Telehealth is burgeoning, but how to pay for it?

SINCE THE CORONAVIRUS pandemic hit, going to a doctor’s appointment for many people has looked similar to going to work or visiting a parent: Go to a computer, log onto a video screen, and talk. 

As telehealth explodes in popularity – and has the potential to become a much larger part of the future health care landscape –– a major question that is emerging is how to pay for it. Is telehealth a way to save money, or will it provide convenience at additional expense? Telehealth raises other questions as well, including how to ensure high-quality care and how to safeguard patient privacy. 

The Massachusetts House and Senate have laid out different approaches to paying for telehealth for the next couple of years, and it remains to be seen whether they will agree on a bill before the session ends July 31. At the same time, lawmakers and experts acknowledge that more work must be done by health care experts as the field stabilizes, learning from the quick shift prompted by the coronavirus.  

Don Berwick, a former administrator of the US Centers for Medicare and Medicaid Services and senior fellow at the Institute for Healthcare Improvement, said medicine has been gradually “easing towards” the use of telehealth for years and “now it suddenly has taken off in a way that I think is very, very promising.” 

The use of telehealth during the pandemic, as doctors’ offices closed their doors to non-emergency care and patients have been nervous about returning, is staggering. At its peak in April, telehealth accounted for 13 percent of medical claims nationally – compared to below 1 percent the prior April. Blue Cross Blue Shield of Massachusetts, the state’s biggest insurer, has processed 2.6 million telehealth claims since March 15. 

One reason telehealth increased was an emergency order issued by Gov. Charlie Baker requiring all insurers to cover medically necessary telehealth visits at the same rate as they would pay for in-person visits, referred to as pay parity.  

Before the pandemic, rates for telehealth were negotiated between insurers and providers and were lower than those paid for in-person visits. That provided little incentive for physicians to transition to a new model of care, without a groundswell of interest from either doctors or patients. That model shifted with the pandemic, when physicians were losing revenue due to the cancellation of non-emergency care and patients had little interest in entering a doctor’s office unnecessarily.  

A bill passed by the state Senate in June would require insurers to continue to cover telehealth at the same rate as in-person care for two years. The state’s health policy agencies would be charged with using that time to study telehealth’s impact on health care cost, quality, and access and make longer-term recommendations regarding usage and payment rates.   

A bill proposed in the House would provide permanent pay parity for behavioral health services. It would continue pay parity for one year for primary care visits and chronic disease management, but not other specialties.  

House Majority Leader Ron Mariano, who has taken the lead on the House bill, said representatives chose to limit pay parity for telemedicine to a few specialties and the Health Policy Commission could recommend whether to expand it farther. “We chose these three modalities because we’ve seen it work extremely well in mental health and we think it should work well for chronic disease and primary care,” Mariano said. Mariano said beyond that, practitioners need to prove that telehealth is adding value to the health care system beyond convenience. “To say you can use it as a blanket approach to all treatments doesn’t make sense to us,” Mariano said. 

But Sen. Cindy Friedman, Senate chair of the Health Care Financing Committee, questioned the House’s decision to limit pay parity. She said there are other specialties – like dermatology – that lend themselves well to telehealth. “During this pandemic, everything’s been done via telehealth because people can’t come into the hospital or into the doctor’s office, and what we’ve seen is it works,” Friedman said. 

In the longer-term, once pay parity is no longer required by the state, how much to pay for telehealth is a heated debate between payers and providers.  

Mental health is one area where most experts agree telehealth is effective. Counseling can be done online, and no-show rates for virtual appointments during the pandemic have been significantly lower than typical no-show rates for in-person appointments.  

Blue Cross Blue Shield of Massachusetts just announced that it would permanently continue paying for behavioral health appointments via telehealth at the same rate as in-person visits. Katherine Dallow, vice president of clinical programs for Blue Cross, said since the pandemic, an unusually high number of its telehealth claims – 45 percent – were for mental health services, a strong indication that patients are seeking and accessing mental health care via telehealth. 

