Many states are enacting laws requiring commercial health plans to cover medical services provided via telehealth to the same extent they cover medical services provided in-person. These laws are intended to promote innovation and care delivery in the private sector by catalyzing healthcare providers and plans to invest in and use the powerful telehealth technologies available in the marketplace.
Currently, 29 states and the District of Columbia have enacted commercial payment statutes, and bills are under development in several other states. Examples of enacted laws in the first half of 2015 include Arkansas, Connecticut, Delaware, Indiana, Minnesota, Nevada and Washington.
Although some hospitals and providers already offer telehealth services, it remains “in development” for the majority of healthcare providers. These laws are expected to drive the commercial insurance market, allowing telehealth to be enjoyed by more patients across the states. Successes in these 29 states will signal the promise of telehealth coverage and payment parity to the remaining 21 states as they consider their own legislation.
These laws are generally referred to as “telehealth commercial payer statutes” or “telehealth parity statutes.” They are designed to promote patient access to care via telehealth, whether the patient is in a rural area without specialist care or a busy metropolitan city without the time to leave work or the home and devote three or more hours to an in-person check-up in a crowded waiting room.
There are significant variances across the 29 states, but two related but distinct concepts have emerged.
Telehealth Coverage vs. Telehealth Payment Parity
Telehealth coverage laws require health plans to cover services provided via telehealth to the same extent the plan already covers the services if provided through an in-person visit. The laws do not mandate the health plan provide entirely new service lines or specialties. The scope of services in the plan’s member benefit package remains unchanged. The only difference is that the patient can elect to see his or her doctor via telehealth rather than driving to the doctor’s waiting room.
Telehealth coverage laws also frequently include language to protect patients from cost-shifting. They disallow health plans from imposing different deductibles, co-payments or maximum benefit caps for services provided via telehealth. Any deductibles, co-payments and benefit caps apply equally and identically whether the patient receives the care in-person or via telehealth. This is reasonable and logical because telehealth is not a separate specialty, but simply a technological conduit through which the physician provides care. Such language prevents the patient from being saddled with higher co-payments to access care via telehealth.
A number of states, particularly those that have enacted telehealth payer laws in the last few years, have elected to expand on telehealth coverage with two additional concepts: 1) remote patient monitoring; and 2) payment parity. These policy concepts are in addition to the equal coverage laws discussed above.
The first concept, remote patient monitoring, includes a variety of patient oversight and communications devices, software and processes to allow providers a greater ability to monitor patient care needs and immediately respond. Clinical benefits are significant and well-established, particularly for chronic disease management. Some states have enacted laws requiring health plans to offer remote patient monitoring as an additional service in the member’s benefit package. States have taken this step because remote patient monitoring, by definition, is a virtual distance-based service and does not have an in-person equivalent that would likely already be found in a member’s benefit package.
The second concept, telehealth payment parity, requires health plans to pay providers for telehealth services at the same or equivalent rate the health plan pays the provider when the service is provided in-person. For example, a health plan and doctor enter into a contract where the plan agrees to pay the doctor $50 for each patient examination. Payment parity has the health plan pay the doctor $50 whether he provides the service in-person or via telehealth. If the agreed upon contract rate is $30 for the in-person service, it is $30 for telehealth. Keep in mind: payment parity does not change the plan’s existing utilization review processes. The doctor’s services (whether in-person or via telehealth) must still be of high quality, appropriately documented and medically necessary in order to be paid.
Payment parity is, in part, a response to avoid the problem of health plans paying for telehealth services at only a percentage of the in-person rate or imposing restrictive conditions on telehealth. This problem is real, and the situation currently exists in many states that enacted a telehealth coverage statute but failed to include payment parity language. The result: a telehealth payment statute that is largely useless after the fanfare of the bill’s signing ceremony.
In greater part, payment parity is intended to level the field for healthcare providers to enter into meaningful negotiations with health plans as to how telehealth services are covered and paid. Payment parity does not eliminate or impair opportunities for cost savings, as plans and providers may still voluntarily contract for alternative payment models and compensation methodologies other than fee-for-service. Payment parity laws do not, and are not intended to, prohibit health plans and providers from the freedom to develop and enter into at-risk, capitated or shared savings contracts, all of which are conducive to the benefits offered by telehealth. These compensation models are real opportunities and should be meaningfully explored by plans and providers alike. An online search of the term “payer-provider convergence” will reflect the significant interest and activity plans and providers have in these contracts, as risk-sharing blurs the lines between payers and providers.
Understanding the differences in the telehealth payer statutes in these 29 states – and the market consequences of these differences – is essential for healthcare business leaders, policy analysts or lawmakers considering a similar bill in their home state.
This article was originally posted in mHealth News and appears here with permission.