Recently, Credit Suisse https://www.credit-suisse.com hosted Christa Natoli, Deputy Executive Director, Center for Telehealth and e-Health Law (CTeL) https://ctel.org and Aileen Berquist, Project Coordinator for External Affairs at investor meetings held in New York City. CTeL was established as the prominent “go to” legal and regulatory organization in the field of telehealth and e-health related issues.
Experts discussed several topics related to the telehealth industry. First, in 2001, a law known as the “Consolidated Appropriations Act” (CAA) to expand telemedicine reimbursement under Medicare, was presented in Congress. Congress however was fearful that this act was going to increase utilization rates that would ultimately increase federal requirements.
As a result Congress decided to put certain restrictions on telemedicine. Twenty years later, Congress is trying to remove these barriers and as noted, CTeL is working on pulling back the limitations initially designed in the CAA.
The list of reimbursement services for telehealth is increasing every year, however, Medicare still presents challenges as there are some purposeful restrictions concerning telehealth reimbursement. Still with these restrictions, the utilization rates for telemedicine companies range from 3%-11%.
CMS gives states the ability to determine their own policies related to telehealth. Currently, there are 29 states that have coverage parity which requires insurers to cover the same services delivered through telehealth as are covered in-person as long as it meets the same standard of care.
So far, nine states have payment parity that mandates payments made to the provider for a telemedicine visit need to match with the in-person visit. It has been noted that the adoption of telemedicine is seeing far more success in the states with the payment parity in place. Experts note that there are some states that only allow reimbursements to be applicable to one telemedicine vendor.
Experts note that insurance and employers agree that the primary goal for offering telemedicine is for cost savings. Telemedicine companies also claim that the use of telehealth helps employers avoid ER visits, but experts in the field claim ER visits really don’t cost employers as much money in comparison to treating chronic conditions.
Both insurers and employers want less to do with acute care but want to be more involved in treating chronic and catastrophic diseases. Industry experts attribute the low telehealth adoption rates to the deliberate lack of marketing attempts by insurance companies and employers due to the perceived lack of ROI especially for acute care conditions. However, when looking at telemedicine and chronic case use, it is thought that the telehealth model is a lot more cost effective.
Experts see the telehealth market consolidating as larger companies expand their presence into more profitable high growth areas. For example, some of the major telehealth players have been recently trying to expand into primary care and the industry may see some mergers around acute care. Direct–to-consumer companies are trying to expand by buying companies dealing with chronic conditions.
Experts believe that the industry is likely to see more telehealth companies focusing on artificial Intelligence (AI) rather than acute care, with several telehealth vendors taking advantage of AI to attract more investment. Even if a system fully utilizes AI, the execution is going to be hard since the quality of patient integration is difficult for companies since the quality of patients’ experience will be determined by how much data is available to the company. It is extremely challenging for any one company to have to look at a huge amount of data to assess one patient.
CTel is concerned with how the Ryan Haight Act was created to regulate online prescriptions enforced by Drug Enforcement Agency (DEA) https://www.dea.gov. The act requires a practitioner issuing a prescription for a controlled substance to conduct an in-person medical evaluation.
CTel has been working with DEA to reevaluate the law and allow the use of telemedicine to conduct a physical exam for the purpose of establishing the provider patient relationship for the purpose of prescribing medication.
The Act does not prohibit the use of telemedicine to prescribe controlled substances, and a provider may do so if at least an in-person exam meets a practice of telemedicine exception to the Act’s in-person exam requirement.
Experts note that the exceptions do not easily align with direct-to-patient service models frequently sought by patients in areas such as telepsychiatry or substance use disorder treatment. CTel is working with DEA to rewrite the Ryan Haight Act with the proposed rule expected to be voted on October 24, 2019.
Contact Research Analyst Jailendra Singh at jailendra.singh@credit-suisse.com or call 212-325-8121 for more information and/or to provide feedback.