Taking Stock of Reimbursement Dynamics in Telehealth
In recent years, as technology and acceptance of telehealth solutions as a reliable, verified medium for the delivery of certain types of care has grown, demand for telehealth services has surged. Investment, innovation, and entrepreneurship in telehealth has kept pace, rapidly improving the quality of electronic healthcare delivery. Nevertheless, the ultimate facilitator of widespread adoption of telehealth as a means of care delivery are the twin gatekeepers of the healthcare dollar: commercial and government payors. Without buy-in from Centers for Medicare & Medicaid Services (“CMS”) and commercial insurers, the ability to deploy telehealth solutions to more cases will be limited. Therefore, as we survey the telehealth universe to identify new opportunities and emerging trends, it is imperative that we take stock of existing reimbursement dynamics for telehealth.
Similar to other modes of treatment, the payor universe is more broadly guided by the CMS for standards related to the billing, coding, and reimbursement of procedures utilizing telemedicine. Surprisingly, however, CMS’s existing standards for telehealth are relatively limited, and telehealth services are required to meet strictly defined criteria that do not give telehealth full credit for its potential to reduce cost in the healthcare system and expand access to care.
To meet the criteria for federal reimbursement under telehealth services (42 CFR § 410.78), a series of requirements must be met. First, patient medical information must be transmitted from an originating site to a distant site, where a licensed medical professional furnishes the medical service. Although the distant site is loosely defined and can presumably include any location where the provider can access a telecommunications link, the definition of an originating site is stricter. For real-time interactive telehealth communication, originating sites include most practitioners’ offices, hospitals, clinics, skilled nursing facilities, mental health centers, and dialysis facilities. A notable exclusion is patients’ homes. For federal reimbursement, originating sites must also be located in rurally designated areas, or in Alaska or Hawaii. Certain exceptions exist, including (as of July 1, 2019) the inclusion of homes of individuals with pre-identified substance use disorders as originating sites. But for the most part limitations surrounding originating sites inhibit wider access to telehealth services for Medicare patients, a population that stands to realize outsized benefits of telehealth technology.
Commercial payors are making more progress to expand access to care than their federal counterparts. Although commercial payors such as Cigna, United Healthcare, and Blue Cross Blue Shield still must keep pace with the deployment of telehealth services and evolving technology, most have adopted practical policies for providers and patients to leverage telemedicine. For example, commercial payors have largely accepted remote psychotherapy, psychiatry, and nutrition consulting for patients receiving an initial live consult, regardless of geographic location. “Store and forward,” where the provider reviews patient health information remotely in an asynchronous manner, is also more widely accepted by commercial payors for certain procedures in specialties such as radiology. There is still progress to be made, but if CMS can follow commercial payors’ lead on expanded telehealth adoption, Medicare patients are sure to receive more quality care at a lower cost.
Existing gaps in telehealth coverage are certain to be filled by advances resulting from investment, innovation, and entrepreneurship in the industry. MHT Partners, a leading healthcare investment bank, believes that companies that can create solutions to improve technology, claims management, charting, and compliance will undoubtedly push the telehealth forward, shaping the future state of healthcare. If you would like to learn more about MHT’s healthcare services advisory practice, please e-mail Taylor Curtis (email@example.com), Patrick Krause (firstname.lastname@example.org), or Alex Sauter (email@example.com).