Introduction
Updated as of January 2020.
Telemedicine is a leading innovation that has proven to expedite the delivery of health care. Telemedicine is the use of technology to deliver health care, health information, or health education at a distance. It helps people connect more quickly to their primary, specialty, and tertiary medical needs. Its beginnings trace back to the late 1800s when providers began using the telephone to resolve patient consults at a distance, saving them from making time-consuming house visits.
Despite the convenience that telemedicine offers without compromising the quality of care, some medical providers still resist adopting the practice because certain services don’t always come with insurance reimbursement. Such pushback is one of the reasons why almost 40 state legislatures have passed telemedicine parity laws. Telemedicine parity laws force private insurance carriers to pay medical providers for services delivered via telemedicine at the same rate as those delivered during an in-person office visit.
More rigorous evaluation and data are needed to determine the overall impact of telemedicine parity laws on health care costs, quality, and access. Nevertheless, evidence suggests that these laws may disincentivize the creation of treatment plans that meet the needs of individual patients. They may raise costs and conceal the cost of care from the consumer. And they may encourage the overconsumption of health care by paying providers based on the volume of services and not outcomes.
It is promising that lawmakers continue to advance legislation that encourages more medical professionals to adopt telemedicine so that patients can access care without having to travel long distances. To take the next step, legislators should assess the impact of licensure laws. As of January 2020, the law forces a physician in another state to obtain a North Carolina license for treating someone located in the state. The genius of telemedicine is that care can be provided at a distance. There is no reason to limit that distance to the boundaries of North Carolina.
Key Facts
- In some cases, telemedicine parity laws may incentivize physicians to adopt telemedicine platforms. However, enforcing such a rule undermines telemedicine’s cost-effective capabilities. Compared to an average $114 office visit, a patient can connect with a physician through telemedicine for $38.
- As early as the mid-1990s, Blue Cross and Blue Shield of North Carolina (BCBSNC) provided telemedicine benefits for psychiatric care, psychotherapy, health behavior assessments, and diabetic counseling. Meanwhile, UnitedHealthcare began covering virtual visits for its policyholders in 2015.
- Basic health care can be accessible when it’s not covered by insurance. In 2015, a group of emergency physicians in North Carolina founded RelyMD, an app that offers 24/7 virtual doctor appointments to patients in exchange for a $50 per-visit fee. Patients can seek medical consultation or treatment in the comfort of their own homes via a computer, smartphone, or tablet in a matter of minutes.
- Direct primary care (DPC) physicians incorporate telemedicine into their patients’ monthly membership fees. Phone calls, texts, emails, FaceTime, secure messaging platforms, and specialty consults – the most common uses of telemedicine – are all included at no additional cost to the patient.
- To mitigate the ongoing provider shortage, Carolinas HealthCare System (CHS) has its intensivists and nurses remotely monitor hundreds of patients across 10 of the system’s intensive care units (ICUs). The ability for remote providers to practice proactive medicine has helped lower the health system’s mortality rates by 5 percent and length of stay in the hospital by 6 percent.
Recommendations
- Do not pass telemedicine parity laws. Parity laws set a precedent for state governments to further meddle in private enterprise by forcing insurers to pay for other telemedicine services that are beyond the scope of their original plan design. Insurance companies should not be required to treat in-person care the same as telemedicine care.
- Congress should pass a law stating that the practice of telemedicine is tied to where the provider is located, not to the patient. Currently, physicians can deliver telemedicine only to patients who are located physically in the state where the provider is licensed. If payment instead is tied to the provider’s location, then the provider could deliver care to patients anywhere.
- North Carolina should recognize out-of-state professional licenses of medical professionals who are in good standing in their state. Licensure barriers limit telemedicine’s growth. Absent action from Congress, North Carolina could still increase the use of telemedicine by allowing out-of-state physicians to treat North Carolinians virtually.
