Government recognizing the value of Telehealth–Federal and state policy is evolving to support it

Over the course of the last 2-3 years, we as physicians have seen great value in the usage of Telehealth for:

  • Maintaining or decreasing healthcare cost
  • Convenience in the chronically ill or aging population
  • Access for patients in rural communities

As healthcare costs are escalating, the government is taking notice of telehealth benefits.

Deloitte Center for Health Solutions health policy brief explores the regulatory landscape and  how federal and state policy is evolving to meet consumer demands for technological  innovation as we transition to value-based care.

The following comes from the report by Deloitte Center.

Telehealth and the evolving policy landscape

Improving digital connectivity between patients and providers is critical to achieving value-based, patient-centered care.

Many health care organizations are exploring strategies to leverage technology, including telehealth, to increase consumer engagement and focus on prevention and chronic care management outside the traditional physician office visit. Findings from Deloitte’s 2016 Survey of US Health Care Consumers shows that interest in and use of telehealth is rising. The policy landscape—including payment policy and care provisions across state lines—is evolving to keep up with consumer demand and technology innovations.

An aging population, increasing chronic illness, the importance of self-care, accelerating health costs, regulatory reform, and new payment models are driving interest and growth in telehealth.1 Some recent studies show that telehealth visits are associated with lower costs than traditional in-office visits and could result in Medicare savings,2 while others are concerned about its potential to increase costs in a fee-for-service environment.3 Under new value-based payment models that reward outcomes (including lower total cost of care) rather than utilization, telehealth may be a cost-effective solution to provide access to care and, ideally, reduce unnecessary hospital care. Given these trends, providers and health plans should continue to monitor the complex and ever-evolving policy landscape around telehealth, and consider adopting targeted strategies for telehealth that encourage self-care and increase medication adherence to realize the clinical and economic benefits.4

New telehealth policies will likely need to balance potential increased access to services with potential cost increases, as well as payment and licensing changes and what they may mean for provider business models.5 This policy brief provides an overview of trends in telehealth and consumer interest; the regulatory landscape; and the potential barriers, opportunities, and enablers for telehealth in the coming years. Top-of-mind policies for providers and health plans include:

  • Current Medicare payment policy and proposed legislation to change it
  • The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and its impact on telehealth
  • Centers for Medicare and Medicaid Services (CMS) initiatives that are encouraging telehealth
  • Recent Medicaid legislation that encourages telehealth6 in states and Medicaid managed care
  • State policy trends, including licensing reciprocity and reimbursement, and examples of state telehealth regulations

“Many telehealth advocates and analysts hope CMS initiatives and models will demonstrate the value of telehealth services and thereby lay the groundwork for expanding coverage in Medicare.”

Implications of evolving polices for health care stakeholders

Health care providers

The American Hospital Association reports that 52 percent of US hospitals were using telehealth in 2013 and another 10 percent were moving toward adopting the platform. A recent policy recommendation from the group includes asking the Senate Finance Committee’s Chronic Care Management workgroup to make telehealth the standard of care for people with chronic conditions, rather than a separate path of care alongside traditional in-person visits.7

As consumer interest in telehealth continues to grow, and as the federal and state policy landscape evolves to reduce barriers to telehealth, providers may consider investing in telehealth capabilities. In particular, providers may consider strategies for targeted populations who are affected by value-based care models.

Finally, given the complex and ever-evolving policy landscape around telehealth, it would be wise for providers to monitor ongoing federal and state efforts.

Payers: Health plans and employers

With many health plans developing and investing in capabilities that make health care more convenient and accessible to consumers, it is not surprising that health plan adoption of telehealth is growing. The past year has seen a flurry of activity, with some commercial health plans partnering with telehealth vendors to pilot or expand telehealth services. In addition, more health plans and large employers are interested in incorporating telehealth into their benefit structure.8

UnitedHealth Group predicts 20 million of its members could access and receive coverage by telehealth providers in the next year; Anthem is expanding its LiveHealth Online program to most individual and employer-based plans, including exchange members in 11 states, and also predicts 20 million members will have telehealth benefits in 2016.9

For employers, telehealth may be as much of a human resources topic, used for recruitment and retention, as well as a health care topic. According to a 2015 survey by American Well, one-third of employers offered telehealth in 2015, up from 22 percent in 2014, with 49 percent saying they planned to offer a telehealth benefit in 2016. Reducing medical costs and improving access to care are some of the reasons employers are investing in telehealth; others include employee satisfaction, improving productivity, and attracting new talent.10
The Affordable Care Act (ACA) requires that health plans serving health insurance exchanges meet standards for network adequacy. As health plans move toward narrower provider networks for exchange plans in order to reduce premiums, telehealth is one important strategy that could help health plans meet network adequacy standards more cost-effectively—and help providers deliver care to underserved areas more efficiently.11

Like providers, health plans may want to pay attention to the evolving policy landscape to confirm that their efforts mirror those of CMS and that they are not burdening providers with different requirements. There is an opportunity for health plans to play a leading role in pioneering telehealth strategies, as the federal government will likely continue to look to the commercial market for additional telehealth quality and cost-effectiveness data.


For now, Medicaid and Medicare plans are not paying for telehealth.  But, that is about to change as insurance boards see cost containment with implementation. As we the physicians lay the groundwork and lead the way, federal policies will follow us (as the patients currently do).

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