Telehealth coverage

Long-Term Telehealth Coverage in Question for Physicians and Hospitals


February 8, 2023 | Reading Time: 3 Minutes

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The White House recently announced a two-year extension for telehealth waivers. However, the higher reimbursement rates for telehealth coverage paid to physicians and hospitals due to COVID public health emergency have only been approved for one year through the end of 2023. The discrepancy has many hospitals and medical providers on edge.

Why Telemedicine Is Struggling for Telehealth Coverage

Many hospitals and health systems relied upon telehealth during COVID-19. Executives invested in technology and infrastructure for telehealth to meet the unprecedented demand for telehealth services. Telehealth visits billed to Medicare were paid at the same fee-for-service rate as an in-person visit. Medicare added over 100 billing codes for the duration of the public health emergency. 

Telemedicine Reimbursement Specifics

When the Centers for Medicare and Medicaid Services (CMS) develops the fee schedule, each code has three components:  

  • Work Relative Value Unit (RVU)
  • Practice expense RVU, and
  • Malpractice expense RVU.  

When a service is performed in a facility (e.g., hospital, advanced surgical care or ambulatory surgery center, nursing home, outpatient department), the practice expense RVU is lower than in a “non-facility” such as a medical professional’s office. The lower RVU is paid because the practice does not have the expense for the overhead, staff, equipment, and supplies used to perform that service. 

During the public health emergency (PHE), however, CMS reimbursed providers at the “facility” rate and created “payment parity” between an in-person and a telehealth visit. They paid higher rates for patients at home or at other non-medical sites. At issue is that telehealth rates may revert to pre-COVID, non-facility levels, and payment parity will disappear. As a result, patients will likely be required to come to the physician’s office for their routine services rather than using telehealth and remote patient monitoring technology both parties now have at their fingertips and have been using for years. 

Before the pandemic, telehealth was only reimbursed on a limited basis, and reimbursement was moderated by many restrictions. For instance, patients had to be in a designated rural area or when they received services in a clinic, hospital, or another medical facility. During the pandemic, CMS issued waivers to remove many restrictions at non-facility sites, such as a patient’s home. CMS will continue this higher Medicare reimbursement rate for 2023, but the future depends on legislators planning 2024’s PFS.

Private payers, known as commercial insurers, are regulated by state law. Almost half of the states have passed payment parity laws, and in the other half, commercial plans vary widely. This variance is particularly true for companies that span multiple states. A plan may reimburse for a CPT code in one state, but the same company may not pay for that same CPT code in a neighboring state.

The Need for Clarification of Payment Partity

The recent omnibus bill addressed many regulatory and legislative telehealth concerns with waivers. It, however, still needs clarification on telehealth coverage for medical visits beyond prescribing for psychiatry and medical psychology. The remaining question has to do with payment parity. CMS failed to address the parity issue in the 2023 Physician’s Fee Schedule (PFS), thereby requiring attention between now and July 4, when CMS will release payment decisions proposed for the next annual physician fee schedule. Providers will be asked to comment on rates and policies and draft proposals within 90 days. After that, CMS will release its final Rule to take effect on January 1, 2024. Interested readers may want to scan the American Telemedicine Association’s comparison sheet of the proposed 2023 Medicare reimbursement policy vs. the Final Rule.

More information is expected when CMS releases the annual physician fee schedule, but the argument is raging. An optimist would say that consumer demand is likely to settle the issue. A pessimist would likely say that several legislative barriers must be overcome, and given the contentious nature of Congressional proceedings, the barriers are still too numerous to make assumptions. In these cases, it is wise for interested parties to make an effort to send letters to their elected officials.

While CMS has waived Medicare restrictions for telehealth services across state lines, the restrictive state law holds for plans beyond Medicare, including Medicaid and commercial payers. Several groups, including the ATA, support the continued higher rate of non-facility telehealth coverage for physicians. They also support flexibility in negotiated rates between payers and providers in value-based contracts that don’t depend on fee-for-service reimbursement.

Telehealth Coverage for Behavioral Health Professionals

While the information above may be daunting news for physicians and their patients, mental health providers continue to enjoy permanent Medicare telehealth reimbursement through 2024. Private payor groups differ from state to state in their policies, though. That same FAIR Health regional tracker showed in October of 2022 that social workers deliver telehealth more than twice as often as any other provider group. The most frequently used (27.4%) CPT code is 90837 for PSYCHOTHERAPY, 1 HOUR.

Optimizing Telehealth Billing: Current Telehealth CPT Codes & Telehealth Reimbursement Strategies

Today’s telehealth CPT codes and other telehealth billing issues are in rapid flux. Information gathered from online searches or colleagues can be outdated and incorrect — and lead to frustrating claim denials.

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