Telehealth as a Substitute Good for Expanding Access is Contingent on Beneficiary Attribute

October 20, 2021 – Sanjula Jain, Ph.D.

In the last issue of The Washington Compass, we explored the question of whether telehealth might substitute for or supplement Medicaid non-emergency medical transportation (NEMT) benefits. While the number of Medicaid patients utilizing NEMT services declined and telehealth utilization temporarily increased following the onset of the COVID-19 pandemic, a small proportion of beneficiaries that used NEMT prior to the pandemic substituted or supplemented these services with telehealth, suggesting that telehealth and NEMT are fundamentally different access-enabling benefits.

As a follow-up, we wanted to analyze the attributes of the Medicaid population taking advantage of the benefit overlap to understand consumer preferences for care delivery at a time when many individuals were avoiding hospital-based settings. Consideration for telehealth as a substitute good for NEMT is contingent on several factors, such as whether the intended service can be delivered virtually, distance to healthcare facilities, and whether the patient has the knowledge, awareness, and enabling factors to use telehealth.

Consistent with national trends, the average age of NEMT users that supplemented or substituted services with telehealth was much lower than those that paused NEMT services and did not substitute with an alternative. Moreover, women were more likely than men to substitute or supplement NEMT services with telehealth, 69.4% and 64.7% respectively.

A higher proportion of individuals paused specialty services (45%), compared to behavioral health (22%) and primary care (28%) visits. Given that most behavioral health and many primary care services can be delivered remotely, compared to some specialty services that require an in-person visit (e.g., bloodwork, dialysis), it is not surprising that fewer beneficiaries paused primary and behavioral health visits. Physical distance from healthcare facilities is also an important contributing factor in deciding whether to continue or pause NEMT services. Beneficiaries that reside further, on average, to a hospital were more likely to pause versus continue NEMT services.

Intuitively, telehealth would serve as a helpful alternative or supplement for beneficiaries that live further from the campus of a hospital, but the data shows that those individuals were less likely to utilize telehealth. Rural populations are more likely to have reduced access to broadband, which creates access barriers for telehealth services similar to the way in which physical distance discourages in-person services.

The increasing focus on social determinants of health (SDOH) underscores the importance of transportation on individual and population health. While telehealth could be an effective substitute for certain NEMT services (e.g., behavioral health), NEMT is necessary to continue facilitating in-person care such as dialysis. Chronic care management requires in-person care at least some of the time, and research has shown that investments in Medicaid NEMT have positive impacts on both care management and program costs.

As the government’s role as the largest payer of healthcare services continues to grow, effective policymaking will require evidence-based insight into the individuals that will be directly affected by such benefit provisions. Analyzing demographics of market-specific consumers and general utilization trends does not paint a complete picture. While strides have been taken to better account for SDOH at the local level, social factors should be weighted more heavily in policy decisions.


Policy In Focus 

Over the last two weeks, Members of Congress have been primarily focused on discussions regarding the debt ceiling. With President Biden signing legislation to extend the debt ceiling by $480B through December 3, House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) aim to pass the bipartisan infrastructure package by October 31. However, progressive members have repeatedly stated that the Senate must pass the budget reconciliation package before voting in favor of the infrastructure package. 

With a contingent viewing the cost of the budget reconciliation package as too large, it is unclear how Democrats will reduce the cost by at least $1T to address those objections. Negotiators in Congress indicated that the bipartisan plan to establish the Advanced Research Projects Agency for Health will be removed from the reconciliation package but was included in Democrats’ year-end spending proposals. Democrats have also discussed potentially removing provisions to expand Medicare to include dental, vision, and hearing benefits, which would cost $350B over a decade.

In its current form, the reconciliation package includes a broad set of healthcare priorities. The package includes provisions to strengthen the Affordable Care Act, allow the federal government to negotiate drug prices in Medicare, adjust reimbursement rates for Part B drugs, and prohibit pharmacy benefit managers from engaging in spread pricing in Medicaid. While reconciliation and infrastructure will continue to take priority through 2021, Congress also must address other healthcare policy issues such as the temporary moratorium on the 2% Medicare reimbursement sequester cuts.

CMS Releases 2022 Medicare Advantage (MA) and Part D Star Ratings
The Centers for Medicare and Medicaid Services (CMS) released the 2022 Star Ratings for MA and Medicare Part D prescription drug plans. According to CMS, 68% of MA plans with prescription drug coverage will have a rating of at least four stars for 2022, up from 49% in 2021. Approximately 90% of MA beneficiaries with prescription drug coverage are enrolled in a plan that earned at least four stars in 2022. Adjustments were made for the 2022 Star Ratings due to the possible impact of the COVID-19 pandemic. Of note, CMS released MA and Part D plan offering and design details for 2022; the number of MA plans will increase, and the number of prescription drug plans will decrease. Learn more.

