John Locke Update / Research Brief

Telemedicine Regulations Do’s and Don’ts

posted on in Health Care, Health Care & Human Services, Law & Regulation
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Telemedicine and telehealth are two terms that are gaining notoriety in the health care field. The two terms are often used interchangeably. Depending on the context, however, they may refer to different services. In the broadest sense, telemedicine or telehealth refer to a patient receiving health care treatment or diagnosis remotely through telecommunications. In more specific terms, telemedicine may indicate clinical procedures performed remotely, while telehealth may be a term used to describe the application of telecommunications in health care that go beyond standard clinical care.

Telemedicine is not a new phenomenon. The gains in technological capabilities over the past several years have increased its potential use dramatically. Infusing technology into health care may change fundamentally the way patients can receive care outside of the traditional brick and mortar facility. Physicians already use telecommunications for health care delivery, but much of the potential has yet to be discovered. As is the case with many innovations, government regulation that may have good intentions could hinder the adoption of this cost saving, patient-driven delivery model. In this research update, I will examine some telemedicine regulation do’s and don’ts.

Telemedicine Regulation Do’s

Any regulation related to telemedicine should emphasize the primary goal of accessibility. No matter where you are, telemedicine allows you to see a physician in a matter of minutes. To maximize patient convenience, lawmakers should allow North Carolina patients to obtain care from physicians and providers throughout the United States. Currently, to treat patients in North Carolina, a physician would need to obtain a North Carolina medical license, even if the physician has a license in another state and is in good standing with the state medical board.

Lawmakers have introduced a bill that would allow new ways for patients to access psychiatric professionals. A provision of the Healthcare Expansion Act of 2019 would enter North Carolina into the Psychology Interjurisdictional Compact which would increase access for patients to see licensed psychologists in other states through virtual or online tools.

While the compact is an important step forward, lawmakers should go even further and allow for out-of-state doctors to treat or diagnose North Carolina residents via telemedicine without restrictions on services. States erect artificial barriers to care by imposing strict licensure laws. Lawmakers could increase access by amending North Carolina laws to allow a licensed physician from another state to treat patients in North Carolina so long as they are in good standing with their medical board. This would also increase competition among providers, which is beneficial to patients. If North Carolina opened up new paths to telemedicine, patients would have more access to physicians and greater access to specialists around the country.

Telemedicine Regulation Don’ts

Lawmakers should not regulate telemedicine in any way that may impede its growth, adoption, or use. In particular, imposing a mandate that requires insurers to pay or reimburse for telemedicine services at the same rate as in-person visits is contradictory to many of the benefits that telemedicine offers. A bill before the N.C. General Assembly this legislative session would do just that. House Bill 721: Increase Access to Telehealth Services has a section that would require every health benefit plan in the state to reimburse for covered services delivered via telemedicine at the same rate as an in-person visit. From part two, section two of the bill:

(b) Every health benefit plan offered by an insurer in this State shall reimburse for covered services provided to an insured through telehealth.

(c) Telehealth coverage and reimbursement shall be equivalent to the coverage and reimbursement for the same service provided in person.

Some may ask how this provision impedes the goals of telemedicine. Wouldn’t a requirement for insurance companies to pay for services provided through telemedicine at the same rate as in-person visits encourage the use of telemedicine? In some cases, maybe, but to mandate such payment parity is contradictory to telemedicine’s potential cost-effectiveness.

To remain patient-focused, the physician and patient should determine telemedicine usage. Negotiations between insurers and providers should establish reimbursement for services provided through telemedicine, rather than a payment requirement mandated by law. If insurers are forced to pay for virtual services at the same rate as in-person services, there is no incentive for the utilization of technology that has the potential for cost savings and a more patient-centered form of care. As former John Locke Foundation Director of Health Policy Katherine Restrepo concludes in a report on telemedicine parity laws:

In the end, telemedicine parity laws perpetuate the shortcomings of our current health care system. They may disincentivize the creation of a treatment plan that meets the needs of individual patients. They may raise costs and conceal the cost of care from the consumer. And they may encourage the overconsumption of health care by paying providers based on the volume of services and not outcomes.

All but 14 states currently mandate some form of parity payment for telemedicine services. Many organizations are opposed to such laws because they have a negative impact on the ability of providers, insurers, and employers to design benefit plans with options that can increase efficiency and reduce costs. During testimony on a parity bill in Connecticut last year, Adam Greathouse, Senior Associate of Health Policy for the ERISA Industry Committee, observed, “legislation that mandates that reimbursement for telemedicine be the same rate as that of in-person services is simply illogical and unnecessary” and “reimbursement rates should be negotiated between providers and insurers, not mandated by government.”

Although health care is one of the most regulated sectors in America’s economy, lawmakers should let the untapped benefits of telemedicine come about through market forces, rather than regulation. Physicians may gradually adopt telemedicine services into their practice as they gain more confidence in its usage. Others may see it as a cost-effective way to treat or diagnose more patients than they could in a traditional manner. Regardless of the speed in which physicians adopt the use of telemedicine, it would be wise not to kill off any of the benefits through excessive regulations.

Jordan joined the Locke Foundation in the summer of 2018 as Health Care Policy Analyst. After two years in the research division, he moved over to the government affairs team. Jordan now works with state decision-makers in the public and… ...

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