Telehealth Reimbursement: How Shared Services Support Digital Transformation

In 2023, telehealth services represented over 13% of outpatient visits in the US, up from 1% in 2019, largely due to the COVID-19 pandemic. This surge prompted regulatory changes that expanded coverage and allowed audio-only visits. However, reimbursement policies differ significantly among Medicare, Medicaid and private insurers, leading to challenges for providers and patients. Integrating advanced technologies like AI and blockchain presents promising opportunities to enhance telehealth’s effectiveness and security.

Key Points

• Telehealth services surged to over 13% of outpatient visits in the US in 2023, up from 1% in 2019.
• The pandemic accelerated telehealth adoption, with visits increasing by 154% from March 2019 to 2020.
• Regulatory changes expanded telehealth coverage, allowing audio-only visits and more providers.
• Telehealth reimbursement varies significantly among Medicare Medicaid, and private insurers.
• Advanced technologies like AI and blockchain promise to enhance telehealth's future and security.

In 2023, telehealth services represented over 13% of all outpatient visits in the US (Glaser J et al. 2023). That is a dramatic increase from just 1% in 2019, reflecting a significant shift in healthcare driven by digital transformation and accelerated by the COVID-19 pandemic. This evolution is reshaping the reimbursement landscape, with insurers reassessing their policies and new technologies emerging to facilitate remote care, marking a pivotal moment in healthcare history. Understanding these developments is essential for navigating the future of medical services, highlighting the importance of exploring how these trends are transforming reimbursement and their implications for the healthcare sector. Business transformation agency Tru Performance offers below an overview of how implementing shared services can enhance an organisation’s journey to greater efficiency and innovation.

Navigating the Telehealth Reimbursement Landscape

Before COVID-19, telehealth faced significant barriers such as regulatory restrictions, reimbursement issues and technological constraints. The pandemic, however, dramatically accelerated its adoption. Telehealth visits in the U.S. increased by 154% between March 2019 and March 2020(Koonin LM et al. 2020). It became essential for managing routine care, chronic conditions and mental health services, facilitating safe and effective remote care delivery.

In response, regulatory bodies expanded coverage and reimbursement for telehealth services by lifting geographic and site restrictions and allowing a broader range of providers to deliver care. They also permitted audio-only visits to address technological disparities.

These changes introduced complexities for revenue cycle management (RCM). RCM teams now face challenges adapting to new billing codes, ensuring compliance with telehealth documentation requirements, navigating varied reimbursement rates and managing cross-state licensing issues. Accurate billing and understanding payer-specific policies are crucial for optimising revenue and ensuring continued access to telehealth services.

Types of Telehealth Services Covered

Now, any provider eligible to bill Medicare for professional services can also bill for telehealth services (Health Resources & Services Administration, 2023). However, significant differences exist in how Medicare, Medicaid, and private insurers manage telehealth reimbursement. (U.S. Centers for Medicare & Medicaid Services 2023). The Centres for Medicare & Medicaid Services (CMS) has expanded the list of covered telehealth services, many of which will continue to remain reimbursable by Medicare until December 31, 2024. Notably, some services now permit telephone-only visits without the requirement for both audio and video (U.S. Centers for Medicare & Medicaid Services, 2024). While Medicare does support telemedicine services, it mandates that real-time video calls be used for reimbursement, which is offered at the same rate as in-person visits. These services are primarily accessible in rural areas and specific locations, such as hospitals or clinics, and claims must include a GT modifier.

Medicaid reimbursement for telehealth varies by state due to the lack of a federal mandate. While some states offer coverage for telehealth services, only 13 states, including California, Colorado and New York, provide reimbursement. Each state has its own set of rules and coverage options, leading to a patchwork of telehealth policies across the country. This inconsistency can create challenges for both providers and patients seeking telehealth services, as the availability of coverage may depend significantly on geographic location.

Private insurers also have differing policies regarding telehealth reimbursement. In 12 states, including California and Texas, insurers are required to cover telehealth services; however, reimbursement rates and coverage may differ from those for in-person visits. These variations can result from state regulations and the specifics of individual insurance plans, adding another layer of complexity to the telehealth reimbursement landscape.

Telehealth reimbursements face several challenges, including regulatory inconsistencies across states and payers, which leads to fragmented reimbursement policies. Although Medicare has relaxed some of its rules, private payers and Medicaid programmes still vary widely in their coverage, creating uncertainty. Additionally, there is an ongoing struggle for equitable access to telehealth, particularly in rural and underserved areas, where technological and infrastructure limitations, such as unreliable broadband internet, can impede the adoption of telehealth services.

The Role of Digital Transformation in Healthcare

On February 21, 2024, a cyberattack on Change Healthcare, a subsidiary of UnitedHealth Group, exposed sensitive information, including medical records, billing details and Social Security numbers of millions of Americans. The breach caused widespread disruption in healthcare operations, leading to a backlog of unpaid claims and highlighting the vulnerabilities in telehealth infrastructure. Such incidents underline the critical need for robust cybersecurity measures as the reliance on digital healthcare platforms increases.

Despite these challenges, the future of telehealth holds immense promise, particularly with the integration of advanced technologies like Artificial Intelligence (AI), the Internet of Things (IoT), and blockchain. These innovations can further digitise healthcare, enhancing data security, patient monitoring and decision-making processes. AI technologies, including machine learning and natural language processing (NLP), are transforming healthcare by analysing vast amounts of medical data, such as medical images and patient records, to extract crucial insights that support clinical decision-making.

Telehealth also facilitates a shift towards more flexible and value-based care models, enabling shared services and remote monitoring that provide continuous, personalised care. This approach can make healthcare more equitable and efficient, ultimately benefiting both patients and providers.

Shared services are set to play a significant role in the healthcare sector's evolution. By centralising departments that manage common support functions—such as human resources, finance, supply chain management, operations, and IT—healthcare organisations can enhance efficiency, standardise processes, and achieve cost savings through service consolidation. This model aims to realise economies of scale, improve service quality, and boost productivity while offering flexibility in determining whether services are developed internally or sourced externally. Beyond cost reduction and quality improvement, shared services provide advantages like time zone benefits, domain expertise and enhanced business continuity.

Conflict of Interest

Tru Performance offers innovative business transformation and shared services solutions that streamline operations and enhance customer experiences. Through advanced digital tools, they aim to drive digital transformation and streamline shared services like IT, human resources, and finance for enhanced efficiency and customer satisfaction.