  • Insight: The increase in number of MA plans with at least four stars indicates that insurers are increasing investments in operations and policies to improve performance on ratings measures. With the majority of plans receiving four or more stars, stakeholders have discussed the potential for adjusting benchmarks for plan rating. Specifically, the Medicare Payment Advisory Commission (MedPAC) has previously recommended changing the methodology of measuring star ratings, particularly assessing quality at the local level. Whether CMS will incorporate these program recommendation changes remains to be seen. Additional scrutiny of MA came earlier this month from former CMS Administrator Don Berwick and former Trinity Health CEO Rick Gilfillan, citing plan overpayments, risk adjustment issues, and physician ownership as factors contributing to the MA “Money Machine.”

Office of the National Coordinator for Health Information Technology (ONC) Announces Initiative to Standardize Healthcare Data Sets
ONC announced the formation of USCDI+, a program that will support the creation of domain or program-specific datasets that will operate as extensions to existing programs. USCDI+ is a service that ONC will provide to federal partners that are seeking to increase interoperability between datasets that extend beyond the core data in the USCDI to meet agency-specific programmatic requirements. Learn more.

  • Insight: USCDI+ efforts for quality measurement and public health are starting with CMS and the Centers for Disease Control and Prevention, with more to be added once the program is more firmly established. One of the pillars of USCDI+ is collaboration with federal partners, health care providers, and the health IT community to inform and support health IT advancement for priority use cases including data sets, standards, implementation specifications and potential certification criteria.

Policy in Development

The Improving Seniors’ Timely Access to Care Act of 2021, introduced by Rep. Suzan DelBene (D-WA) would streamline and standardize the way MA plans use prior authorization and would provide additional oversight and transparency of prior authorization. Health insurers, including many MA plans, often require providers to obtain prior authorization for certain medical treatments or tests before initiating care. The legislation is cosponsored by 227 Members of Congress and remains well positioned to be enacted into law. As importantly, approximately 70 health provider and advocacy groups support the legislation. While the proposal could be enacted into law in stand-alone fashion, Congress is almost guaranteed to attach the bill to a larger must-pass spending package for enactment. Learn more.

Reps. Susan Wild (D-PA) and Brian Fitzpatrick (R-PA) reintroduced The Fair Drug Prices For Kids Act, which would allow states to purchase prescription drugs at the lowest price offered by drug manufacturers. Under the Medicaid Drug Rebate Program (MDRP), drug manufacturers are required to sell their products to Medicaid at the lowest prices offered to any commercial payer (i.e., “Medicaid best price”). In states with a standalone Children’s Health Insurance Program (CHIP), the Medicaid best price is unavailable. Therefore, these states pay higher prices for the same prescription drugs, which can result in higher costs and reduced access to medicines. The legislation, which has received endorsement from industry stakeholders including First Focus Campaign for Children and Patients For Affordable Drugs Now, has bipartisan support and a path to enactment but requires additional Congressional support. In August, Senators Mark R. Warner (D-VA) and Cory Booker (D-NJ) introduced a companion bill in the Senate. Learn more.

Rep. Brad Schneider (D-IL) introduced the Primary and Virtual Care Affordability Act, which would amend the Internal Revenue Code of 1986 to extend the exemption for telehealth services from certain high deductible health plan rules. If passed the bill would expand access to telehealth by making it more affordable for certain individuals. Rep. Schneider has repeatedly voiced support of telehealth. Learn more.


Rep. Ashley Hinson (R-IA) introduced The PT for PTs Act of 2021, which would amend title XVIII of the Social Security Act to include physical therapists as practitioners able to furnish telehealth services in Medicare. The bill would increase payment parity in telehealth for physical therapists and improve access to care for beneficiaries requiring physical therapy services via telehealth. Learn more.


Rep. Matt Rosendale (R-MT) introduced the Drug Pricing Transparency and Accountability Act, which would increase reporting and transparency requirements in the 340B Drug Pricing Program, requiring hospitals to submit claims on all Medicare and Medicaid transactions under 340B. The bill would lower the cost of prescription drugs dispensed by hospitals and other facilities for certain patients and ensure that the savings are passed on to consumers.  Learn more.


  • 247 Members of Congress wrote to House Leadership regarding payment cuts, up to 9% overall, in Medicare for certain healthcare providers taking effect later this year. Learn more.
  • An interim final rule from CMS is under review at OMB that implements the Administration’s healthcare workforce vaccination mandate plan, which will be released amid the current U.S. nurse staffing shortage. Learn more.
  • FDA issues draft guidance on hospital and health system compounding pharmacies. Learn more.
  • CMS issued a report on 2019 Medicare fee-for-service utilization of Z Codes for social determinants of health. Learn more.
  • Kentucky, Maine, and New Mexico will operate state-based healthcare exchanges (SBEs) beginning for the 2022 plan year, bringing the number of SBEs to 18. Learn more.
  • Nevada is the most recent state to extend regulatory oversight of healthcare transactions involving physician practices. Several states, including Connecticut, Massachusetts, Oregon, and Washington have passed similar legislation. Learn more.

Looking Ahead

  • October 21: The House Appropriations Committee will hold a hearing regarding the VA’s Electronic Health Record Modernization implementation. Learn more.
  • October 28-29: The Medicaid and CHIP Payment and Access Commission will hold a public meeting; the agenda is forthcoming. Learn more.

Thanks to Katie Patton, Kelly Boyce, and
 The Vogel Group for their research support.