There has been a lot of provider skepticism that the explosion of telehealth is sustainable in the absence of reimbursement parity—but payers are skeptical that it's sustainable without guidelines for its strategic deployment.
Providers were able to rapidly scale up telehealth offerings during the pandemic due to temporary, flexible regulations and expanded reimbursement. Mass adoption of telehealth elevated patients' expectations for digital care and won over reluctant providers.
However, many of the regulatory flexibilities, including parity for telehealth visits, are set to expire at the end of the public health emergency. Provider organizations and telehealth vendors are left wondering how changes in reimbursement will affect new and evolving telehealth offerings.
We spoke with various health plan leaders to see what they learned about telehealth during the pandemic, what they're planning for reimbursement structures, and what they'd still like to learn about telehealth.
Reimbursement rates will generally land between 75% and 90% of in-person rates
It's unlikely that plans will decide to pay for telehealth at parity, but the good news is that plans are not looking to retrench back to pre-pandemic rates. Instead, plans will likely land somewhere between 75% and 90% of in-person rates.
Some plans are using criteria to set reimbursement rates for providers—the more criteria providers meet, the higher the reimbursement rate. There are a few schools of thought for establishing the criteria:
- Maturity of telehealth offerings—More advanced platforms and programs will receive more favorable reimbursement rates. Sub-criteria within this category include:
- HIPAA-compliant technology
- Availability of interpretive services
- Number of virtual visits offered during off hours
- Quality of telehealth visits—Providers that deliver virtual care with comparable or better outcomes than in-person visits will receive more favorable reimbursement rates. Quality metrics include:
- Number of in-person visits immediately following a virtual visit
- Number of emergency department visits for same or related diagnosis following a virtual visit
- Results from patient satisfaction surveys and patient reported outcomes
- Level of risk in value-based arrangements—Providers that take on down-side risk will receive more favorable reimbursement rates.
The idea of meeting criteria is popular among providers, plans, and employers, although the stakeholder groups disagree on what exactly the criteria should be. There's still a question of how the criteria will shakeout and if it's a successful mechanism for determining reimbursement rates.
Behavioral health and primary care are exceptions
Nearly all plans are converging to reimburse tele-behavioral services closer to parity. Telehealth visits accounted for about two-thirds of all behavioral health visits over the past year, and demand remains at peak levels.
Plans, providers, and employers all recognize that behavioral health lends itself to a virtual environment since there's no need for physical examination of a patient—and many view these services as underutilized prevention. Telehealth services also help reduce potential barriers to going in-office, such as mental health stigmas.
With respect to primary care before the pandemic, plans focused on shifting most low-acuity urgent care to lower cost virtual options, with an array of vendors. Some plans were experimenting with giving traditional PCPs telehealth flexibility to encourage more longitudinal care relationships with their patients.
Emerging from the pandemic, plans are simultaneously supporting more virtual primary care with traditional PCPs to further their population management capabilities—as well as exploring their own "virtual primary care first" insurance products to enable more control over downstream utilization.
Local providers are plans' first resort
Plans want to encourage local providers to use telehealth, especially now that the pandemic forced so many providers to stand up telehealth offerings.
Despite some apprehension about unnecessary referrals, plans think that virtual visits can strengthen the patient-physician relationship and that that relationship will promote care continuity. Patients have also signaled they'd prefer seeing their own provider for virtual visits.
Coming out of the pandemic, plans worry that a mix of local and national vendor telehealth services will lead to disjointed and overutilized care. As a result, many plans are reconsidering the role of national telehealth vendors which, prior to the pandemic, were a convenient (and low-cost) way to access care—especially urgent care.
Now plans see vendors' role as a safety net for times of unusually high volumes or a back-up choice during off hours, like evening and weekend appointments.
Plans will continue to monitor data and utilization to see how telehealth performs in terms of quality and cost. They'll also watch how providers and patients are choosing to use telehealth. As more data comes in, they will continue to adjust reimbursable services and reimbursement rates.
What does this mean for providers?
Providers shouldn't let lower reimbursement rates get in the way of making continued progress on telehealth. Even without parity, reimbursement rates will likely be higher than pre-pandemic rates—an encouraging sign that plans are open to future flexibilities.
Providers should continue to collect data on quality outcomes and value of telehealth, including what care their patients use in the days and months following a virtual interaction. They should also consider how they will use telehealth in the future—the types of visits that lend themselves to virtual care, the mix of virtual and in-person for care plans, and where their patients see the value in telehealth. Plans are looking for this data from providers as they continue to re-evaluate telehealth services and reimbursement rates.
Finally, virtual platforms can enable easier prioritization of care management, risk adjustment, and referral management goals from health plans. Providers should explore opportunities to use these virtual modalities to align with plans' strategic priorities that can come with added revenue streams.
What does this mean for vendors?
Plans are willing to pay a higher unit cost to keep care with the local provider—especially because they believe that local doctors provide telehealth services that contribute to better care continuity. To adapt, telehealth vendors should progress beyond the transaction to establish partnerships with providers and payers.
Having the same goals and objectives will be the key to success in this relationship: like providers, vendors should be pursuing better evidence gathering of downstream cost and quality outcomes.
Vendors should also prove how their solution addresses providers' pain points and fits into the care continuum. Telehealth vendors will have an advantage when providers are experiencing elevated levels of patient volumes and during off-hours.
They also have an advantage in rural geographies where patients might not otherwise be able to receive care. Vendors can also put their efforts towards areas primed for sustained telehealth use—such as behavioral health and primary care.