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Study: States’ Private Payer Laws Are Harming Telehealth Growth

A Center for Connected Health Policy report finds that state laws mandating private payer coverage for telehealth aren't uniform or strong enough, and are keeping providers from adopting the technology

Source: ThinkStock

By Eric Wicklund

- Two-thirds of the states in the US may have laws to promote telehealth and telemedicine coverage by private payers, but many of those laws are weakly written, giving payers too much discretion to set their own ground rules and turning providers away from those services.

That’s the conclusion of a study by the Center for Connected Health Policy, commissioned by the Reforming States Group and supported by the Milbank Memorial Fund. It paints the picture of a disjointed and vague set of rules governing private payers that are doing more to impede telehealth than promote it.

“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 34-page report, written by policy advisor Mei Wa Kwong and program associates Christine Y. Calouro and Laura M. Nassen, says. “The reality is that lack of clarity and clauses that impede the expansion of telehealth-delivered services weaken many of these laws.”

Since the Affordable Care Act was passed in 2010, state laws defining and governing telehealth and telemedicine have increased by more than 300 percent, with many of those efforts focused on private payers and Medicaid. At present, 31 states and the District of Columbia have passed legislation mandating telehealth coverage by private payers.

But each state is setting different guidelines. While all support video-conferencing, only 72 percent allow asynchronous (store—and-forward) telehealth and 56 percent allow remote patient monitoring. And while they don’t generally restrict telehealth or telemedicine to rural locations or healthcare sites, as Medicare does, they do restrict certain services or modalities.

READ MORE: What Telemedicine, Telehealth Resource Centers Offer to Providers

“The absence of specific language regarding these factors in a telehealth private payer law can have the effect of providing private payers with greater discretion to set their own policies regarding each factor,” the report notes. “It became clear that the absence of language regarding a certain factor could be just as important as the explicit inclusion of language.”

This all adds up to a murky set of rules and regulations that are repelling healthcare providers looking to expand telehealth and telemedicine services.

“Despite the passage of telehealth private payer laws, expansion of the use of telehealth to deliver care has not moved as rapidly or expansively as state policymakers may have envisioned,” the report says. “This could be due to the ambiguous way most of these laws are written, often omitting critical language that could encourage providers to utilize and be reimbursed for telehealth care. This lack of clarity in the language of the private payer laws provides discretion to the private payer to establish its own disparate policies that may or may not be restrictive, making it challenging for providers and patients to understand and navigate.”

Other barriers to telehealth expansion, the report found, include a lack of clarity on what types of telehealth are covered, limitations created by state licensing boards, an absence of billing codes for specific telehealth services, and “burdensome regulations governing telehealth payments.”

One of the more glaring misconceptions, according to the report, is that states with private payer laws are ensuring that telehealth services are comparable to in-person care. In fact, only three states – Minnesota, Delaware and Hawaii – have an explicit mandate for payment parity.

READ MORE: Providers Must Negotiate Telehealth Reimbursement With Payers

“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.”

The report did note that few states set restrictions of where telehealth or telemedicine can be delivered – a policy found in Medicare, and which “has been cited as a significant barrier to the use of telehealth since only certain parts of the country qualify.” 

“The fact that most state telehealth reimbursement laws lack these limitations indicates that states tend to view telehealth-delivered care as benefiting more than just the rural underserved population,” the report noted, and it allows private payers to reimburse for non-traditional services, such as those taking place in the home or office. But these laws also do not specifically prohibit restrictions on sites, leaving the door open for private payers to set their own rules.

Finally, the report noted that most telehealth private payer laws don’t establish what types of providers or specialties are covered, enabling ancillary services like audiologists, speech pathologists and physical therapists to be eligible for reimbursement. But since most laws don’t specify those providers, a private payer could just as easily sets its own limits on what specialties are covered.

The report offered five recommendations to policymakers:

  1. Consider explicit language that details the exact intent of policymakers such as ensuring all modalities are to be reimbursed by private payers.
  2. Ensure that payment parity language is included if the intent of policymakers is to have telehealth reimbursed at the same rate as in-person services.
  3. Consider inclusion of an education component for providers and consumers.  
  4. Consider a robust, comprehensive telehealth policy within the state Medicaid program.
  5. Work with state licensing boards to create telehealth policies that allow licensees the flexibility to utilize technologies in delivering care, but still take into consideration the safety of the patient.

READ MORE: New Report Charts Slow Progress for Telehealth Reimbursement

“More careful crafting of the language for these laws and a more comprehensive implementation plan that includes the voice of payers, providers, and consumers will be needed to achieve greater adoption of telehealth-delivered care in the future,” the report concludes.


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