The COVID-19 pandemic was a catalyst for telehealth benefit expansion in the Medicare Advantage (MA) market. Within the highly competitive telehealth landscape for 2021, there are many different levels of benefit offerings. As a result, MA organizations are left to wonder how to best frame their telehealth benefit going forward.

Executive Summary

This article provides a summary of 2021 telehealth benefits in the Medicare Advantage market and highlights some considerations looking forward. Using the Milliman MACVAT®, we analyzed all 2021 individual MA plans to determine the breadth of telehealth offerings available to beneficiaries, drilling down to the service category, or plan benefit package (PBP) level. In 2021, over 94% of plans will offer additional telehealth benefits, an increase of 36 percentage points from about 58% of plans in 2020.¹ Using February 2021 enrollment, we estimate about 95% of beneficiaries enrolled in MA will have telehealth access in 2021.

Key takeaways from this analysis include:

• Primary care is the most common telehealth offering, covering approximately 90% of MA enrollment, followed closely by nonphysician mental health services (86%) and psychiatric services (84%).
• Chronic special needs plans (C-SNPs) offer telehealth coverage less often to their enrollees than other plan types, and when they do it is for fewer services, on average, than other special needs plan (SNP) types.
• Individuals enrolling in preferred provider organization (PPO) plans saw higher telehealth coverage of the top four service categories (identified by enrollment within each category): primary care, nonphysician mental health services, psychiatric services, and urgent care. In addition, health maintenance organizations (HMOs) with added point-of-service benefits—HMO-POS plans—provide telehealth access to nearly about 6.6 categories, on average, while both HMO and PPO plan types cover 5.8 and 6.0 categories, on average.
• Plans with overall 2021 star ratings of 4.5 or 5.0 provide telehealth access to an average of 6.8 and 7.7 categories, respectively. On average, plans with overall 2021 star ratings of 3.5 or lower or 4.0 are able to provide telehealth coverage for about 5.8 and 5.6 categories, respectively.

Background on Medicare Telehealth

Prior to the declaration of a national public health emergency (PHE) in response to the coronavirus disease 2019 (COVID-19) on January 27, 2020, traditional Medicare providers were restricted to offering telehealth services broadly through a strict set of guidelines²:

• Only Medicare Part B services were covered.
• Telehealth services were limited to real-time audio/video communications.
• Telehealth could only be provided by specific practitioners at a “distant” site to beneficiaries at an “originating” site.³ Geographic restrictions applied to the originating site, as well as restrictions on what are considered rural areas. Historically, a beneficiary’s home was not considered an originating site and telehealth could only be accessed at the offices or clinics of certain providers in designated rural areas.

While many MA plans had additional flexibility beyond these geographic and originating site restrictions, many did not choose to expand telehealth services much before the COVID-19 pandemic. Prior to 2020, MA plans could have offered telehealth services, but all of them would have been considered a supplemental benefit, on which Medicare Advantage organizations (MAOs) likely were not willing to spend Part C rebate dollars. The priority is typically on high-value, visible supplemental benefits and neither health plans nor beneficiaries considered telehealth services part of this category. Beginning with the 2020 plan year, MA plans had the ability to offer “core” traditional Part B Medicare services through telehealth, no longer considering them a supplemental benefit,⁴ though only 58% of plans in 2020 chose to utilize this flexibility.⁵

On March 13, 2020, the administration issued the "Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak," which temporarily waives some of the restrictions preventing telehealth adoption for the duration of the PHE. This allowed the following changes to telehealth services in Medicare:

• Prior to the pandemic, a beneficiary’s home was not considered an originating site under the telehealth rules as they applied to Medicare. Now, given the emphasis on social distancing, a beneficiary’s home, regardless of where they live, can be considered an originating site.
• The Centers for Medicare and Medicaid Services (CMS) clarified the need for most telehealth services to be provided by audio and video equipment, including smartphones, as long as they operate with “two-way, real-time interactive communication between the patient and distant site physician or practitioner.”⁶ Services allowed to be provided by audio-only are evaluation and management (E&M), certain behavioral healthcare counseling, and educational services.
• Additionally, MA organizations should keep in mind that while telehealth services can be provided with audio-only telehealth, CMS requires ”services [to be] provided using an interactive audio and video telecommunications system that permits real-time interactive communication”⁷ in order to have the a diagnosis be eligible for risk adjustment purposes.

