States progressing on legislation to support telehealth services
Reimbursement rates remain a sticking point for telemedicine adoption, but states are working to change that.
States have made significant process in creating access to telehealth services, a new survey finds. The Foley and Lardner report reviews telehealth statutes across all 50 states, with an eye on how state lawmakers are creating legislation that allow both access to, and reimbursement for, this growing area of health care technology.
Related: 2019: The year of telehealth?
The report notes that there are currently 42 states and Washington, D.C. that have some form of telehealth commercial payer law. The survey found that some states, such as Florida, Massachusetts, and Michigan, have payment laws but do not actually require plans to cover telehealth services. In eight states—Alabama, Idaho, North Carolina, Pennsylvania, South Carolina, West Virginia, Wisconsin, and Wyoming—there are still no telehealth commercial payer laws.
A roadblock to services is crumbling
The report compares the latest survey to one conducted in 2017 and finds that progress has been made across many states. “At the time of the [2017] survey, one of the biggest barriers to adoption was limited or unclear reimbursement for telemedicine and digital health services,” the company said in a statement. “While reimbursement remains a major concern in the industry, the progress on a state-by-state basis over the past two years has been impressive.” The report points to recent laws passed in Georgia and California as “best-in-class” legislation in this area.
Telehealth services, which for many years were often relegated to rural health applications, have become much more common for the general population, from virtual primary care visits to mental health services. “Patients and providers continue to push for more virtual care services, and health plans are beginning to offer more meaningful coverage of these modalities,” the report said. “These laws benefit patients by increasing access and availability to health care services, and catalyze the growth of telehealth technologies throughout the country.”
Barriers remain, including lack of parity
The report details how the language of telehealth bills can limit coverage and access to services. In general, more narrowly focused legislation tends to inhibit applications that come with a growing and changing technology. Some states have had to pass follow-up legislation to fix unintended consequences caused by limited statutes, the report noted. Another issue to watch, the report said, is cost shifting, as some plans will charge higher deductibles, co-payments, or maximum benefit caps for services provided via telehealth.
But the report singled out parity laws as an especially important issue. Parity is different than coverage, the authors noted. Without parity language, insurance carriers could cover telehealth at much lower rates than they cover identical in-person services.
“Without payment parity, a health plan could unilaterally decide to pay network providers for telehealth services at 50 percent of the reimbursement rate that health plan pays the provider for an identical in-person service,” the report said. “If the health plan’s payment rate is too low, it can create a disincentive for providers to offer telehealth services, undermining the very policy purposes the coverage law was intended to achieve.”
At the same time, the report recognizes that parity can be a tricky concept, since in-person and telehealth visits are by nature different types of care. “Ideally, payment parity laws should not prevent the parties from negotiating for different reimbursement rates for telehealth vs in-person services, so long as such negotiations are truly voluntary by the provider and not forced upon them,” the report concludes. “Model payment parity laws should not eliminate opportunities for cost savings and should allow health plans and providers to contract for alternative payment models and compensation methodologies for telehealth services, so long as those negotiations are voluntary.”
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