In this commentary, attorney Nathaniel Lacktman shares why, in the era of payment reform, it is critical for health plans to provide telemedicine reimbursement.
LacktmanHealth plans must embrace telehealth services. This is true whether you run a Medicare Advantage plan, a Medicaid managed care organization, a commercial health plan, or an employer-sponsored plan.
Not only is telehealth currently the best vehicle to promote care management by increasing patient "touches" and enhancing the doctor-patient relationship, it is a paved pathway for providers and payers to develop viable risk-sharing payment models, whether through value-based purchasing, shared savings, full subcapitation or otherwise.
Related: Telemedicine is poised for growth
Yet, commercial health plans have historically not covered telehealth-based services as a member benefit. As a result, many of the early telehealth programs were built around cost-savings models, patient self-pay, or employer-sponsored payments. The current telehealth technical infrastructure and professional expertise makes these providers perfectly-suited partners for health plans seeking a turnkey solution to improving access and quality in the plan’s member population. Put another way, there are hospitals and providers out there with “telehealth Ferraris” just waiting for a health plan to bring the gasoline.
Due to this historical unwillingness to cover telehealth, states have enacted laws requiring commercial health plans to cover services provided via telehealth to the same extent the plan covers services provided in-person. These laws are designed to promote private sector innovation by catalyzing providers and plans to use the powerful telehealth technologies available in the marketplace.
NEXT: Where states stand
Twenty-nine states plus Washington, D.C., have telehealth commercial payment statutes, with bills under development in several states. Examples of enacted laws in the first half of 2015 include Arkansas, Connecticut, Delaware, Indiana, Minnesota, Nevada, and Washington.
And yet, even in some states with a coverage law (particularly ones with vaguely-drawn statutes), health plans impose policies restricting telehealth coverage in ways that do not benefit their own members, such as only offering coverage for members in rural areas or at certain “originating sites.”
Health plans can significantly benefit from increasing care management access to all their members, including those in urban areas. Moreover, some plans cover telehealth services at only a fraction of the equivalent in-person rate. In so doing, the plan actually creates a disincentive for their network providers to invest in (or even offer) telehealth services to the members. These policies do nothing to help a plan manage the care of its member population or its long-term costs.
Related: Top Five Industry Challenges of 2015
Health plans need to be smart about telehealth benefits. They should proactively engage providers and develop meaningful contract arrangements, payment models, and coverage policies with the goal of promoting cost-effective utilization to harness the benefits (both short-term and long-term) of telehealth as a component of population health management.
Viable models exist out in the market, and we continue to work on provider telehealth and virtual care contracts using a variety of alternative payment methodologies, leaving fee-for-service reimbursement behind.
For those health plans that choose to sit on the sidelines, the likely result will be one or both of the following: their state lawmakers enact a telehealth payment parity law requiring the plan to cover telehealth and pay for telehealth services at the same or equivalent rate as in-person services; or the plan’s competitors will proactively incorporate telehealth networks, be hailed as visionaries for population health, and consume market share.
Nathaniel Lacktman is a partner at Foley & Lardner. He is a healthcare regulatory, compliance and business lawyer with a focus on telemedicine and innovative healthcare arrangements. Follow him on Twitter @Lacktman or email him at nlacktman@foley.com.
Lurbinectedin and Atezolizumab Combo Improves Survival in Extensive-Stage Small-Cell Lung Cancer
June 20th 2025When small-cell lung cancer (SCLC) has spread to distant parts of the body, it’s classified as extensive-stage, which applies to nearly two-thirds of SCLC cases at the time of diagnosis.
Read More
Conversations With Perry and Friends: Paul Fronstin, Ph.D.
May 9th 2025Perry Cohen, Pharm.D., a longtime member of the Managed Healthcare Executive editorial advisory board, is host of the Conversations with Perry and Friends podcast. In this episode, his guest is Paul Fronstin, Ph.D., director of health benefits research at the Employee Benefit Research Institute.
Listen
Conversations With Perry and Friends
April 14th 2025Perry Cohen, Pharm.D., a longtime member of the Managed Healthcare Executive editorial advisory board, is host of the Conversations with Perry and Friends podcast. His guest this episode is John Baackes, the former CEO of L.A. Care Health Plan.
Listen
Women Pay More and Get Less from Employer Health Plans
June 19th 2025In a report by JPMorgan Chase's Morgan Health, it was found that 37% of women with employer-sponsored insurance said meeting their deductibles is difficult, and 36% reported that their plans didn’t cover care they expected—or paid less than anticipated.
Read More