Telemedicine Breaks Into the Mainstream, Part 2: The Regulatory Landscape

In this Digital Business series, we take a closer look at telemedicine from a regulatory, reimbursement, and business perspective, along with understanding its long-term implications. Part 2 examines the existing regulatory landscape of telemedicine and changes that will impact telemedicine adoption.

Last year was a boom for telemedicine, with several digital health companies entering and raising staggering venture funding rounds. Venture Capital firms invested $220 million in 2019 alone. Still, companies and healthcare providers are cautiously optimistic given the greater regulatory risks and significant variations in state and federal laws governing telehealth. Policies around the delivery, privacy, credentialing of providers, informed consent, and more is critical to understanding the long-term utilization of telemedicine beyond COVID-19. 

Currently, state medical boards implement telemedicine standards for practitioners within their state, with the intention that care delivered via telemedicine be upheld to the same standards as in-office visits. Cross-state licensing allows physicians to provide some care for patients in neighboring states–filling a critical need for some states with limited resources. In addition to state regulations, public-health systems like Medicare and Medicaid also dictate how telemedicine can be practiced.  

Medicaid, national health insurance available for people age 65 or older, younger people with disabilities, and people with End-Stage Renal Disease ((permanent kidney failure requiring dialysis or transplant) provides medical assistance for low-income families–a population that could really benefit from telemedicine platforms. Medicaid is also regulated by individual states, and thus creates 50 variations in regulations. States have started passing guidelines around asynchronous monitoring (non-real-time interaction), remote patient monitoring, and reimbursement policies for private payers. This infographic elaborates more on Medicaid and states telehealth and reimbursement policies.

Medicare often serves as a guide for how private payers will reimburse as well. Traditional Medicare limits telehealth services to real-time interactions only, rural communities only, and must originate from a providers’ office/hospital. Medicare Advantage plans are allowed additional leeway under the “electronic exchange” clause. Regardless, both Medicare and Medicaid policies are restrictive, which is unfortunate since patients with chronic conditions could especially benefit from being monitored at home, and is also recognized as one of the most effective and cost-efficient methods of monitoring patient outcomes.

Private payers adhere to states’ Parity Law that requires private insurance companies to reimburse providers for care provided remotely. There are some variations between states on whether only real-time or asynchronous monitoring is covered. How much providers are reimbursed vary and is determined by the individual payer. Studies have found that the majority of private payers still reimburse at levels equivalent to in-person visits.

The reimbursement and regulations landscape has drastically loosened over the past couple of months to address public health demands. The new models have turned telemedicine into a financial and effective platform—for payers, providers, and patients. We will have to continue monitoring the regulatory landscape to evaluate telemedicine viability beyond COVID-19.


More in the Series

Telemedicine Breaks Into the Mainstream, Part 1 explores how the COVID-19 pandemic is removing barriers, both cultural and regulatory, catapulting telemedicine into the forefront of healthcare delivery. 

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