Payers Embracing Telemedicine Cost Savings, Ramping Up Reimbursement in 2016

Foley & Lardner LLP

Often considered the primary obstacle to telemedicine implementation, reimbursement changes are now better viewed as one of the most prominent drivers of telemedicine expansion. Payers are finally beginning to realize what many providers have known for some time – telemedicine brings cost savings and improved patient-member satisfaction.

Private Insurers

For private insurers, the appeal of using virtual-care visits for minor health issues to reduce costs is increasingly difficult to ignore. Cigna has been covering care through telehealth provider MDLIVE for Cigna’s self-insured employers since January 2014. In April of this year, UnitedHealthcare followed suit, announcing that its self-funded employer customers will enjoy virtual visits as a covered in-network benefit, with coverage expanding in 2016 to individual and employer-sponsored plans.

By next year UnitedHealth Group predicts that 20 million of its members will have access to covered telemedicine services via its three partner networks. Anthem’s LiveHealth Online predicts similar numbers for its members across 14 states. Aetna and Humana have comparable types of coverage for certain customers.

Government Insurers

On the public side, telemedicine has been on the radar for the past two decades with broad applications. And while Medicare currently covers telemedicine only for patients in rural areas, the rate of telemedicine adoption among government programs is poised to increase rapidly starting in 2016. The Veterans Administration (VA) recently expanded use of telemedicine across state lines to increase access for patient consultations. Additionally, the Medicare Telehealth Parity Act of 2015 is currently making its way through the House. If it becomes law, it will expand the definition of telemedicine and the types and locations of services available, as well as provide reimbursement parity under the Centers for Medicare and Medicaid Services (CMS).

Recent developments in reimbursement mean providers should make enhancements to telemedicine programs now, both for the immediate cost savings and growing opportunities for revenue generation, to say nothing of patient quality and satisfaction. Reimbursement is among five telemedicine trends driving health care transformation in 2016 and beyond. Next, we will cover the rise of international arrangements and how they are contributing to the coming telemedicine boom.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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