Post-pandemic allowances for telehealth claims have not triggered runaway healthcare spending

If Congress doesn’t act soon, CMS’s flexible funding of telemedicine visits—a temporary holdover from the COVID era—will dry up next year. A new study may help persuade fiscally cautious representatives not to let that happen.

The research, conducted at UCLA’s David Geffen School of Medicine and published May 11 in JAMA Network Open, shows the post-pandemic accommodations for telemed claims have not spurred significant spikes in patient visits or overall healthcare spending. 

The bottom line is that the major spending increases some feared have not materialized. 

“As policymakers weigh whether to extend Medicare telemedicine flexibilities beyond their 2027 expiration, our findings suggest limited near-term spending risk,” the study’s authors write. 

At the same time, they note, broadened payer acceptance of telehealth also seems not to have moved underserved consumers to avail themselves of the opportunity for greater access to care. 

Accordingly, the researchers recommend keeping an eye out for longer-term effects on costs, health outcomes and quality of care. 

Robust and representative study sample 

For the study, John Mafi, MD, MPH, and colleagues analyzed payment data recorded from January 2019 through October 2023, half a year after the public health emergency ended. 

The data sample included 3.04 million individuals (mean age, 54.2 years; 55.7% female) who had 120 million visits and incurred $178.4 billion in spending from 2019 to 2023.

The team looked at telemed claims data not only from Medicare, Medicare Advantage and Medicaid but also commercial insurance.

Importantly, Mafi and co-researchers analyzed all ambulatory visits, not just telemedicine engagements. 

Further, they tallied the total per-member, per-month spending on professional, inpatient, facility outpatient, prescription drug and ancillary care services. 

Counterintuitive visit counts, price tags and concerns 

Among the team’s key findings: High telemed-adoption areas had 2.4% fewer visits and 0.5% lower spending as compared with low-adoption areas. 

Consistent with that pattern, point estimates showed 4.4% fewer visits and 2.3% lower spending among urban populations; 2.5% lower spending for Medicaid-insured individuals; 5.3% lower spending for dual-eligible individuals; 3.0% lower spending for Medicare Advantage–insured individuals; and 1.5% lower spending among the most socially vulnerable populations. 

On the other hand, point estimates suggested some metrics moving in the other direction. Spending in rural areas had 3.4% more visits and 3.8% higher spending, commercially insured individuals had 1.1% higher spending, Medicare fee-for-service patients had 1.0% higher spending and the least socially vulnerable groups had 4.5% higher spending. 

Summarizing the import of the above findings and others uncovered by the present analysis, Mafi and fellow researchers write:  

“Taken together, [our] results suggest that continuing current telemedicine coverage is unlikely to meaningfully increase near-term spending—a timely and policy-relevant finding as pre-deductible telehealth coverage is now permitted in high-deductible health plans, and federal telemedicine flexibilities are set to expire on Dec. 31, 2027, absent further congressional action.”

No overutilization effect—but no extended reach, either 

In coverage of the study by UCLA Health’s news operation, Mafi highlights the conclusion that wider availability of telemedicine neither opened access for underserved populations nor drove up questionably appropriate utilization across the board. 

“Our findings suggest neither prediction came true on a national scale,” Mafi says. “As telemedicine use grew, visits and spending in heavy users tracked closely with patterns in lighter users. That is reassuring for anyone worried about ballooning costs—but sobering for anyone hoping telemedicine would close longstanding gaps in access.”

At least so far, Mafi adds, telemedicine “looks more like a substitute for in-person care than a true expansion of it.”

The study’s senior author, Katherine Kahn, MD, emphasizes that the analysis only covers activity to a few months post-pandemic, “when telemedicine use was still settling into a new equilibrium.” 

“Much more work is needed to understand telemedicine’s longer-term effects on quality of care, health outcomes and spending, and whether those effects differ across the diverse populations who depend on it,” Kahn says. “Policymakers should keep monitoring closely as the evidence base matures.”

The study is posted in full for free.