Most health execs say payers should be forced to pay for telemedicine


Managed Healthcare Executive’s 2017 Technology Survey findings reveal that more healthcare executives see the value in telemedicine reimbursement.

Traditionally, telemedicine has been used in a provider-to-provider setting with very limited reimbursement options because of the fee-for-service model, says Randy Parker, chief business development officer for MDLIVE.

"However, as the healthcare system transitions to the value-based care payment structure, telemedicine will become an affordable option for health systems and plans to meet or exceed incentive payment scoring outcomes, therefore allowing reimbursement to expand rapidly, according to experts," Parker says.

Managed Healthcare Executive’s 2017 Technology Survey found that over half of the more than 120 respondents (62.2%) believe that the federal government should mandate that payers pay for telemedicine services. The full survey findings will be released in February.


“Telemedicine is the cure to much of our healthcare challenges-it offers access to care regardless of geographical location or urban/rural setting; it offers an affordable care option in the midst of consumers being more heavily burdened with healthcare costs that consistently eat away at disposable income; and it offers quality of care that is consistent with care received in in-person settings,” says Parker.


Managed Healthcare Executive editorial advisor Kevin Ronneberg, MD, vice president and associate medical director of Health Initiatives at HealthPartners, shares a similar viewpoint that telemedicine services are important to improving healthcare costs and trends. 

“Many services do not require the time and expense of an in-person visit to a clinic, urgent care or ER. Our 24/7 online clinic,, is a great case in point. Just past its sixth anniversary, virtuwell is approaching combined savings of $25 million for health plans, employers and consumers,” Ronneberg says. “Telemedicine services also contribute to workplace productivity, given the convenience and time gained over in-person visits.”

Widespread reimbursement for telemedicine is a necessity because it ultimately increases adoption of telemedicine, which results in improved access, improved quality, lower costs, and increased scores on quality of care metrics, according to Parker.

“Many providers have already recognized this and are aggressively adopting telemedicine into their care delivery model,” he says. “Ideally, all public and commercial payers would see the value of telemedicine in reducing costs and improving patient health and reimburse telemedicine for medical and behavioral care across all geographies.”

Next: Criticism, concerns



Criticisms and concerns  

However, there are some who remain skeptical of telemedicine and what it will deliver.

Traditionally, telemedicine consisted of provider-to-provider consultations that didn’t have defined claims coding or revenue parameters, and provider-to-patient consultations challenged the fee-for-service reimbursement policy because of requirements to document service delivery at a specific, physical location, according to Parker.

“Changing to a new technology is always challenging in any industry, and healthcare is no exception,” he says. “Telemedicine is disruptive-it requires new routines, new policies and procedures, new tracking and reporting, and oversight. Additionally, telemedicine, along with other new healthcare approaches, was caught up in the Affordable Care Act political debate and affected individual states’ positions on it.”

Also, there are some who fear that telemedicine will needlessly drive up healthcare cost trends, Ronneberg says. “We suggest the payers take an honest look at the data. To be sure, not all telemedicine solutions are the same. And some don’t perform as well as others, just like traditional clinics,” he says.

But there are clear examples of high-performing telemedicine services in the market. “Some are demonstrating measurable and substantial cost savings, creating access for those who really need to be seen in person, and reducing lost productive time for workers who no longer have to take a half day for a medical appointment,” Ronneberg says. “We hope those responsible for reimbursement strategy will be curious enough to learn about the different business models and craft new policy that rewards those business models that are truly reducing the cost of care while delivering quality and satisfaction. This can be done in a responsible way.”

Federal government’s role, limitations

The current need for the federal government’s role in telemedicine reimbursement is to create consistency across states to allow for more consumers to access telemedicine services without barriers, according to Ronneberg. 

“This includes clinician licensing-each state licenses clinicians which leads to unnecessary bureaucracy, complexity and costs-and there is wide variation in the definition and limitations placed on telemedicine that are not related to safety or quality [i.e., some states require a previous in person visit before telemedicine can be accessed],” he says.

There are gaps along a number of lines that make telemedicine more difficult for consumers and providers. One of the issues, according to Parker, is that states vary widely in the mandates they have regarding what types of telemedicine services are covered under insurance plans.

“For example, in some states, video is the only telemedicine consultation method covered,” he says. “This can be an issue because we know that some patients prefer audio consultations or even secure text for behavioral health-specific cases.”

Additionally, there are still requirements in some states that one of the two parties involved in a telemedicine consultation must be in a primary care practice office for the consultation in order for it to be covered under insurance and/or the provider to be reimbursed, according to Parker.

“This rule creates a burden for the patient and provider, and limits the availability and adoption of telemedicine to consumers who would benefit from a high quality, accessible, and lower cost method of care,” he says.

Additionally, behavioral health reimbursement is “seriously lagging in the U.S., which applies to all methods of care, but especially telemedicine,” according to Parker. “This is a major concern, as America is realizing that mental health issues are going uncared for and affecting many families and communities.”

Next: Largest impact



Largest impact

The largest impact of telemedicine will be seen once telemedicine capabilities have been fully integrated with electronic health records and analytics infrastructure, according to Parker.

“This will ensure care is executed in a timely manner and patients at risk for developing or escalating a chronic disease, such as diabetes, are recognized earlier. It will also help providers manage chronic disease patients in a more effective manner over a longitudinal basis, such as 24 months or longer,” he says.

Parker predicts that telemedicine will be fully adopted as an effective, cost-efficient, and high-quality method for medical and behavior health diagnosis and treatment.

“Not only because it’s the right thing to do, as leading healthcare providers have shown by fully embracing it, but because it’s a key means to performing well on quality-of-care metrics and measurements. In other words, telemedicine enables you to thrive competitively as a healthcare provider,” he says. “We also predict we will see a new kind of healthcare provider emerge that is virtual care at its core and links to the brick-and-mortar care method when needed.”

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