Telehealth Home Care for Patients Gains Momentum on Capitol Hill

Through a surprising May 2024 feature article in Politico, a broad audience of Americans learned for the first time that it’s now possible to provide hospital-quality care to a substantial proportion of recovering inpatients at home. What’s even more surprising is that hospitals are treating some of these patients at home for acute conditions.

Now, why would a story previously covered only by the healthcare press suddenly break out into political outlets like Politico and Roll Call? That’s because of proposed legislation on Capitol Hill extending Medicare’s Covid-era authority to reimburse hospitals for inpatient care within patients’ homes.

Yet controversy swirls around these initiatives because questions exist about how extending this reimbursement would impact costs and patient outcomes.

To free up hospital bed and provider capacity, early in the pandemic Congress, the Department of Health and Human Services and several other federal agencies enacted temporary emergency measures to encourage medical treatments at home. These treatments were only recently made possible through technological advances in telehealth—treatment geared around computers and mobile devices connected to the internet via broadband.

Back then, two mechanisms encouraging in-home hospital treatment were introduced. First, Congress agreed to reimburse providers’ charges for Medicare patients treated through telehealth. Second, the Center for Medicare and Medicaid Services (CMS) introduced regulations enabling more treatment at home.

But today, four years later, many of those laws and regulations will soon expire at a time when many hospitals across the nation—and especially nonprofit hospitals and public hospital districts—find themselves in dire financial predicaments. Hospitals lost the emergency federal subsidies that helped pay for Covid patients, and they now face dramatically increased labor costs resulting in lower margins.

We recently analyzed this cost squeeze in depth within our April 2024 MHAOnline feature article, Palomar Health’s Financial Crisis: Is Private Management the Answer? In that analysis, we describe the extreme measures suddenly undertaken to avoid bankruptcy by one of the largest public hospital districts in the United States, San Diego’s Palomar Health. That district chose to partially privatize operations to make financially beneficial strategic partnerships more attractive to private healthcare firms in their region, like Kaiser Permanente.

In a movement known as hospital-at-home or H@H, hospital leaders argue that they can cut costs and overhead by using computers to turn patients’ homes into exam and recovery rooms. A two-pronged lobbying effort appears to be underway to convince Congress to agree, in part spearheaded by a coalition of about 60 healthcare industry stakeholders that calls itself Moving Health Home.

The first prong of this lobbying attempt advocates the extension of general telehealth regulations implemented in 2020. In May, the Ways and Means Committee’s lawmakers in the House of Representatives voted unanimously in favor of extensions to the emergency pandemic rules encouraging hospital care at home through telehealth. The legislation voted out of the committee extends the pandemic-era rules enabling all Medicare patients to have access to telehealth for another two years.

Meanwhile, in the Senate, pending legislation by Senator Brian Schatz of Hawaii that would make those telehealth rules permanent has been co-sponsored by about 66 percent of senators. Moreover, Democratic Senator Tom Carper of Delaware and Republican Senator Marco Rubio of Florida have also introduced a bipartisan measure extending federal reimbursement for hospital-at-home services. Politico reported that Senator Carper additionally plans to introduce his bill similar to the pending legislation by Senator Schatz that would make in-home hospital care permanent.

The second prong of the lobbying initiative has focused policymakers’ attention on a regulation waiver program of the Center for Medicare and Medicaid Services called Acute Hospital Care at Home, or AHCAH. This program enables the reimbursement of enrolled hospitals that deliver acute-level hospital care within patients’ homes, which frees up acute care beds within hospitals for other seriously ill patients.

Policymakers are currently debating a five-year extension of this program, which will expire on December 31, 2024, without an act of Congress. The Ways and Means Committee and the Energy and Commerce Health Subcommittee approved bills extending the program until 2029.

Proponents argue that implementing the AHCAH program has significantly expanded access to care among hospital patients requiring continued acute medical attention. CMS has so far enrolled 331 hospitals across 37 states to provide care within this program. These hospitals must provide a daily physician visit over video or in person, along with at least two daily clinician visits in person. Hospitals must also offer a 24-hour system for clinicians to address phone calls from patients and provide emergency services in half an hour or less.

