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Telehealth, the 21st Century Gold Rush

Phil C. Solomon
Vice President, MiraMed Global Services, Inc., Jackson, MI

Introducing Telehealth

The American Telemedicine Association (ATA) defines telemedicine as the remote delivery of healthcare services and clinical information using telecommunications technology. Today, as telemedicine crosses the chasm of innovation, it leverages a wide array of clinical services using internet, wireless, satellite and telephone media to deliver clinical care.

What is the distinction between telemedicine and telehealth? Some industry pundits use the terms “telemedicine” and “telehealth” interchangeably. The more popular definition is that telehealth is explicitly defined in law and/or policy and regulations. In some cases, “telehealth” is used to reflect a broader definition, while “telemedicine” is used mainly to define the delivery of clinical services. Both have one thing in common. They are setting a new “gold standard” in the delivery of healthcare services. For the purpose of simplicity, the term telehealth will be used to describe both terms.

Lawmakers, Providers and Consumers Strike Telehealth Gold

Telehealth is booming! The growth of this medical sector is happening so rapidly that it can be compared to the astonishing progression of the California Gold Rush in 1848. The goldseekers of yesteryear can be compared with today’s providers and medical technologists. Due to telehealth, the delivery of care is advancing swiftly in the U.S. In comparison, gold miners progressed from using simple techniques to “pan” for gold to adopting sophisticated methods to uncover millions of dollars of gold. The “gold” healthcare providers will receive in the telehealth rush will be the opportunity to develop a healthier and better-served patient.

Unlike the gold rush that was over almost as soon as it started (1848–1855), telehealth’s growth seems to have no end in sight. That said, the technological delivery of clinical care is not without its challenges. There is ongoing legal wrangling and discussions between attorneys, legislators, lobbyists and industry groups about how each state will handle telehealth’s evolution and reimbursement.

The “tug of war” about how to implement telehealth began over 40 years ago with hospitals attempting to extend care to patients in remote areas. According to the ATA, the use of telehealth has spread rapidly and now is used in some form by over 50 percent of American hospitals. It has been so successful at improving a patient’s clinical health status that the technologies are advancing to include a growing variety of applications and services using two-way video, email, smart phones, wireless tools and other forms of telecommunications technology.

Policymakers Grapple with State Telehealth Laws

In March 2016, the Center for Connected Health Policy (CCHP), a program of the Public Health Institute, released the fourth annual edition of the State Telehealth Laws and Medicaid Program Policies report.1 This guide provides policymakers, health advocates and other professionals the most current information on telehealth-related policies, laws and regulations for all 50 states and the District of Columbia.

The key findings of the report determined that no two states are alike in how telehealth is defined and regulated. While there are some similarities in language, perhaps indicating states may have utilized existing verbiage from other states, noticeable differences still exist. These differences create a confusing environment for telehealth participants to navigate, particularly when a health system provides healthcare services in multiple states.

The report focused on ten specific telehealth-related policy areas:

  1. Medicaid reimbursement – Forty-nine states have some form of reimbursement for telehealth in their public program.
  2. Reimbursement for live video – The most predominantly reimbursed form of telehealth modality is live video, with every state coverage law offering some type of live video reimbursement.
  3. Reimbursement for remote patient monitoring (RPM) – Only 16 states have some form of reimbursement for RPM in their Medicaid programs RPM.
  4. Reimbursement for email/ phone/fax – Email, telephone and fax are rarely acceptable forms of delivery unless they are in conjunction with some other type of system.
  5. Reimbursement for transmission/facility fee – Thirty states will reimburse either a transmission, facility fee or both.
  6. Location of service provided – Although the practice of restricting reimbursable telehealth services to rural or underserved areas, as is done in the Medicare program, is decreasing, some states continue to maintain this policy.
  7. Consent issues – Twenty-nine states include some sort of informed consent requirement in their statutes, administrative code and/or Medicaid policies.
  8. Licensure – Nine state medical boards issue special licenses or certificates related to telehealth.
  9. Online prescribing – There are a number of nuances and differences across the states. However, most states consider using only an internet/online questionnaire to establish a patient-provider relationship (needed to write a prescription in most states) as inadequate.
  10. Private payer laws – Currently, 31 states and the District of Columbia have laws that govern private payer reimbursement policies.

