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Telehealth Growth, Savings Tied to Parity Laws

A new health policy brief argues that telehealth will only grow and support the promise of value-based care if providers are reimbursed at the same rate as in-person care.

- Telehealth will only succeed if providers are reimbursed at the same rate as in-person care.

That’s the conclusion drawn from a health policy brief developed by Health Affairs and the Robert Wood Johnson Foundation. It argues that the nation’s move from volume-based to value-based healthcare will be accomplished only if providers can be assured of delivering high-value care at a lower cost – and that’s what telehealth promises.

“As the United States moves from uncoordinated, volume-based delivery of health services to an integrated, patient-centric, value-based model, healthcare delivery will increasingly focus on achieving higher-quality care, improved care access and lower costs,” the brief states. “In enabling healthcare organizations to provide high-quality, ‘anytime, anywhere’ care to patients and operate more cost effectively, telehealth programs play an important role in achieving these goals.”

Unfortunately, the brief points out, we have a ways to go to reach that goal.

At the federal level, the Centers for Medicare and Medicaid Services places a number of restrictions on Medicare reimbursement for telehealth, the brief notes, offering a “less-than-ideal example for states to follow.” At the state level, meanwhile, there’s a battle between those who feel telehealth should be reimbursed at the same level as in-person care and those who feel the two platforms should be compensated differently.

According to the brief, 49 states and the District of Columbia provide some coverage for telehealth under Medicaid, while 32 states and the DC area have some form of parity law in place for private insurers. But each state approaches the matter differently – 23 states and DC have full parity, while Missouri, Colorado and Virginia “require payment on the same basis as in-person services, which allows them to take into consideration the cost differences of telehealth versus in-person services.”

At the other end of the spectrum is Arkansas, which currently places “arbitrary limits” on providers and originating sites for patients, and which still mandates an in-person encounter between a provider and patient before enabling telehealth.

In making the argument for parity laws, the brief cites increasing consumer demand for telehealth services as well as the potential for savings, including improved chronic care management and reductions in hospital readmissions and unnecessary emergency room visits.

On the other hand, opponents have five arguments against parity:

  1. Telehealth technology hasn’t proven its value yet, and may lead to unreliable or substandard care;
  2. The platform may skew the balance of quality care, creating “a greater inequity in the quality of care available in rural areas;”
  3. Because telehealth appointments are often one-time encounters, there are concerns that the data from such a visit won’t make it into the patient’s medical record, creating gaps in care and in some cases putting pressure on the patient to verify the encounter;
  4. There are concerns about patient privacy and the security of medical data in a virtual environment; and
  5. If telehealth does prove to save money, that should be factored into reimbursements alongside the risks and the potential for lower quality of care.

According to the brief, while opponents argue for more scrutiny and different reimbursement rates for telehealth, proponents say telehealth should be supported and expanded to create incentives for more patients and providers.

“By reimbursing at the same rates as in-person services, states support the growth and development of telehealth, while encouraging more and more physicians to use it as a method of care,” the brief argues. “Furthermore, if reimbursements for telehealth do not align with in-person services, the cost savings projected for telehealth will never be realized because providers will stay with in-person services to recoup their costs.”

The brief does see some hope for future. While Congress is set to debate a Medicare Telehealth Parity Act that would, if passed, “modernize” federal telehealth guidelines and reimbursement, many states are moving forward with telehealth-friendly legislation as well.

“Without parity, there are limited incentives for the development of telehealth or for providers to move toward telehealth services,” it notes. “If there are no incentives to use telehealth, then providers will continue to focus on in-person care, which will keep healthcare costs high, continue to create access issues and possibly provide lesser standards of care for chronic disease patients who benefit from remote monitoring.”

Dig Deeper:

Massachusetts Drops Parity from Telemedicine Reimbursement Bill

States Take the Lead in Paying for mHealth

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