CBO Actions Seen by Some to Impede the Adoption of Telemedicine

In an article on Politico.com, author David Pittman reports on actions by the Congressional Budget Office (CBO) that may be creating roadblocks to a swifter embrace of telehealth technologies by lawmakers.

Established by Congress in 1975, the CBO produces independent analyses of budgetary and economic issues to support the Congressional budget process.  Any legislation considered in Congress must be “scored” by CBO as to its fiscal impact on the Federal budget.  House and Senate rules require that any spending be offset either by spending cuts or revenue increases, so the bill under consideration is “revenue and spending neutral”.

“Telemedicine’s advocates, frustrated by the CBO’s lack of enthusiasm for increasing payment for their technology, are crying foul at the federal budget keepers. They charge that CBO routinely overestimates the cost of new Medicare services — and there’s some evidence they are right.

In 2001, Congress added limited coverage for telemedicine into section 1834(m) of the Social Security Act, which the telemedicine community is trying to purge.

At the time, CBO predicted telemedicine would cost Medicare $150 million in the first five years. But the program has spent a mere $57 million over 14 years, according to the The Robert J. Waters Center for Telehealth and e-Health Law (CTeL).  Telemedicine advocates point to [this] fact as exhibit A in CBO’s tendency to overestimate costs.

‘It’s very hard to figure out, after the fact, how accurate CBO has been with respect to the scoring of most legislation because most legislation represents a marginal change to something that’s already happening,’ said Phil Joyce, a public policy professor at the University of Maryland who wrote a 2011 book on CBO.”

Pittman notes that a thorough academic review of CBO’s work over the years would be difficult.  “Such a task would be thorny. It’s impossible to know the number of doctors’ visits, for example, that would have occurred had a policy change not happened.  So many factors influence a hospital’s payments that it’s hard to disentangle them or attribute a particular quantity to a change Congress mandated several years before.”

Author Pittman concludes his report on the debate about CBO over-estimating the cost of telemedicine, quoting former Pennsylvania Rep. Allyson Schwartz, a lawmaker noted for her work in health policy who now runs a Medicare Advantage advocacy group.

“CBO isn’t unfair, nor are its standards too high. If anything, [telemedicine] advocates need to find better ways to show CBO their proposed changes work and will save money. They do seek to be fair, but they’re also careful, Schwartz said.”

Click here for the Politico.com article:  Telemedicine fans point to CBO’s history of cost overestimates


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