CBO: Telehealth bill will reduce Medicare spending by $80M by 2027

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The Congressional Budget Office (CBO) has released a cost estimate report on the implementation of the “Increasing Telehealth Access in Medicare Act,” stating the bill would save Medicare spending by $80 million by 2027.

Currently, Medicare Advantage (MA) plans must be approved to use rebates to pay to provide telehealth services beyond was is included in Medicare’s fee-for-service program. The bill (H.R. 3727) would allow MA plans to include the cost of telehealth services in bids and increase funding to the Medicare Improvement Fund.

“In general, CBO expects that an MA plan that begins or expands coverage of telehealth benefits under H.R. 3727 would do so based on the plan’s expectation that it could manage telehealth services in a manner that would enable it to lower its bid,” stated the report. “Because coverage of telehealth benefits as a supplemental benefit is very limited, CBO estimates that the savings from plans that begin or expand telehealth services would slightly exceed the increased cost for plans that already offer telehealth services as a supplemental benefit.”

Overall, the CBO estimates a reduction of $80 million in direct spending from 2018-2027, provided the bill is implemented at the end of 2017. Additionally, CBO estimates the bill would not increase net direct spending or budget deficits by over $5 million in any 10-year period after 2028.