New Jersey State Policy Lab: Challenges with Telehealth Adoption in Light of a Global Pandemic

Rajisha Shah, Aakanksha Deoli, MHA

The COVID-19 pandemic led to a significant increase in telehealth volume and revolutionized healthcare regulatory guidelines for its use. Telehealth expanded access to care, especially during the pandemic, and made chronic disease management more convenient. The healthcare landscape saw a significant shift with the increasing growth of telemedicine companies, and commercial insurers are concentrating on expanding in-network telemedicine providers. The focus of this blog post is to highlight the critical changes in telehealth policies before, during, and after the COVID-19 pandemic.

In the pre-COVID era, the Centers for Medicare and Medicaid Services (CMS) provided telehealth reimbursement only in remote & rural areas for certain services. The restrictions to using telehealth also included the provider types, their state licensures, and geographic locations. Furthermore, audio-only telehealth was not reimbursed for any medical condition. However, during the COVID-19 pandemic and Public Health Emergency (PHE), virtual consults and videoconferencing increased in demand to limit the spread of novel coronavirus. Therefore, CMS and private insurers loosened the telehealth restrictions. The federal government relaxed requirements for Medicare, enabling telehealth from any geographic location, and states expanded Medicaid to include telehealth, simultaneously eliminating restrictions on provider licensing. Audio-only telehealth services are covered for select conditions, primarily including behavioral health.

The telehealth visits before the PHE were trending upward but remained low. According to research done by Intermountain Healthcare, only 20% of people were aware of telehealth. Thus, lack of consumer awareness played a pivotal role in the lack of adoption. Technology anxiety & socio-economic disparities also relate to the reduced consumption of telehealth. Among providers, 77% of physicians reported reimbursement uncertainty as a barrier to the adoption of telehealth services before the pandemic. In the state of emergency, however, the tides turned: 95% of health centers reported using telehealth compared to 43% in 2019. The highest rate of telehealth visits was among Medicaid, Medicare, Black individuals, and individuals earning less than $25,000. This necessitated the change in the regulatory framework surrounding telehealth.

In the current scenario, most states have mandated “service parity” but are lagging on “pay parity” for telehealth. The question remains whether telehealth should be reimbursed at the same rates as in-person visits. In March 2022, The Congress Omnibus Spending Bill expanded the temporary telehealth changes for five additional months, including waivers on geographic locations & provider types. Nonetheless, Congress plans to suspend payment parity for telehealth except for mental health conditions after the lapse of PHE. It is essential to focus on the challenges with respect to its use and implementation to predict telehealth’s future outcomes and benefits accurately.

Low-value care is a significant concern in the United States healthcare system. It is estimated that low-value services account for about $ 75- 100 billion of healthcare spending every year. Low-value care is prevalent among traditional Medicare and Medicare Advantage patients. Primary care is the foundation for any healthcare system, and telemedicine has enabled patients’ access to primary care. Telehealth has shown promising results in the health outcomes of patients. In the recent past, the Center for Medicare and Medicaid Services has announced a new initiative to build a value-based primary care model around telehealth.

The recently passed CHRONIC Care Act significantly decreased care fragmentation through telehealth and reduced reimbursement barriers for telehealth. Under the Act, telehealth makes the post-discharge follow-up convenient, thereby reducing the 30-day readmission rate, e.g., the 30- day readmission rate for heart failure patients via telehealth follow-up was 22% which is 2% less than the readmission rate for non-follow up cases. The scope of telehealth services has expanded beyond chronic conditions & behavioral health, including but not limited to urgent care centers, pharmacies, and outpatient care. Primary care is the foundation of our healthcare infrastructure, and telemedicine has enabled people’s access to primary care easier. Telehealth has shown promising results in the health outcomes of patients from both preventative and curative perspectives.

Furthermore, there is also a debate on whether it costs clinicians less to deliver virtual care over in-person care. Some studies have shown that, on average, physicians spend more time on the video than on in-person appointments. This challenges the idea that telehealth is used to offset lower patient volumes. Some concerns remain around the overutilization of telehealth and fraud associated with the billing practices.

In rural areas, limited broadband access could be seen as one possible reason for adopting the audio-only telehealth option. If telehealth reimbursement is lower than in-person visits, hospitals may not be able to continue providing telehealth services. Congress is making significant investments to address the digital divide in the rural communities via Federal Assistance Programs. Continued efforts in this area would modernize healthcare which is the need of the hour. Additionally, eliminating audio-telehealth from rural areas would discourage providers from investing in telehealth infrastructure in remote places.

Telehealth proved to be an effective tool to address access-related challenges during the COVID-19 pandemic. The convenience provided by telehealth made it a preferred option for both patients & providers. As the patient demand for telehealth services continueshealthcare systems compete to deliver the best telemedicine experience. Therefore, it is critical to pursue and further broaden the current telehealth guidelines post-pandemic to maintain the momentum of enhanced access to health care and keep up with patients’ needs.