Telemedicine, Payers

Report finds only 10 states provide true telehealth payment parity

Very few states so far require health plans to pay the same for healthcare delivered remotely as they do for care delivered in person, a practice known as telehealth payment parity.

States are making progress in fostering telehealth services, but they still have a way to go to ensure remote and virtual services are reimbursed at the same level as in-person care, according to a report issued in December by law firm Foley & Lardner.

Only 10 states so far require health plans to pay the same for healthcare delivered remotely as they do for care delivered in person, a practice known as telehealth payment parity.

That is according to a report by the law firm Foley & Lardner. The states with true parity are: Arkansas, Delaware, Georgia, Hawaii, Kentucky, Minnesota, Missouri, New Mexico, Utah and Virginia. California is slated to join them under a law signed in October by Gov. Gavin Newsom. The law, described in the report as a model, sets payment parity as a baseline but allows providers and plans to negotiate rates that differ from the baseline.

“Without payment parity, a health plan could unilaterally decide to pay network providers for telehealth services at 50% of the reimbursement rate that health plan pays the provider for an identical in-person service. This is not a theoretical risk,” the report said, citing an example from New York.

Another potential barrier lies in how states define telehealth for purposes of coverage, the report said. If the term refers only to licensed physician services, it might not cover software, devices or other emerging technologies associated with virtual care.

The report notes that, overall, 42 states and the District of Columbia have enacted laws covering commercial insurers and telehealth, which is seen as a way to make care more affordable and accessible, especially in rural areas. However, the laws vary widely in their effectiveness.

“For example, four states have telehealth coverage laws on the books that do not actually mandate health plans to cover services delivered via telehealth (Florida, Illinois, Massachusetts and Michigan),” wrote the report’s authors, attorneys Nathaniel M. Lacktman, Jacqueline N. Acosta and Sunny J. Levine. They are based in Foley & Lardner’s Tampa Bay office.

Still, the number of states adopting laws overall represents progress. About five years ago, fewer than 25 states had telehealth commercial insurance laws, Lacktman wrote in an emailed response to questions. The states still without laws are Alabama, Idaho, North Carolina, Pennsylvania, South Carolina, Wisconsin, West Virginia and Wyoming. Lawmakers in Pennsylvania have been trying to pass a bill but the measure has been held up over efforts to attach abortion restrictions to it.

Even in states with laws, barriers remain, largely depending on the language in a given statute, according to the report, Foley & Lardner’s third on telehealth since 2014. Previous reports in 2014 and 2017 surveyed healthcare providers, who expressed frustration over telehealth reimbursement policies that were limited or unclear. The 2019 edition reviewed specific state laws.

Five states, for example, require patients receiving telehealth services to be in a particular setting, the report said.

Elsewhere, a law might require health plans to cover the same services delivered via telehealth as they would cover in person. But remote monitoring is not a service offered in person.

“For this reason, some states (e.g. Mississippi) have enacted follow-up legislation to expressly expand the scope of covered virtual care to include remote patient monitoring,” said the report noting that similar laws are on the books in 12 other states, including Connecticut, Georgia, New Mexico and Virginia. “These laws benefit patients by increasing access and availability to health care services, and catalyzing the growth of telehealth technologies throughout the country.”

Even more states, 24, mandate coverage for what the report refers to as store and forward asynchronous healthcare. That essentially means telemedicine delivered without real-time communication between doctor or patient, Lacktman wrote in an email. It could cover, for instance, a teledermatology patient who uses an app or online platform to upload her medical history, related information and a high-resolution photo of the affected skin area. A doctor would then review the medical history, make a medical assessment and provide a treatment recommendation back to the patient via secure messaging.

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