Telemedicine – 2015 Year in Review

As the year winds down, we look back on the significant developments in telemedicine in 2015 as well as look forward to what 2016 will bring. The number of providers offering telemedicine and telehealth services dramatically increased in 2015, with no sign of slowing in 2016. This is, in large part, due to state lawmakers’ attempts to remove or ease common barriers to telemedicine expansion – including licensure and reimbursement.  States continue to sign on to the interstate medical licensure compact, and more states are requiring commercial insurers to cover telemedicine services on par with in-person services. Not to be left out, Congress introduced several bills in 2015 that seek to expand the use of telemedicine for Medicare beneficiaries, and we expect a fourth telemedicine bill to be introduced early in 2016 that would address Medicare coverage and reimbursement. Additionally, many state legislatures and/or state medical boards issued more detailed standards for the provision of online treatment and prescribing, which decreases the uncertainty of state laws in this area and paves the way for providers to tailor their telemedicine programs to fit within state laws. Listed below are four important developments in telemedicine for 2015 and our prediction of trends in 2016.

1. Interstate Medical Licensure Compact

Licensure, and license portability, is an important issue facing the expansion of telemedicine services. Although a few states provide for a special license for physicians providing telemedicine services in the state, the majority of states require physicians to obtain a full state license. However, in 2015, the Federation of State Medical Boards (FSMB) introduced the Interstate Medical Licensure Compact. The Compact creates an expedited process for eligible physicians to apply for licensure in states that adopt the Compact. It is intended to allow for a less onerous and time-consuming process for physicians seeking licenses in multiple states while allowing states to retain their licensing and disciplinary authority. Twelve states passed the Compact language in 2015, with bills pending in eight additional states.

2. Expansion of Commercial Insurer Coverage of Telemedicine Services

This year saw an unprecedented number of states enacting laws requiring commercial insurers to cover telemedicine services. Eight states passed telemedicine coverage and reimbursement laws in 2015, and similar bills are in development in several other states. State laws governing commercial insurers vary widely but generally come in three forms: (i) the stipulation of certain criteria if insurers choose to cover telemedicine; (ii) require coverage of telemedicine for certain services, certain populations, or all members; or (iii) require reimbursement at the same rates as in-person care. Currently, 32 states and the District of Columbia have telemedicine parity laws, some of which will go into effect in 2016 or 2017.

In addition to state laws requiring reimbursement for telemedicine, some commercial insurers are choosing to cover telemedicine services for all or a select segment of their members. For example, several large insurers offer online live video telemedicine visits with providers as a covered benefit for members. And, in some cases, these services are also available for a fee to non-members.

3. Expansion of Medicare Coverage for Telemedicine Services

This year saw the introduction of several bills in Congress that would affect telemedicine services provided to Medicare beneficiaries. The Telemedicine Parity Act of 2015 would gradually increase the scope of telemedicine services covered by Medicare and addresses many of the current limitations in Medicare’s coverage of services provided to patients remotely. Notably, the bill would, two years after enactment, permit reimbursement under Medicare for certain services provided in a beneficiary’s home, regardless of rural or urban designation.

Additionally, the Telemedicine for Medicare Act of 2015 is aimed at streamlining professional medical standards by allowing physicians licensed in one state to provide care remotely to Medicare patients located in other states without obtaining a license in the patient’s state. The Telehealth Modernization Act of 2015 goes beyond changes to the Medicare program and calls for states to authorize health care professionals to deliver health care to individuals via telemedicine and consider adopting specified conditions for the provision of telemedicine services in the state.

Notably, the Senate’s telehealth working group will likely introduce a bill early in 2016 that would expand Medicare reimbursement for telemedicine services. The bill would authorize the HHS Secretary to issue telemedicine “bridge” demonstration waivers to Merit-Based Incentive Payment System eligible professionals and ACOs for patient management activities using telemedicine services and remote patient monitoring services. Additionally, the bill permits payment for telemedicine and remote patient monitoring services in alternative payment models, and sets forth improvements in the Medicare fee-for-services coverage of telemedicine services provided to patients with chronic conditions.

4. State Laws Governing Online Treatment and Prescribing

Amid the excitement about the potential for telemedicine, states continued to express concerns about the safety and security of telemedicine services. Many state legislatures and regulators are attempting to balance the rapid acceleration of technology and telemedicine and its potential benefits with the responsibility to ensure safe, quality care for their constituents. In response to these concerns, many states chose to enact laws or issue regulations more clearly defining telemedicine and establishing specific treatment and online prescribing standards. States vary on the requirements but, in general, most states allow services provided via telemedicine to establish a valid physician-patient relationship and satisfy physical examination requirements as long as the standard of care is met. States differ on the definition of telemedicine, but most require something more than an online questionnaire. Notably, the Texas Medical Board issued regulations requiring an initial in person examination prior to providing treatment and prescribing via telemedicine. These regulations have been the subject of a high profile antitrust case filed by TelaDoc. You can read more about this case here.

What to Expect in 2016

The growth of telemedicine shows no signs of slowing in 2016. Both private and government payors will continue to expand telemedicine coverage as consumers become more comfortable with the technology and increasingly demand access to remote services. Additionally, you can expect to see states continuing to lead the charge in telemedicine expansion, including more bills mandating coverage and reimbursement for telemedicine services. Finally, many provider types, including retail health clinics, traditionally drivers of innovation in the health care industry, will continue to expand their telemedicine services through apps as well as incorporating telemedicine services as part of their brick and mortar locations.

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