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Medicare Telehealth Spending Estimator

Policymakers have until December 31, 2024, to decide which pandemic-era telehealth policies should remain in place for Medicare beneficiaries. To aid policymakers in weighing these decisions, BPC created a telehealth spending estimator tool.

This tool allows users to estimate Medicare’s telehealth spending over the next three years based on various policy decisions. For example, the tool can estimate how much Medicare can expect to spend on telehealth services if telehealth continues to be reimbursed at parity with in-person services. Also, the tool allows users to make different policy decisions about the future of tele-primary care services, behavioral health care, and specialty care.

During the COVID-19 pandemic, Medicare allowed all beneficiaries, regardless of medical condition or geographic location, to access telehealth appointments from home and with any provider. Pre-pandemic, telehealth access was mostly limited to beneficiaries living in rural areas and patients were required to travel to designated sites for care. To ensure people could still access care during the pandemic, Medicare removed established patient requirements for telehealth services, began reimbursing health care providers the same for telehealth and in-person visits, and freely allowed the use of audio-only telehealth, or telehealth services without live video.

The cost of telehealth services is merely one consideration in developing evidence-based federal policy for the effective use of telehealth. Policymakers must balance often-competing goals, including maintaining program costs, patient access to care, and quality outcomes. This tool can help policymakers understand the estimated cost of telehealth services for the Medicare program associated with their policy decisions.

To learn more about BPC’s telehealth recommendations and complete Medicare data analysis, see: The Future of Telehealth After COVID-19: New Opportunities and Challenges.

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Telehealth Spending Estimator for Medicare Beneficiaries

  • Primary Care
  • Behavioral Health Care
  • Other Specialty Care

Will Medicare beneficiaries use more or less telehealth than they do today?

Options: an expected amount based on current use patterns, more than they use today, less than they use today
Primary Care
Behavioral Health Care
Other Specialty Care

How much should Medicare reimburse for telehealth compared to in-person services?

Choose from 50-100% of parity with in-person visits for the same type of visit
Primary Care
Behavioral Health Care
Other Specialty Care

Which telehealth modalities should Medicare beneficiaries have access to?

Options: all, audio-only, two-way video
Primary Care
Behavioral Health Care
Other Specialty Care

Which providers should beneficiaries be able to see via telehealth?

Options: all providers, only those they have seen before
Primary Care
Behavioral Health Care
Other Specialty Care
See Results
Results for year

Projected Telehealth Spending

Includes beneficiary out of pocket

Primary Care
$986,455,361
PBPY Spending
$41.13
Behavioral Health Care
$986,455,361
PBPY Spending
$41.13
Other Specialty Care
$986,455,361
PBPY Spending
$41.13
Total:
$2,781,021,949
Baseline scenario:
$3,271,790,476

Notes

PBPY = Per Beneficiary Per Year

The analysis utilized 100% Medicare outpatient and physician carrier claims and Medicare Beneficiary Summary Files from 2019 through the third quarter of 2021. The baseline scenario assumes that telehealth use patterns stabilize, reimbursement stays at 100% of parity with in-person services, beneficiaries retain access to all telehealth modalities, and beneficiaries retain access to all providers via telehealth. Specific limitations of this study include coding discrepancies in the underlying Medicare data and the relaxation of some billing restrictions during the PHE, that affect the accuracy and scope of telehealth service utilization to date. The spending estimates are driven solely by telehealth utilization and do not include any adjustments for downstream cost savings or cost increases induced by the use of telehealth. Therefore, this tool only estimates Medicare’s spending on telehealth and does not assess the degree to which access to telehealth services substitutes for in-person care. Not all scenarios are mutually exclusive. Total cost sum of selected scenarios may not be true representation of cost for implementing combined scenarios. Tool assumes the number of beneficiaries enrolled in traditional Medicare remains unchanged from 2021. As telehealth service reimbursement drops lower as a percent of in-person service reimbursement, assume lower than expected telehealth utilization. Our source for inflation is here. For a more detailed methodology of the model see here.

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