As many of you know, reimbursement for telehealth services is a mixed bag.  On the one hand, private payers generally seem ahead of the curve.  Many leading private insurers reimburse for telehealth.  Generally these coverage policies provide reimbursement for telehealth services when they involve the use of real-time interactive audio, video, or other electronic media for diagnosis and consultation.  Just as significantly, more than half the states and the District of Columbia have passed telehealth parity statutes which require health insurers to provide coverage for services provided via telehealth if those services would be covered if provided in-person.  The picture for private insurer telehealth coverage is generally good and getting better.

On the other end of the scale is Medicare.  I think it is fair to say that no payer lags further behind in reimbursing for telehealth than Medicare.  The numbers tell the story.  The Center for Telehealth and eHealth Law reports that in calendar year 2014, Medicare reimbursed approximately $14 million under its Part B telehealth benefit—or about .0023 percent of total Medicare spending in 2014—a mere pittance.  The real reason for this is that the Medicare telehealth benefit was primarily intended for rural patients.  In addition:

  • The definition of “telehealth” is limited to real-time audio visual communication between provider and patient (in other words, there is no coverage for so-called asynchronous or “store and forward” technology).
  • Fewer than 100 codes are reimbursable under the telehealth benefit.
  • Other restrictions exist related to type of facility where a patient may present, and what kind of provider may deliver services (e.g., physicians, nurse practitioners).

Medicare Advantage offers more opportunities for telehealth coverage, but overall the current Medicare telehealth reimbursement picture is relatively bleak.

Medicaid Reimbursement for Telehealth

Medicaid telehealth reimbursement exists somewhere in the space between private payers and Medicare.  As you know, Medicaid provides health coverage to about 70 million low-income adults, children, pregnant women, and others.  The program is administered by states who are required to cover certain mandatory services (such as hospital and physician services, home health), but is funded jointly by the states and the federal government.  States do have flexibility to decide what optional services (such as telehealth) to cover beyond the mandatory services.  This has resulted in a patchwork of different coverage policies that vary by state.

Fortunately, there a number of stakeholders that closely track Medicaid telehealth coverage policies by state.  One of these is the Center for Connected Health Policy, which issues a quarterly report reviewing various telehealth legal and regulatory issues for all states.  In its last report (July 2015), the Center found the following regarding Medicaid telehealth coverage:

  • 47 states and the District of Columbia provide some coverage for telehealth (Iowa, Massachusetts, Rhode Island do not according to the report).
  • In many Medicaid programs, the definition of “telemedicine” or “telehealth’ for purposes of reimbursement is limited to services that take place in real time—thereby excluding asynchronous or remote patient monitoring from coverage.
  • Live video is the most predominantly reimbursed form of telehealth with almost all of the states that cover telehealth offering some type of live video reimbursement in their Medicaid programs.
  • Services provided via telephone, e-mail, or fax are seldom covered unless they are used along with other forms of care delivery.
  • Only 9 states (including Illinois, New Mexico, and Virginia) currently reimburse for store-and-forward services. Even in states that do cover store-and-forward, covered services may be limited—such as in California, where only store-and-forward services related to teledermatology, teleophthalmology and teledentistry are reimbursable under Medicaid.
  • 16 states (including Colorado, Maine, and South Carolina) provide Medicaid coverage for remote patient monitoring although many restrictions exist. For example, in some states, coverage for remote patient monitoring is limited to home health agencies. There are also restrictions regarding the conditions which may be monitored and the type of monitoring devices that may be used.
  • 29 states reimburse a transmission and/or facility fee.
  • 29 states (including Connecticut, Kansas, and Maryland) require some form of informed consent prior to the use of telehealth.

All in all, the picture for Medicaid reimbursement for telehealth is far better than it has been in the past. Each state Medicaid program is different, so stakeholders need to carefully analyze each state’s telehealth coverage policies. My sense is that given the serious fiscal and clinical (e.g., provider shortages, network inadequacy) issues faced by many Medicaid programs, telehealth will increasingly be viewed as a means to seriously address these challenges. We are starting to see this play out in the Medicaid managed care space.

Medicaid Managed Care Coverage

By way of quick background, a majority of states contract with managed care organizations to provide services to certain Medicaid beneficiaries. Generally, these managed care plans receive a monthly premium from the states for each enrollee, and have greater flexibility to cover more services and allows the states to better target and customize services. As the American Telemedicine Association noted in its report on telehealth and Medicaid managed care published last year, “states have increasingly used [Medicaid managed care] to create payment and delivery models involving capitated payments to provide better access to care and follow-up for patients, and also to control costs.” Because of this flexibility, a number of leading Medicaid managed care plans are either already covering telehealth or are developing telehealth initiatives and pilots—especially related to telemental health and teledermatology. In my view, the future looks bright when it comes to Medicaid managed care and telehealth.