Understanding the Telemedicine Industry’s Growth, Changes and What’s to Come

Numerous sectors have expanded their usage of virtual care, but behavioral health/psychiatry, radiology and neurology have consistently ranked in the top 5 specialties utilizing telemedicine over the last several years. Health system executives also cited primary care and cardiology as the specialties where telemedicine solutions have highest potential to transform the standard of care. However, according to the report, post acute/smart aging and chronic care management are prime for rapid growth and have some of the most potential for the highest impact on patient care⁵.

Chronic care management (CCM) comprises a significant percentage of the total health care costs. In fact, about

While payers, particularly Medicare, have often put burdensome restrictions on telemedicine reimbursement, taking advantage of virtual options for chronic care patients could improve traditional healthcare facilities’ capacities.

Patients 65+ not only have the most complex chronic conditions, but they can also benefit the most from behavioral health services, especially those caused by loneliness or dementia. Virtual care has the potential to meet the need for comprehensive care that can be provided to older populations on a regular basis. Medicare and Medicaid reimbursement may continue to pose challenges, but since skilled nursing facilities also face financial penalties under Medicare, exploring online options may help ease gaps in care.

A 2019 poll found that out of 2,000 surveyed adults, two-thirds used some type of digital health monitoring device.⁷ When combined with the fact that devices such as Apple watches contain FDA-approved apps that conduct and transmit EKGs in real time, it’s no surprise that virtual care can offer tremendous benefits to the cardiology sector.

Behavioral health and telepsychiatry offer immense value on their own, but they can also positively impact providers treating patients with other physical ailments, such as chronic conditions. This sector has proven to be an increasingly effective way to meet patients’ needs, especially as it typically requires less investment than other specialities, which may rely on imaging, lab results and other third party costs.

Of course, this is by no means an exhaustive list, as many other specialties continue to see benefits from telemedicine. Outpatient and long-term care are likely to increase telemedicine offerings as well.

While CMS is making continuous updates around reimbursements due to COVID-19, Medicare typically only covers services if delivered via live video. According to the Center for Connected Health Policy, originating sites (where the patient is located at the time of service) must be

Patients being treated for end stage renal disease, acute stroke or substance abuse disorder may be exempt.

Beginning this year, telehealth coverage has also been expanded under Medicare Advantage Plans, APMs and ACOs. which you can find here.

You can view the changes made in light of COVID-19 here. However, keep in mind that not all of these changes will be permanent and may continue to update on short notice.

As of 2019, 6 states, including California, Georgia and Hawaii, had passed or enacted telehealth payment parity laws (meaning reimbursement amounts for telehealth services must be the same amount as if they were administered in person). 41 states (including Washington DC) have some type of law that governs how telehealth can be covered under private plans. To search by state, you can go here

Because Medicaid is governed on a state-by-state basis, each program will have its own set of requirements. Many place restrictions on what constitutes an originating site. Before the start of the COVID-19 pandemic, 19 states considered the patient’s home to be an eligible site under particular circumstances. Twenty-two states offered at least partial coverage of remote patient monitoring services.

The passage of HR 6074 and HR 748, as well as other CMS guidelines, relaxed some of the regulatory and reimbursement restrictions around telehealth for Medicare patients. This includes expanding the qualifications for an originating site, what types of practitioners can provide telehealth services and expansion of telehealth services covered. You can find the complete list here.

There are numerous studies showing that telemedicine often leads to cost savings for practices. A 2017 survey found that 71% of respondents realized cost savings or ROI from telemedicine services and 54% realized savings above 10%¹⁰. And since the Affordable Care Act dictates that hospitals must maintain low levels of readmission rates and patient infections, ensuring accessible outpatient services can also help prevent financial penalties.

A look at data from the Veterans Health Administration shows that in 2012, the cost of their telehealth program equaled $1,600 per patient per year, whereas traditional home-based care cost over $13,000 and over $77,000 for nursing home care. According to the American Hospital Association’s brief on the VHA study,

Many patients are unaware of their providers’ virtual options and whether or not their insurance will cover remote services. According to a recent Black Book survey, only 25% of respondents had used telehealth before COVID-19, and 59% are more likely to use telehealth services now than previously.¹² Over half believe they either do not have access or are unsure if they do. What’s more is that doctors without previous experience are feeling pressured to get up to speed quickly. While recently released guidelines by the CDC, WHO, the Academy of Family Physicians and the American Medical Association have offered some support, knowledge gaps among both providers and patients will still take time to fill. However, despite previous hesitation on the part of patients, providers and payers, there is good reason to believe that widespread adoption of telemedicine platforms is here to stay, even post-pandemic. Concerns around insurance coverage and technology use still persist, but as more telemedicine platforms continue to innovate, these hesitations and knowledge gaps should gradually subside.