Advocates claim those facilities have broadly expanded the hospital care options at home for acutely ill patients. One such proponent, the American Hospital Association, went on record during April 2024 in support of this program’s permanent extension. Here’s how the AHA’s Senior Vice President for Advocacy and Political Affairs, Lisa Kidder Hrobsky, justified the extension in a letter to two U.S. representatives, Republican Brad Wenstrup of Ohio and Democrat Earl Blumenauer of Oregon:

Hospitals and health systems continue to see H@H programs as a safe and innovative way to care for patients in the comfort of their homes. This kind of care is well suited for medium acuity patients who need hospital level care but are considered stable enough to be safely monitored from home. Rather than staying three days or longer in the hospital, these patients can be treated safely by their doctor and a team of medical professionals while in the comfort of their own home.

A growing body of research shows that H@H is an effective strategy that improves components of the value equation — improve outcomes and enhance the patient experience. A randomized control trial found that acutely ill patients admitted to H@H through the ED were three times less likely to be admitted to the hospital within 30 days than usual inpatient care patients.

What’s driving all this legislation all of a sudden? None of these House and Senate measures would have been possible without recent innovations that were unavailable before the past few years. Many of these new devices are part of a branch of technology known as remote patient monitoring, or RPM.

For example, medical monitoring of hospitalized patients at home was a key benefit touted for civilian use of the internet as early as the late 1980s by its developer DARPA, the Defense Advanced Research Projects Agency, as well as by AT&T and the regional Bell operating companies (RBOCs). However, that capability wasn’t available until early in this decade because of new advances in sensor technology that enable clinicians to remotely monitor patients.

During the pandemic, healthcare systems also invested heavily in the networks, infrastructure, and procedures to support such monitoring. For example, a 2023 report by the management consulting firm Bain & Company revealed that since 2020 most healthcare providers have emphasized remote care and telehealth in their budgets when boosting their spending on technology.

Furthermore, more patients will comply with wearing sensors at home these days because today’s new generation of those devices is less intrusive than in the past. Dr. Jiang Li, the CEO of a Silicon Valley startup known as Vivalink that develops connected healthcare solutions for inpatient and remote patient monitoring, told Politico that rapid developments in this technology now enable clinicians to watch over patients from far away.

“Almost everybody’s thinking about how to make adjustments to embrace new technology. This trend definitely will continue—it will continue on a global scale, not just the U.S.,” he said.

However, questions have been raised about two issues with hospital-at-home treatment. The first issue involves unjustified charges that CMS currently allows hospitals to bill for hospital-at-home services. The second concern is a lack of data that clearly shows the advantages of H@H treatment in terms of patient outcomes.

With respect to the questions about unjustified charges, Medicare pays the same reimbursement for H@H cases as it does for inpatients staying within hospitals—but in cases where hospital-at-home care costs less than usual care, there’s no provision for Medicare to share in those savings. Moreover, Medicare also reimburses “facility fees,” which hospitals sometimes bill because they cover costs for equipment and overhead like lighting, electricity, and air conditioning.

Eileen Appelbaum, a co-director at the Center for Economic and Policy Research who’s studied hospital mergers and private equity transactions, told Roll Call that H@H has turned into a promising moneymaker for private equity investors along with some hospitals.

“I do think that careful selection of patients and the conditions that are being treated has enabled hospital-at-home to be valuable, but taxpayers are greatly overpaying for it,” she said. “It’s money for nothing on the facility fee because there are no facilities involved.”

Then an independent commission created by the federal government in 1995 to advise Congress, the Medicare Payment Advisory Commission or MedPAC, also weighed in. MedPAC issued a critical June 2024 mandated report chapter saying that various issues make it difficult to compare costs and outcomes between patients treated in a hospital and those treated at home.

Part of the reason is that hospitals must merely report only three H@H patient data metrics to CMS. Those metrics include unanticipated mortality, the total number of patients discharged, and the number moved back to hospitals. MedPAC’s commissioners argue that much more data should be provided to CMS on H@H cases because the hospitals treating those cases have to collect and record the patient’s vitals along with their other health information anyway.

“Whether AHCAH can provide value to beneficiaries and the Medicare program—through better outcomes and reduced Medicare expenditures for follow-on care—has yet to be conclusively determined,” says the report.