The Centers for Medicare and Medicaid Services is taking a more open approach to telehealth in a finalized Medicare rule by allowing home health agencies to bill for remote patient monitoring.

Under the new rule released Oct. 31, remote patient monitoring will now be an allowable cost. Typically, telehealth services are not covered by Medicare if they are replacing in-person home healthcare, according to CMS. However, the agency said it will include remote patient monitoring because it can increase the quality of care for patients, specifically those treated with home care.

Allowable costs for remote patient monitoring will now be defined as the collection of physiologic data such as ECG, blood pressure and glucose monitoring, which is digitally stored or transmitted by the patient or caregiver to home health agencies, according to the rule.

The agency said in a statement that they hope the change will incentivize more home health agencies to adopt telehealth.

CMS also increased payments to home health agencies by 2.2%, effective Jan. 1, 2019. The agency estimates that the increase will total $420 million. One of the largest changes in the rule is the restructuring of the home health prospective payment system. The new system is called the Patient-Driven Groupings Model and will focus more on patient information and clinical characteristics in order to classify payments.

Part of the restructuring includes changing the payment unit measure from 60 days to 30 days. The change is to better reflect a move towards paying for quality of care and not the volume of care, according to the rule.

The changes are expected to take place in 2020. In order to make the prospective payment system changes budget neutral, CMS will make a 6.42% decrease in payment rates.

Rick Weissenstein, a Cowen Washington Research Group analyst, said in an Oct. 31 note that the payment-rate cut is opposed by the home health lobby and "several bills have been introduced to stop the cut, though they are unlikely to pass this year." MedPAC, a congressional advisory committee for Medicare, supported the 6.42% reduction and advised CMS to monitor the changes and make sure a larger payment is not required, according to Cowen.

CMS also changed how it classifies rural counties for rural add-on payments. Rural-add on payments are payment modifiers on top of traditional reimbursements designed to help rural home health agencies, which tend to have higher overhead costs, according to the National Association for Home Care and Hospice.

From calendar year 2019 to 2022, CMS will divide rural counties into three classifications: health utilization, low population density, and all others. The payment rate will vary depending on the classification and rates will decrease by up to 1% every year. Health utilization and all other will begin at 1.5% and 3%, respectively, while the low-population-density classification will begin at 4%. By 2022, low population density will be the only classification receiving add-on payments.