The U.S. lacks uniform legislation regarding telemedicine—what it is, where it should be provided and how it should be paid for. Nonetheless, there is progress at both the federal and state levels—progress that is helping make telemedicine implementation easier and telemedicine services more accessible and affordable to people who need them.

Part of the difficulty of enacting telemedicine legislation stems from the fact that telemedicine, or telehealth, takes so many forms:

  • It can mean a videoconference between a hospital patient surrounded by an onsite clinical team in consultation with a remote hospitalist, cardiologist or other specialist via Internet hookup. It can mean a visit at home with your physician on a smartphone or tablet. (These are examples of what the industry refers to as synchronous communication.)
  • It can include store-and-forward services where medical data is transferred to a physician for later review without the need for real-time communication between doctor and patient. (This is called asynchronous communication.)
  • It can also refer to remote patient monitoring, where a provider tracks healthcare data for a patient who has gone home from a hospital or care facility.

Telemedicine in all these forms addresses key issues in the U.S. healthcare system. A health policy brief by Y. Tony Yang in the August 15, 2016, edition of Health Affairs neatly sums it up: “ … telehealth can improve access to health care in populations that are underserved, such as rural areas, as 20 percent of Americans live in rural areas, but only 9 percent of physicians practice in these areas. Telehealth allows patients to access care through real-time appointments and specialist consultations and to reduce the amount of time and resources rural patients spend to access some health care resources.”

There are three avenues through which a provider can be paid (or reimbursed) for telemedicine care: Medicare, if the patient is 65 and over; Medicaid, if the patient is low income; or private pay or private insurance from third-party carriers such as Aetna or Blue Cross Blue Shield. Legislation at both the federal and state levels has been passed to address the requirements for enabling and controlling reimbursement through these three avenues. But there is still much work to be done as lawmakers continue to consider how best to incorporate telemedicine within current systems of reimbursement for healthcare services.

Federal legislation affecting Medicare

The 2010 Affordable Care Act took a small step forward in encouraging telemedicine services as a viable component of healthcare by allowing them to be reimbursed through Medicare, but only in certain circumstances. For example, the beneficiary must be in a qualifying rural area as determined by the Health Resources & Services Administration, which provides programs that bring healthcare to people who are geographically isolated, economically or medically vulnerable. The patient must also be receiving the services in a physician’s office, a hospital or other healthcare facility.

(At Eagle Telemedicine, our services are always performed in hospitals, and many of the hospitals that use our services are in qualifying rural areas. Thus, Medicare frequently pays for the services our physicians provide.)

A significant expansion in Medicare’s coverage of telemedicine came in February 2018, when Congress approved the Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act of 2017 as part of the federal budget deal. The CHRONIC Care Act — which has been praised by the American Telemedicine Association (ATA) and other telehealth advocacy groups — expands telehealth access to Medicare beneficiaries suffering from chronic illness. Under the CHRONIC Care Act, beginning in 2020, in-home telehealth visits for those patients will be reimbursed, with a goal of reducing the cost and frequency of hospital visits.

This is an important step forward in addressing one of the nation’s most serious and costly health problems: chronic illness in the elderly.  According to a report by the Centers for Disease Control and Prevention (CDC), approximately 71% of the total healthcare spend in the U.S. is associated with care for Americans with more than one chronic condition. Among Medicare fee-for-service beneficiaries, people with multiple chronic conditions account for 93% of total Medicare spending.

A large proportion of these costs are for acute care hospital and ED visits that could be prevented by intervention earlier in the diseases’ progression. Putting a greater focus on public health programs to prevent chronic diseases is one way to address these costs—and that is what the CHRONIC Care Act aims to do.

In addition, new rules finalized in late 2018 by the Centers for Medicare and Medicaid Services (CMS) allow for a $14 CMS payment for a phone or video interaction between a patient and physician to determine whether an office visit or other service is necessary. The rules also create a code to reimburse evaluation of store-and-forward video or images, as well as a code to reimburse phone or Internet communications between professionals on a healthcare team. The rules are the product of CMS’ commitment to modernize the U.S. healthcare system.

State legislation affecting Medicaid and private insurance

The Health Affairs policy brief reports that 49 states and the District of Columbia have some Medicaid coverage for telehealth, and nearly all reimburse for live video telehealth between a patient and doctor. Under Medicaid, only nine states reimburse for store-and-forward telemedicine, while at least 16 states have some sort of Medicaid reimbursement for remote patient monitoring. Unlike current Medicare regulations, most states do not restrict telehealth services to only rural locations in order to be reimbursed by Medicaid.

Far more inconsistent from state to state are the laws regarding how private pay insurance should reimburse for telemedicine. Telehealth parity laws require reimbursement by health plans for telehealth services at the same or equivalent rate as in-person services. This is important, because without parity laws, telehealth coverage by private insurers is too low to be an effective incentive for physicians to provide telehealth services over in-person services.

The ATA’s website keeps a running total of how many states have enacted parity laws for private insurance coverage of telemedicine. At the time of this writing, 35 states and the District of Columbia require telehealth reimbursement comparable to that for in-person services. Other states have partial laws, placing limits on the types of technology, patient locations, covered provider types. They may also require an in-person visit to establish a patient-provider relationship.

We are confident that legislation for full telehealth parity will come state by state as telemedicine continues to demonstrate its value. Restrictions in parity laws will be lifted as the U.S. moves to a better coordinated, patient-centric healthcare delivery system focused on improving quality and access and reducing costs. Reservations about telemedicine—ranging from fears of unreliable technology, of patients being more vulnerable to hacking of private information, of important information being left out of patient records as they move from one doctor to the next—are gradually falling by the wayside as consumer demand for telehealth services continues to rise.

We take heart in what happened in 2018 in Texas, where telemedicine’s value was studied and debated perhaps more ferociously than anywhere else in the country. Finally, the Lone Star State did away with the requirement that patients must see a doctor in person before being treated via telemedicine. Recognizing that telemedicine bears the same weight and carries the same credibility as an in-person physician visit, Texas set a benchmark for other states to follow.