Parity of payments for telemedicine will remain only until 2023

Photo: Luis Alvarez/Getty Images

The federal government has extended the telemedicine phase-out by two years, but the current higher reimbursement rate will only last until the end of this year.

During a public health emergency, the Centers for Medicare and Medicaid Services reimburse providers at a non-hospital rate, which provides pay parity between an in-person visit and a telehealth visit.

The telemedicine flexibilities were initially extended for 151 days and then for two years after the end of the public health emergency. If PHE ends in mid-April, as predicted, health systems and other providers can expect the telemedicine phase-out to continue until at least the end of 2024.

But current reimbursement rates only last until 2023, according to Kyle Zebley, senior vice president of public policy for the American Telemedicine Association. After that, rates could return to pre-pandemic lower levels. More information is expected to come when CMS releases its annual Physician Payment Schedule.

“Perhaps by 2024 (based on) the pay schedule for doctors, there is a chance that it will decrease again,” Zebli said.

WHY IS IT IMPORTANT

Many hospitals and healthcare systems have relied on telemedicine in the midst of the COVID-19 lockdown. Leaders have been investing in telehealth technology and infrastructure as the number of people using virtual care has grown.

One of the big obstacles to its further use is the issue of payment parity.

The recently passed comprehensive bill removed many of the regulatory and statutory hurdles associated with telemedicine, Zebli said, but was silent on reimbursement.

According to him, there was no legislative action on this issue, since the powers to establish reimbursement are exercised through the existing powers of the CMS.

“The biggest change that has happened during the pandemic for CMS to determine what Congress has postponed is a higher refund rate overall,” Zebli said.
CMS makes payment decisions in the Physician’s Annual Payment Schedule. Suppliers will be notified around July 4 when the agency releases a draft proposal for rates and other rules. Stakeholders will then have 90 days to respond before the CMS publishes its final rule, which will take effect January 1, 2024.

Medicare has added over 100 billing codes for the duration of the public health emergency. Telehealth visits billed by Medicare are currently billed at the same service fee rate as an in-person visit.

The current payment parity is based on object rates. Prior to the pandemic, telemedicine was reimbursed on a limited basis, such as when the person receiving the service was in a certain rural area and when they left their home and went to a clinic, hospital, or other healthcare facility to receive the service.

During the pandemic, CMS initiated higher compensation in other settings, such as the patient’s home. CMS will continue this higher Medicare reimbursement rate through 2023, Zebli said.

Commercial insurers are governed by state law.

Half the states have passed bill parity laws, Zebli said. On the other hand, commercial plans vary widely in what they cover and the reimbursement rate, he said. According to him, this is true even for the same insurer in different states.

“Even the big players will vary significantly from state to state,” he said.

CMS has lifted Medicare’s restrictions on out-of-state services, Zebli said, but that doesn’t go against state law.

BIG TREND

Whatever decision CMS makes for reimbursement after 2023, telemedicine is here to stay, Zebli said.

“Patients want to keep getting it, providers want to deliver it,” he said. “We have a positive momentum behind it.”

In 2020, the use of telemedicine has skyrocketed in healthcare settings, Zebli says, and it’s still 65% times higher than before 2020.

However, as of October 2022, telemedicine usage has slowed by almost 4%, according to FAIR Health’s monthly regional telemedicine tracking.

The issue of reimbursement is critical, Zebli said, and there are other federal and state hurdles that need to be addressed.

ATA maintains a continued higher level of non-hardware reimbursement. In addition, it maintains flexibility in negotiated rates between payers and providers in value-based contracts that are independent of service charge reimbursement.

Twitter: @SusanJMorse
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