Could Insurers Use Telemedicine to Widen Provider Networks?

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Many states are tightening their network adequacy standards, and telemedicine might help insurance companies meet those standards, especially in rural and underserved areas, notes a new report sponsored by the Robert Wood Johnson Foundation.

But after discussions with insurance executives, state insurance regulators, and healthcare providers in six states, the researchers concluded that most insurers are not yet using telemedicine for this purpose.

"Most respondents predict that telemedicine providers have the potential to help support an adequate local network, particularly for specialty services," the report pointed out. However, uncertainty about how regulators would perceive this effort, the lack of infrastructure in most practices, and the concerns of organized medicine about telemedicine have inhibited insurers from using this technology to fill gaps in their networks, the report said.

The researchers defined telemedicine as including audiovisual consultations between patients and physicians, "store and forward" transmission of radiographs, scans, and photos from one provider to another, and remote patient monitoring. Although "virtual visits" that use videoconferencing can occur between physicians and patients at home, the report focused on telemedicine visits that originate in a clinic with a healthcare professional present.

The study noted that insurers increasingly favor narrow physician networks to hold down costs, especially in the state insurance exchanges. In response, both federal and state regulators have proposed more robust network adequacy standards at the state level. These new standards include time, distance, and access measures.

The six states that the researchers examined — Arkansas, Colorado, Illinois, Maine, Texas, and Washington — all have such network adequacy standards. They also include areas where the availability of physicians is considered below average.

Colorado is the only one of these states that has passed a law permitting insurance companies to use the availability of telemedicine providers to help meet its network adequacy requirements. Starting January 1, 2017, health plans will be able to use telemedicine to help meet the state's criteria for specialty provider-to-covered-person ratios.

The National Association of Insurance Commissioners recently revised its model law for network adequacy. The model law, which states may use as the basis for their own legislation, now includes the use of telemedicine to establish the adequacy of insurance networks. According to the report, this shows that state regulators are aware that telemedicine could be used to close gaps in access.

The regulators who were interviewed for the report said they were open to the idea of telemedicine. However, the report noted, the regulators viewed telemedicine as a supplement to, not as a replacement for, in-person visits to physicians.

Washington state regulators took an especially strong stance on this point, saying they would not accept telemedicine as a way of meeting their time and distance requirements. But they said they'd make exceptions where a certain kind of specialist was not available in a particular area.

Texas was the only state where regulators had seen insurers include telemedicine in their network adequacy submissions. Even there, it was rare and was usually associated with follow-up care by certain specialty groups, such as oncologists.

Some respondents noted that, in many areas, there was insufficient infrastructure to use telemedicine. Neither payers nor providers have invested in the videoconferencing equipment required to set up remote consults between primary care offices and specialty sites. And while providers are increasingly reimbursed for doing remote consults with patients, "there is insufficient penetration [of telemedicine] to make its use practical," insurers told the researchers.

"Some respondents question the cost efficiency using telemedicine within provider practices because of the need for resources to support both the technology and the patient with a telemedicine visit," the report added. "Respondents also indicate the need for training and education for both providers and consumers in the use of telemedicine. As a result, insurers may not view telemedicine as an economical or practical method to ensure network adequacy."

If and when telemedicine becomes mainstream, the report noted, insurers might use it as a bargaining chip with the specialty groups and healthcare systems that dominate some markets. "The expansion of telemedicine could give insurers greater negotiating leverage with some of those providers, particularly if insurers can make a bona fide threat to exclude that provider or specialty group because enrollees can receive the same services via telemedicine," the report said.

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