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Kansas Payers Push Back Against Telehealth Payment Parity

With two telehealth payment parity bills defeated this past summer, Kansas lawmakers are clashing with private payers over whether telemedicine and in-person visits are valued evenly.

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By Eric Wicklund

- Payers in Kansas are fighting proposals for payment parity in telehealth, saying a virtual visit shouldn’t be reimbursed at the same rate as in in-person visit.

“Telemedicine services are not equivalent to in-person services and, therefore, should not receive parity to in-person services in reimbursements,” Coni Fries, of Blue Cross Blue Shield of Kansas City, said during a Kansas Legislature committee meeting last week. “Primary care physicians are paid at a higher rate because we expect them to manage our members’ care throughout the year. On the contrary, telemedicine appointments might be one-time engagements.”

Reimbursement is one of the most vexing issues hindering the expansion of telehealth and telemedicine, with payers, providers and legislators all at odds over how physicians should be paid for their online time.

According to the American Telemedicine Association, at least 33 states and the District of Columbia have some sort of payment parity law on the books, requiring that telehealth visits be reimbursed at the same rate as in-person visits. In states like Massachusetts, meanwhile, health plans have successfully fought against such legislation.

"It's mostly a vehicle for making sure that people who want to do telemedicine on whatever terms they make up and charge what they want will get away with it," Jim Kessler, general counsel for Springfield, Mass.-based Health New England said in 2016, when efforts to legislate payment parity failed to pass. "If you mandate certain services and reimbursements, you're taking away the whole negotiating ability of health insurers to benefit consumers."

READ MORE: Telehealth Growth, Savings Tied to Parity Laws

In Kansas, legislators debated two bills this past summer that would have supported parity. Neither made it past the House, and the matter was referred to a subcommittee, which is charged with making recommendations to the 2018 Legislature.

BCBS Kansas was among the most vocal opponents, saying the legislation would strip insurers of the power to manage their own services.

“It takes away the ability of the insurance companies to be able to price accordingly for the services provided, while also keeping an eye on how to keep premiums as low as possible for our employer groups and our members who purchase insurance,” BCBS-Kansas spokeswoman Mary Beth Chambers told Kansas Public Radio station KCUR 89.3

State Rep. James Kelly, R.-Independence, whose Telehealth Parity Bill (H.B. 2206) was shot down this summer, said arguments against the legislation were misguided, and that opponents were mistakenly thinking that such a law would force payers to create new lines of coverage.

“The issue that we wanted to do was to not force any company that wasn’t offering telehealth coverage to have to provide it, and that would be the mandate,” he told KCUR 89.3. “The other is more of a way to make it a playing field where providers would be willing to do it.”

READ MORE: Providers Must Negotiate Telehealth Reimbursement With Payers

He’s not alone in making that argument. Some telehealth and telemedicine advocates have suggested higher reimbursements simply to push hesitant providers to adopt the technology. Once the benefits are seen – in improved access, reduced cost and better clinical outcomes – they argue the payment structure will work itself out.

At last week’s meeting of the House and Senate health committees, healthcare executives once again made their pitch for telehealth and telemedicine.

“We believe telehealth, when utilized wisely, can reduce provider practice costs, improve their productivity and facilitate triaging for special care,” said Eve-Lynn Nelson, director of the Center for Telemedicine and Telehealth at the University of Kansas Medical Center and the Heartland Telehealth Resource Center, one of 14 federally funded centers across the country.

The cause was taken up by the Lawrence Journal-World, which urged the Legislature in an Oct. 23 editorial to help a state that ranks 39th in doctors per capita.

“In an environment of increasing physician shortages, especially in rural areas, telemedicine is likely to become increasingly critical to the state,” the newspaper reported. “Part of making such a system work is making sure that insurance reimbursement for telemedicine services is treated fairly in relation to in-person services. It’s an issue that legislators would be wise to tackle in 2018.”

READ MORE: Examining the Rocky Road to Telehealth Parity

Even if legislators opt for parity, crafting a bill won’t be easy.

Just last month, a Center for Connected Health Policy study found that only three states – Minnesota, Delaware and Hawaii – have an explicit mandate for payment parity.

“Therefore, in 28 states and the District of Columbia, commercial health plans are only required to cover a telehealth-delivered service if the service is covered if delivered in person, but are not legally required to reimburse at the same rate as is paid for in-person delivered services,” the report found. “This gives private payers the flexibility to set lower or higher rates of reimbursement for telehealth-delivered services.”

“This study makes clear there is broad misconception that because private payer laws are in place in many states around the country, telehealth is achieving its promise of parity of benefits and payment with in-person care,” the report concluded. “The reality is that lack of clarity and clauses that impede the expansion of telehealth-delivered services weaken many of these laws.”

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