Report: Reimbursement for Telehealth Services Nearly 40 Percent Lower than Non-Telehealth Care

Feb. 26, 2016
A recent policy brief published by the Health Care Cost Institute (HCCI) found that telehealth claims continue to be reimbursed at lower rates and only seven states have passed laws mandating reimbursement parity between telehealth and non-telehealth care.

A recent policy brief published by the Health Care Cost Institute (HCCI) found that telehealth claims continue to be reimbursed at lower rates and only seven states have passed laws mandating reimbursement parity between telehealth and non-telehealth care.

HCCI is a non-profit organization that promotes independent, nonpartisan research and analysis on the causes of the rise in U.S. health spending. The policy brief was written by Fernando Wilson, Ph.D. and his colleagues at the College of Public Health at the University of Nebraska Medical Center and Jim Stimpson, Ph.D., School of Public Health, City University of New York.

The authors noted that although state policies surrounding telehealth have substantially expanded in number and scope, it is unclear whether healthcare providers have responded to these policies by increasing their utilization of telehealth technologies. “To address this gap in knowledge, we characterized state policies involving use of telehealth in clinical care and their reimbursement. We also analyzed one of the largest private claims database in the U.S. to document recent trends in telehealth-related billings by primary care providers,” the authors wrote.

For the brief, HCCI examined billions of claims from Aetna, Humana, Kaiser Permanente and UnitedHealthcare for more than 50 million individuals per year enrolled in commercial insurance or Medicare advantage and claims data were used for 2009-2013. In that time, 6,506 claims were made for services related to telemedicine and 95.9 million were for non-telehealth services.

The authors found that while telehealth claims submitted by primary care providers grew from 1,246 claims in 2009 to 2,558 in 2013, they continued to be reimbursed at lower rates. “Non-telehealth service reimbursements increased every year since 2009, rising from $57 to $61. In contrast, after increasing from $60 to $68 from 2009-11, average reimbursements for telehealth claims declined substantially after 2011, decreasing from $68 to $38 in 2013. Similarly, the gap between telehealth and non-telehealth charges widened after 2013,” the authors wrote.

The authors also concluded that lower average reimbursements for telehealth billings may discourage adoption of telehealth technologies.

And while many states permit reimbursement for telehealth services, only seven states—Arkansas, Delaware, Hawaii, Minnesota, Mississippi, Tennessee and Virginia—have passed statutes mandating parity with reimbursement for non-telehealth services.

The authors state that although telehealth claims submitted by primary care providers have increased since 2009, these claims are still rare in comparison to the number of non-telehealth claims submitted each year. “Our results suggest that providers may not have been responsive to the policy changes occurring across states in this time period. Reasons for this are unclear, but may be related to reimbursement policies,” the authors wrote.

The authors also note that one in eight primary care physician uses the internet or email for some patient consultations during a week, yet few states specifically allow email as a reimbursable service, and some payers will not cover asynchronous telecommunications such as email.

“For physicians receiving the majority of their revenues from Medicaid, less than 3% used internet or email in a consultation during a typical week; this compares to 13% for other Medicaid providers. These findings suggest that adoption of more advanced telehealth infrastructure is unlikely in areas with high numbers of economically disadvantaged patients given the low rate of internet and email use that we observe in the NAMCS database,” the authors stated. “These disadvantaged and medically underserved communities face the highest barriers to accessing care, and thus telehealth has strong promise to ameliorate persistent socioeconomic disparities in patient outcomes by reducing these barriers.”

The authors state that there is a clear need for improved data collection efforts in this area to increase understanding of actual rates of telehealth implementation among providers, particularly in underserved areas.

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