CBO: CHRONIC Care Act would increase federal spending in short term before reducing costs

One telehealth expansion bill won't see a quick return on investment, according to an analysis by the Congressional Budget Office.

The Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act of 2017 (S.870) would alleviate CMS restrictions on telestroke services. According to the CBO's fiscal analysis, federal spending would increase in the short term for these services, before gradually reducing costs over time.

The agency estimated the bill would reduce direct spending for Medicare and Medicaid by $217 million in the first five years. But, CBO estimates the expansion of telestroke services would increase direct spending by $180 million over the 2018 to 2027 period.

Although the initial expansion of Medicare coverage from 2018 to 2027 would likely see an increase in direct spending, CBO suggests the program would still reduce costs in the long run.

"Taking into account that pattern of an initial increase in spending and a reduction over time for each cohort of patients each year, CBO expects that expanding Medicare coverage of telestroke services ultimately would reduce Medicare spending," the report reads.

The agency added the Medicare population located in nonrural settings sees about 550,000 strokes each year. The legislation would enable providers to treat 14 percent of these nonrural patients with telestroke services by 2027.

Overall, the bill would increase state shares of increased Medicaid spending by $93 million because of increased enrollment.

"Because states have significant flexibility to adjust their financial and programmatic responsibilities, such additional expenditures would not result from an intergovernmental mandate," the analysis reads.

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