COVID-19 necessitated widespread loosening of state and federal restrictions on and rapid expansion of telehealth. Now, as policy makers consider telehealth in the post-pandemic period, they must make decisions about payment parity—whether to continue reimbursing clinicians equivalent amounts for in-person and telehealth visits.
Some argue that telehealth requires less clinical effort and fewer overhead costs than in-person care, undercutting the case for payment parity. Other concerns include telehealth’s lower effectiveness compared to in-person care, the potential for overuse and fraud, and increased health care spending. Those who support payment parity believe it would help clinicians adopt and maintain telehealth as a way to support health care access and patient experience. Arguments on both sides would be strengthened by more high-quality studies.
Because many tensions about payment parity are rooted in volume-based reimbursement, another way to help resolve the debate is to test telehealth within dedicated value-based payment models.
For instance, one concern about continued telehealth payment parity is that it could spur use that adds to, rather than substitutes for, in-person care, thereby increasing use and spending without clear clinical benefits. These risks may be enough for some payers to shift away from parity for certain telehealth modalities. Medicare has proposed that it will limit audio-only telehealth to mental health services in specific situations after the public health emergency.
However, these concerns are most relevant under volume-based fee-for-service, in which spending is inherently disconnected from quality or clinical accountability. In contrast, value-based payment models link use with quality accountability by design. Therefore, these models could be designed to evaluate the impact of telehealth use on relevant clinical, quality, and spending outcomes.
Another example of this opportunity can be found in the argument for continuing payment parity because telehealth services do not necessarily cost providers less to deliver them than in-person visits. In fact, costs may be similar due to equivalent malpractice expenses; similar patient complexity, volume of data reviewed, and risk of management options; and the need for staff to complete tasks such as virtually rooming patients and troubleshooting technologic difficulties.
Again, these points are also most relevant in fee-for-service arrangements that use relative value units to link payment as directly and precisely as possible to elements such as physician effort, staff time, and practice expenses. In contrast, value-based payment models encourage clinicians to deliver care—whether in-person or telehealth, or both—that focuses on outcomes and cost efficiency. Not only would that dynamic obviate the need to get expense and time inputs exactly right, it could also increase the likelihood of identifying creative approaches to care redesign involving telehealth. This might include, for example, using care modalities or methods that are not currently reimbursed under fee-for-service.
Formal Evaluation
Another reason to test telehealth within dedicated payment models is to ensure formal evaluation. Unfortunately, changes implemented within fee-for-service environments may or may not ever be formally evaluated, creating the possibility that policy makers could invest in telehealth payment changes without understanding their positive or negative impacts. In contrast, value-based payment models must be evaluated by statute. Such evaluations would deepen our understanding of tele-services’ impact on relevant clinical, quality, and utilization outcomes.
Mandatory evaluations would enable policy makers to gain insights about other important issues such as clinical implementation and disparities. For example, formal evaluations of primary care payment models have included assessments about practices’ perspectives, progress and areas for improvement, and clinical outcomes. Evaluations of bundled payment models have included specific evaluation of vulnerable populations, such as those with high health care usage or conditions such as dementia.
Generating similar insights from telehealth policy—how it affects vulnerable populations and clinicians—are critical for informing policy. Clinicians may face sizeable barriers implementing telehealth or identify innovative approaches that merit further study. By both circumventing certain barriers, such as transportation, and creating others, such as internet and device access, telehealth is poised to potentially both alleviate some disparities for vulnerable or historically marginalized populations, while exacerbating others. Early evidence suggests that older, minority, non-English speaking, and rural patients are more likely to receive audio-only versus audio-visual care. Telehealth payment policy should be guided by data about how services affect health equity.
Existing Programs
One way forward: Use existing payment programs as the basis for new telehealth payment models. For instance, the Alliance of Community Health Plans has proposed a multiyear model that shares a number of similarities with Medicare’s primary care payment models. The Alliance model would begin with a five-year period of payment parity while plans, clinicians, and patients used existing quality metrics and other means to evaluate what care is best delivered via telehealth. Afterwards, the model would shift toward capitation, reimbursing clinicians on a per-member-per-month basis based on high reimbursement for those services most optimal for telehealth and lower reimbursement for less optimal services.
Of course, more work would be needed to flesh out certain features of the Alliance or another similar model (for example, risk adjustment; defining patient populations, not just services). Nonetheless, there is merit in the underlying idea of a phased approach that begins with assessing telehealth under payment parity and shifting to an alternate payment arrangement. A similar approach could be applied to episode-based models, maintaining payment parity for telehealth services; evaluating how telehealth affects quality and use; and using that information to adjust telehealth reimbursement as part of episode spending targets.
To be fair, testing telehealth within new payment models is not a panacea. Models must account for the fact that telehealth benefits may vary by modality (for example, audio-only versus audio/video), timing (real time versus asynchronous), or clinical condition. Currently, value-based payment model evaluations do not include equity as an explicit criterion for success. Payment models for telehealth must avoid disproportionately harming safety-net clinicians and the communities they serve.
Nonetheless, many doubts raised in the debate about telehealth payment parity are grounded in volume-based reimbursement. One way to resolve these issues is to test telehealth within value-based payment models. Such an approach would obviate concerns over cost, facilitate the formal evaluation desperately needed in our current telehealth environment, and provide a means to monitor and incentivize the reduction of disparities in telehealth access. Policy and practice leaders should undertake this work without delay. Although it was COVID-19 that prompted the rapid uptake of telehealth in US health care, it will be evidence of benefits and harms that carries momentum into future policy and practice.
Authors’ Note
Dr. Liao reports receiving honoraria from Wolters Kluwer, the Journal of Clinical Pathways, and the American College of Physicians; personal fees from Kaiser Permanente Washington Health Research Institute; and textbook royalties from Wolters Kluwer; all outside this blog post.
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