As part of its new Next Generation Accountable Care Organization model of payment and care delivery, the Centers for Medicare and Medicaid Services are allowing ACOs to use telehealth services, thereby extending coverage for telemedicine services to millions of Medicare beneficiaries. 

Under this new ACO model announced by CMS on March 10, Medicare telehealth services can be covered without regard to longstanding rural and institution restrictions, requiring a beneficiary be located in a rural area and served at a health facility. And, for the first time, telehealth coverage will be extended to 80 percent of Medicare beneficiaries living in metropolitan areas and from any service originating site, such as their home.

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The ACOs in this next generation model will take on greater performance risk than those in current models, while also potentially sharing in a greater portion of savings.

“ACOs will have a number of tools available to enhance the management of care for their beneficiaries,” writes Patrick Conway, M.D., chief medical officer at CMS, in a blog post. “These include additional coverage of telehealth and post-discharge home services, coverage of skilled nursing care without prior hospitalization, and reward payments to beneficiaries for receiving care from ACOs.”

The American Telemedicine Association (ATA) applauded the decision by CMS, which gives Next Generation ACOs the ability to cover and reimburse for telehealth services just like Medicare Advantage plans currently allow.

“For nearly four years, ATA has urged CMS to waive all the Medicare restrictions for all ACOs,” said Jonathan Linkous, CEO of ATA, in a written statement. “This is an important change in CMS policy and attitude. We hope it will encourage CMS and Congress to further open up all value-based payment plans to telehealth.”

CMS expects about 15 to 20 ACOs to participate in the Next Generation ACO model. Additional information can be found here.

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