Parity for telemedicine reimbursement is a long way off in the United States. The variations in rules by region and state can make your head spin. The good news is that telemedicine and the hospitals that implement it are coming out financial winners, even in today’s shifting payment market.
And “shifting” is clearly the right word. Let’s start with Medicare, the federal health insurance program for Americans 65 and older. Medicare reimbursement for telemedicine services is based on geographic restrictions; Medicare only covers telemedicine in a defined rural area or a county outside a defined Metropolitan Statistical Area. Today, that requirement is waived for 44 Next Generation Accountable Care Organizations (NGACOs) in an effort by the federal government to expand telehealth coverage under Medicare.
State expansion is growing…slowly
Other variations come with Medicaid, the health insurance program governed by each state for low-income individuals and those with disabilities. Then there is the private payer market. More than 30 states and the District of Columbia have enacted laws that require private payer reimbursement for telehealth to be equal to the comparable in-person service. (See a recap of states that do and don’t, including an interesting analysis of Florida’s resistance to parity. For the most up-to-date state legislative and regulatory tracking, see The American Telemedicine Association’s State Policy Resource Center.)
One can take heart in the fact that only 11 states had telehealth parity laws in 2011. Momentum is growing, but not quickly enough. Another downside is that many of these laws are unclear, setting the stage for disparate payer policies that ramp up the confusion among providers and patients.
One thing is clear, however. Here at Eagle Telemedicine, we’re not seriously affected by the tangle of approaches to covering the service of telemedicine in hospitals, or by the debates at the federal, state and private payor level. We continue to bring new facilities into the Eagle family—facilities that represent all types of inpatient care: traditional inpatient hospitals serving rural and metropolitan communities, long term acute care hospitals (LTACHs), and the new kid on the block, micro-hospitals.
Our growth continues…rapidly
As we enter 2018, we are chalking up growing success because of the clinical and bottom-line benefits we deliver to hospitals, regardless of the debate over parity, and regardless of how the reimbursement chips will ultimately fall.
Why? Because most hospital leaders understand they face far more significant costs due to lack of proper physician and specialist coverage than they ever would by a telehealth reimbursement rate that is less than optimal. Of course, we support 100-percent parity for telemedicine services across the country, but the lack of it isn’t stopping us from bringing demonstrable value to our partner hospitals.
Fractionally lower reimbursement vs. catastrophic adverse event costs
Think about it: What do unnecessary delays in care cost? For example, The Joint Commission (TJC) wants to see 100-percent compliance with a requirement that patients with pneumonia have an antibiotic started within four hours of coming to the ED. If antibiotics are administered later than that, it typically means another day in the hospital, which adds up to greater cost and greater risk for everyone concerned. So why would anyone argue with having a telemedicine physician available to provide that diagnosis and prescription on the spot?
What if you have an undesired event in the ED while patients are holding for a physician consult or disposition? You might be facing $10,000-$15,000 in risk management staff time and preliminary legal fees just to get to the bottom of what happened. What if you transfer a stroke patient because you don’t have quick access to a neurologist to provide the right diagnosis and treatment? A teleneurologist consult in the ED might be reimbursed at a lower rate than an in-person visit with an onsite neurologist, but keeping the stroke patient in your hospital could mean a $10,000 DRG reimbursement that you’d lose if the patient had to be shipped to a tertiary referral center for treatment. Which is the smarter investment? And more importantly, which scenario is better for that patient? You decide.
Telepsychiatry is another plus
Patients with behavioral health problems pose another enormous risk for hospitals that lack coverage by specialists who can quickly diagnose and find proper placement for individuals who need psychiatric care. Hospitalists frequently face a dilemma: I don’t have access to timely psychiatric services, so do I admit this patient unnecessarily to the hospital, or send him or her home, possibly to attempt suicide?
ED physicians and hospitalists generally err on the conservative side, admitting the patient—even if the hospital doesn’t have a behavioral care unit—until a psychiatrist can provide proper evaluation and find suitable placement for the patient. That costs money, a situation that telemedicine can remedy, as documented in a timely article recapping recent research on quality health care in the ED. South Carolina launched a statewide initiative in 18 rural and urban EDs with telepsychiatry. Since March 2009, the program has served more than 18,000 patients with remarkable results when compared with matched controls: a decrease in length of stay from 1.35 days to 0.43 days, a reduction in admissions from 22 percent to 11 percent, and follow-up visit rate increases from 16 percent to 46 percent.
A separate study noted in the same article compared face-to-face visits and telepsychiatry in mental health patients in an ED, and found no significant differences in disposition recommendation, strength of recommendation, or diagnosis on a dangerousness scale.
New tools for new challenges
For more information on billing for telemedicine services, we’ve developed a list of FAQs that help provide answers and point you to other resources for determining your reimbursement status.
It’s good to know the details, but it’s also good to look at the bigger picture, too. There are many persuasive arguments to be made for telemedicine’s use as an efficient new tool to meet new challenges:
- To deliver care earlier in the disease process.
- To ease the growing burnout rate among physicians.
- To bring a wider range of specialty care to community hospitals, helping them provide quality care to patients close to home.
These arguments far outweigh the fractional differentials in reimbursement between a telemedicine and an in-person visit. We make them nearly every day, and you know what? Based on our exponential growth in 2017 and the global proliferation of telemedicine, people are most definitely listening.