U.S. health insurers, wary of telehealth overuse, urge more planning in policy easing

Antonita Madonna

U.S. healthcare providers and some lawmakers want to extend a regulatory accomodation for telehealth services granted during the COVID-19 pandemic. Health insurers, however, want policymakers to manage concerns regarding its overutilization and to redefine healthcare-provider state licensing requirements.

Growth in the use of telehealth services has skyrocketed during the pandemic as the Trump administration considerably relaxed regulations pertaining to the use and reimbursement for telehealth in the Medicare program. Patients and healthcare providers, forced to stay home and adhere to strict social distancing guidelines outdoors, quickly embraced telehealth when insurers widened the scope of reimbursements beyond that mandated by the government.

Both Alex Azar, Secretary of the U.S. Department of Health and Human Services and Seema Verma, Administrator of the Centers for Medicare and Medicaid Services, have also expressed their support in making the regulatory relief longer lasting. However, Congressional action is required to revise legislation that impedes the use of telehealth more widely.

Health insurers are supporting calls to extend this regulatory flexibility given to telehealth but urge caution in developing policies.

To ensure the continued growth of telehealth, policymakers must allow insurance providers to be able to design their benefits and offerings in accordance with the needs of their members, according to Americas Health Insurance Plans, a group of health insurers.

Insurers are also asking policymakers for flexibility in reimbursements and permission to use utilization management tools. Overutilization of telehealth has been one of the foremost concerns for insurers in the past. Private insurer claims from telehealth in the U.S. rose 4,347 percent to 7.52 percent in March 2020, from 0.17 percent the previous year, according to healthcare data provider FAIR Health.

Insurers have been credited with being the game-changer in the astronomical growth in telehealth use since March, through their decision to reimburse almost all telehealth consultations at the same rate as face-to-face visits. Self-funded employers also are supportive of telehealth usage, seeing it a a convenience that means more productive hours for employees.

eClinicalWorks, a telehealth service provider, said it saw usage minutes surge to more than 2 million minutes per day since May from an average of 50,000 minutes a month prior to the onset of the pandemic. “If they take away reimbursement for it, you won’t find people using it … and you cannot have it fall because it is providing tremendous benefits to patients”, says Girish Navani CEO of eClinicalWorks.


Consumers and healthcare providers have soaked up the convenience and accessibility associated with telemedicine, especially in rural areas, and the possibility of safe access to healthcare even during an infectious disease outbreak. Insurers, on the other hand, have shown “guarded enthusiasm” for this sudden explosion in telehealth usage, Navani said.

While the concept of virtual care has been around for nearly two decades, few insurers covered telehealth services, and those that did applied varying criteria and reimbursement rates. At the start of 2020, only about half of U.S. states had rules mandating insurers to cover telehealth in some form.

Federal agencies can address some of the policies around telehealth reimbursement on Medicare but state and federal legislators have to work on the bigger restrictions if momentum around the use of telehealth is to be sustained.

For instance, legislators will have to solve a key issue of allowing healthcare professionals to practice across state boundaries. Currently, healthcare providers practicing in a state must be licensed to work in that state.

These barriers were temporarily removed during the public health emergency when physicians and nurses were allowed to practice across state lines in some cases, to allow personnel to treat patients in COVID-19 hotspots.

Policymakers must eliminate restrictions around geography, existing patient-provider relationships, and state licensure that prevent telehealth from growing organically, AHIP said.

Insurers also want lawmakers to work on approving telehealth as “legitimate care” and allowing virtual healthcare providers to be counted toward network adequacy requirements.

“As learned during the COVID crisis, telehealth can be clinically comparable to in-person care for many conditions and consumers. Policymakers must recognize this and allow for telehealth visits to be counted towards network adequacy requirements, risk adjustment calculations, and quality measurement,” AHIP said.

In addition to healthcare-related changes, connectivity problems remain an additional concern that needs to be managed. Access to high-speed broadband internet continues to be a barrier for many rural telehealth programs especially where live video connections are required between providers and patients, according to Rural Health Information Hub. Dropped calls and delays in video feeds can interrupt care delivery and hinder adaptation of telehealth programs. If widely adopted, up to $250 billion of the current U.S. healthcare expenditure could potentially be virtualized as a result of COVID-19, an estimate from McKinsey & Co shows.

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