Kansas Providers Say Payment Parity is Crucial for Telehealth Adoption

A new report from the University of Kansas Health System credits payment parity as a prime ingredient in telehealth expansion during the coronavirus pandemic, with many providers saying they need that financial support to continue using the technology.

But state lawmakers, wary of another battle with insurers over the controversial concept, aren’t sure they want to include that in future legislation.

The report, conducted by the health system and the Health Ministry Fund, found that 85 percent of providers surveyed see payment parity as “a top policy priority.” Many said reimbursement prior to the COVID-19 crisis wasn’t enough “by a large margin” to cover costs.

“Payment parity is an important policy because it affects their financial stability; in fact, before COVID-19, finances were a significant barrier to their using telehealth at all,” the report concludes. “Some practices would not have started using telehealth were it not for COVID-19. The nature of the disease itself (the need for less physical contact and more social distancing) certainly drove some of the increase in telehealth offering and use, but the reimbursement and other policy changes likely also played a part.”

Kansas was one of many states to issue emergency orders during the pandemic to improve access and coverage for telehealth, including payment parity, and several private payers followed suit. But those rules will end when the public health emergency ends, and the payer industry is set to continue its argument that payers should be able to set their own reimbursement rates with providers.

This worries lawmakers as they look to continue telehealth’s momentum after the pandemic.

“It’s a can of worms,” State Rep. Brenda Landwehr, R-Wichita, who chairs the committee that oversees the state’s KanCare Medicaid program, told the Topeka Capital-Journal. “When you open it, it explodes in this building.”

That happened just three years ago, when payers in the Jayhawk State fought back several attempts to legislate payment parity.

“Telemedicine services are not equivalent to in-person services and, therefore, should not receive parity to in-person services in reimbursements,” Coni Fries, of Blue Cross Blue Shield of Kansas City, said during an October 2017 Legislature committee meeting. “Primary care physicians are paid at a higher rate because we expect them to manage our members’ care throughout the year. On the contrary, telemedicine appointments might be one-time engagements.”

“It takes away the ability of the insurance companies to be able to price accordingly for the services provided, while also keeping an eye on how to keep premiums as low as possible for our employer groups and our members who purchase insurance,” BCBS-Kansas spokeswoman Mary Beth Chambers told Kansas Public Radio station KCUR 89.3 at the time.

Other states have fought similar battles, with some passing payment parity legislation and others opting to allow payers and providers to negotiate rates.

The COVID-19 crisis has pushed that issue back into the spotlight, as states and federal lawmakers look for ways to continue the progress made in telehealth adoption and use this year.

According to the study in Kansas, most providers surveyed said they had a positive experience with telehealth during the pandemic, and two-thirds want to continue using those platforms after the crisis. But they see challenges ahead in difficulty using the technology, access to broadband services, and, most importantly, reimbursement.

“We need to continue to be able to provide telehealth and phone services for our patients to keep them safe and be reimbursed like in person visits so that keeping our patients safe does not negatively impact our ability to keep our clinic doors open,” one survey respondent said. “The overhead cost of providing telehealth services makes this difficult otherwise.”

“I was totally against telehealth before COVID,” another provider said. “I did not see a use for it in my practice. Now that I have tried it ... my patients and I love it. I'm very afraid that reimbursement will be taken away and I will have to give it up.”

Other states are grappling with this issue as well.

In Texas, a state lawmakers has submitted a bill establishing permanent payment parity for telehealth services. And in Illinois, a coalition of healthcare organizations is lobbying lawmakers to do the sameas Providers Say.

“Payment parity is the linchpin to removing existing barriers to patient access and provider adoption, paving the way for the widespread implementation of telehealth,” the group argues. “By allowing insurers to negotiate separate in-person and telehealth payment rates, particularly as premiums continue to rise, insurers will profit at substantial expense to patients, providers, professionals and employers.”

In Ohio, meanwhile, lawmakers are working on new telehealth guidelines that steer clear of parity, following a report in September from the Buckeye Institute that questioned its long-term value.

“Private insurers have recognized the promise of telehealth and have already shown a willingness to expand telehealth coverage, but they are still learning where the true potential and value for telehealth really lies,” James Woodward, PhD, an analyst with the Columbus-based think tank, said in the report. “A payment parity requirement at this early stage would prematurely signal that telehealth treatment options are interchangeable with in-person visits in terms of cost and quality. Medical studies, however, do not warrant this conclusion or pricing structure inasmuch as there are still many areas in which telehealth’s medical value is not yet established.”