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Telehealth

Telemedicine Reimbursement 2016: A Year of New Promises and Challenges

This year promises to be a breakout year for telemedicine reimbursement.

We’re finally beginning to see the culmination of years of research and trials around telehealth solutions, and as a result, the emergence of new promises and challenges. As the environment changes, so will reimbursement from both government and private payers. It’s essential that all healthcare stakeholders stay on top of these moving forces if they want to respond in ways that will positively impact businesses and organizations.

New Promises

Telemedicine is a growing market, both fiscally and geographically, but one of the most interesting elements is its spread across the world. Because this growing technology platform eliminates the barriers of physician-patient contact, the globe is the limit. While reimbursement in this area might be more complex, it is also an opportunity for insurance providers to offer their clients a wider, more diverse selection of care options.

Most importantly, 2016 looks to be the year in which we conquer one of the biggest obstacles to telemedicine reimbursement — ethical use. The American Medical Association (AMA) recently announced its adoption of a set of ethical guidelines to be used in telemedicine to encourage effective and safe interactions between doctors and patients. The AMA has also adopted a policy for coverage and reimbursement of telemedicine services that encourages the Centers for Medicare & Medicaid Sevices (CMS) and other stakeholders to treat them similarly to traditional consultations.

Evolving Challenges

Of course, challenges remain, and one of the greatest lies in navigating rural health.

While telehealth holds great potential for rural areas, it still faces challenges around Medicare coverage. Specifically, Medicare currently limits reimbursement to only a specific subset of live video encounters that are performed while the patient is at a clinic or facility in a rural area. This has contributed to multiple states (29) passing telemedicine parity laws mandating the reimbursement of telemedicine visits by commercial insurers. Still, there is no generally accepted reimbursement standard for private payers.

All of this is happening in an environment where telemedicine visits for Medicare beneficiaries in rural areas jumped from 7,015 in 2004 to 107,955 in 2013. A recent study published in The Journal of the American Medical Association found that the majority of those beneficiaries were under 65 and recipients of Medicare coverage due to disability. Use of telemedicine services was also found to be higher in the 12 states with parity laws as of 2011.

As it lags, the federal government is feeling additional pressure to bring Medicare reimbursement up to speed. In May, 22 health systems, in conjunction with other key healthcare individuals and organizations, addressed the Director of the Congressional Budget office in a letter that focused on the importance of the use of commercial data to evaluate the effectiveness of telehealth. As the letter explained, “The lack of Medicare data is understandable given the outdated statutory restrictions on telemedicine: since federal law prevents many providers from being paid when they use telemedicine to serve Medicare beneficiaries, obviously, little data is available.”

Learn more about how our healthcare technology solutions can help support an effective telehealth strategy here.