The bigger question relates to other medical specialties.  

Lora Pellegrini, president and CEO of the Massachusetts Association of Health Plans, said the promise of telehealth was that it would lower costs, since doctors could conduct telehealth appointments without paying for office workers and office space, and could be more efficient. “I think if telemedicine were to be paid at an in-person rate in perpetuity, we’d really lose the opportunity to use telehealth technology as a cost savings,” she said. 

Pellegrini also worried about increased costs for redundant visits, if a patient sees a doctor virtually, then has to go to an office visit. 

Dallow said early concerns that telehealth would lead to a spike in frivolous visits have largely been unfounded. Instead, she said telehealth has let people get care after hours or during the workday, and prevented them from delaying care or ending up in the emergency room.  

At the same time, Dallow said often doctors need to do a physical exam or order a lab test, making in-person visits more necessary in non-behavioral health specialties. She believes there must be more conversation about how to reimburse medical visits. 

On the other hand, Massachusetts Medical Society president David Rosman, a radiologist, said telehealth has not decreased costs for doctors, who must still maintain physical offices. It requires additional expenditures on computers and secure applications. The cost savings, he said, are to patients, who do not have to miss work or pay for transportation or childcare. 

“At least for the foreseeable future, we’re dealing with a situation where telehealth is incredibly important, specifically in reducing health care inequity,” Rosman said. “And reimbursement is critical to be at an equal level because of the current ongoing increasing costs and because of ongoing pandemic-related decreased revenues.” Rosman said he wants to see pay parity “indefinitely.” 

While acknowledging the concern that telehealth will lead to extraneous appointments, Rosman said telehealth will also provide more access – for example, letting someone visit a primary care doctor who would otherwise have to miss work or travel a long distance. 

Berwick said in the long term, he believes telehealth should be a less expensive way to get care, but it remains an open question whether it will replace in-person visits or be added to them, which affects costs. “When Henry Ford invented cars, he didn’t price them at parity with horses,” Berwick said. “It’s a different way to get care, and we need to understand the cost structure independent of the history.” 

Beyond reimbursements, experts say numerous other questions need to be answered if telehealth becomes the norm. One is exactly what would be covered. Both the House and Senate bills would authorize coverage for video and telephone calls, but only the Senate would consider text or email communications telehealth.  

There are questions about data privacy and cybersecurity. Dallow said during the pandemic, doctors talked to patients via Zoom or FaceTime, which are not secure connections. If telehealth becomes more widespread, physicians will have to move to secure platforms.  

Regulating, licensing, and credentialing is also an issue, since in theory, an out-of-state doctor could provide care to a Massachusetts resident via telehealth, but that doctor would not have passed Massachusetts’ licensing standards.  

As telehealth becomes more popular, there could be a boom in third-party companies providing only telehealth. Already, some insurers contract with companies like Teledoc or American Well to offer telehealth to their members. Typically, the insurers pay the companies a lower rate than they would for in-person visits to offer a limited network of physicians who are available to members – for example, to take an urgent care call at night when their doctor’s office is closed. 

Firefly Health, a year-old company headquartered in Watertown, aims to replace a traditional primary care doctor with a remote health care team. Co-founder and CEO Andy Ellner said licensed practitioners in each state where the company operates comprise a health care team for each patient, with a health coach and specialists, including mental health clinicians. Practitioners check in with patients regularly to help them with goals like managing diabetes or losing weight.  

Firefly partners with urgent care facilities so someone who needs a lab test or x-ray is sent there. Firefly is paid a monthly fee by employers or health plans. It has around 5,000 people signed up in Massachusetts.  

“Our model is, we think, a more profound shift, not an incremental one,” Ellner said. “We’re no longer delivering the service discreetly around visits, or one annual visit, we’re in constant connection.” 

“I think the pandemic is one of the worst global tragedies I’ve seen in my life, but it did produce new ways of thinking,” Berwick said. The question, he said, is, “Do we want to take advantage of the momentum established in digital health and map it into the emerging health care system?”