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The Virtual Care Reimbursement Parity Puzzle: What Everyone Should Know

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 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.

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.

Healthcare Regulation: Virtual Care Goes to Washington

Healthcare regulation: It’s a challenging, complex, and fascinating thing. And it becomes even more so when new technologies like virtual care are added to the equation. We all know that technology moves at the speed of light – after all, people are now entering the workforce who never lived in a world without the internet. Regulation, however well-intentioned, just can’t keep up.

Fortunately, telemedicine and virtual care are increasingly on the radar of legislators. After attending a gathering at the Senate Broadband Caucus and the American Telemedicine Association’s EDGE conference, both in Washington D.C., I can confirm there is significant interest in the benefits that virtual care can bring to all healthcare stakeholders: Patients, providers, and payers.

The Senate Broadband Caucus

Dr. Hafner-Fogarty demonstrates the Zipnosis platform for Senator Amy Klobuchar

Particularly in rural areas, one of the key challenges to making telemedicine and virtual care accessible is reliable, fast internet. This is particularly important for more bandwidth-intensive modes of care like video, but even our online adaptive interview does require an internet connection to function. I was able to present to a number of Senators, staffers, and other interested parties, sharing how the Zipnosis platform works and outlining the benefits that virtual care can bring to both rural and urban populations.

ATA EDGE

The ATA’s fall event this year was held in D.C., and had a distinct regulatory focus. Discussions focused on virtual care and telemedicine challenges like reimbursement, standard of care, and geographic limitations. It was gratifying to connect with fellow ATA members and hear their perspectives on the current state of virtual care regulation.

Federal Healthcare Legislation Today

Another topic of focus at these meetings and in the virtual care and telemedicine industry, is the Creating Opportunities Now for Necessary and Effective Care Technologies for Health Act of 2017, also known as the CONNECT Act. This is important bipartisan, bicameral legislation that removes CMS barriers to using telehealth for Medicare and Medicaid patients. As a consequence, this bill has industry-wide support—HIMSS named it as one of their 3 Congressional “asks” for the 2017-2018 legislative session.

A conversation with Senators Heidi Heitkamp and Shelly Moore Capito at the Senate Broadband Caucus meeting

Currently, the CONNECT Act is with the Senate’s Finance Committee. However, there is clearly an appetite for this type of legislation on the hill. Last month, the Senate unanimously passed the CHRONIC (Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care) Act of 2017, which among other things, addressed expanding access to telehealth for Medicare populations. It’s still early in the legislative process, but I’m hopeful that the CONNECT Act will receive the same support in the Senate, and that both bills will clear the House.

A recent article on the Health Affairs blog noted that access to care is a universal challenge – not just a rural one. Using healthcare policy changes to remove barriers to virtual care and telemedicine is an important aspect of my work at Zipnosis, and I’m pleased to see support for legislation that will do just that.

About the Author

Rebecca Hafner-Fogarty, Zipnosis Chief Medical Officer

Rebecca Hafner-Fogarty, MD, MBA, FAAFP, Senior Vice President of Policy and Strategy

In addition to being a primary care physician and serving as Senior Vice President of Policy and Strategy at Zipnosis, Dr. Hafner-Fogarty has extensive experience in medical regulation, serving on the MN Board of Medical Practice from 1998-2003, 2004-2010, and 2012-2016. She served as board president in 2009 and has also been involved in medical regulatory activities at the national level.