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2 More Telehealth Bills Return to Congress For Another Try

By February 25, 2021February 26th, 2021No Comments

By Eric Wicklund

Both the TREATS Act and the Telehealth Modernization Act are being re-submitted this week, as telehealth advocates look to set the agenda for post-COVID-19 connected health coverage.

– As federal and state lawmakers look to establish telehealth policy beyond the coronavirus pandemic, much of the conversation will focus on payment parity.

That’s the biggest take-away from a recent study of state telehealth commercial insurance coverage and parity laws by the Foley & Lardner law firm.

The study, the firm’s fourth, depicts a nation that had rushed to embrace telehealth roughly one year ago to better deal with the COVID-19 crisis, and was aided by federal and state emergency measures that improved access and coverage. Now lawmakers are grappling with the idea of making some or all of those emergency measures permanent to keep the momentum going.

“During the pandemic, health plans overwhelmingly changed their telehealth coverage and payment policies to encourage providers and patients to use virtual care alternatives to in-person treatment,” says Sunny Levine, an associate with the firm. “This was spurred in part by state and federal policy changes, and in part by health plan’s self-initiated decisions. Post-pandemic, health plans will continue to offer coverage of telehealth and virtual care services, although perhaps not as aggressively as currently seen.”

The path seems somewhat less rocky for some emergency measures. Nearly everyone agrees that telemental health should be permanently expanded to take on the growing issues of substance abuse, depression, stress and anxiety, while measures that expand telehealth coverage to clinics, health centers and the patient’s home are seeing widespread support. This also holds true for proposals to expand the types of providers able to use telehealth, such as therapists, social workers and home health workers, and coverage for remote patient monitoring and asynchronous telehealth.

Both Sarah Iacomini, an associate with the firm, and Alexis Bortniker, one of the firm’s partners, say state and federal actions to expand telehealth coverage will affect how private payers plot their strategies.

“Take a clinician attending to a patient with a chronic illness, for example,” says Iacomini. “They meet regularly, so it would be easier for the patient to adhere to a care plan by attending some visits via telehealth instead of only in-person. If that clinician is not guaranteed payment because the patient’s insurer doesn’t cover telehealth – or even if the private payer pays substantially less solely because the visit is virtual – then that clinician is less likely to offer telehealth to their patients.”

“A patient living in a state with coverage and reimbursement parity provisions, however, would not have their care plan compromised, as the law prevents the private payer from choosing to exert that financial pressure on the clinician,” she adds. “By enacting emergency laws, states also indirectly influence private payers because people who become used to telecommunicating with their healthcare providers will, in turn, exert demand on the insurance market to continue offering telehealth benefits even after temporary laws lapse.”

Meanwhile, the jury’s still out on how federal telehealth policy will evolve. The Centers for Medicare & Medicaid Services expanded some coverage in its 2021 Physician Fee Index, but those steps were small, and Congress hasn’t yet made its imprint on the debate with any action on bills that aimed to expand telehealth access.

“As a general matter, private payers followed Medicare’s lead on telehealth reimbursement during the pandemic, expanding access and increasing payment for providers forced to move to a telehealth model overnight,” Bortniker says. “Changes were broad. Decisions were sometimes hastily made in light of the unprecedented nature of the situation. As the months pass, and payers have more time to mine utilization data and assess the impact of the telehealth expansion, we will likely see payers to proceed in their own direction, straying from Medicare requirements where they are not applicable. Payers will develop their own policies and requirements for telehealth in order to manage costs and have better control over utilization, while still meeting network adequacy minimums.”

It could be that state actions help frame the national debate over reimbursement. Some telehealth advocates say payers should reimburse for telehealth services at the same rate as for in-person care, while others feel that payers should negotiate their own rates with providers.

The Foley & Lardner study shows that payment parity did increase during the past two years. In all, 22 states now have laws that specifically address telehealth reimbursement, up from 16 in 2019, and 14 states now mandate true payment parity, up from 10 two years ago.

Jaqueline Acosta, special counsel at the law firm, notes that 40 percent increase in states with parity laws is actually higher right now, because several states have enacted emergency measures for parity that only remain in effect for the duration of the public health emergency.

“While expansion of coverage for telehealth services is definitely positive, I believe states need to continue to shape informed and clear reimbursement policies for telehealth and digital health services,” she says. “This is a trend I hope continues.”

Nathaniel Lacktman, a partner with Foley & Lardner and chair of the firm’s Telemedicine & Digital Health Industry Team, says that issue will likely dominate state telehealth policy debate in the coming year.

“Payment parity laws were created in response to health plans paying for telehealth services at only a fraction of the rate the health plan pays for the identical service when delivered in person,” he says. “This can occur when a state enacts a broad telehealth coverage law, but fails to include any language regarding the reimbursement or payment of telehealth services. These laws are more intrusive into private contracting and opponents contend they can prevent immediate savings from telehealth by reimbursing telehealth-based services at a lower payment amount.”

But Lacktman also notes that states can design payment parity laws that give payers some leverage. In both Georgia and California, lawmakers set the base at equal coverage for both virtual and in-person services, then allowed payers and providers to negotiate alternate payment rates.

“Ideally, payment parity laws should not prevent the parties from negotiating for different reimbursement rates for telehealth vs. in-person services, so long as such negotiations are truly voluntary by the provider and not forced upon them,” he says. “Well-drafted payment parity laws can level the field for providers to enter into meaningful negotiations with health plans as to how telehealth services are covered and paid. Model payment parity laws should not eliminate opportunities for cost savings, and should allow health plans and providers to contract for alternative payment models and compensation methodologies for telehealth services, so long as those negotiations are voluntary.”