CMS reports that prior to the PHE, only 15,000 Medicare fee-for-service (FFS) beneficiaries received a telehealth service each week,⁸ suggesting nearly 500,000 FFS beneficiaries received a telehealth service in an average eight-month period. During the PHE, CMS’s preliminary data shows that, between mid-March and mid-October 2020, over 24.5 million out of 63 million FFS and MA beneficiaries, or nearly 39%, have received a telehealth service.⁹

CMS updated the list of services that are payable under the Medicare physician fee schedule on October 14, 2020, to include services that are considered covered under the PHE,¹⁰ adding 11 additional services to those that were previously considered eligible. On December 1, 2020, the physician fee schedule final rule added 60 additional telehealth services that will continue to be covered under Medicare after the PHE ends.¹¹

Telehealth Offerings Differ Across the MA Spectrum

Select the subcategory of data you would like to view using the buttons below. Using the Service Category feature, you can use CTRL and select multiple service categories of interest to view in the graphics below. Hover your mouse over any data item and it will bring up a callout box detailing additional information.

The interactive graphic demonstrates the telehealth coverage for each high-level service category and shows the percentage of the total number of members with telehealth coverage within each category. We rank the categories by the percentage of membership covered by each category. Primary care is offered most frequently in a telehealth setting at over 90% of membership covered, closely followed by two service categories that address mental health needs: nonphysician mental health services (86%) and psychiatric services (84%). Of the top five categories, outpatient substance abuse services is the least frequently available category, and covers about 63% of enrollees.

Telehealth Offerings by SNP Type

We reviewed the data categorized by SNP type, as summarized in the interactive graphic.

• Nearly 91% of enrollment has telehealth coverage for primary care services for general enrollment plans, and over 94% of enrollment has this same service covered for the institutional SNPs (I-SNPs). However, this percentage drops to about 87% for dual-eligible SNPs (D-SNPs) and only about 71% for C-SNPs. In all cases, primary care has the most coverage by each of these plan types.
• In general, for the categories analyzed, C-SNP plans offer coverage for fewer services via telehealth compared to all other plan types.
• I-SNPs provide the most coverage for telehealth services than other plan types. However, nonphysician mental health services are covered slightly more in both the general enrollment and D-SNP markets relative to I-SNPs.

Figure 1 shows he number of total telehealth services covered, on average, by each SNP type. General enrollment plans on average cover the greatest number of services, with an average of 6.1 telehealth categories covered, followed closely by I-SNP and D-SNP plan types at 5.8 and 5.7 services, respectively. C-SNPs cover fewer services through telehealth, only about 4.6 categories on average.

Figure 1: Average number of services covered by telehealth by special needs plan type

Telehealth Offerings by Plan Type

The interactive graphic summarizes telehealth coverage data by broad plan type: HMO, HMO-POS, and PPO, including both local PPOs (LPPOs) and regional PPOs (RPPOs).

• HMO plans provided much less telehealth coverage to their beneficiaries for urgent care services, with about 56% of members with access to that benefit, whereas PPO plans opted to provide urgent care services via telehealth to just over 83% of their enrollees.
• HMO-POS plans tended to emphasize coverage for outpatient substance abuse services, with about 71% of their enrollment covering this benefit.
• Individuals enrolling in PPO plans in all cases saw higher telehealth coverage of the top four categories, in particular for nonphysician mental health services, with almost 95% of enrollment covered, psychiatric services, with about 91% of enrollment covered, and urgent care services, with approximately 83% of enrollment covered.

Figure 2 demonstrates HMO-POS plans on average cover about 6.6 categories via telehealth, while PPO and HMO plan types cover 6.0 and 5.8 categories, respectively.

Figure 2: Average number of services covered by telehealth by plan type

Telehealth Offerings by Overall Star Rating

Lastly, the interactive graphic summarizes telehealth coverage by 2021 overall star rating (to be used in the 2022 bid development).

• Plans with a 3.5 or less 2021 overall star rating tend to cover slightly more primary care via telehealth as a percentage of total than their counterparts with 4.0 or higher star ratings. They also provide more nonphysician mental health services and psychiatric services (as a percentage of total) than both 4.0 and 4.5 star rating plans, on average.
• The low coverage of urgent care and high coverage of outpatient substance abuse services relative to the market are driven by a few key plans with significant membership (i.e., Kaiser Foundation Health Plans).

