Medicare Beneficiary Use of Telehealth Grows, Overall Adoption Remains Low with Major Opportunities for Expansion

A new report titled “Information on Medicare Telehealth” from the Centers for Medicare and Medicaid Services (CMS) shows relatively large growth in the use of telehealth services among Medicare Fee-for-Service (FFS) beneficiaries from 2014-2016. Yet, overall adoption remains low: Only a tiny fraction of the total Medicare FFS population currently uses telehealth.

This is due in large part to Medicare policy and restrictions that sharply limit the types of services, settings and geographic areas that qualify for reimbursement. However, that’s about to change based on CMS rulemaking.

The CMS data analysis details who uses telehealth, the diagnosis and rate of growth. In addition to utilization trends, CMS reports on three other key issues as mandated by Congress (in the 21st Century Cures Act) including:

  • Barriers that might prevent telehealth expansion;
  • The types of high volume services that might benefit from telehealth;
  • Activities by the Center for Medicare and Medicaid Innovation that test increased access to telehealth;
  • The populations of beneficiaries whose care may be improved most in terms of quality by the expansion of telehealth services.

CMS used administrative claims data for Medicare FFS beneficiaries, plus claims for dual-eligibles (Medicare and Medicaid enrollees); those with a disability under age 65; and ESRD patients. They note there may be some under-reporting based on definitions and billing.

Report Highlights Show

  • A large increase in the year-after-year growth rate of telehealth services relative to patient population growth;
  • Services were primarily used by those with a mental health diagnosis;
  • Utilization spiked among those aged 85 and older;
  • Telehealth was not often used by beneficiaries with physical conditions.


  • The number of beneficiaries using telehealth grew by 48.3% with a 65.3% increase in services furnished by practitioners, 2014-2016
  • 90,000 Medicare FFS beneficiaries used 275,199 telehealth services or 0.25% of the 35 million FFS Medicare beneficiaries included in the claims analysis, 2016.


  • Beneficiaries 85 years and older used 12.5% of telehealth services in 2016, an increase of 136% from 2014.
  • 60% of dual-eligibles received telehealth services in 2016, a 64.4% increase from 2014.
  • People with disabilities accounted for 65% of beneficiaries using telehealth in 2016, using over 66% of all telehealth services. The number of beneficiaries increased by 37.7% with a 53.7% increase in the total services used, 2014-2016.
  • Utilization rates were highest in Texas, Iowa, California, Missouri, Michigan, Minnesota, Wisconsin, Georgia, Virginia, and Kentucky, all with large rural areas.

Use by Diagnosis

  • Psychotherapy was one of the most common services; 85.4% of all telehealth users (74,547 beneficiaries) had at least one mental health diagnosis;
  • Fewer than 1,000 beneficiaries with chronic physical conditions such as heart failure and diabetes used telehealth services.
  • Utilization is growing for some physical conditions: heart failure increased 105% and stroke by 113% from 2014-2016.
  • Telehealth use for co-morbidities (beneficiaries with depression and hypertension, diabetes or ischemic heart disease) is higher compared to those without such a diagnosis.

CMS analysis suggests the use of telehealth services would dramatically increase if just a fraction of FFS beneficiaries receiving in-person services (office visits, hospital/nursing home consultations, chronic disease management, etc.) switched to telehealth.

They also note the potential for telehealth to improve access to care in rural and urban areas, reduce wait times, add convenience, and reduce disparities. As in the commercial sector, it could help Medicare beneficiaries receive care “anytime, anywhere.” And, with the recent CMS rulemaking aimed at eliminating restrictions for telehealth reimbursement, watch this space for further updates.

Given telemedicine’s rapidly growing and ever-changing landscape, it is crucial for organizations to not only identify ways to promote quality and improve outcomes, but also to differentiate themselves. Click here to learn more about the CHQI Telemedicine Accreditation Program, which promotes access to quality-based, standardized, and outcomes-driven health care regardless of the type of clinical services being provided.

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