The Virtual Care Insider

The Virtual Care Reimbursement Parity Puzzle: What Everyone Should Know

in Industry

Becki Hafner-Fogarty

Becki Hafner-Fogarty
SVP for Policy and Strategy
June 28, 2018

In a 2015 survey of family physicians conducted by the AAFP’s Graham Center, family physicians cited education and reimbursement as the two leading barriers to telemedicine adoption by family physicians. Since that survey, not much has changed – particularly in the area of reimbursement parity.  

Telemedicine reimbursement regulations remain complicated, complex and fragmented. And the notion of parity has been variably defined and interpreted within and across states. Today, reimbursement is often a key issue in pending telemedicine bills across the country.

One concerning trend is language included in telemedicine legislation that explicitly prohibits the state from requiring reimbursement parity. If this sort of “carve out” language becomes commonplace, we risk diminishing the ability to use virtual care to address the quadruple aim—improve cost, quality and access, and reduce physician burden.

The Current State of Reimbursement

Currently, 29 states offer coverage parity, which requires insurers to cover telemedicine/virtual care services the way they do in-person care, some with exceptions or restrictions. Only 3 states have legislation mandating both patient coverage parity and provider reimbursement parity, though several states offer provider reimbursement for specific specialties or circumstances. To date, 18 states either do not have legislative language or explicitly exclude parity for coverage and/or reimbursement.

The current state of virtual care reimbursement in the United States.

The Trouble with the Current State

The current state of reimbursement parity is largely payer-centric. What I mean by that, is that individual payers determine reimbursement for virtual care and telemedicine services based on their contracts with healthcare organizations and telemedicine service companies. In my experience, this model isn’t in the best interests of patients and providers. Often, primary care providers get cut out of the care delivery process, limiting their ability to use virtual care and other innovative technologies to care for patients at the lowest cost, most appropriate point of care.

What Payer-Centric Reimbursement Looks Like

Payer-centric model; no reimbursement parity

    1. Employer / health plan contract with telemedicine service company for online care delivery.
    1. Member is routed to telemedicine service company provider for care.
    1. Telemedicine service company receives any co-pay and is paid contract rates by employer/health plan.
    1. The visit record remains with the telemedicine service provider.
  1. The primary care provider is left out, and the patient record is often incomplete.

Diagram showing how patient record is incomplete with primary care provider left out.

How Reimbursement Parity Should Work

In an ideal world, reimbursement will be fair and equal across all providers, giving primary care physicians and healthcare organizations the ability to effectively compensate providers who care for their patients online.

What Patient and Provider-Centric Reimbursement Looks Like

Patient/Provider Centric Virtual Care; Reimbursement Parity

    1. Patient connects with provider’s virtual care service.
    1. Provider makes diagnosis & treatment.
    1. Provider submits for and receives reimbursement beyond co-pay.
  1. Information is retained in patient’s EHR.

Patient record is complete when primary care provider is included; patient data is recorded in EHR.

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