What Clinicians Need to Know About Telehealth Pay Parity

Payment parity for telehealth has evolved over time and gained more prominence in recent years, especially with the increased adoption of telehealth services. The COVID-19 pandemic played a significant role in accelerating the adoption of telehealth and prompted many healthcare systems and insurers to implement temporary measures, including payment parity, to support the use of virtual care. During the public health emergency, many countries introduced or expanded telehealth reimbursement policies to ensure that healthcare providers were adequately compensated for virtual visits.

Now after the public health emergency has ended, various healthcare systems, insurers and policymakers have been working to establish and maintain payment parity for telehealth services. It’s crucial for the widespread adoption and sustainability of telehealth services.

What exactly is pay parity?

There are two types of pay parity laws:

• Payment parity for telehealth requires that telehealth visits be reimbursed at the same rate as if the visit had been delivered in-person.

• Service/coverage parity requires the same telehealth services to be covered as if they were delivered in-person. Coverage/service parity does not guarantee the same payment rate. 

Both types of pay parity laws can be extremely beneficial to clinicians as it guarantees their telehealth services will be covered by insurance - in some cases reimbursed at the same rate.

Federal parity laws

In the United States, most payment parity and service parity laws are determined on the state level - however there are some laws set forth from the federal level. For example, there is service parity for Medicare Advantage that is covered through telehealth by Medicare Part B. However, there is generally no service parity with all covered services. 

And when it comes to payment parity, Medicare Advantage plans have the flexibility to set different cost-sharing structures for specific Part B services (services covered under Medicare Part B) depending on whether those services are provided through an in-person visit or electronically through telehealth. 

Which states have pay parity laws?

Pay parity laws vary greatly from state to state - with some states having both payment and service parity laws and others having neither. Additionally, it's important to note that even when states have either pay parity law, the specific wording of the mandate can alter how it is enforced and can dictate which types of telehealth services are eligible for reimbursement. So it is imperative that clinicians fully understand the pay parity laws of their jurisdictions. 

As of November 2023, there are 43 states with one or both types of pay parity laws. 

The following states only have service parity laws: 

• Arkansas

• Florida

• Indiana

• Kansas

• Maine

• Michigan

• Mississippi

• Missouri

• Montana

• New Hampshire

• New Jersey

• North Dakota

• South Dakota

• Tennessee

• Texas

• Virginia

The following states have both payment parity and service/coverage parity laws:

• Arizona

• California

• Connecticut

• Delaware

• Georgia

• Illinois

• Iowa

• Kentucky

• Maryland

• Massachusetts

• Minnesota

• Nebraska

• Nevada

• New Mexico

• New York

• Oklahoma

• Oregon

• Rhode Island

• Utah

• Vermont

• Virginia

• Washington

• West Virginia

No matter which state a clinician decides to practice in, maintaining thorough and accurate documentation of telehealth visits is essential for billing and potential audits. This includes documenting the services provided, patient interactions and any other relevant information. 

Pros and cons of pay parity

Payment parity for telehealth can be a controversial topic within the healthcare industry. The controversy arises from differing perspectives on the appropriate reimbursement for telehealth services compared to traditional in-person visits. Here are some of the pros and cons to pay parity laws for telehealth. 

Pros

Incentive for telehealth adoption:

• Pay parity encourages healthcare providers to adopt and embrace telehealth services, as they can receive comparable reimbursement for virtual visits compared to in-person visits. This promotes the expansion of telehealth offerings.

Patient convenience:

• Telehealth allows patients to receive medical care from the comfort of their homes, reducing travel time and costs. Pay parity supports the sustainability of this model by ensuring that clinicians are adequately compensated for virtual visits.

Continuity of care:

• Pay parity facilitates the continuity of care by ensuring that healthcare providers can offer consistent services whether through in-person visits or telehealth. This is particularly important for patients with chronic conditions who require regular check-ups.

Flexibility for providers:

• Healthcare providers have the flexibility to choose the most appropriate mode of service delivery based on patient needs, without concerns about significant disparities in reimbursement rates.

Cons

Financial implications:

• While pay parity is designed to ensure fair reimbursement, it may pose financial challenges for healthcare systems, insurers or government programs. Balancing the costs associated with in-person and telehealth visits can be complex.

Overutilization of services:

• Some critics argue that pay parity might lead to overutilization of telehealth services if reimbursement rates are the same as in-person visits. This could result in unnecessary virtual visits, potentially driving up overall healthcare costs.

Administrative challenges:

• Managing billing, coding and reimbursement processes for both in-person and telehealth visits can be administratively complex. Healthcare providers may face challenges in navigating these processes efficiently.

Variability in services:

• Not all medical services may be suitable for telehealth delivery. Pay parity may not account for the variability in services and the different levels of complexity associated with in-person and virtual care.

Ultimately, the pros and cons of pay parity for telehealth depend on various factors, including the specific healthcare system, regulatory environment and the goals of telehealth implementation. Striking a balance between fair reimbursement and sustainable healthcare delivery is an ongoing challenge within the healthcare industry.

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