Page 6 ATA State Telehealth Policy Toolkit Coverage and Reimbursement

telemedicine-provided services under their Medicaid program. Unlike the aforementioned states, Maryland’s
fiscal analysis included estimates by the state’s Department of Health and Mental Hygiene, which suggested that
telehealth coverage would cause a 2 percent increase in the use of physician services and ultimately increase
Medicaid expenditures by $6.3 million in FY 2014 and $8.5 million in FY 2015. Despite these costs, the
Maryland Health Department estimated a net savings of $0.9 million in avoided transportation costs and $1.6
million in avoided emergency department admissions. In 2014, MD legislators and state health officials
revisited this issue and ultimately supported the enactment of telehealth parity for all Medicaid beneficiaries.

Mandating Parity -- Commercial insurers often oppose, as a philosophical principle, almost any state
requirement. Although telemedicine parity would not impose coverage of new services, here is some alternate
language that could be proposed to address these concerns:

a) This section shall not be interpreted to authorize a plan to require the use of telemedicine when the
health care provider has determined that it is not appropriate.
b) A plan may subject coverage of a telemedicine service under this section to all terms and conditions of
the plan, including but not limited to deductible, copayment or coinsurance requirements that are
applicable to coverage of a comparable health service provided in person.

Other challenges to telehealth parity bills involve protections on cost-sharing. Some opponents claim that
private insurers should be allowed to apply different or greater charges to patients who use telehealth. If
allowed, such a policy would not achieve parity. Provisions like the one below, act as a consumer protection
against such deviant practices. If a private payer states that they will cover a healthcare service, then a
consumer should expect that service will be covered at the same rate whether in-person or via telehealth.

A health insurer may require a deductible, copayment, or coinsurance amount for a healthcare service
delivered through telehealth, provided, that the deductible, copayment, or coinsurance amount may not
exceed the amount applicable to the same service when it is delivered in person.

Medicare Influence – As the nation’s largest single payer for health care, Medicare is often used by other payers
for guidance on specific aspects. Unfortunately, Medicare coverage of telehealth is restricted by an outdated
federal law. In contrast, federal Medicaid law gives the states flexibility for telehealth coverage – and the
Medicare restrictions do not apply. States are not required to submit a state plan amendment (SPA) to offer
coverage of telemedicine if coverage and reimbursement is comparable to in-person services. States have the
option/flexibility to determine whether (or not) to cover telemedicine; what types of telemedicine to cover;
where in the state it can be covered; how it is provided/covered; what types of telemedicine
practitioners/providers may be covered/reimbursed (as long as such practitioners/providers are “recognized” and
qualified according to Medicaid statute/regulation) and how much to reimburse for telemedicine services.

Malpractice – Another argument that may be posed is that telemedicine increases a provider’s medical liability.
This is largely a baseless claim. There have been very few liability claims. Instead, the more recordable nature
of telemedicine improves documentation and verification. It should be noted that some increasing case law
points toward provider liability for not using telehealth as it becomes the new standard of care.

“Essential Health Benefits” – There is still some false but lingering opposition to private insurance parity related
to each state’s definition of “essential health benefits,” developed in response to the federal Patient Protection
and Affordable Care Act (PPACA). In such cases telehealth should be recognized not as a “benefit,” but as a
way to provide a benefit. Of course, services that are not otherwise covered by the insurance company would
not be covered when delivered via telemedicine. Providers may only bill procedure codes in which they are
already eligible to bill.

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American Telemedicine Association
www.americantelemed.org