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April 27, 2016

Who's at the telehealth table? Challenges facing providers, vendors, and government

Daily Briefing

Telehealth services will likely play an integral part in improving access to and efficiency of care. However, the reimbursement and regulatory landscape surrounding telehealth services remains murky at best and restrictive at worst.

We spoke with Julie Allen, Jen Breuer, and Fatema Zanzi of Drinker, Biddle & Reath to discuss the rapid evolution of telehealth and how the government must respond to changing health care demands.


Question: What are some of the most pressing telehealth-related challenges for providers?

Answer: Payment. Payment parity (i.e., comparable coverage and reimbursement for telemedicine services to that of in-person services) is a big issue of focus right now. As of today, 28 states have enacted payment parity laws for telehealth services. However, there is no board to enforce adherence to parity laws, so even providers in states with parity aren't always guaranteed to receive equal, or adequate, payment for telehealth services provided. This payment uncertainty discourages providers from offering telehealth services since payers aren't required to appropriately compensate them for the care they provide remotely.

Licensure. Licensure issues limit a provider's ability to provide care for patients outside of the state in which the patient is located, except when states have reciprocity. Licensure is granted through state board exams, and physicians are typically licensed only to practice in one state, or in two or three if they live close to the borders. Legislation known as the Telemedicine for Medicare Act (TELE-MED) has been introduced in Congress to allow a Medicare provider to provide telemedicine services to a Medicare beneficiary residing in a different state from the Medicare provider. Thus far, the legislation has not moved forward. The issue of multi-state licensure is not without controversy, as organized medicine as a whole does not support any adjustments or carve-outs to the traditional state licensure board process.

No clear standard of care. In terms of malpractice risk, sometimes providers fear they're being judged against unknown metrics. Certain states have set unclear standards for services provided via telehealth, while other states require physicians to evaluate patients using the same standards as they would in a face-to-face interaction. This “element of the unknown” makes providers uneasy.


Q: What role do telehealth vendors play?

A: Telehealth products assist with the care process to a greater extent than medical tools have in the past, occasionally going so far as to blur the line between provider and care platform. Vendors are integral to care provision, but they neither assume liability nor reap financial rewards for individual cases. Technology is a critical component of telemedicine, and the traditional Medicare program has struggled with this to a certain extent as the program considers what exactly it is paying for when it reimburses providers for telemedicine services. It has further struggled to determine what that payment rate should be given that care is comprised of both the provider's services and the technology involved in providing those services 

For the future, under value-based payment models, providers will be forced to take on more patient risk than ever before. They will want to be assured that if—and, realistically, when—they invest in technology to support their telehealth practice, as telehealth expands into this space, the technology will help them meet their goals of achieving savings and maintaining a high quality of care. More information about the technology will help them make those decisions, and the expectation is that technology vendors will want to ensure their technology is marketed in this way.

Q: Why is the government interested in telehealth?

A: More than ever, policymakers and regulators are taking a close look at how to address coverage and reimbursement challenges that currently exist. Many view utilization of telehealth as a potential tool to reduce Medicare costs and overall health care spending while improving access to care for the chronically ill as well as those patients in remote geographic locations. They also consider telehealth a potential avenue to improve engagement with consumers, improve health care maintenance, and keep patients out of costly acute care settings. Regulators are also concerned, however, that the easy access to care through telehealth applications may in fact increase utilization (potentially for medically unnecessary care) and, similarly, expenses.

Thus, key challenges must be addressed to achieve the goal of making access to telehealth services a reality for more individuals. Because many telehealth services remove the most fundamental aspect of traditional care—face-to-face interaction between provider and patient—it is difficult for the Centers for Medicare & Medicaid Services (CMS) to figure out how to pay for interactions that use telehealth. What are they actually paying for? To whom should these payments be made? When should the payments take place? CMS officials are also asking questions around the efficacy of telehealth. In a 2015 study, the Agency for Healthcare Research and Quality was unable to draw definitive conclusions about quality of care or cost savings through telehealth services. These doubts have translated into very slow policy movement toward telehealth adoption, especially through traditional fee-for-service Medicare.

Q: Telehealth services evolve rapidly, but government generally moves slowly. Doesn't that create a problem?

A: CMS needs to continue looking for ways to allow for coverage of services under value-based payment models. In a more integrated health care system where the goal is to keep patients out of the hospital, CMS has to look at a tool like telehealth as one that can improve health care delivery.


Movement has been slow, but there has been some notable progress: the Next Generation ACO program launched in 2015 includes waivers that allow for telehealth coverage. CMS will likely use data from Next Generation providers as well as the Medicare Advantage plans utilizing remote patient monitoring to guide its decisions about expanding telehealth coverage in the future.

Q: What does the landscape of telehealth look like moving forward?

A: The demand to expand telehealth practice and coverage is high from all types of providers, from primary care physicians who are looking to help their patients manage chronic diseases to specialists caring for high-risk, high-cost patients. Telehealth also holds significant potential for fields like behavioral health, where patient populations are often high-risk and can see significant benefits from remote, easy-to-access care.

The patient voice offers the strongest, or perhaps most decisive, push. As health care becomes a much more consumer-driven field, providers, policy makers, and payers—including CMS—will have to respond to meet patient demands, including the demand for access to health care services provided via telehealth as a cost-effective way to engage the health care system.

Members of Congress are attempting to respond to this demand. In February of this year, a bipartisan group of lawmakers proposed the CONNECT (Creating Opportunities Now for Necessary and Effective Care Technologies) for Health Act, which seeks to expand the availability of services provided via telehealth under Medicare. The Senate Finance Committee began to undertake an effort last year to examine how to improve care for seniors with chronic health care issues, focusing on telehealth expansion as a key area of interest. More legislative activity around telehealth is expected into next year under a new Congress and administration.

In the paradigm shift from volume to value in health care, exploring the promise of telehealth will be a continued area of focus with an effort to consider both expansions in coverage and how to appropriately reimburse for these services. For providers, it will be important to watch how CMS responds and to monitor the willingness of the provider community to consider options for allowing medicine to be practiced using telehealth. Typically, Medicare drives health care coverage and payment decisions, but in this particular field, Medicaid and commercial payers have in many ways led the charge. It will be interesting to see if and how Medicare catches up.

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