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CT Employers, Payers Oppose Fixed Rates for Telehealth Services

A state bill to allow physicians to provide telepsychiatry is facing employer and health plan opposition because of a provision to fix rates for telehealth services.

Fixed rates for telehealth services in CT

Source: Thinkstock

By Kyle Murphy, PhD

- A recent hearing to discuss a bill to allow Connecticut physicians to provide telepsychiatry services saw employers and health plans in the state opposing a measure to pay for these telehealth services at the same rate as in-person services.

Introduced earlier this year, the proposed legislation (HB 5299) would allow licensed physicians to prescribe certain medications to treat psychiatric disorders using telehealth, allow for telehealth examinations, and establish implement payment for parity for telehealth services.

While the bill currently enjoys the support of state hospitals and psychiatrists, employers and payers view the provision for payment parity as grounds to oppose the legislation.

The ERISA Industry Committee (ERIC) questioned the logic of the provision.

“Large employers have been the biggest innovators in health care, and the vast majority have adopted telemedicine as a way to provide added value for their employees and to help drive down health care costs,” stated ERIC Senior Associated for Health Policy Adam Greathouse. “For the aforementioned reasons, legislation that mandates that reimbursement for telemedicine be the same rate as that of in-person services is simply illogical and unnecessary.”

The organization representing large employers called on state legislators to remove provision, noting that “reimbursement rates should be negotiated between providers and insurers, not mandated by government.”

Connecticut Business and Industry Association noted employer concerns about the ability of telehealth services to improve the cost and quality of healthcare if rates were to be artificially fixed.

“Currently, in Connecticut the average cost of care for Telemedicine appointment is $45 v $186 for an in-person visit. If the underlying bill is passed the $45 Telemedicine appointment will more than quadruple, totaling an average cost of care $186,” read the testimony of CBIA’s John D. Blair.

“The problem with state mandated payment parity is that by requiring payment parity for telemedicine, the patient would realize ZERO savings for choosing to seek care through telemedicine, which is inherently less expensive than in-person care,” the testimony continued.

“To date, we have collectively recognized that there is a substantial need for the state to embrace cost-saving measures. The language of this bill runs counter to this kind of thinking. There is no doubt that HB 5299 would substantially increase healthcare costs and makes little sense if we truly are embracing every opportunity to curb healthcare costs in Connecticut.”

The Connecticut Association of Health Plans voiced similar concerns.

“The same ‘fixed costs’ associated with a brick and mortar facility are simply not required for the practice of Telehealth and therefore; the same “fixed reimbursement or parity isn’t called for either,” the associated argued. “Telehealth has also provided consumers with affordable options for particular types of service like psychiatry. Passage of the parity component of HB 5299 will have serious negative connotations for consumers robbing CT’s citizens of yet another affordable option for care.”

Teladoc, one of the nation’s largest telehealth companies, also weighed in on the issue, claiming that the bill as presently proposed would undermine efforts to decreasing healthcare spending.

“The state should be encouraging, not discouraging, cost-saving innovations. No provider should be forced by state law to accept a higher reimbursement than the provider is willing to charge,” the company noted in opposition of HB 5299.

Those opposing the bill also included the Connecticut Stated Medical Society, albeit on different grounds. As part of the hearing, the group contended that the legislation would not ensure that patients receive appropriate counseling and support services needed to combat substance abuse disorders and could therefore threaten patient safety.

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