A recent University of Michigan study has provided data on telehealth utilization as policymakers prepare to vote on extending Medicare telehealth coverage standards that originated during the COVID-19 pandemic. This legislative decision follows a period of payment interruption for Medicare telehealth services during a government shutdown in late 2023, which temporarily affected millions of beneficiaries and led to operational adjustments for healthcare providers. Congress later authorized retroactive payments for services rendered during that lapse and extended current coverage standards through January 2026.
Overview of Medicare Telehealth Coverage
Medicare telehealth coverage significantly expanded in March 2020 in response to the COVID-19 pandemic, moving beyond previously limited circumstances. These temporary allowances enabled broad Medicare coverage for virtual healthcare appointments, impacting a substantial portion of the nearly 7 million Medicare beneficiaries who utilize these services annually. Policymakers are tasked with determining by January 30 whether to temporarily renew or permanently extend these current telehealth coverage standards.
Impact of Past Payment Interruptions
In October 2023, a suspension of certain government operations resulted in a halt to Medicare payments for telehealth services. This interruption stemmed from the inability to reauthorize the temporary pandemic-era allowances for Medicare telehealth coverage.
During this period:
- Medicare beneficiaries, such as Vicki Stearn of Bethesda, Maryland, were informed that Medicare payments for telehealth services had ceased and, in some cases, paid out-of-pocket for virtual doctor's visits, anticipating future reimbursement.
- Healthcare providers faced operational challenges and a lack of clear guidance on future reimbursement. Kyle Zebley, senior vice president of public policy at the American Telemedicine Association, indicated that some hospital systems might lack the financial capacity to sustain telehealth services without government reimbursement.
- Hundreds of hospitals reportedly suspended investments in "hospital at home" programs, which offer remote monitoring for patients with serious conditions. Patients requiring ongoing care through these programs were, in some instances, discharged or admitted to traditional hospitals.
- Johns Hopkins, a hospital network, initially continued scheduled telehealth appointments, holding off on billing Medicare with the expectation of future reimbursement. However, as the shutdown persisted, Johns Hopkins informed Medicare patients on October 16 to schedule new visits in person. This shift affected patients with conditions like cancer or neurological care, for whom in-person travel can pose difficulties.
- Teams of remote physicians, while continuing to serve patients with private health insurance, experienced concerns regarding the stability of their care model during the Medicare payment pause.
Congress subsequently authorized retroactive payment for telehealth visits conducted during this period and extended future coverage under current standards through January 2026.
University of Michigan Study on Telehealth Utilization
A new study from the University of Michigan, published in Health Affairs Scholar, provides data intended to inform congressional decisions on telehealth coverage. The study analyzed data from over 60 million individuals, encompassing nearly 539 million appointments from January 2019 through June 2024.
Key findings of the study include:
- The total number of patient visits has not increased since most patients gained virtual access to healthcare providers.
- For non-surgical medical specialties and mental health providers, the total number of visits stabilized and even slightly declined through June 2024.
- The study concluded that overall healthcare visits remained stable or decreased over time, even in areas where telehealth was widely adopted, and did not indicate "runaway utilization" concerns associated with covering telehealth at parity with in-person care.
- Currently, telehealth accounts for 44% of all behavioral health visits and 9% of primary care visits among traditional Medicare beneficiaries.
- Lead author James D. Lee stated that the data does not suggest increased overall utilization due to telehealth expansion.
The analysis differentiated between telehealth and in-person visit trends across surgical, non-surgical, and behavioral health care. The study noted a declining trend in total visits for behavioral health and primary care, which researchers suggested might reflect existing shortages of providers and reduced capacity due to provider burnout.
Study Limitations and Funding
The study's analysis did not include asynchronous patient portal messages, visits where providers did not bill traditional fee-for-service Medicare, or data from approximately half of Medicare beneficiaries enrolled in Medicare Advantage plans.
Funding for the study was provided by the Agency for Healthcare Research and Quality, with additional support from the U-M Institute for Healthcare Policy and Innovation and the VA Office of Academic Affiliations.
Future Outlook for Medicare Telehealth
Despite past operational challenges, there is reported bipartisan support for the eventual return and potential permanent status of Medicare telehealth services. The immediate legislative focus remains on the upcoming January 30 deadline for policymakers to vote on the future of these coverage standards.