Road to Reimbursement: Location

Reimbursement policies usually present more of a challenge to telemedicine adoption than technology or training. Healthcare providers have reported high interest in offering remote care for their patients but question whether it makes good business sense if they cannot get paid. The first article in this series referenced a survey reporting reimbursement is one of the major barriers in telehealth adoption.

While the “Road to Reimbursement” can be difficult, there are ways to navigate the obstacles and potholes. In this series, we provide snapshots of common barriers to telemedicine reimbursement along with best practices to address each.

The next roadblock highlighted has to do with the location of the patient and provider. In this article, we will learn more about how that affects payer obligations as well as what to expect in the coming months.

In a recent survey of over 400 patients, a majority identified the biggest advantage of using telemedicine was the convenience of being in their home.  Others cited the benefit avoiding the “need to travel” or staying in the comfort of their own home or office.

History of the Issue

Unfortunately, the traditional approach to reimbursing for telehealth is not conducive to what is commonly called Direct-to-Consumer or Direct-to-Patient telemedicine. Historically, Medicare will only reimburse for appointments where the location of patients who are being seen during the virtual visit, known as the “originating site”, meets two criteria. The first is that their location must be officially defined as a “rural” area (though it’s really any place that doesn’t meet the criteria for urban) and/or a Health Professional Shortage Area, both of which are designated by the Health Resources & Services Administration. The second is that the facility must be licensed for telehealth use by Medicare. Medical offices, clinics, hospitals, and health centers are common places that fall into those categories.

Just as Medicare has a history of limiting location of the originating sites, state policy hasn’t been very progressive either. California was the first to pass any sort of law governing telemedicine in 1996, followed by Illinois in 1997, Texas in 1999, and then Kentucky passed the first complete parity law in 2000. But it wasn’t until after the technology industry growth in the early 2000’s that lawmakers realized that they needed to keep pace with the advancements in technological innovation in healthcare – and they have been playing a game of catch-up ever since. However, after the passing of the Affordable Care Act in 2010, passed telehealth legislation increased by 300%. It was not until 2018 that every state and Washington D.C. adopted language in their state Medicaid laws addressing telehealth; and still there are only 39 states with any kind of law governing private payer telemedicine reimbursement, and they are all very different.

The Current State of Things

We are, thankfully, entering a new age of telehealth reimbursement, one which is seeing increasingly relaxed restrictions. Starting in 2019, CMS will reimburse services for treatment and management of End Stage Renal Disease in the home in any geographic location, with yearly in-office visits as the only requirement. The same will be said for diagnosis, treatment and early management of acute stroke episodes. Those were both included in the Bipartisan Budget Act of 2018. The other piece of legislation that was passed which affected the location of covered telehealth services through Medicare was the SUPPORT for Patients Act, which allows reimbursement through CMS for telehealth services provided in the home for treatment and management of Substance Use Disorder as well as other co-occurring mental and behavioral disorders for patients with SUD.

Heading into 2019, there are thirteen State Medicaid programs that reimburse for telehealth in the home; nine of which are open to all types of remote care. Those states are: DE, CO, MN, MT, NV, NY, VT, WA and WY. The other four have specifics set out: in Maryland, the home is only allowed as an originating site for the hearing impaired. In Michigan, it is only allowed for Speech Language Pathology and Audiology services and Behavioral Health Therapy. In South Carolina it is reimbursed when the patient is at home only for the purpose of psychiatric assessment and diagnosis. Finally, in Texas, it is reimbursable when it is for mental health care services – general medical services are considered for reimbursement as well, but only with a required “presenter” onsite for the duration of the virtual visit, who is licensed to perform whatever medical services are necessary. Luckily, there are no Medicaid policies with limitations on geographic location (Arizona was the last to have such a restriction, and it was eliminated in January of 2018).

Parity laws are another story. These are laws requiring or allowing private payers to cover and/or pay for telehealth services the same way they do the same in-person services. They are often confusing, as the wording varies from state to state, and they can contain loopholes that end up making them more a barrier to telehealth adoption than an encouragement. Most do not contain language specific to the location of the patient during service delivery – but there are a few that do. Listed below are the states that currently mention the originating site, patient location, or service delivery setting during telehealth appointments:

  • CA – health plans cannot limit the setting where services are provided
  • IL – services must be covered in the home for senior diabetes patients, if the payer is covering telehealth at all
  • KS – “cannot exclude from coverage a service solely…based upon the lack of a commercial office from which to practice medicine”
  • MN – specific list of sites that must be covered, the home is NOT included
  • NV – cannot refuse coverage because of originating site, but are not required to ensure covered services are available at a particular originating site
  • VT – explicitly includes home as part of the definition of an originating site and must cover services
  • WA – specific list of sites, home and any other DTP location at the discretion of the patient are included

As you can tell, the laws are not clear cut at all, and often open to interpretation. The best course for a provider wanting reimbursement for DTP services through private payers is to be sure you know the current parity law down to each individual word before speaking with the insurance companies.

