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States Take the Lead in Paying for mHealth

A National Conference of State Legislatures report finds that states are advancing mHealth reimbursement through their own Medicaid programs and by requiring private payers to follow suit. But each state is following its own path.

- At the root of every mHealth project is one simple question: Who will pay for it?

No one has a good answer to that.

A recent report prepared by the National Conference of State Legislatures, prepared after a year-long study, questions whether the Centers for Medicare & Medicaid Services is hindering mHealth growth with burdensome Medicare policies. And faced with those obstacles, states legislatures are finding new ways to pay for the services through Medicaid.

“States have significant control and flexibility in their Medicaid programs, unlike in Medicare, including the ability to decide Medicaid coverage and reimbursement for telehealth,” the report states. “According to CMS, ‘states are encouraged to use the flexibility inherent in federal law to create innovative payment methodologies for services that incorporate telemedicine technology.’ State policy typically determines what constitutes telehealth; the types of technologies, services and providers that are eligible for reimbursement; where telehealth is covered and how; and other guidelines.”

But no two states are taking the same approach, leading to a mish-mash of coverages and concepts that can make the diehard mHealth advocate’s head spin. According to the American Telemedicine Association – which will soon be updating its own report cards for every state – every state except Rhode Island has some coverage for telehealth, and nearly all of them reimburse providers for video telehealth services.

Then things get tricky. Nine states – Alaska, Arizona, California, Illinois, Minnesota, Mississippi, New Mexico, Oklahoma and Virginia – reimburse for store-and-forward services. At least 17 reimburse for remote patient monitoring, while two others tie those reimbursements to senior care services through their departments of aging. And of the 48 states that offer some sort of coverage for behavioral health or mental health services via video consult, eight fund telehealth services through their home health services budgets.

Who gets reimbursed can be just as tricky. According to the report, 15 states and the District of Columbia don’t set limits on what type of provider can be reimbursed, while 19 states break it down into nine categories or less – and four limit reimbursement only to physicians.

And while Medicare limits its reimbursements to rural locations - defined as Health Professional Shortage Areas (HPSAs) or in a county that is outside of a Metropolitan Statistical Area (MSA) – and sets restrictions on who’s administering and who’s receiving the care, the study notes that many states either don’t have any restrictions or are removing those limits. Nevada, Michigan, Missouri and Colorado recently lifted those geographic limits, the report states.

As for who’s giving and who’s receiving telehealth care, the report says states are evenly divided in how they reimburse via Medicaid. Twenty-four states and the District of Columbia don’t specify where the patient is located or in what type of setting he/she is based; half of all states allow care to be delivered in a patient’s home, and 16 states enable care to be delivered in schools or school-based health centers. Finally, 28 states and the District of Columbia don’t require that a healthcare representative – called a “telepresenter” – be present with the patient at the point of care.

The report also notes that states are experimenting with new payment and delivery models, with telehealth in the mix. Some 24 states are allowing telehealth under Medicaid managed care plans, which can take the form of managed care organizations or accountable care organizations. Some are also using state plan amendments, waivers and grants.

While states are expanding mHealth reimbursement through Medicare, they’re also compelling private payers to follow suit. In all, 32 states and the District of Columbia have telehealth parity laws on the books, requiring private payers to reimburse for mHealth care at an equivalent rate or “on the same basis” as in-person care, or will have them in place by 2017. Full parity – “when both coverage and reimbursement are comparable to in-person services” – is in effect in at least 23 states and the District of Columbia, according to the ATA.

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