Telemedicine: Another Tool in the Toolkit to Meet Network Adequacy Standards?

By Sandy Ahn, Sabrina Corlette and Kevin Lucia

Telemedicine has long been touted as the next big thing in healthcare. And its use is rapidly increasing among hospitals and health systems to increase their visibility among patients and enhance access to their services. But while telemedicine has been embraced by many hospitals and health systems, health insurers have been much slower to embrace this alternative care method. And few, if any, are using it as a tool to help meet state or federal network adequacy standards. Although the newly updated network adequacy model law adopted by the National Association of Insurance Commissioners recognizes telemedicine as an alternative health care delivery option, no state to date has enacted it.

To find out some of the opportunities and challenges to the use of telemedicine as a network adequacy tool, Georgetown researchers, in partnership with the Urban Institute and with funding from the Robert Wood Johnson Foundation, reviewed regulations and spoke with key stakeholders – insurance companies, state insurance regulators, and medical providers  in six states: Arkansas, Colorado, Illinois, Maine, Texas and Washington. Researchers found that while stakeholders generally praised telemedicine as a way to increase access to services, it is unlikely to be used as tool to meet network adequacy standards any time soon. The full report can be found here.

Key Findings

First, insurers face regulatory uncertainty about whether and how telemedicine would be an acceptable way to meet network adequacy standards. No state has published guidance for insurers on this question. In part this is because regulators tend to react to problems in the market. They are less likely to issue guidance that proactively helps shape a market trend. Among our study states, Texas was the only one in which regulators report seeing insurers use telemedicine providers as part of their network adequacy plans, but they have seen it only rarely. Across all of our study states, insurers report a lack of clarity about how regulators will view attempts to use telemedicine providers to replace or supplement local providers, and interviews with regulators suggest that they themselves have not fully thought through the risks and benefits for consumers.

Second, many health care interactions require a face-to-face interaction with the patient. For example, telemedicine will never be a viable care delivery option in specialty areas such as anesthesiology and emergency. Yet these are the very same specialties that insurers often report as having contracting challenges. Insurers are thus limited in using telemedicine to increase their negotiating leverage with local specialty groups that may be reluctant to join their networks at prices offered by insurers.

Even in specialty areas like psychiatry and dermatology where telemedicine can work effectively, medical practice standards and operational barriers make its use and acceptance limited among insurers, providers, and consumers. In some states, medical boards place restrictions on telemedicine practice, such as limits on prescribing medications or requiring an initial encounter to be face-to-face. Many stakeholders believe these restrictions have impeded its growth.

In addition, varying state approaches to private insurance coverage of telemedicine services also limit providers’ willingness to invest in and use the technology. Roughly half of states require parity of reimbursement with face-to-face encounters for some services provides through telemedicine, but in many states the decision to cover telemedicine services and at what level is left to the insurer. Insurer stakeholders with whom we spoke did not identify increased utilization of services or fraud as reasons not to cover telemedicine – or invest in its expansion – but presumably their failure to do so suggests uncertainty about whether the potential benefits would ever outweigh costs.

However, as networks have narrowed, state and federal regulators are under increasing pressure to hold insurers to quantifiable network adequacy standards, such as a maximum travel time or distance, provider-to-enrollee ratios, or maximum wait times. The more regulators do so, the more incentives there may be for insurers to look to telemedicine to help meet those standards. State regulators will need to provide clearer guidance about the use of telemedicine than they have to date, to ensure that consumers have medically appropriate access – whether in person or through technology – to the care promised under their health benefit plan.

One thought on “Telemedicine: Another Tool in the Toolkit to Meet Network Adequacy Standards?

  1. Can Telehealth Solve the Access Issue?

    Access to appropriate and timely care is an all-too-common issue plaguing rural and urban communities across America.

    Some access issues are a result of primary and specialty provider shortages. Other access issues can be attributed to the design of a health plan’s network.

    Telehealth (aka Telemedicine), a tool increasingly used by hospitals and physicians, may be the key to solving both of the aforementioned access issues.

    Growth of narrow networks has sparked increased regulatory focus on a health plan’s ability to provide an adequate network that meets member needs. Researchers at Georgetown University, in partnership with the Urban Institute and funded by the Robert Wood Johnson Foundation, recently released a study that examined the opportunities and challenges facing telemedicine as a tool for insurers to use in demonstrating network adequacy.

    The Georgetown study noted there’s a patchwork of state regulations both expanding and limiting the use of telehealth, depending on the state. While growing in popularity, many physicians and regulators remain concerned about the quality of care delivered via telehealth. Additionally, it was reported that insurers – to the degree it was utilized – often employed telehealth services only for certain specialty groups as a consultative service or follow-up to already-delivered care.

    Regulatory respondents cited in the study predicted that “telemedicine providers have the potential to help support an adequate local network, particularly for specialty services… that can effectively deliver care remotely as a way to address widespread provider shortages.” The study also noted none of the states studied had issued or published guidance to health plans indicating whether or how telehealth would be judged when insurers’ access plans were reviewed.

    Before regulators accept a health plan’s use of telehealth services as a demonstration of network access, they must first ensure that, like an in-person office visit, the telehealth service delivers an acceptable quality standard of care. This care must be delivered in an appropriate setting and in a manner that protects the patient from harm.

    In response to requests from telemedicine leaders, URAC created a robust Telehealth accreditation program to meet demand for an objective, independent validation of the highest standards of telemedicine quality, safety, compliance, and patient protection.

    Given the rigor and high level of performance required of applicants, telehealth service providers who achieve URAC accreditation will demonstrate their commitment to industry-leading best practices. Regulators can be confident that health plans utilizing URAC accredited telehealth services have a patient-focused framework for access to quality health care services.

    Many states already use URAC accreditation to augment oversight of health plan operations. URAC’s Telehealth accreditation can be a source of additional leverage to assure that patients have access to the quality and timely care they need.

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