Figure 3 shows plans with a 4.0 or lower star rating only cover an average of approximately 5.7 service categories via telehealth, whereas plans with a 4.5 or 5.0 star rating covered an average of 6.8 and 7.7 services via telehealth, respectively.

Figure 3: Average number of services covered by telehealth by 2021 overall star rating

We also reviewed coverage of telehealth services in 2021 by plans that had a $0 premium or a non-$0 premium. There was not a discernible difference in the number of average services covered via telehealth, with these plans offering 5.8 and 6.0 services via telehealth, respectively.

Methodology and Assumptions

To perform these analyses, we relied on detailed information on MA plan telehealth benefit offerings for 2021. We also used publicly available MA enrollment information from February 2021 to develop enrollment-weighted averages by the groupings noted above. The various groupings we analyzed include:

• Special needs plan type
• Plan type
• Star rating
• $0 premium plans vs. non-$0 premium plans

The values presented reflect plans available in 2021. We excluded Part A services from our service category analysis. The information released by CMS includes detailed cost-sharing information by PBP service category, enrollee premium, star rating, and enrollment by plan. We used the Milliman MACVAT (which summarizes the previously mentioned information released by CMS).

We included all individual plans, e.g., non-employer group waiver plan (EGWP) MA prescription drug (MAPD) plans. We excluded standalone prescription drug plans (PDPs), medical savings account (MSA) plans, Medicare-Medicaid plans (MMPs), Program for All-Inclusive Care of the Elderly (PACE) plans, Part B-only plans, and Cost plans.

What’s Next for Telehealth in MA?

While most MA plans quickly adapted to the COVID-19 pandemic by covering telehealth, there may be additional expansions of allowable telehealth services as we look toward the future, including Part A or additional supplemental benefits. Some items of consideration include:

• Member behavior: We need to consider whether the rise in telehealth usage will be a permanent change in Medicare beneficiaries’ behavior in how they access healthcare across the spectrum of services. Will beneficiaries accept a long-term change to visiting their doctor(s) for all healthcare services, will they revert back to pre-pandemic behavior, or is it somewhere in between? Will members see telehealth access to particular services as a necessary benefit when enrolling, or not? These issues, coupled with provider telehealth service offerings, will likely shape the offering of telehealth and other digital benefits in the future.
• Provider adoption: While the MA market experienced a large increase in telehealth offerings in 2021 relative to prior years, it remains to be seen if providers, along with beneficiaries, will accept a permanent change to the access of healthcare services through the internet. It is possible that providers may change their practices in how care is delivered, for example by lowering brick and mortar investment while increasing their telehealth presence with leaner staff. Alternatively, providers may struggle to sustain this business model, and may return most or all services back to in-person.
• Telehealth access: Internet connectivity and costs associated with quality internet will remain a barrier to accessing video-based telehealth services for those in rural areas, who are often low-income. Some considerations include:
  • Note that CMS currently, as of the date of this paper, allows MA plans to sponsor the use of a smartphone or tablet for MA primarily health-related benefits under the “remote access technology” supplemental benefit category. However, these devices must be locked so they can only be used for “remote monitoring or to enable engagement with healthcare providers,”¹² or primarily health-related purposes (and not for “cosmetic, comfort, general use, or social determinant purposes”¹³).
  • CMS also allows MA plans to provide enrollees a cellular data plan if it is limited to only health-related activities under this same guidance. However, cellular data plans without limitations can be provided as a non-primarily health-related benefit under the special supplemental benefits for the chronically ill (SSBCI) benefit type.¹⁴ SSBCI benefits can be not primarily health-related; and “so as long as the cellular data plan has a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee,”¹⁵ it would be allowable under this benefit flexibility.
  • Two plans elected to take advantage of this and offered a “data plan” benefit with a $1,000 limit benefit in calendar year (CY) 2021, Humana’s H5216 – 239, Humana Care Extra (PPO), and H5216 – 240, Humana Care Extra (PPO D-SNP), both offered in the same counties in the Atlanta metropolitan area of Georgia. The SSBCI data plan is aimed at those beneficiaries with diabetes, certain cardiovascular disorders, or dementia and would allow beneficiaries data while using a personal device for healthcare needs, up to $1,000 per year.¹⁶ CMS noted that these benefits, within the limits described, may be provided as a COVID-19 permissive action for the duration of the PHE and/or be included in a bid submission for the entire contract year (presumably for the CY 2021 bid year, given the May 13, 2020, date of the memorandum).¹⁷

Caveats, Limitations, and Qualifications

Julia M. Friedman is a consulting actuary for Milliman, a member of the American Academy of Actuaries, and meets the qualification standards of the Academy to render the actuarial opinion contained herein. To the best of my knowledge and belief, this report is complete and accurate and has been prepared in accordance with generally recognized and accepted actuarial principles and practices.

