Telehealth Off to the Races … Or Will Obstacles Persist? – Part 2


The COVID lockdown forced the government to unshackle telehealth from long-standing restrictions to provide Americans with access to care and commercial payors followed suit, agreeing to cover and pay for telehealth services. Utilization soared and polls show telehealth is extremely popular with consumers.

The road ahead for telehealth in this country is not certain, however. Previously, we discussed federal Medicare law and policy that will likely restrict progress. What about other payors?

State law governs Medicaid and non-ERISA commercial health plans. The good news is that since 2019, state laws expanding telehealth coverage have increased considerably. The bad news is that there are 50+ sets of complicated, sometimes hair-splitting rules to navigate. 

Currently, 43 states and DC maintain some statute on telehealth for commercial payors but the differences are significant. While some states truly make telehealth a consistent option for people with commercial insurance, other states have laws akin to Swiss cheese. For example, three states have telehealth laws that do not actually mandate that health plans cover services delivered by telehealth (Florida, Illinois, and Michigan).

The most pesky hitch with state law is that, while they mandate telehealth coverage parity, that health plans cover telehealth services if the policy covers the same care in-person, they do not require payment parity. Health plans are not required to reimburse providers the negotiated in-person rate and frequently pay far less for telehealth services. 

According to Foley & Lardner’s 2021 50-State Survey of Telehealth Commercial Insurance Laws, 22 states have laws addressing telehealth reimbursement, an increase from 16 in 2019, and only 14 of those states mandate true payment parity, an increase from 10 in 2019. 

This lack of commercial payor reimbursement, combined with Medicare restrictions including that telehealth is only covered in rural areas, means providers have been unable to afford the expense of establishing telehealth services when no payment would result. 

State coverage and reimbursement for Medicaid beneficiaries also varies but all 50 states and DC include some form of reimbursement for telehealth in their Medicaid programs, according to the Center for Connected Health Policy (CCHP). However, like Medicare, many states have limitations on payment rates, the types of services Medicaid covers, types of clinicians allowed to provide telehealth, and location of provider and/or patient.  

Putting mandates aside, during the pandemic commercial payors voluntarily made major policy changes to enable subscribers to access care via telehealth.

CCHP reports that during the public health emergency (PHE), the largest national insurance carriers voluntarily expanded coverage for telehealth medically necessary services under members’ existing plans. Six of seven major insurers waived cost-sharing for telehealth COVID treatment as well as primary, urgent and behavioral health care visits in-network. And six of seven payors agreed to reimburse providers the in-person rate for telehealth care. 

The various payors set their own expiration dates for these policies. Some started charging copays again at the end of 2020. Telehealth coverage for most is pinned to the PHE expiration. 

All this boils down to a tremendous amount of uncertainty for telehealth going forward. And we have only discussed payment policy here. Other prickly policy issues include licensure, privacy, and virtual care beyond telehealth such as remote patient monitoring. 

Health systems and providers scrambled and invested heavily to stand up telehealth services overnight during the pandemic to ensure patients had access to care. They now strive to blend in-person and virtual care into a comprehensive, patient-centered delivery model. 

Americans have experienced the ease, convenience, continuity and quality of telehealth and we really like it. 

The question is, will the government and payors allow America’s health system to continue our critical digital health journey unimpeded? 

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