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  • Washington Highlights

    MedPAC Discusses Telehealth and Payment for Outpatient Drugs


    Mary Mullaney, Director, Hospital Payment Policies
    Gayle Lee, Director, Physician Payment & Quality

    The Medicare Payment Advisory Commission (MedPAC) met Nov. 9 and Nov. 10 to discuss the expansion of telehealth services in Medicare and payment for separately payable drugs in the hospital outpatient prospective payment system (OPPS), among other issues.


    The commission staff members discussed policy options for the expansion of telehealth in Medicare following the public health emergency (PHE). While most MedPAC commissioners support the continuation of telehealth services, they also discussed the need for policies that would prevent potential overutilization in the fee-for-service program. Telehealth policy options post-PHE provided by MedPAC staff included:

    • Expanding Medicare telehealth services covered by Medicare.
    • Eliminating coverage of audio-only services after the PHE.
    • Reimbursing at lower rates for telehealth services than for in-person services.
    • Requiring patient cost-sharing for telehealth services.
    • Not allowing telehealth services to be billed for “incident to” services.
    • Potentially setting caps on the amount of telehealth services provided to Medicare beneficiaries.

    Outpatient Drugs

    Under the OPPS, the costs of drugs are generally included in the payment rate of the related services, also known as “packaging.” Packaging is thought to encourage providers to be efficient. However, some high-cost drugs are paid for separately, which means that there is a separate payment for the drug in addition to payment for the services provided in the same visit. The commission staff presented preliminary policy considerations to change how Medicare pays for separately payable drugs. One potential policy change offered by commission staff would be to require separately payable drugs to show clinical superiority over established drugs to be eligible for a separate payment. Draft recommendations may be discussed in spring 2021.

    The next MedPAC meeting is Dec. 3 and Dec. 4.