Telemedicine Reimbursement and Licensure Expands in State Regulations

At its annual meeting, the American Telemedicine Association reports that 24 states now require that healthcare received via telemedicine be paid the same as in-person services.

Over just six months, state regulating bodies show moderate improvement in telemedicine policies and laws, the American Telemedicine Association reports this week.

At its annual meeting in Los Angeles this week, the ATA reported that 24 states and Washington, D.C., now have enacted parity laws requiring comparable coverage of and reimbursement for services delivered via telemedicine as is available for in-person services, by state-approved private insurance plans, state employee medical plans, and Medicaid. Three more states than had such laws in effect last September.

Telemedicine regulation was tracked in a national survey conducted last fall and updated this spring, according to ATA's Coverage and Reimbursement Report.

Health insurers in states still lacking parity laws are pressure, according to a major South Carolina healthcare provider who spoke at this week's ATA conference in Los Angeles.

"Ninety percent of the private insurance [in South Carolina] is Blue Cross Blue Shield," said pediatrician James McElligott, medical director for telehealth at the Medical University of South Carolina (MUSC) Health in an interview. "They have each year taken baby steps [in telemedicine reimbursement]. [That's] the main reason we are not going for parity legislation."

Telemedicine reimbursement is "not as good as we need, but we're working with Blue Cross Blue Shield so that would cover the vast majority of the state," McElligott says. Insurers in states still lacking parity laws hope to avoid passage of such laws by responding to demands for greater coverage of telemedicine, he adds.

Medicare reimbursement of telemedicine services, the only category not covered by the ATA survey, remains a more daunting challenge to states with a particular kind of geography, such as South Carolina. In that state, "44 out of 46 counties are rural by our definitions, but not by [Medicare's]," McElligott says. "It's almost as if telehealth is only acceptable if you're North Dakota, where you have these huge distances."

McElligott also notes that Medicare policy toward telemedicine reimbursement is cumbersome in that much of the policy is dependent on the particular disease being treated.

Despite these difficulties, MUSC, which is owned and operated by the state of South Carolina, was able to obtain more than $31 million over a two-year-period to create a statewide telemedicine system, says Mark Lyles, MD, chief strategic officer of MUSC's clinical enterprise. MUSC then obtained complementary grants from the Duke Endowment and others, Lyles told an ATA audience.

"We are in active discussion with key legislators to get away from the one-time appropriations process, which makes it quite challenging to budget for future years, and so we're asking for some of our future support to be included in the base budget from the [South Carolina] Department of Health and Human Services," he says.

In an interview, Lyles cautioned that "we can create the biggest, the boldest, the most connected program, but if there's no reimbursement model that sustains it, then it will go unused. There still is a high degree of randomness amongst all the ways the various states are addressing this issue. It is good to see South Carolina being somewhat progressive in areas where we have traditionally not been."

Connecticut and Rhode Island rank at the bottom of the ATA Coverage and Reimbursement report.

"Connecticut actually has language that says [they] will not cover clinical encounters that are conducted electronically," said Latoya Thomas, director of ATA's state policy resource center, in an interview. "They're essentially stating that 'We just won't do telemedicine. We're not going to cover it. We're not going to pay for it.' And Rhode Island has been largely silent on that. So you still have those two outliers."

The ATA Coverage and Reimbursement Report compares telemedicine adoption for every state in the U.S. based on 13 indicators. Since the initial report was released in September 2014, five states and the District of Columbia have maintained the highest possible composite score suggesting a supportive policy landscape that encourages telemedicine adoption (Maine, New Hampshire, New Mexico, Tennessee, and Virginia), while Maryland and Mississippi have dropped from an 'A' to 'B' as a result of additional restrictions being placed on telehealth coverage under their Medicaid plans.

Numerous Medicaid agencies that received 'C' grades or poorer last fall "made moderate improvements to expand coverage of services, like rehabilitation, physical therapy, occupational therapy, and speech language pathology and audiology, or they're expanding coverage of services by other healthcare practitioners," Thomas says. "No one wants to fail" at the ATA scorecard, she adds.

The ATA Physician Practice Standards and Licensure Report reviewed state laws and medical board standards in each state. The report revealed some variance from the initial report issued in September. With policy changes made to accommodate out-of-state physician-to-physician consultations via telemedicine, Massachusetts was the only state to improve to an 'A'. Twenty-two states received the highest possible composite score, which suggests that an extremely supportive policy landscape exists in these states for telemedicine adoption and usage.

The District of Columbia, Idaho, and West Virginia dropped from an 'A' to 'B' in ATA scoring due to the creation of new telemedicine clinical practice policies in their states. Texas joins Alabama as the only states with the lowest composite score, 'C,' due to revised telemedicine clinical practice policies.