The Current State of Telehealth Insurance Coverage
Telehealth policies are expanding to match the patient and industry demand
If we’re being honest, the topic of telehealth insurance coverage can stir up some confusion. Although this technology can improve patient quality of care and enhance healthcare efficiency, telehealth policies may limit its benefits. This causes uncertainty among healthcare leaders who aren’t sure whether they should adopt virtual care into their workflow or leave it on the back burner.
As leaders in virtual care, we want to bring you clarity on this subject so you can make informed decisions. After all, the healthcare industry is already complex enough, with all of its stakeholders, treatment protocols and more. Therefore, below, we will discuss the current state of telehealth insurance coverage as it relates to both public and private insurance.
The types of telehealth
Before we discuss where telehealth insurance coverage stands today, you’ll want to be up to speed on the different forms of telehealth. They play a key part in coverage.
Asynchronous telehealth
Occasionally called store-and-forward, asynchronous telehealth involves interactions between parties that don’t occur in real time. When it’s between a patient and provider, it may involve exchanging messages in the patient portal. Providers also use it to communicate with one another, such as sending and evaluating lab results and images.
Remote patient monitoring is another form of telehealth, typically categorized under asynchronous telehealth. This method allows one to use technology to deliver, gather and store health information for later use. An example would be a provider monitoring their patient's blood pressure levels from home or tracking A1c levels through a continuous glucose monitor.
Synchronous telehealth
When most people talk or think about telehealth, they’re referring to synchronous visits. These interactions occur in real time and are back-and-forth communications. This may look like a therapist offering virtual mental health visits or a patient having online follow-up visits via video chat with their primary care provider.
Telehealth policies before COVID-19
Before COVID-19, telemedicine use in the United States was steadily increasing, but the logistics were slightly more complicated. Even when providers and patients wanted to use telehealth, there were often barriers. These barriers spanned from privacy regulations and technological interface capability issues to restrictions on party location and reimbursement hiccups.
The federal government's involvement in telehealth initiatives typically revolved around Medicare. At the time, Medicare limited reimbursement of telehealth services to individuals in rural areas. These visits could only be performed at authorized originating sites (e.g., where the patient is located during the video), and a patient's home didn’t qualify as an originating site. Rules like this often conflicted with state regulations, which may not have contained geographic coverage limitations for reimbursement.
State telehealth laws varied, which is still the case now. For instance, some states had no telehealth parity laws that dictated the reimbursement rate for telehealth services and service coverage. At the same time, others required full coverage and had payment parity for telehealth services. This lack of uniformity among the federal and state governments created hesitation among payers, patients, and providers.
Telehealth policies during COVID-19
The COVID-19 public health emergency upended many of the previous barriers to telehealth. Suddenly, virtual care became a solution that allowed patients to communicate with providers while quarantining.
In March 2020, Congress changed many Medicare restrictions, including where telemedicine must occur, what services could be reimbursed and the platforms that could be used. Telehealth policies surrounding privacy regulations and interstate practice became more relaxed. Private payors and states soon followed Medicare’s strategy, significantly expanding telehealth services.
Telehealth insurance coverage today
Since the pandemic, we’ve all witnessed the power of telehealth. It’s given people access to medical specialists, is a resource to those with transportation issues, and improves care coordination among healthcare professionals. However, many of the telehealth policies put in place during the pandemic were just temporary orders. So what does insurance coverage look like today?
Medicare and telehealth insurance coverage
Medicare is a federal health insurance program for individuals 65 and older. However, individuals younger than 65 may qualify if they have certain disabilities, like Lou Gehrig’s disease or permanent kidney disease.
Now, let’s discuss what’s going on with Medicare. In December 2022, Congress extended Medicare coverage of telehealth visits through December 31, 2024. This temporary order allows the following:
Medicare patients can receive telehealth services at home.
No geographic limitations exist for originating sites for non-behavioral and mental telehealth services.
All eligible Medicare providers can provide telehealth services, including physical therapists, occupational therapists, etc.
In-person visits aren’t required within six months of an initial mental telehealth service or annually.
Some services may be completed using audio-only platforms.
Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) may act as distant site providers for non-behavioral/mental telehealth services.
Under this temporary order, Medicare treats synchronous telehealth services like in-person visits. Therefore, patients would pay the same for virtual visits as they would for clinic or hospital visits. However, the flexibilities are set to end after December 31st, 2024. In May 2024, another bill to extend the flexibilities again passed through the House.
Research shows that telehealth usage among Medicare recipients has improved access to care. While beneficial, only time will tell if Medicare will make these temporary orders permanent.
Do note that federal law limits asynchronous telehealth coverage to specific projects in Hawaii and Alaska.
Medicaid and telehealth insurance coverage
Medicaid is a joint state and federal health care program that provides medical services to American adults and children with limited income and resources. Every state runs its own Medicaid program, so the benefits and eligibility requirements will vary. However, they must follow general rules provided by the federal government.
According to Health and Human Services, most states permit the following:
Asynchronous telehealth services
The home qualifying as an originating site
Electronic, telephone, and virtual visits
Pay parity
However, also consider these Medicaid telehealth policy trends:
50 states and Washington D.C. reimburse some form of live video in Medicaid fee-for-service
33 state programs reimburse for synchronous telehealth
37 states reimburse for remote patient monitoring
43 states and D.C. reimburse for audio-only services
These numbers reflect the expansion of telehealth policies. For instance, coverage of audio-only services has more than doubled since 2021. Just a few years ago, only 22 states provided telehealth insurance coverage of synchronous services; now it’s 33.
Commercial and private insurance coverage
Commercial insurance companies like United Healthcare, Blue Cross Blue Shield and Kaiser Permanente have expanded coverage for telehealth services, and each one follows its own billing process.
However, 43 states, DC, and the Virgin Islands have private payer laws that require telehealth reimbursement. Twenty-four states have explicit payment parity, meaning coverage and payment would be equivalent to if the person had the same service in person.
No new states have added a private payer law since 2023, but some states have modified their requirements. To stay up-to-date on these matters, use the Policy Finder Tool.
The future of telehealth coverage
Although there’s still some uncertainty about whether Medicare’s temporary orders will become permanent, the future of telehealth looks bright.
Because of the pandemic, many of the previous barriers to telehealth insurance coverage have been addressed. Most states have implemented telehealth policies and regulations regarding reimbursement. In addition, providers are less resistant to this innovative tool, and many patients now expect it.
Today, telehealth is a part of many healthcare organizations' business plans, especially if they hope to remain competitive. With the demand for telehealth services increasing, insurers will likely expand their coverage to match it.
Ready to scale your telehealth offerings?
Now that you’re up to speed regarding telehealth insurance coverage let’s discuss how OpenLoop can support your organization.
We provide digital health companies, employers, retailers and pharmacies looking to get into virtual care, the complete infrastructure needed to build a successful program. We got rid of the need for multiple point solutions and brought it under one full-service solution. The best part, it’s all white-labeled under your own brand. Only interested in a few of our solutions? No Problem! We’ll work with you to support the areas you need.
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