It’s Time to Cement Telehealth’s Place in U.S. Health Care

By John Glaser and Kyle Zebley

January 20, 2023

One of the few positive side effects of the deadly and catastrophically disruptive Covid-19 pandemic has been the blossoming of telehealth. Though useful telehealth technology has been available for several years, adoption was slow until providers had to scale it up in a matter of weeks as a safe way to see and treat patients when clinics were closed. At the peak of pandemic usage, telehealth accounted for 13% of total outpatient encounters, up from just above zero in early 2020. Medicare telehealth utilization showed a 63-fold increase during the pandemic.

Other useful effects of the pandemic, such as rapid vaccine development and research interest in post-viral syndromes, are probably here to stay no matter what. However, retaining and expanding the benefits of telehealth is a different story. The investments that have already been made in technology and training were only possible due to the waiver of a mountain of federal regulations that have hampered telehealth adoption for decades, and which, after the passage of an omnibus funding bill at the end of 2022, are set to expire on December 31, 2024. State and federal policymakers can rethink how telehealth is regulated (and thereby, to some extent, how all care is regulated) and permanently codify a better approach, or they can allow emergency regulatory changes to sunset on schedule and lose the opportunity.

We say “opportunity” because more than 80% of physicians believe that patients have better access to care since using telehealth while 94% of patients who have had a telehealth encounter want to continue to have access to telehealth in the future. While the change to care delivery at the outset of the pandemic was abrupt and the early interactions were often not ideal, the experience has prompted both providers and patients to look at their relationships and what it means to deliver care in a new way. Although telehealth usage dropped once clinics started to reopen, it remains above pre-pandemic levels.

Our not-for-profit organization, the American Telemedicine Association (ATA), which promotes safe, affordable, and appropriate access to telehealth, believes that the federal and state governments should recognize the value that telehealth demonstrated during the pandemic and use what was learned to improve regulations. In this article, we describe five priorities that we believe should serve as guides for crafting new regulations.

A Tangle of Regulations

To understand why the task at hand is so complex, it will help to review how telehealth has been regulated prior to 2020. The federal government plays a significant role. Its health-care-financing programs, in particular Medicare, shape much of the nation’s health care through decisions about what services they will and won’t pay for — decisions that commercial insurers often emulate.

Prior to the beginning of the pandemic, Medicare only reimbursed for virtual care services if the patient lived in a rural area and was physically in a Medicare provider’s office during the virtual consultation with a remote specialist. (This requirement was a remnant of Medicare’s original telehealth pilots in the 1990s, when rural homes had no internet connectivity and clinics had to install expensive equipment to offer the service. It was never updated to keep pace with new technology. Congress had to allow the executive branch to waive it during the pandemic.) These services were mostly used as a mode of consulting, for accessing specialty expertise not available in person in the provider’s community.

The Health Insurance Portability and Accountability Act (HIPAA), which governs how providers use and share patient information, imposes its privacy, security, and breach notification requirements on telehealth as well. The Drug Enforcement Agency regulates whether and how controlled substances can be prescribed through telehealth. The Food and Drug Administration regulates telehealth technologies that fall under the general category of medical devices — for example, remote monitoring devices, connected devices, or sensors that send health information and data back to a remotely located provider. And the Federal Trade Commission monitors telehealth for fraudulent or anticompetitive practices.

But the bulk of telehealth regulation — like the bulk of medical practice generally — is handled at the state level, and no two states approach it exactly the same way. Each state licenses its own medical providers, and those that want to practice in more than one state must pursue licensing in each one. Some states, particularly those that are short of providers, have adopted licensing compacts with other states to ease this regulatory burden, but they are by no means widespread.

Each state has its own policies on:

Which telehealth modalities are acceptable.

Some states only allow synchronous modalities like phone calls and video chat. Others also allow asynchronous interactions such as text or patient portals or continuous interactions such as those using remote patient monitoring.

Which medical professions are permitted to provide telehealth services and under what circumstances.

For instance, nurse practitioners have full independent medication-prescribing authority and therefore can prescribe controlled substances after a telehealth visit with a patient in Arizona, Iowa, Montana, and Washington. In contrast, nurse practitioners are required to have physician supervision over all their activities, including prescribing, in California, New York, Georgia, and Texas, which complicates the process of prescribing following a remote consultation.

How new patient-provider relationships are established.

