by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
A growing body of academic literature suggests that medical providers can deliver telemedicine to patients by mobile phones, television screens, or computer monitors that is comparable to in-person consultations.
As telemedicine can uphold the quality of health care, it’s also a cost-effective way to increase access to basic health care needs. Many live video consultations between a patient and a physician, for example, cost around $50 compared to $170 for an office visit.
But some ‘telemedicine parity’ laws are undermining technology’s capability to reduce out of pocket health care costs for consumers. These laws force insurance companies to not just cover services delivered by telemedicine, but reimbursement must be the same as in-person services. A few examples..
Kentucky: “A health benefit plan shall include coverage for services provided to an insured through telehealth…Telehealth coverage and reimbursement shall be equivalent to the coverage and reimbursement for the same services provided in-person.”
Tennessee: “Health insurance carriers are required to provide coverage for telemedicine under the same reimbursement policies that the plan permits for in-person encounters.”
Virginia: “Reimbursement must be the same as in-person services.”
According to the Health Care Cost Institute, more than seven states enforce payment parity. Its certainly admirable that lawmakers are trying to incentivize more providers to adopt telemedicine as a way to further spread access to health care – especially for patients living in rural areas – but “payment parity” sets a minimum price floor for these services and distorts market competition within the telemedicine industry.
Rather than enforcing parity laws, lawmakers should instead look to reducing medical licensure barriers that inhibit the growth of telemedicine. You can read more about that here and here.