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In response to the COVID-19 pandemic, the Centers for Medicare and Medicaid Services issued rulemaking to require Medicare to pay the same rates for telehealth and in-person care for the duration of the public health emergency (PHE).  Now that the end of the pandemic may be in sight, stakeholders are debating whether Medicare should continue offering payment parity for telehealth services post-pandemic.  Since Medicare’s actions often inform what private payers do, stakeholders will be watching closely what the agency decides to do.

Against Payment Parity

A chief argument against payment parity is that it could lead to overutilization and higher spending.  For patients with the right technology, accessing telehealth can be very convenient, leading health experts to suggest some patients may use telehealth more than necessary.  Corollary to this, some experts are worried about telehealth’s potential to create more opportunities for waste, fraud, and abuse.

Additionally, opponents to payment parity contend that telehealth requires fewer resources and less clinical effort than in-person visits.  For example, a 2017 study from Health Affairs found the average cost of a telehealth visit for an acute respiratory infection was $79 compared to $146 for in-person visits.  Simple virtual check-ins may also require less decision-making, time, and other factors considered “clinical effort” when compared to in-person appointments.

Furthermore, some worry payment parity in telehealth may propagate low-value care.  For certain conditions, telehealth may prove limiting for providers, and there is no substitute for the type of evaluation physicians can provide through in-person visits.  Parity opponents argue that higher reimbursement rates tied to in-person visits will ensure patients can more regularly receive a full evaluation, thus preventing the likelihood symptoms missed during telehealth visits progress to become more expensive chronic conditions down the road.

For Payment Parity

Those in favor of continuing payment parity post PHE say there is no evidence that telehealth has resulted in overutilization.  Most instances of telehealth usage, parity proponents say, has been to substitute in-person to visits as a result of the COVID-19 pandemic.  According to data from electronic health record company Epic, the number of telehealth visits declined rapidly by summer 2020 following an initial increase in April 2020.  This data suggests that patients are so far not opting for more telehealth visits over in-person visits out of ease or convenience.  Additionally, some physicians argue some diagnoses can require as much clinical effort as in-person visits.  According to a 2020 study from the University of Michigan, surgeons reported spending more time on telehealth than in-person visits.

Proponents of payment parity also say telehealth services utilize far more resources than patients realize.  While telehealth may not seem to require the same “brick and mortar costs” as in-person visits, providers assert that telehealth requires an investment in technology, both to set-up virtual visits and keep up with changes in technology.  For certain medical conditions, digital monitoring and home-based care products may require additional resources.  Providers also say that some diagnoses can involve just as must clinical effort as do in-person appointments.

Moreover, parity supporters contend that clinical guidelines about when telehealth and in-person care is appropriate can prevent low-value care.  For instance, the American College of Obstetricians and Gynecologists has issued guidance on when patients should require a physical examination.

What Happens Next?

CMS can continue to pay the same rates or the agency could propose a differential payment rate.  Either way, the decision would be subject to the rulemaking with notice and comment.  For the part of Congress, the legislative branch hasn’t weighed in.  While legislators have introduced a slew of bills to permanently expand telehealth coverage and abolish pre-pandemic restrictions on telehealth, none address how telehealth should be paid for.  A lone exception is H.R. 8308, the Telehealth Coverage and Payment Parity Act.  Introduced by Rep. Dean Phillips (D-MN) in September 2020, the legislation would require commercial insurers to pay the same level for the same level for telehealth services as it would for in-person services.  However, this legislation does not affect Medicare, and as of this writing, the bill has yet to be reintroduced in the 118^th Congress.

In their January 2021 public meeting, the members of the Medicare Payment Advisory Commission (MedPAC) suggested that Medicare continue telehealth payment parity for 1-2 years following the end of the PHE as a “pilot program” to evaluate how to telehealth services should be reimbursed permanently.  However, MedPAC’s comments have yet to be taken up in any legislative proposal.