Prior to the pandemic, these relationships were easily established in person with a “new patient” clinic visit. Some states already allowed for the establishment of a patient-provider relationship via telehealth, but the conditions for doing so and the technology that could be used in establishing the relationship varied considerably. During the pandemic, many more states developed various telehealth approaches for establishing new relationships. Some states require a real-time video chat to establish a relationship, while others allow an audio-only phone call. Some allow asynchronous communication as long as it protects the patient’s information from unauthorized access: for example, messaging through a patient portal or filling out a secure online intake form or questionnaire.

Whether and how medications can be prescribed.

Several states have kept the pre-pandemic status quo for initiating prescriptions for controlled substances, which required an in-person examination but allowed refills to be handled via telehealth. In contrast, some states adopted the approach of the federal government, which waived the in-person exam mandate during the pandemic.

Whether out-of-state practitioners may treat patients without holding a full in-state license.

In recent years, collections of state licensing boards of different health care professions have worked together to create processes through which providers licensed in one state can offer care in another. These collaborative agreements differ by provider type, but they generally are referred to as “compacts.” Several states have also recently developed an approach to create a registration system unique for telehealth providers that requires the providers to adhere to state laws and regulations with respect to liability coverage and scope of practice. These policies have greatly expanded the ability for telehealth care to be delivered across state lines.

How non-federal insurers reimburse telehealth.

This includes telehealth coverage requirements for public and private health plans, reimbursement for services provided via telehealth, and eligibility of providers to deliver reimbursable services.

While specific applications have achieved some traction — for example, the ability we alluded to earlier to bring specialty care to rural areas or stand-alone niche telehealth services for prescribing erectile dysfunction drugs or treating urinary tract infections — these federal and state regulatory barriers, and particularly the disparities in state regulations, have been important factors in preventing telehealth from being integrated into the overall health care system.

Emergency Measures

The formal public health emergency (PHE) triggered by the pandemic enabled the relaxation or modification of many telehealth regulations. The federal government made the following changes, among others:

• Allowing coverage and reimbursement of Medicare telehealth services regardless of the patient’s location
• Allowing Federally Qualified Health Centers and Rural Health Clinics to be reimbursed for telehealth services
• Waiving the requirement that a physician see a patient in person before using telehealth for the remote prescribing of a controlled substance
• Allowing hospitals to provide telehealth services from other sites, such as ambulatory surgery centers, inpatient rehabilitation hospitals, hotels, and dormitories
• Permitting telehealth to be designated as an “excepted benefit,” allowing more employees to receive telehealth through their employers. In addition, many states enacted temporary emergency measures that increased telehealth options for patients and beneficiaries, including licensure waivers that increased the number of providers allowed to deliver care across state lines.

The resulting increase in telehealth usage helped maintain medical care during the height of the pandemic that would have been unsafe in person without a notable adverse impact on the effectiveness of care. A report published September 2022 in the Journal of the American Medical Association (JAMA) shows that telemedicine use was associated with either significantly better performance or no difference in 13 of 16 measures of primary care quality. In addition, the pandemic has offered the opportunity for clinicians to study and improve the effectiveness of telehealth. (Thousands of telehealth-related journal articles have been published since 2020.)

The Need for Action

Unfortunately, the federal legislation easing the regulation of telehealth is temporary in nature: Again, its provisions will disappear at the end of 2024. Several pieces of legislation dealing with making permanent various aspects of telehealth have been introduced over the last few years but have stalled. Now that Congress has extended these flexibilities through 2024, the telehealth community is hoping to work with Congress to finally make them a permanent option for Americans.

While almost all states have allowed their emergency orders to expire, the vast majority have updated their laws governing telehealth since the start of the pandemic. These updates are a good start, but the reform of telehealth regulations is still very much a work in progress.

While we favor most of the new state laws, we believe that some of them either don’t go far enough or reinstitute unnecessary barriers. For example, Alabama passed a telehealth law earlier in 2022 setting up a permanent telehealth framework that’s beneficial overall, but its restrictions on remote prescribing of controlled substances leave Alabamans with less access to care than citizens in other states. In California, a new law helped ensure that Medicaid will cover telehealth services, but it largely prohibits Medicaid patients from establishing a new relationship with a provider over audio-only phone or through asynchronous modes even if the care delivered conforms to practice standards otherwise. This provision disadvantages patients who don’t have access to a computer or a smartphone.

