States are opening the door to telehealth payments

Topics: Health Information Technology, Telemedicine, Politics and Policy, Federal Government, State Government

By Joe Infantino, senior staff writer

Telehealth is on the verge of becoming a health care industry norm, experts say.

Major health systems are adopting the technology, state legislatures are passing bills to facilitate access, and the American Medical Association this summer adopted ethical guidelines to help physicians put the technology into practice.  

"It's a long time coming," Michael Meza, the leader of telemedicine at Kootenai Health, told American Health Line.

Kofi Jones, vice president of government affairs at American Well, in a Forbes opinion piece said telehealth is reaching its breakthrough—or "game over"—moment. She wrote, "We are getting closer to a time in our digital health care evolution when we will no longer think of telehealth as anything separate or distinct. It will be fully integrated into everyday care delivery."

That, in part, is happening because states are addressing a longstanding barrier to telehealth: disparate and sometimes restrictive payment policies.

Patchwork of payment policies

There currently is no widely accepted telehealth reimbursement standard for private or public payers.

Medicaid and Medicare cover some telehealth services but only under certain conditions. Further, Medicaid programs vary by state. According to a Health Affairs policy brief, almost all states reimburse for live-video services, but just 16 reimburse for remote patient monitoring. Meanwhile, four states limit Medicaid reimbursement to just physicians, while 19 pay nine types of providers.

Coverage and reimbursement policies are no more consistent among private payers.

Whether a private insurer covers telehealth services often depends on whether the provider practices in a state that enforces parity laws, which require private insurers to reimburse telehealth-provided services at the same level that they cover in-person care. Thirty-two states and Washington, D.C., have enacted parity laws, according to Health Affairs.

But levels of coverage under those laws are not consistent across states. For example, Colorado, Missouri, and Virginia require payment at the same level as in-person services. Arizona limits parity to geographic regions and specific services. And Arkansas currently places limits based on patient location and provider type and requires an in-person visit before telehealth services can be provided. 

This patchwork of policies and the sometimes "arbitrary" requirements imposed by public and private payers poses a barrier to adoption, according to the American Telemedicine Association (ATA), which grades states based on their telehealth policies.

For example, Stacey Carson, chair of the Idaho Telehealth Council, told American Health Line that many hospitals may consider this patchwork a barrier because "in their perspective, it's difficult to implement a telehealth program when you don't know what the reimbursement modality is going to be." She added, "When you have a lot of differences between payers, it's difficult to ascertain the return on investment when rolling out a new program."

In its latest report card for coverage and reimbursement, ATA looked at various policies including parity laws for private insurance, Medicaid, and state employee health plans in 2015. It gave 28 states failing grades for at least one type of parity law. Three states received failing grades for all three.

States take action on telehealth

With so many states lagging in telehealth coverage, it might sound premature to say telehealth is nearing its "game over" moment. But recent legislative action shows states are finally starting to address obstacles to telehealth.

Take Rhode Island. Last year, the state received an "F" grade for its lack of parity laws, but in June, Gov. Gina Raimondo (D) signed into law a bill (HB 7160B) that requires private insurers to cover telehealth-provided services—albeit not necessarily at the same level as those provided in person.

The law, which takes effect Jan. 1, 2018, defines eligible telehealth technology as "real time two-way electronic audiovisual communications," such as video conferencing and store-and-forward technology, but it excludes audio-only phone calls, email, or automatic computer programs used for certain conditions. The law does not limit originating sites to rural areas and includes patients' homes.

In Louisiana, which received a "B" grade from ATA, lawmakers removed restrictions that had prevented out-of-state telehealth companies from operating within its borders.

Previously, a Louisiana Board of Medicine rule required companies to have an office within state lines to provide services. But HB 570, which was signed in June, removed that restriction and expanded the state's definition of telehealth to include audio communication and two-way video conferencing.

Several other states also have been advancing telehealth-related legislation in the past year:

  • Alaska, which received a "B" grade from ATA, removed out-of-state telehealth provider restrictions when it enacted SB 74 in June, and it also required payment for telehealth-based behavioral health services;
  • Arizona, which received a "C" grade, struck a provision that limited payment to rural-based telehealth services; and
  • Hawaii Gov. David Ige (D) in July signed a bill (SB 23295) that requires the state's Medicaid program to cover telehealth services.

Harry Greenspun, director of the Deloitte Center for Health Solutions, told MeriTalk that the wave of legislation in the past year shows telehealth is in the "amping up" stage.

And more states could yet follow suit.

In Pennsylvania, lawmakers are considering SB 1324, which would implement the state's first standards for telehealth and require insurers to reimburse such services. It also would allow providers to establish relationships with patients via telehealth technology.

The bill defines telehealth as "the delivery of health care services provided through telecommunications technology to a patient by a health care practitioner who is at a different location." It specifies that telehealth would "not include the use of audio-only telephone conversation, facsimile, email, instant messaging, phone text, answers to an online questionnaire, or any combination thereof."

In Arkansas, the state medical board approved an amendment to the state code that would allow physicians to establish relationships with a patient without an in-person visit. The board will meet again next month to determine separate regulations that establish telemedicine standards of care.

Federal action could promote more change

At the federal level, Congress is considering legislation called the Medicare Telehealth Parity Act (HR 2948), which would:

  • Allow a patient's home to serve as the originating site;
  • Expand the number of qualifying geographic locations to include federally qualified health centers and any rural health clinics and expand coverage of telehealth services; and
  • Increase the types of providers who could offer Medicare-covered telehealth services to include diabetes educators, licensed respiratory therapist, audiologist, occupational therapists, physical therapist, and speech language pathologists.

HR 2948's chances of passage are unclear, however, as it has been sitting in committee since July 2015. But if the bill passes, Meza said it could have a domino effect at the state level.

"Everyone looks to Medicare to see what they're doing and see how their payment structure is organized," Meza told American Health Line. "I think that would be the last nail in the coffin for other payers, if they haven't come on board already."