State telehealth parity laws, which generally require private payers (and occasionally Medicaid programs) to cover telehealth services if those services would be covered if provided in-person, have long been trumpeted as a means to increase telehealth acceptance. The argument is simple: given how the availability of health care services is usually directly tied to whether (and how) payers cover a particular service, laws that require payers to cover telehealth services should drive utilization. A recently published report, however, questions the impact these laws have on telehealth utilization.
The Center for Connected Health Policy (CCHP), the federally funded national telehealth resource center, conducted a five-month study to analyze state telehealth parity laws and the impact these laws may have on telehealth utilization. In an interesting twist, the report’s authors also interviewed health plan executives to gain insight into how plans cover and reimburse telehealth services, and the issues preventing greater telehealth utilization. The report should be required reading for all telehealth stakeholders seeking to understand the telehealth reimbursement landscape.
Here are some key general highlights:
- As of September 2016, 31 states and the District of Columbia have passed telehealth private payer laws.
- How a parity law is drafted can determine “the expansiveness of reimbursement and can predict telehealth utilization.”
- Inclusion/exclusion of certain language may create barriers to telehealth utilization by allowing payers to limit the types of services that may be reimbursed.
- Only 3 states have laws that explicitly require payment parity (meaning payers in these states have to reimburse for telehealth at the same rate as they pay for in-person services).
- Live video is the modality most often referenced in the parity statutory definition of telehealth. Approximately 70 percent of state parity laws reference store-and-forward, and about 55 percent include references to remote patient monitoring.
- Only 4 states and the District of Columbia include a site limitation in their parity laws.
- Unlike the Medicare program, parity laws usually do not include explicit exclusions regarding types of services, types of providers, and geographic locations.
Payer Interviews
As I mentioned, the report’s authors interviewed commercial plan executives, medical officers, and other plan representatives in six states (CA, MS, MT, OK, TX, and VA), resulting in a compelling look into how commercial payers view telehealth. For plans not participating in interviews, CCHP conducted research regarding their telehealth policies. Some points to highlight from the interviews:
- The majority of selected plans only reimbursed for live video. Some plans provide limited reimbursement for store-and-forward, but only for certain specialties.
- Remote patient monitoring is not being reimbursed by any of the payers that were part of the study.
- The majority of interviewees confirmed that their plans reimbursed telehealth services at the same rate as in-person services.
Plan interviewees also noted that, notwithstanding the increase in state parity laws, telehealth utilization is generally low. Among the reasons provided:
- Patients are reluctant to use telehealth, although once they try it, many respond positively.
- Patients have a preference to see physicians and other providers in-person.
- Providers are reluctant to use telehealth for a number of reasons ranging from lack of training, skepticism regarding telehealth, or concerns that they could lose business by providing telehealth.
- Lack of education and awareness regarding the availability and efficacy of telehealth.
Medicaid
CCHP also spoke with Medicaid representatives and concluded that private payer laws have little impact on Medicaid telehealth policies unless the laws explicitly include Medicaid. The Medicaid representatives also noted that providers face significant challenges in implementing telehealth programs, including the cost of equipment and billing issues.
Moving Forward
While the report acknowledges the promise of telehealth, CCHP concludes that many obstacles remain, including what it describes as “a broad misconception that, because telehealth private payer laws are in place in many states around the country, telehealth is achieving its promise of providing the same patient benefit and payment as in-person care.” Specifically, the report warns that parity laws “have been weakened by their lack of clarity and often contain clauses that may negate much of the intent of the legislation.” The report encourages more careful drafting of laws and a more comprehensive implementation plan. CCHP concludes by asking policymakers to consider, among other things, the following steps:
- Using explicit language in private payer laws.
- Ensuring that payment or reimbursement parity language is included in the language of these laws assuming it is the intent of policymakers to have telehealth reimbursed at the same rate as in-person services.
- Developing a comprehensive Medicaid telehealth policy.
Conclusion
I believe the report is significant for two reasons. First, it dispels the notion that the existence of state parity laws alone will drive greater telehealth utilization. As the report makes clear, some of this is due to poorly drafted laws in some states—but I believe that much of the disconnect between parity laws and telehealth utilization is tied to broader issues regarding telehealth utilization generally. The lack of knowledge and education on the part of consumers regarding telehealth, for example, is as big a stumbling block as any other. Second, it appears that while plans have bought into the benefits of telehealth they are cautious regarding how to drive utilization. The report points out that most plans prefer a slower approach to telehealth expansion and favor using methods such as pilot projects to assess potential expansion.
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