Does Your State Support Telehealth?

Posted by James Baker, Chief Medical Officer | June 4, 2018 |
James Baker, Chief Medical Officer

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Over the years, payer reimbursement for telehealth has been one of the barriers thwarting the technology from reaching its full potential. Telehealth applications are in widespread use among hospitals and even among insurance payers, who are seeking ways to improve access to care while proactively educating and engaging patients in their treatment.

This article will look at the current state of reimbursement. Which states require parity in covered for in-patient visits at the same rates as virtual visits? With the trends leaning toward declining government reimbursement, where does Medicare currently stand on telehealth?

Trends Forcing Telehealth into the Mainstream

“Telehealth is a well-established means of increasing access to care and health education for underserved and rural communities, and is capabilities have greatly expanded with recent technological advancements.”

Center for Connected Health Policy

The current state of healthcare, coupled with consumer attitudes that embrace technology all point the way toward wider telehealth adoption.

In the U.S., healthcare spending is rising rapidly and that trend is expected to continue for the next decade. By 2026, U.S. healthcare spending will reach $5.7 trillion. As the population of Baby Boomers ages, it is expected to push healthcare services past the breaking point. This all comes at a time when the Association of American Medical Colleges suggests that primary and specialty physician shortages could surpass 120,000 by 2030.

But an article in Managed Healthcare Executive suggests that these issues could be solved or at least lessened by wider acceptance of telemedicine visits, which, for specific non-urgent treatments, can drop the cost per patient encounter to around $38.

With studies clearly illustrating that the American public is not only comfortable with their digital devices, they’d be willing to at least try telemedicine as a new treatment option, what’s the biggest issue standing between the lower costs and greater efficiency that telehealth applications can bring?

The current hurdle that providers face is that payers are lagging behind the technology application, to the detriment of the American health system. The good news is that there is light at the end of this particular tunnel, as even Medicare shifts to allow reimbursement for telehealth.

The State of Payers, 2018

“Direct-to-consumer (DTC) telemedicine is growing at an ever-expanding rate due to new phone, computer, app technology and patient demand. Now, patients can quickly assess healthcare providers for phone or video visits via their personal devices. For hospitals and providers, the big draw with virtual visits is the potential savings involved in replacing physician office visits and ER visits.”

Managed Healthcare Executive

The Center for Connected Health Policy (CCHP) has a fact sheet that suggests that Medicare reimbursement for telehealth has been stagnant for the past few years. The problem has been that these services were tied to specific originating site and geographic restrictions that limited reimbursement. Some of the reimbursement hoops necessary for payment included having the patient located in a non-Metropolitan Statistical Area (MSA) with the service originating in a provider office or hospital – to name one example.

Too, Medicare reimbursement for telehealth has been traditionally tied to a specific list of CPT codes, which change annually. But a shift is occurring; in the 2018 Physician Fee Schedule, CMS did unbundle 99091, allowing clinicians to receive reimbursement for the collection and interpretation of remote-generated health data. Skipping the word “telehealth” in the fee schedule will help providers avoid geographic limitations on asynchronous telehealth applications, according to the CCHP.

But by 2017, 48 states and DC were actively reimbursing for some form of telehealth. However, there are still restrictions on the type of application and the type of provider. While state laws are constantly evolving, it’s clear that the trend is now toward improving access to telehealth technology by increasing the reimbursement options for providers.

By 2020, Medicare advantage plans will finally be allowed to offer coverage for telehealth beyond what is currently covered under Part B. While the discussion around the final rule is ongoing, most believe that the shut door on reimbursement from this payer is opening.

We also know that 2020 will finally see ACOs (Accountable Care Organizations) able to expand their telehealth offerings under Medicare a fee-for-service beneficiary plan designating the patient’s home as an originating site eligible for payment.

On the private payer side of the reimbursement map, 23 states have passed laws requiring parity between the reimbursement amounts for an in-office visit and a virtual visit. On the horizon are new laws allowing practitioners to treat patients across state boundaries in order to stretch services and improve access to care – especially in rural areas.

But the patchwork of payer reimbursement remains unwieldy; there is no national standard for reimbursement for this technology. That creates tension; on the one side are providers who experience the time and cost reduction that telehealth can bring, along with a patient population clearly intrigued with the service. The other side holds giant insurance bureaucracies always lagging behind the innovation that digital technology can bring.

In the meantime, telehealth technology has rapidly advanced into a reliable and efficient digital service accessible on any device. Providers and patients are simply waiting on the payer industry to catch up.

The Future State of Telehealth and U.S. Healthcare

“As the health care sector transitions from a volume-based fee-for-service model to one that rewards value, virtual health could have a significant return on investment. For hospitals, physicians, and other caregivers, virtual health could enhance the ability to improve care, outcomes, convenience, and patient engagement while reducing costs.”Wall Street Journal

The time has come for telehealth to move to the forefront of American healthcare. The benefits of cutting costs while increasing access to care have been widely established. Telehealth applications improve outcomes by allowing faster and more convenient access to medical treatment. Healthcare IT News suggests that $7 billion annually or an average of $126 per patient encounter could be saved by using telehealth applications. Expanding the reach of physicians while lowering costs holds tremendous promise for a healthcare system that is struggling to do more with less money and fewer providers.

To find out more about the OrthoLive telehealth application and what it can do for your practice, contact us.

Topics: "telehealth", "reimbursement", orthopedic practice