States Make Progress with Telehealth Reimbursement Laws

The COVID-19 pandemic has resulted in a significant increase in state telehealth reimbursement laws, but more progress can still be made to address the biggest barrier to telehealth adoption, lawyers at Foley & Lardner LLP say in a new report.

Currently, more than 43 states and the District of Columbia have some state telehealth statute for commercial payers. These laws have resulted in more coverage for telehealth services compared to previous years, but the same cannot be said for telehealth reimbursement law, the report stated.

Only 22 maintain laws that address telehealth reimbursement and 14 offer true “payment parity” for the services, the report found. Those numbers are only up slightly from 16 and 10 states, respectively, in 2019.

“Telemedicine and digital health care has played a critical role during COVID by allowing providers to safely deliver medical care when and where patients need it, whether urban or rural locations,” said Jacqueline Acosta, special counsel and one of the report’s authors.

“While many legal and regulatory complexities across 50 states can create barriers to entry, the temporary waivers have allowed providers to deliver care in new and different ways, which may lead to blazing new digitized care pathways in the coming years,” Acosta continued.

Limited or unclear reimbursement for telehealth and other digital health services has been one of the most significant barriers to adoption, the law firm reported.

Without adequate reimbursement, providers struggled to purchase the systems necessary for telehealth and virtual care, believing the undertaking would be too costly without much of a return. COVID-19 has changed that by ensuring adequate reimbursement for providers who can treat patients safely and appropriate via telehealth.

The federal government has led this charge by implementing Medicare flexibilities through the public health emergency and under the direction of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and subsequent COVID-19 legislation.

States have followed course, enacting their own laws to ensure patient access to telehealth services during the pandemic.

Together, the policy landscape has shifted more so in 2020 versus recent years. But many of these telehealth reimbursement regulations and laws are slated to expire once the public health emergency officially ends or are narrow in scope, which could create more telehealth adoption and utilization challenges down the road, the lawyers said.

In Massachusetts, for example, true payment parity only applies to behavioral health services. Meanwhile, the state has only temporarily extended payment parity for primary care and chronic disease management services for the next two years and all other services until 90 days after the COVID-19 state of emergency.

Limitations on telehealth reimbursement also exist in other states, according to the report.

But overall, the trend is heading towards equitable treatment for telehealth, the lawyers stated.

“Since our last report, telehealth coverage and remote patient monitoring services have been dramatically expanded largely due to the COVID-19 pandemic,” said Nathaniel Lacktman, partner and chair of the firm’s national Telemedicine & Digital Health Industry Team. “Health plans are offering more telemedicine and digital health coverage as part of a broader acceptance of virtual care; changes we believe will largely remain even after the Public Health Emergency ends. The public health emergency did not create the telemedicine industry; it simply accelerated its inevitable growth.”

Continued telehealth reimbursement is at the top of provider wish lists lately.

Providers have been able to implement telehealth and other digital health services thanks largely to new reimbursement policies and payment parity. And now that patients are accustomed to telehealth visits, many providers fear they will not be able to sustain the increased demand without permanent telehealth reimbursement policies from private payers.

“[C]hanges in payment policy address some of the biggest issues facing physicians as they struggle to make up for lost revenue and provide appropriate care to patients,” the American College of Physicians (ACP) said in a June 2020 letter.

Some private payers have already started the process of scaling back telehealth coverage and reimbursement from the height of the pandemic, providers are saying. Additionally, states like New Hampshire are now debating ending telehealth payment parity and coverage of audio-only services.