What’s Changing

The good news is, there have been huge strides made in reimbursement policies over this past year alone, and things are only getting better from here.

Reworking Value-Based Care

Starting this year, CMS is continuing its push towards value based care, and transitioning from the Medicare Shared Savings Program to it’s new Pathways to Success program. To understand this, we’ll give a brief healthcare financial risk model overview: upside risk involves practices receiving incentives or bonuses when their services save money (according to a previously-decided benchmark cost for each service) – they share in the savings. Downside risk is when the practice is either financially penalized by paying back money to the payer or receives less for services when they go over the benchmark amount – they feel the pain of overspending.

In the previous program, Accountable Care Organizations could choose between only upside risk, or one-sided risk, a small amount of downside risk, or a full, two-sided risk track, and they could stay in that Track a maximum of 6 years. Most (81%) chose, you guessed it: the one-sided, upside risk-only track.

With the new program, there are only two options: the BASIC track, which allows new ACOs (ACOs previously enrolled in Track 1 cannot choose this) to start with upside risk only, and gradually add in more downside risk for a period of two years, ending with full two-sided risk by the end of that period. Low-revenue ACOs are allowed three years for that process, at the discretion of CMS.

The other option is the ENHANCED track, which lets ACOs dive right into full two-sided risk. With more risk, though, comes more flexibility and allowances from CMS, including access to the same Telehealth Expansion Waiver that ACOs participating in the Next Generation ACO Pilot Program (which is still active, with a projected end date in 2020) enjoyed. That waiver eliminates all geographic and facility requirements for telehealth, without stipulations on type of service or provider. 

While that is a lot to take in, it signals a major shift in the healthcare industry as a whole. Payers are wanting to cover telehealth in the home as they recognize it as the future and best incarnation of what live video visits have to offer. They just don’t want to be burned financially any more than practices and providers do. But as Medicare eases into it, so will everyone else.

Revolutionizing Policy

There were quite a few bills proposed in the last legislative session that suggested in some way or another for CMS to do away with the originating site restrictions entirely, and, while we will get there someday, CMS has made it clear they are not ready for that yet. However, at the state level, there is one policy in particular that is making waves in this new year and could signal a new trend in state legislation. California announced this month that they are finalizing changes to their Medi-Cal telehealth provider policy that reworks how they consider services for reimbursement entirely: they will allow providers to decide when and what is appropriate, with no restrictions besides common sense – eg., that the service is medically necessary or that the coding has to specify some in-person element to the service. This is a whole new way of looking at telehealth, as a tool like any other tool in a health provider’s arsenal, and trusting that that provider is well-equipped to decide when and how to use it appropriately.

Also, in the past legislative session, 65 bills and 49 regulations were passed that had something to do with expanding access to telehealth, with a high majority of them obviously born out of the concern over the nation’s opioid crisis. We can look forward to more such bills, with behavioral health services becoming some of the first allowed in the home in many states.

Expanding Direct-to-Patient Telemedicine

We have also seen a shift in the commercial marketplace that is opening up DTP telemedicine: partnerships between pharmacy chains (like CVS and Walgreens) and services that provide isolated DTP telemedicine services (like American Well and TelaDoc). Private payers have been getting in the game as well, with CareFirst, Aetna, Cigna, Partners, and more all offering encapsulated telemedicine options. While these are a great start, patients are much more likely to schedule video visits with their own provider.  This is especially true if they have never used telemedicine before. However, just seeing these partnerships being formed shows that the whole world is catching on to the amazing vision of telemedicine – bringing access to care to wherever the patient may be. 

Please check out our Resource Library for answers to questions on policy and more – and if you can’t find the answer, drop us a line or shoot us an email and we would be happy to help! Keep a lookout for the next article in our series, the “Road to Reimbursement: Logistics.” 

About Simple Visit

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