Private Payers Reimbursed Telehealth, In-Person Care Equally in 2020

In 2020 when the coronavirus pandemic forced a major shift to telehealth and virtual care, private payers were reimbursed for telehealth and in-person care equally, research from Peterson-Kaiser Family Foundation (KFF) Health System Tracker discovered.

The researchers used 2020 Health Care Cost Institute (HCCI) data to assess average paid amounts for evaluation and management claims and mental health therapy claims.

After controlling for regional, provider-level, and severity-level differences, the results showed that telehealth and in-person care payments were nearly equal in 2020.

For an established patient with severity level one care, in-person payment was $33 on average, while for telehealth the average payment was $34. At the highest severity level (level 5) for established patients, the difference was slightly more profound: in-person care payments were on average $137 while telehealth payments averaged $143.

For new patients the costs were higher—$63 for in-person and $61 for telehealth severity level one care, $267 for in-person and $273 for telehealth severity level 5 care.

The researchers compared payments for mental healthcare, both in-person and telehealth care in 2020 for privately insured individuals and found that the prices were about the same.

More than half of the mental health therapy claims that private health plans covered were telehealth visits in 2020 (52 percent).

For providers who offered the same service via telehealth and in-person care, 10 percent of mental healthcare claims and ten percent of evaluation and management claims cost ten percent more when delivered via telehealth.

Most providers offering telehealth and in-person care for the same service offered the two care delivery methods at nearly the same price. Nearly nine out of ten of all evaluation and management telehealth claims (86 percent) and almost nine out of ten mental health therapy telehealth claims (85 percent) were within 10 percent of the in-person cost for the same service.

Telehealth has significant advantages over in-person care when it comes to convenience. This is why many employers have predicted that telehealth will remain an important part of care in the future.

However, the researchers questioned whether the other largely acclaimed benefits of telehealth—such as controlling uncertain healthcare spending—will persist.

“We do not know at this point if private insurers continue to pay for telehealth in parity with in-person care,” the researchers acknowledged. “However, if telehealth payments continue to be the same as those for in-person care, then this raises questions as to whether telehealth will reduce the spending on common health services, as some have predicted.”

This data offers important context to one of the major debates of 2020: how to reimburse telehealth services. Major payers attested that they were reimbursing at parity before the pandemic hit and, at the time, they predicted that they would continue to do so post-COVID.

Employers and payers alike have had to grapple with how to integrate telehealth solutions into their typical coverage policies now that the pandemic has become more manageable. In 2020, employers predicted that they would accelerate access to telehealth and payers considered how to transform this care delivery method into more than just an “add-on” benefit.