It is not a shock to discover wide differences of opinion between state legislators and policymakers regarding the future of telehealth. Some states are expanding telehealth reimbursement, while others continue to restrict and place limitations on delivered services. The differing implementation of telehealth is no surprise. Coming to a universal agreement about any healthcare legislation is about as easy as finding a gold nugget at an abandoned gold mine.

According to the National Conference of State Legislatures (NCSL) report, in 2015 there were 200 telehealth bills introduced in all but eight states, and in the current legislation session in the 2016 legislative session over 150 bills have landed on state lawmakers’ desks. Because of this, there are no shortages of legal questions and issues healthcare providers, hospitals and other enterprises need to be aware of regarding telehealth services.

A Legal Expert Weighs In on Telehealth’s Future

Nathaniel Lacktman, head of the law firm Foley & Lardner’s telemedicine and virtual care practice and a leading authority on the latest legal and policy issues surrounding the telehealth market, provides answers to seven key questions about the emergence of telehealth and how it is affecting lawmakers, providers and consumers.2

1. Question: What are your thoughts regarding telemedicine policy?

Nathaniel Lacktman: Some of the most interesting policy activity concerns payment for telemedicine-based services and socalled telehealth coverage statutes. These laws require a health insurance plan to cover a service delivered via telehealth if that service would be covered if delivered in person. In this way, telehealth coverage statutes are like consumer rights laws. An individual has no choice as to what insurance company his or her employer selects to administer his or her benefits, no choice as to what specific health plan is offered under that benefit plan and no choice as to which providers are contracted in that plan’s network. So, even insured patients feel a sense of disenfranchisement in the health insurance industry. And health coverage is arguably the most important insurance coverage a person might carry. Consumers have far more ability to flex their spending power when buying life insurance, disability insurance or car insurance. Yet, health insurance is a very different process, and the individual consumer really cannot speak with his or her dollars.

Telemedicine is well established and utilized by patients and doctors in all 50 states. But, by and large, unless a state passes a telehealth coverage law requiring health plans to cover these services, they do not cover it. An insurance company might have operations across the country, with a variety of different health plans underneath it. The insurer will cover telehealth services when it has a health plan in a state with a telehealth coverage law, but in states without these laws, the insurer will not offer telehealth as a covered benefit. I find this disappointing and frustrating, as do many healthcare providers and patients. We see a much more robust and meaningful utilization and enjoyment of telehealth services in those states that have passed telehealth insurance coverage laws.

2. Question: How much are differences in state laws and insurance barriers affecting the telehealth industry?

NL: Variances across states in multi-state arrangements are definitely a barrier. Much of the traditional healthcare delivery system relies on Medicare payments, and a large amount of our overall health costs are paid by that program. The Centers for Medicare & Medicaid Services (CMS) sometimes is unfairly criticized because people “demand” CMS change the Medicare telehealth coverage rules and allow reimbursement for patients in urban areas as well as rural. But these restrictions were imposed by Congress and contained in the Social Security Act. CMS cannot override these federal statutes. However, CMS has made many outreach efforts to eliminate restrictions and promote the meaningful use of telemedicine in healthcare delivery, and it should be recognized for those efforts. A number of bipartisan bills have been proposed over the years, but they will need federal action. By April 2017, the U.S. Government Accountability Office (GAO) will issue two reports on telehealth studies and the Medicare program to see if eliminating the restrictions would represent a big financial burden or not. Those reports were required to be created as part of the “doc fix” bill in April 2015 and could be a catalyst for legislative movement by Congress.

3. Question: How are state variances affecting the telemedicine market?

NL: I do believe we will eventually reach a point where health plans are meaningfully covering telehealth services, whether it is through legislative efforts or sheer enrollee demand. Until then, we need these coverage statutes because so many providers participate in managed care programs. Changing that environment will catalyze utilization, adoption and people’s enjoyment of these services.

4. Question: How are the variances in state telemedicine laws creating issues when it comes to interstate medical licensing?

NL: Primarily, it is an administrative paperwork burden, but nothing insurmountable. Here’s an easy scenario: the doctor is located in New York, the patient is in Miami, and the patient receives a consult, diagnosis and prescription from that doctor via telemedicine. The default rule is that the New York doctor must have a license to practice medicine in Florida because the doctor is delivering care into the state of Florida. There are exceptions to this rule. Licensing is not a show-stopper; it’s more of an operational or administrative burden. But there are a multitude of solutions and ways to approach licensing and scale up to have regional and national coverage of a telehealth-based medical group.

