The explosive growth in telehealth over the past five years has resulted from, among other things, the Centers for Medicare & Medicaid Services’ (CMS) extension of Medicare reimbursement to remote monitoring of patients by healthcare providers. A remote monitoring sector has quickly emerged since, embraced by clinicians and patients, but also shaped by medical device and diagnostics manufacturers, platform developers, management service organizations, and venture capital. Medicare has not imposed on remote monitoring the same kinds of controlling standards and limitations that otherwise pervade federal health reimbursement. As a result, the sector has enjoyed unharnessed growth. Recently, Medicare contractors considered imposing standards and limitations through development of a Local Coverage Determination (LCD), but—as of yet—have held back from doing so. Below we provide more detail concerning where matters stand.
On May 19, 2023, two of the seven Medicare Administrative Contractors (MACs) that administer Medicare for CMS announced that they will not be issuing a Local Coverage Determination (LCD) for remote patient/physiological monitoring (RPM)—for now. This announcement follows the multijurisdictional contractor advisory committee (CAC) meeting on February 28, 2023, which the two MACs—Novitas Solutions and First Coast Operations—participated in, along with four other MACs, to discuss the potential need for guidance on RPM, which took off during the pandemic. To date, there have been no established Medicare coverage policies issued on the local or national level for RPM services. While this decision does not change the current coverage, it also does not restrict it—a victory for the telehealth, MedTech, and digital health industries.
RPM
RPM codes are heavily relied upon by the digital health industry, such as the use of wearable devices. RPM services typically entail the use of medical devices and software to monitor individuals’ vital signs, including blood pressure, blood sugar, SpO2, and heartrate, from outside the doctor’s office—most often, from home. RPM services allow providers to constantly monitor patients’ vital signs at home. RPM should not be confused with the closely related emerging field of remote therapeutic monitoring (RTM). RTM is designed for remote patient treatment management using medical devices that collect nonphysiological data. Critical data relating to treatment-related criteria such as therapy/medication adherence, therapy/medication response, and pain level can be collected through RTM.
Utilization of RPM services drastically increased during the pandemic, when providers wanted to keep more patients at home to help protect them from COVID-19 exposure and to keep hospital beds available for COVID-19 patients. During the initial boom of RPM billing during the pandemic, CMS clarified the RPM codes in FY21 Payment Policies final rule and the associated CMS fact sheet. Since then, RPM services have become a common tool for providers to constantly monitor patients at home, with the idea being that constant monitoring of vital signs can help avert harm and reduce cost by catching illness early on. For example, if a monitored patient’s blood sugar increases over weeks or months, their provider may identify potential diabetes and initiate early preventive treatment, thereby avoiding the personal suffering and more costly acute care that untreated diabetes may entail.
This preventative care approach to medicine is echoed in statements made by Department of Health and Human Services (HHS) Secretary Xavier Becerra earlier this year. He said HHS was “moving health care in this country from an illness-care system to a wellness-care system” (emphasis added). The Secretary explained that “[a]n illness-care system forces hard-working Americans to deplete their life savings to get the care and support they need. A wellness-care system advances and invests in long-term care, and in-home care, where our older adults and Americans with disabilities can thrive in their communities.” It seems likely that RPM services will play a significant role in moving the country toward Secretary Becerra’s goal of a wellness-care system.
MACs and CACs
MACs are private insurance companies that perform critical functions in the Medicare Program. CMS contracts with seven MACs to administer traditional Medicare claims, including processing the claims, as well as dealing with redetermination requests, and enrolling providers. Each MAC serves designated geographic areas as an intermediary between Medicare and those local healthcare suppliers and providers whose goods and services are compensated by the Program. MACs also can issue evidence-based LCDs on whether a type of service, healthcare, or item should be covered by Medicare in the absence of a National Coverage Determination (NCD), an evidence-based determination published by CMS concerning coverage at the national level. Before issuing LCDs, it is not uncommon for the MACs to meet with another to discuss coverage for a given service or item. These meetings, called CAC meetings, often result in the issuance of LCDs.
On February 28, 2023, six of the seven MACs came together for a CAC meeting to discuss RPM and RTM for nonimplantable devices. Specifically, the MACs were looking to determine whether an LCD should be developed to guide those performing RPM services and utilizing the related billing codes. The MACs put out questions to the industry ahead of the meeting for discussion. Some telehealth lobbying groups wrote a letter to Novitas, the MAC that hosted the CAC meeting, raising concerns that the MACs were not considering enough evidence and that the process to determine whether an LCD was necessary was not transparent enough.
Initial Win for Telehealth
RPM services in Medicare will continue to remain on our radar as we await decisions from the remaining MACs and other industry developments. For example, in April 2023, the HHS Office of Inspector General (OIG) announced a review of RPM services in Medicare by the Office of Evaluation and Inspections; the expected issue date is 2024.
We are closely monitoring CMS, the MACs, and OIG’s activity related to RPM services. If you have any questions or are interested in learning more, please contact James Ravitz, Georgia Ravitz, Eva Yin, Andrea Linna, Paul Gadiock, Shawn Lichaa, Kathleen Snyder, Shari Esfahani, Jeff Weinstein, Marissa Hill Daley, or any member of the firm’s FDA regulatory, healthcare, and consumer products practice.
James Ravitz, Jeff Weinstein, and Marissa Hill Daley contributed to the preparation of this Wilson Sonsini Alert.