Goal is to better align coverage and payment with clinical benefits  

Tie reimbursement to clinical value, end forever codes, and improve data collection 

A report from the Peterson Center on Healthcare provides new guidance for policymakers regarding coverage and payment for remote monitoring technologies. The report is a synthesis of three separate evaluations of digital health tools by the Peterson Health Technology Institute (PHTI) and an analysis of trends in Medicare and Medicaid billing. It includes recommendations on reimbursement, access, and data collection to ensure this rapidly growing area of healthcare better serves patients, while avoiding an increase in spending on ineffective and wasteful services. Given the rapid growth in patients receiving remote monitoring services, the increasing duration of monitoring periods, and the significant potential for further expansion, now is the time for payers and policymakers to reset policies to ensure that value is driving coverage decisions. 

The report makes three key recommendations:  

1. Let performance drive coverage and reimbursement 

Policymakers and payers should design coverage and reimbursement policies based on research that establishes whether and how long remote monitoring is effective in managing the condition being treated.

2. Drive access to and use of high-impact services 

Using payment incentives, policymakers and payers can encourage the use of high-value remote monitoring services, particularly in rural areas, while also discouraging wasteful and ineffective use.  

3. Improve data collection and transparency 

In order to make evidence-based decisions about the effective and efficient use of remote monitoring, payers and policymakers need more specific information about the performance of these technologies, including what digital solutions are used, what physiological and other data are being collected, what specific condition the solution is being used to treat, and the relevant provider information.

Remote monitoring uses technology to enable medical professionals to track patients’ health and manage treatment between visits—including remote patient monitoring (RPM) of data such as weight, blood glucose, or blood pressure measurements and remote therapeutic monitoring (RTM) of self-reported pain and activity levels. However, Medicare billing for remote monitoring has grown rapidly in recent years, and the number of patients receiving long-term monitoring is increasing steadily despite clinical evidence that most of the benefit occurs in the first few months. Additionally, it is challenging to evaluate the appropriateness of remote monitoring billing because of numerous gaps in data collection, including the specific health information collected for patients, the devices being used, and the provider ordering the service.  

Federal spending within traditional Medicare on RPM increased sharply in four years, from $6.8 million in 2019 to $194.5 million in 2023. RTM shows a spending surge, growing from $2.2 million in 2022 (the year the codes were introduced) to $10.4 million in 2023 in traditional Medicare. Further, Medicare pays the same amount for remote monitoring regardless of what condition is being tracked, and it allows providers to bill the codes indefinitely. Given that a majority of people enrolled in Medicare have chronic conditions that could qualify for remote monitoring, the future spending potential is significant, necessitating better policies adhering to standards and evidence on clinical benefits. 

The report synthesized three PHTI evaluations of digital tools to treat diabetes, hypertension, and musculoskeletal disorders, covering the conditions associated with the majority of spending and utilization for remote monitoring services. In 2023, diabetes and hypertension monitoring represented 73% of total RPM spending in traditional Medicare. Musculoskeletal disorder monitoring was the most common application for RTM, representing 59% of all RTM episodes and almost half of RTM spending. 

The report also finds that some providers are billing for remote monitoring services long after the time when patients are likely to gain additional value from it. For example, clinical evidence supports remote patient monitoring for blood pressure management for up to six months, yet four in 10 hypertensive traditional Medicare patients were monitored for more than six months.  

“As we adopt exciting, new technologies that extend care beyond the walls of the doctor’s office, we need to design payment models that align with clinical benefits for patients,” said Caroline Pearson, executive director of the Peterson Center on Healthcare. “That means ending ‘forever codes’ that incentivize long-term billing of ineffective care and instead designing payments that reimburse providers for the periods of time they should be actively monitoring and managing their patients’ diseases.” 

While remote monitoring solutions are currently used by only a subset of people enrolled in Medicare, their use—and duration of use—is growing rapidly. Moreover, the sector is being flooded with an array of new products from hundreds of technology companies marketing the potential to increase provider revenue for longer periods of time. Medicare currently has no limit on duration of billing for remote monitoring, which means providers are reimbursed up to $1,110 per patient, year after year. The report comes at a pivotal moment for remote monitoring technology, given the importance of finding valuable technologies to better treat patients while preventing a rapid increase in spending on ineffective and wasteful care. 

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About the Peterson Center on Healthcare 

The Peterson Center on Healthcare is a nonprofit organization dedicated to making higher quality, more affordable healthcare a reality for all Americans. The organization is working to transform U.S. healthcare into a high-performance system by finding innovative solutions that improve quality and lower costs, and accelerating their adoption on a national scale. Established by the Peter G. Peterson Foundation, the Center collaborates with stakeholders across the healthcare system and engages in grant-making, partnerships, and research.