Telehealth providers who rely on the health insurance market for a revenue stream and sustainability must navigate a system that is not always clear on eligibility, coverage, and payment. Traditionally, lack of coverage and payment for telehealth has been a barrier to adoption by providers and patients across the health care spectrum. The enforcement of billing practices by some insurers would indiscriminately permit coverage and payment for telehealth-provided services such as radiology but deny payment for other covered health care services provided remotely.
Over the past few decades states have tried to correct this loophole by developing and promoting statutory and regulatory insurance frameworks that encourage telehealth adoption and utilization statewide. The progress in states’ acceptance of telehealth has been incremental yet significant. In 2005, 24 state Medicaid programs covered telehealth-provided services and only two reimbursed for telehealth in the home. 2 Twelve years later, 50 state Medicaid programs and the District of Columbia cover telehealth-provided services and 39 reimburse for telehealth in the home. 3
Whereas the states are incubators of innovations with decades of experience embracing telehealth, conversely, federal programs like Medicare have found very little adoption of telehealth. This is largely due to statutory restrictions that prohibit telehealth coverage to approximately 80% of Medicare beneficiaries because they live in nonrural communities. 4 Other policy areas that stifle telehealth growth for Medicare include limits on designated patient settings, eligible provider types, and restraints on permissible modalities (eg, remote patient monitoring). 5
On the other hand, Medicaid, which is another federal program that covers 20% of the U.S. population, administers insurance coverage to eligible low-income beneficiaries and is not bound by the same federal restrictions as Medicare. In fact, the Centers for Medicare & Medicaid Services (CMS) encourages states to use telemedicine to satisfy federal requirements for efficiency, economy, and quality of scale. 6 CMS also does not require states to submit a state plan amendment (SPA) to cover telehealth for the delivery of services already agreed to by the state and federal entity.
Although states have latitude to comprehensibly cover services regardless of the delivery method, no two states are alike in their approach to use telehealth as a means of addressing public health concerns. The Pennsylvania Department of Public Welfare initiated Medicaid coverage of telehealth in 2007 to enhance access to mental health services and improve the quality of care for expectant mothers due to the shortage of specialists. 7 This included reducing neonatal intensive care unit (ICU) stays, unnecessary hospital stays, and avoidable patient medical transportation. During an office visit, enrolled beneficiaries were provided remote access to maternal-fetal specialists and psychiatrists using interactive audio-video equipment or telephone. Studies have shown the value of using telehealth to reduce costs and alleviate the complications of high-risk pregnancy. 8–10 The effectiveness of Pennsylvania's program led to the expansion of telehealth to include home-based telecare activity, sensor, health status, and medication monitoring for the elderly or adults with disabilities, as well as other specialty services. 11–13
The approach to regulate telehealth coverage varies by state and may require approval or action by more than one agency. Some states have chosen to enforce changes in their health plan terms and conditions of coverage through regulation or bulletin/notice, whereas others enact legislation. Guidance may include a new section on telehealth comprehensively, or may include a subtle mention in each benefit design. For example, coverage and payment conditions for telehealth may vary depending on the type of health professional providing services, place of service/location of the patient, types of services, and modality used.
Twenty-three states and the District of Columbia allow Medicaid coverage of telehealth in schools. States have many options to improve school-based telehealth, which include enacting legislation, proposing changes in administrative regulations, or applying for a federal block grant under Title V of the Social Security Act to improve maternal and child health. Another federal funding opportunity includes a formula grant under the Individuals with Disabilities Education Act to enhance services for children with special needs.
School-based telehealth programs have demonstrated value and been shown to be effective. Ohio and Virginia Medicaid programs have covered school-based speech-language therapy delivered via telehealth since 2011. 14 Students receive remote therapy services in their schools from a licensed speech-language pathologist via an interactive audio-video connection. Hawaii Medicaid updated their telehealth coverage under Medicaid Fee-For-Service and Managed Care in 2016. Enacted legislation removed geographic and patient setting barriers and now permits access in both university- and school-based health centers.
Research shows that patients who receive care in their home are more likely to have better health outcomes and are less likely to be admitted, or readmitted, to the hospital, resulting in significant cost savings. 15 States may enact legislation or leverage waiver authority to offer telehealth to address specific populations or health conditions such as home-based remote patient monitoring for those with chronic conditions. Like school-based telehealth, states have numerous options to include Medicaid coverage of home-based remote patient monitoring. States may seek a federal waiver, such as a home- and community-based service waiver under Social Security Act section 1915(c), or health home option for chronic care under the Affordable Care Act section 1945. States may also apply for federal demonstration programs such as “Money Follows the Person” (MFP), authorized by the American Recovery and Reinvestment Act, which allocates federal funding for transitioning Medicaid beneficiaries from institutions to the community.
Kansas Medicaid covers home-based remote patient monitoring through a “Money Follows the Person” waiver to manage chronic illnesses of beneficiaries 65 years or older. 16 Louisiana and Pennsylvania have CMS-approved 1915(c), which allows Medicaid coverage of home-based telecare activity, sensor, health status, and medication monitoring for the elderly or adults with disabilities. 17
Impressively, state telehealth private insurance parity laws have included provisions ensuring comprehensive service coverage and statewide access. In 1995, Louisiana was the first state to pass a telehealth parity law thereby prohibiting their private insurers from denying coverage or payment for services provided via telehealth compared to those provided in-person. 18 The state with the largest land mass in the country, Alaska, and those with the smallest land mass—Connecticut, Delaware, Rhode Island—have all enacted telehealth private insurance parity laws. Over the course of two decades 33 states and the District of Columbia have enacted similar laws.
Colorado enacted a parity law in 2001 that included rural restrictions. At the time, Colorado was the only state in the nation with statutorily enforced geographic restrictions for telehealth coverage under private insurance. In 2015, lawmakers amended the parity law to remove the rural-only restrictions and promote statewide access to telehealth. 19
There are other opportunities to enhance telehealth coverage for state-regulated plans. Modernized network adequacy standards for managed care plans is another vehicle to promote access and availability to telehealth. Revised in 2015, the network adequacy model now includes a definition for telemedicine and telehealth and advises plans to describe ways in which they will use telehealth in their network access plans. Telehealth coverage under self-funded state employee health plans are affected by telehealth parity laws. These health plans purchase insurance through a state-regulated third party. Twenty-six states with telehealth parity laws also include coverage for state employee health plans. 20