the same rate as in-person visits. 

The Real Winner: Behavioral Health 
Telehealth visits made up 1% of behavioral health visits in 2019. In 2020? 38.1% — the most significant increase compared to any other provider type (primary care, specialist). This considerable increase in telehealth use suggests behavioral health providers leveraged telehealth to reach those in need

The need for behavioral health could be related to several factors such as stress, loneliness, unemployment and economic uncertainty during the pandemic.

It’s no wonder why investment into digital mental health startups has increased more than 300% from 2019 to 2021. This year, mental health startups have received more funding than cardiovascular and diabetes care combined.  

My Two Cents
If telehealth is here to stay then it needs to be sustainable. Reimbursing telehealth at the same rate as in-person visits defeats the whole value proposition of telehealth: a “cost-effective method to deliver patient care and expand access.”

At the same time, you can’t talk about the cost of care without talking about the quality of care. Are we delivering better care by using telehealth? For all the hoopla telehealth receives, we should ensure the modality is high-value care by looking at health outcomes data, wherever they are. If not, we run into the formidable cycle of paying millions of dollars for services that don’t improve quality of care or lower costs (read: low-value care). Perhaps CMS can further leverage value-based care arrangements for telehealth providers to incentivize high-value care?


Physicians’ Income Dips After Vertical Integration

Vertical integration of physician-owned practices with a hospital or health system is associated with a small but significant reduction in physician income. This may have some people scratching their heads since the benefits, like increased profits, hospitals and health systems reap from vertical integrations don’t trickle down to physicians.

The Deets
The authors of the study used data on physician income with national survey data on physician practice ownership to see whether hospital and health system ownership of physician practices led to differences in physician income between 2014 and 2018. Here’s what they found:

  • Vertical integration with a hospital or health system was associated with a significant $2,987 reduction in physician income overall. 
  • However, vertical integration was associated with a significant $9,652 reduction in income for nonsurgical specialists. It was associated with a significant $10,741 increase for surgical specialists. 
  • Physician income was associated with a significant $8,276 decrease when integration happened in highly concentrated markets, which may reflect differences in bargaining power between physicians and hospitals.  

So, Here’s My Question:
If most physicians (that is, nonsurgical specialists) are losing money through these vertical integrations, why integrate in the first place? Well, while physicians may “lose” on the income, they “win” in other areas like financial risk protection, less administrative burdens (billing, compliance), EHR implementation and more routine scheduling. 

Hospital and health system ownership of physician practices increased nearly 90% during the study period. Covid-19 has only accelerated this growth. Over half of all physicians are now employed by a hospital or private equity firm, up from 41.8% in 2012. What will this look like in a year? Five years? 10 years?


Last Week’s Medicare Cuts Delayed, For Now

The House and Senate passed last-minute legislation to avoid Medicare cuts set to take place in just a couple of weeks. Hold up, Jared. Am I having deja vu?  

You’re not. If this news sounds kind of familiar, it’s because I wrote about it last week

President Biden signed a bill to fund important federal agencies and programs through February 18th, 2022. But one important program was left out: Medicare. Hospitals and physician groups are not happy since this means less pay.

Recall that Medicare spending was to see a 4% reduction due to Statutory PAYGO cuts and a 2% reduction due to Medicare sequester cuts.

What Does a Child Do When They’re Upset? 
They make a lot of noise. And that’s precisely what the American Hospital Association and other physician groups did after last week’s news:

As hospitals and physicians continue their almost two-year battle against Covid on behalf of patients across the country, including the recent disturbing news about the Omicron variant, now is not the time to impose additional financial hardship. It would be an outrage to not protect the very caregivers who are fighting this relentless virus every day.

In response to the above, the House and Senate passed the Supporting Health Care Providers During the Covid-19 Pandemic Act, which will delay the 2% cut to Medicare rates through March — but implement a 1% reduction from April to the end of June — and delay the 4% Statutory PAYGO cuts to 2023. 

Now that hospitals and physician groups won’t see Medicare cuts, they’re “pleased that the House has recognized that now is not the time to make cuts to hospitals and physicians under the Medicare program.” 

Same, Same, But Different
Hospitals and physician groups are now sliding in last second to prevent the start of surprise billing legislation set to take effect in January. Will lawmakers budge as they did with Medicare cuts?


  • The bad news first: A study found that antibodies generated from vaccines were less effective against Omicron than other Covid-19 variants but not completely ineffective. The good news: The booster dose increases protection 25x. If you’re on the fence to get the booster (or vaccinated in general), now’s a better time than ever. 
  • Female physicians earn $2 million less than their male counterparts throughout a 40-year career, according to a new eye-opening study on the gender wage gap. There are a couple of reasons for this: gender bias in the workplace, structural sexism and compensation models that disadvantage female practice styles. 
  • Lyn Health is one of the newest companies launching a platform for chronic care management for the 27% of Americans with multiple chronic conditions. It’ll be interesting to see how they fare against powerful incumbents dominating the chronic disease management space (which I hinted at in this tweet). 
  • Check out CB Insights’ 2021 list of the top digital health startups worldwide. The highlights include 17 unicorns and Cityblock Health raising $891 million since 2018. One of our favorite companies, Carbon Health, wasn’t mentioned in the list and they were S-A-L-T-Y.
  • Clover Health is partnering with Cricket Health to offer personalized value-based care for patients with chronic kidney disease (CKD). CKD is very common in the US, affecting 15% of adults.
  • In New Zealand, the legal smoking age may soon be infinity. The government hopes to gradually ban smoking by increasing the minimum age each year, such that those who are 14 when the law takes effect would never be able to purchase tobacco legally. Our fellow Workweek friend Matthew O’Brien thinks this is an unwise decision: we should regulate products, not ban products.