The material in this report represents the opinion of the author and is not representative of the view of Milliman. As such, Milliman is not advocating for, or endorsing, any specific views contained in this report related to the Medicare Advantage program.

The information in this report is designed to provide an overview of the 2021 telehealth Medicare Advantage benefit offerings. This information may not be appropriate, and should not be used, for other purposes. I do not intend this information to benefit any third party that receives this work product. Any third-party recipient of this report that desires professional guidance should not rely upon Milliman’s work product, but should engage qualified professionals for advice appropriate to its specific needs. Any releases of this report to a third party should be in its entirety.

The credibility of certain comparisons provided in this report may be limited, particularly where the number of plans in certain groupings is low. Some metrics may also be distorted by premium and benefit changes in a few plans with particularly high enrollment.

In preparing our analysis, I relied upon public information from CMS, which I accepted without audit. However, I did review it for general reasonableness. If this information is inaccurate or incomplete, conclusions drawn from it may change.

¹CMS (September 24, 2020). Trump administration announces historically low Medicare Advantage premiums and new payment model to make insulin affordable again for seniors. Press release. Retrieved February 18, 2021, from https://www.cms.gov/newsroom/press-releases/trump-administration-announces-historically-low-medicare-advantage-premiums-and-new-payment-model.

²CMS (March 2020). Telehealth Services. MLN Booklet. Retrieved February 18, 2021, from https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/TelehealthSrvcsfctsht.pdf.

³Distant” site is the location of the provider, while “originating site” is the location of the beneficiary.

⁴The full text of the final rule is available at https://www.federalregister.gov/documents/2019/04/16/2019-06822/medicare-and-medicaid-programs-policy-and-technical-changes-to-the-medicare-advantage-medicare.

⁵CMS, Trump administration announces historically low Medicare Advantage premiums, op cit.

⁶CMS (January 7, 2021). COVID-19 Frequently Asked Questions (FAQs) on Medicare Fee-for-Service (FFS) Billing. Retrieved February 18, 2021, from https://edit.cms.gov/files/document/medicare-telehealth-frequently-asked-questions-faqs-31720.pdf.

⁷CMS (April 10, 2020). Applicability of Diagnoses From Telehealth Services for Risk Adjustment. Retrieved February 18, 2021, from https://www.cms.gov/files/document/applicability-diagnoses-telehealth-services-risk-adjustment-4102020.pdf.

⁸CMS (December 1, 2021). Trump administration finalizes permanent expansion of Medicare telehealth services and improved payment for time doctors spend with patients. Press release. Retrieved February 18, 2021, from https://www.cms.gov/newsroom/press-releases/trump-administration-finalizes-permanent-expansion-medicare-telehealth-services-and-improved-payment.

⁹Ibid.

¹⁰CMS (January 14, 2021). List of Telehealth Services. Retrieved February 18, 2021, from https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/Telehealth-Codes.

¹¹Ibid.

¹²CMS (May 13, 2020). Updated Guidance for Medicare Advantage Organizations. Retrieved February 18, 2021, from https://www.cms.gov/files/document/updated-guidance-medicare-advantage-organizations-5132020.pdf.

¹³Ibid.

¹⁴For more information, see https://www.snpalliance.org/wp-content/uploads/2020/10/Friedman_Mike_Supplemental-Benefits-and-Risk-Score.pdf.

¹⁵CMS, Updated Guidance for Medicare Advantage Organizations, op. cit.

¹⁶More information about these plans is available at https://www.humana-medicare.com/BenefitSummary/2021PDFs/H5216239000EOC21.pdf and https://www.humana-medicare.com/BenefitSummary/2021PDFs/H5216240000EOC21.pdf

¹⁷CMS, Updated Guidance for Medicare Advantage Organizations, op. cit.