While the federal government has sought to increase access to telehealth technologies, most recently with the Centers for Medicare & Medicaid Services (CMS) finalizing a rule expanding coverage of these services in Medicare Advantage, states play a critical role in the coverage and reimbursement environment for telehealth services in the individual and group markets, as well as Medicaid.

Many state legislatures view telehealth as an opportunity to alleviate strains on physician shortages and overburdened health systems by increasing remote accessibility to care. Since 2017, over 40 states and DC have passed legislation expanding various types of telehealth coverage, parity, and reimbursement in both the individual and group markets and Medicaid programs. Most recently, in the 2019 legislative sessions, state legislators introduced more than 80 bills that would increase cross-state licensing for telehealth providers. This is consistent with the Interstate Medical Licensure Compact (IMLC), which is an agreement between 29 states, DC, and the territory of Guam, permitting physicians to practice medicine across state lines and increasing access to telehealth services.

Coverage and Reimbursement in Telehealth Technologies Vary Across States

Telehealth leverages health communication technologies, including direct, electronic, and patient-to-provider interactions that collect and transmit health information to facilitate care without the need for a face-to-face healthcare encounter. Technological innovation even allows direct consultations between providers and patients via video platforms such as Skype. Other innovative modalities include:

• Live Video: Using audiovisual telecommunication technology, providers can have a live, two-way interaction with patients, caregivers, or providers
• Store-and-forward (SFT): Transmitting videos and images through a secure electronic communication system to the necessary health professional
• Remote Patient Monitoring (RPM): Collecting personal health and medical data in one location and transmitting it to a provider in a different location
• Mobile Health (mHealth): Tracking personal health aimed at encouraging health behaviors using smartphone applications and other devices such as wearables

The Current Telehealth Policy Landscape

At the federal level, fee-for-service Medicare covers real-time audio and video, and reimburses only for services with eligible providers (e.g., doctor’s offices, hospitals, critical access hospitals, rural health clinics). Starting in 2020, Medicare Advantage plans can include additional telehealth benefits outside of supplemental benefits.

Notably, states regulate telehealth services through licensure of the health professions and coverage and benefit requirements in the individual and group markets, as well as Medicaid programs. As such, reimbursement varies by state, modality, and state licensure laws. As of August 2019:

• Eighty percent of physicians meet the criteria for licensure across state lines and provide telehealth services through the IMLC
• 36 states and DC have coverage parity policies for private payer coverage, meaning that coverage for telehealth services must be delivered equivalent to an in-person service
• 21 states and DC have coverage parity policies in their Medicaid programs
• 28 states have Medicaid payment parity policies, meaning that health plans must pay providers the same rates for telehealth service that it pays for an equivalent in-person service
• 16 require payment parity for private payers

There is also variability on reimbursement for live video, store-and-forward, and RPM. As of 2019:

• Every state and DC contain live video reimbursement in their Medicaid program, but reimbursement varies between states, with restrictions on the type of service, provider, and location; the states of MI, MO, and NH also expanded their eligible originating site policies
• Medicaid programs in 12 states and DC reimburse for store-and-forward
• Medicaid programs in 21 states and DC include RPM, but most states have limits on information collection, restrictions on monitoring for specific clinical conditions, and include reimbursements only for home health agencies
• Only three states (NY, RI, VA) offer telehealth reimbursement for Medicare-Medicaid dual-eligible beneficiaries

State Legislatures Continue to Show Interest in Telehealth Expansion but Barriers Remain

Access to telehealth services remains a legislative priority in many states, but adoption of new technologies by patients and providers has encountered challenges, including:

• Reimbursement variability across states and relative to in-person patient visits
• Privacy and patient safety concerns, especially related to data sharing and populations with complex health needs

While barriers remain, states continue to pass laws and issue regulations expanding coverage and reimbursement in telehealth. Stakeholder support has been robust, and state legislatures view telehealth as an opportunity to improve quality outcomes and improve care coordination for communities that may otherwise be susceptible to access barriers. Parity in physician payment, site-origination of services, and communication platform coverage will likely be trends that continue in the 2020 legislative session.

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