To consolidate and build on the gains we saw in telehealth during the pandemic, the ATA supports the following five priorities as guides for the crafting of new regulations:

1. Interstate Care

Licensing barriers that keep providers from working across state lines or nationally should be removed. As licensure will continue to be regulated by state governments for the foreseeable future, the best way to obtain access to care across state lines is to create easier pathways for out-of-state practitioners to treat patients across state lines via telehealth, including licensure compacts between states that enable a provider with a license in one state to practice in another state. While we recognize that state legislatures and medical boards want to retain oversight and disciplinary authority over providers operating in their state, we support licensure flexibility models that provide accountability and also leverage telehealth to address workforce shortages and expand patients’ access to care.

State control of practice standards also responds to the often-unstated desire to tamp down competition: In this case, a state legislature or regulatory body may seek to protect in-state brick-and-mortar providers by keeping out-of-state telehealth providers from offering alternatives to their patients. This goal of keeping out-of-state telehealth providers out is often done through clinically unnecessary policy proposals such as mandating in-person or brick-and-mortar health care delivery, which limits the full potential of telehealth.

We think states can better serve their existing provider communities by taking steps to facilitate the incorporation of telehealth into routine care delivery rather than unnecessarily restricting telehealth use or making use cumbersome. We discussed some of these steps earlier.

2. Neutrality

Access to telehealth shouldn’t depend on patients’ physical location, their access to a specific type of technology, or the quality of their communications infrastructure. State and federal laws should ensure that telehealth is not held to a higher standard than in-person care and (as is true for the vast majority of care delivery) the standards of care should be defined by medical professionals and not spelled out in regulation.

For instance, Medicare significantly expanded access to clinically appropriate care during the pandemic by waiving geographic and “originating site” restrictions long embedded in law. For the first time, Medicare beneficiaries could “go to the doctor” via telehealth without leaving their house. Medicare should make this option permanent.

Likewise, to improve patients’ access to necessary medications, the PHE waiver of the requirement that a patient meet with a provider in-person before that provider could prescribe controlled substances should be made permanent, and states should adhere to this standard as well.

3. Value-Based Payment

We won’t truly reap the cost-saving and quality benefits of telehealth until the payment structure rewards the effectiveness of care rather than the quantity delivered. Value-based reimbursement would reward the use of technologies such as telehealth that enable advances in care quality, efficiency, and accessibility, and potentially reduce the overall cost of care. There is no incentive to try to reap these rewards when the payment system is based on the volume of care delivered. While there has been some momentum towards value-based payment, it represents a highly disruptive change, and regulators and payers have been understandably cautious. However, too much of the current payment structure remains based on fees linked to the volume of services delivered.

Realizing that health care will live in a volume-based and a value-based payment world simultaneously for several years, Medicare should use its vast influence to embed telehealth in its volume-based physician fee schedule, which dictates what services are covered and how much providers will be paid. In addition, Medicare should continue its efforts to introduce value-based care payment approaches. Commercial insurers should follow Medicare’s lead, and/or pursue their own telehealth-friendly payment innovations.

4. Underserved Communities

A looming provider shortage will disproportionately affect communities that are already underserved, whether because of remote location or because of poverty and high levels of Medicaid or unreimbursed care. Telehealth can help bring routine care and screening to those communities, averting health problems and identifying those that need treatment before they become urgent.

Even if they are not quite ready to make telehealth benefits universal, all payers, public and private, should cover and reimburse for telehealth services specifically for these communities. This goal can be achieved at the federal level if Congress enacts legislation to permanently adopt pandemic-era flexibilities for Medicare, Federally Qualified Health Centers, and Rural Health Clinics. State legislatures must also work to expand coverage of telehealth services for their state Medicaid beneficiaries.

5. Remote Monitoring

The overall aging of American society presented access challenges even before the pandemic. Managing chronic diseases is costly, and not managing them is even more costly. Leveraging telehealth for remote monitoring of chronic conditions such as diabetes and congestive heart failure can keep patients healthier, let them stay in their homes longer, and ensure they receive timely and clinically appropriate care without unnecessary travel. Medicare can, if it chooses, use its existing authority to expand coverage for remote patient monitoring technology and other telehealth-based devices, assuming they prove their cost-effectiveness.

The federal and state midterm elections are behind us, and governments are gearing up to address their legislative and regulatory agendas for the year ahead. The five priorities we have described should be on them. We believe that the United States can build on the progress it made during the pandemic, and protect the quality, safety, accessibility, and efficiency of health care while ensuring that the benefits of telehealth are available to everyone.