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Easing market access of telemedicine in the US: A guide for innovators

Diagnosing and treating patients remotely through telemedicine in both the private and the Centers for Medicare & Medicaid Services (CMS) payer markets has steadily increased in recent years.The global telemedicine market is projected to reach $34.0 billion by 2020 as patients become more aware of these services.2 Telemedicine improves access to healthcare for underserved and rural patient populations, and promotes population health management, resulting in better clinical outcomes for patients and cost savings for providers.3

CMS set the benchmark definition of telemedicine that private payers often follow

Medicare regulations cover and reimburse a range of telemedicine services, including the use of telecommunications and information technology, to provide access to health assessment, diagnosis, intervention, consultation, supervision and information remotely.4 According to Medicaid, telemedicine is a cost-effective alternative to the more traditional way of providing medical care (e.g., face-to-face consultations or examinations between provider and patient).5

What about cost reimbursement and payer coverage for telemedicine services?

Let’s look at the three categories of telemedicine:

  1. Real-time: A live interaction between a provider and a patient via a videoconference; it can be used to consult with primary care physicians, specialists and other healthcare professionals
  2. Store-and-forward: Captures a patient’s clinical data via a computer or mobile device and then transmits it to a provider for later analysis
  3. Remote monitoring: Allows continuous monitoring of a patient’s clinical data by a provider from a remote location and is more commonly used to assess chronic condition.

Note that payer coverage and reimbursement are often limited to real-time interaction. Yet, with clear reimbursement guidance, providers and patients will more likely utilize and benefit from the technology.

Four factors to consider when establishing a market access strategy in telemedicine

After defining their target population, innovators must understand payers in order to align their services to the rules in place. Then they must keep in mind these four factors when establishing their market access strategy in telemedicine:

  1. Utilization of telemedicine is higher among Medicare patients than private payer patients. Traditionally, reimbursement for telemedicine services is limited to real-time consultations1 for underserved patient populations in rural areas; reimbursement is provided to the originating site (patient location) and distant site (provider location) of services. Remote monitoring is not covered and store-and-forward is only covered in Hawaii and Alaska.6 Medicaid coverage varies from state-to-state, but Medicaid reimburses telemedicine in 48 states.2
  2. Parity laws, which pursue equality, encourage private payers to cover telemedicine services if the clinical service is covered during in-person visits, but coverage decisions and reimbursement levels are made at the state level.7 Some private insurers are experimenting with direct-to-consumer business models, which circumvent third-party suppliers. Provider-based health plans can also offer telemedicine directly to patients and are not subject to standard private and CMS coverage laws.
  3. Legislature supporting telemedicine is constantly evolving. There have been more than 200 telemedicine-related bills launched this year regarding CMS coverage and coverage of store-and-forward and remote monitoring.7
  4. Adequate reimbursement through CMS and private payers will increase the adoption of telemedicine among providers and patients. These stakeholders believe in the clinical and economic advantages of telemedicine, but cannot utilize it without the support of payers. A study found that 90% of providers would use telemedicine if it were appropriately reimbursed.8 For consumers, the number one concern when considering telemedicine is that insurance will not cover it.9

The utilization rate and investor funding in telemedicine continues to grow, making it an attractive option for innovators. But they must understand and guide the market access landscape and reimbursement definitions in order to successfully commercialize new products and services.

If you have any questions or would like more information, email richard.beaton@gfk.com.

References

  1. Siegel J, Kush J, Philip S. Telemedicine and the long-tail problem in healthcare. May 2016.
  2. Sibley G. Secure telehealth can improve access, help lower costs and protect patient data. Feb. 2016.
  3. American Hospital Association. The Promise of Telehealth for Hospitals, Health Systems and Their Communities. Jan. 2015
  4. The Code of Federal Regulations. 42 CFR 410.78.
  5. The Centers for Medicare & Medicaid Services. Telehealth Services.
  6. American Hospital Association. Realizing the Promise of Telehealth: Understanding the Legal and Regulatory Challenges. May 2015.
  7. Beck M. How Telemedicine Is Transforming Health Care. June 2016.
  8. Anthem. Family Physicians and Telehealth: A First Look At Attitudes Surrounding Telehealth. Nov. 2015.
  9. Survey conducted online by Harris Poll on behalf of Xerox in May 2016 among 2,033 U.S. adults 18+.

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