5. Question: What other challenges do you see in the industry that might be preventing telemedicine from taking that next “leap?”

NL: Like anything new, it takes time for buzz to build and for people to become comfortable. Historically, telemedicine has been focused in the academic medical center and university environment, if only because that’s traditionally the domain of pilot programs and research studies to prove clinical efficacy. But the clinical efficacy and safety have been established. Now, we have been seeing studies trying to prove telemedicine’s ROI. People are looking to scalability and sustainability: how to structure service offerings with operational homogeneity so there aren’t variances on a state-by-state basis. I think there’s a better understanding of why providers are using telemedicine, how they plan to use it and a desire to build a model that does not rely solely on cost savings or shoestring grant-funded budgets. Rather, the service itself should generate revenue and improve quality. That’s the next level of sophistication in telehealth business arrangements. In our practice, we aren’t just papering the legal documents, but we frequently advise clients on the business models and structures that will offer these benefits. Some people love the flashy and exciting technology but have no idea about how to turn it into a viable business or service line.

6. Question: Are doctors more comfortable with providing these services compared to years past?

NL: Yes, they are more on board and it continues to grow. The American Medical Association approved new ethical guidelines on telemedicine use after three years of back-and-forth. At this point, it is pretty irrefutable. People are doing amazing things with telehealth and doing it with confidence. As with anything, you need education and exposure before doing it with comfort.

7. Question: What will it take for telemedicine programs to integrate themselves more fully into health systems?

NL: The biggest driver that will fuel overall growth is the move toward population health. That’s a concept a lot of hospitals are driving for as providers will be paid more on a risk-based system with quality of care implications and penalties or risk if the cost of care gets out of control. Already, the smart health systems are looking for ways to reach out to patients to make care more accessible and convenient. The second part is the increasing amount of information available to the doctors by using tools such as remote patient monitoring and patient-centered apps where the goal is to get more information coming from the patient to the doctor. That’s the idea: make care more accessible to the patient and get more (and better) information to the caregivers. If that is achieved, providers will be in a much better position to be successful under these risk-based models, which is the future of healthcare.

Telehealth — Gold Will Be the Consumer’s Reward

Telehealth has become the healthcare delivery model of the 21st Century and a powerful application to help achieve better healthcare, enhanced health outcomes and reduced healthcare costs. By developing efficiencies and spreading the reach of existing care providers, telehealth has the capability to improve healthcare workforce issues and overcome access obstacles, thus decreasing costs and burdens for patients.

The future of telehealth now relies on lawmakers and policy influencers to continue to push the telemedicine narrative by eliminating regulatory barriers to telehealth delivery models, including policies around reimbursement, licensure and credentialing. History reveals that sometimes progress and success can be as fleeting as it was during the gold boom of the 1800s. As long as state and federal regulations keep pace with the technological advances in the practice of clinical care and telehealth, then gold will be the consumer’s reward.

1Healthcare Informatics, For Telemedicine Providers, the Policy Landscape Continues to Have Both Gains and Losses, Report, http://www.healthcare-informatics.com/news-item/telemedicine-providers-policy-landscape-continues-have-bothgains-and-losses-report-says
2 Healthcare Informatics Managing Editor Rajiv Leventhal - Q&A discussing the challenges and opportunities facing the telehealth market, https://www.healthcarelawtoday.com/2016/07/11/the-state-of-telehealth-policy-and-reimbursement-qa/

Phil C. Solomon serves as the Vice President of Global Services for MiraMed, a global healthcare revenue cycle outsourcing company, and is the publisher of Revenue Cycle News, a healthcare business information blog. As an executive leader at MiraMed, he is responsible for creating and executing sales and marketing strategies that drive new business development and client engagement. Phil has over 25 years’ experience consulting on a broad range of healthcare initiatives for clinical and revenue cycle performance improvement. He has worked with the industry’s largest health systems, developing executable strategies for revenue enhancement, expense reduction and clinical transformation. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it., or at (404) 849-8065 and also on Twitter @philcsolomon.

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