Private Insurer Payment for Telehealth On Par with In-Person Care in 2020

In 2020, private healthcare payers reimbursed providers similarly for telehealth and in-person claims, including mental healthcare claims, according to an analysis conducted by Kaiser Family Foundation.

The analysis includes data from the Health Care Cost Institute. The researchers compared payments for professional medical service claims for care delivered through telehealth and in person in 2020. They examined 76 million evaluation and management (E/M) claims and 21 million mental health therapy claims, of which 18 percent of E/M claims and 52 percent of mental health claims were provided virtually.

The analysis revealed that private insurance reimbursement for telehealth E/M claims was on par with in-person claims among new and established patients across all severity levels.

For example, the average payment for the most severe telehealth E/M claims among established patients was $143 compared with $137 for in-person services within the same severity level. Similarly, providers received, on average, $273 for the most severe telehealth E/M claims among new patients versus $267 for equally severe in-person claims.

The research also shows that reimbursement for telehealth and in-person mental healthcare was about the same in 2020.

The average payment among the privately insured for the most common mental healthcare claims, including psychotherapy and group psychotherapy, was approximately the same for care delivered via telehealth and in-person. For psychotherapy, the average payment for telehealth and in-person visits was $48; for group psychotherapy, average reimbursement totaled $58 for telehealth-delivered care and $56 for in-person care.

Even among more severe claims, like psychiatric diagnostic evaluation with medical services, the average payment for telehealth-enabled and in-person care was $198.  

The analysis further examined the average paid amounts for telehealth and in-person claims within provider organizations. An overwhelming majority of providers offered the same service by telehealth and in person. Among them, telehealth reimbursement was within 10 percent (plus or minus) of in-person reimbursement.

Overall, among 10 percent of providers, telehealth claims payment was more than 10 percent higher than payment for in-person care.

"We do not know at this point if private insurers [will] continue to pay for telehealth in parity with in-person care," the researchers stated in the analysis. "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."

But, despite this uncertainty, employers see telehealth as a key private insurance benefit in the future.

According to the 2022 KFF Survey of Employer Health Benefits, 90 percent of employers believe telemedicine will be important in providing access to care, and most do not expect telehealth to increase health spending.

Further, at least one 2022 report from health insurer Cigna claimed that the cost of virtual care visits was, on average, lower than in-person visits. Telehealth use for a non-urgent health concern was $93 less than the average cost of in-person visits for the same concern, while a specialist visit via telehealth was $120 less than an in-person visit.

Virtual visits for urgent care also reduced the use of unnecessary lab tests, leading to an average savings of $118 per episode of care, according to the report.