Is Lack of Telemedicine Reimbursement a Fair Excuse for NOT Getting Started With Telemedicine?

6 Mins read
I recently had an enlightening video interview with Dr. Karen Rheuban, Director of the Virginia Telehealth Network, who explained how passage of telemedicine reimbursement legislation in Virginia dramatically increased telemedicine adoption in that state.

But there’s a lingering question in my mind.

Haven’t there been hundreds of telemedicine programs that have gotten started without the help of reimbursement?

I recently had an enlightening video interview with Dr. Karen Rheuban, Director of the Virginia Telehealth Network, who explained how passage of telemedicine reimbursement legislation in Virginia dramatically increased telemedicine adoption in that state.

But there’s a lingering question in my mind.

Haven’t there been hundreds of telemedicine programs that have gotten started without the help of reimbursement?

If so, is it a fair excuse to say you cannot start a telemedicine program without proper reimbursement for telemedicine consults?

Today, I’ll share a few of the over 40 responses I got to this question when I posed it on LinkedIn.

Here is the original question posed on LinkedIn, followed by a selection of responses.

  • This may be controversial, but do you think it’s a fair excuse that telehealth programs can’t get started because of poor reimbursement for telehealth consultations?
  • I recognize that paying physicians for their telehealth consultations is crucial to getting their engagement, and of course there is wider telehealth adoption in states where legislation has been passed to require payors to reimburse for telehealth consultations.
  • However, isn’t it true that many telehealth programs got started and are still getting started without such legislative support or adequate reimbursement?
  • What do you see as the adoption drivers that have enabled people to overcome the reimbursement challenge?

Roger Downey – Marketing Communications Director at GlobalMed

I don’t think it’s that controversial at all, Nirav.

The Centers for Medicare and Medicaid (CMS) have had these limitations in place because of the unwarranted fear that physicians would overuse telemedicine and then overbill CMS.

At the present time, Medicare will only reimburse physicians for telemedicine if the patients are 25+ miles from a metropolitan area in an underserved rural location.

That rule is ridiculous, and I’m confident it will be changed in the near future.

The reason some physicians in rural areas are moving into telemedicine (or telehealth, if you prefer) is that physician to physician consults can be reimbursed.

Rafael J. Grossmann Zamora, MD, FACS – Attending trauma surgeon at Eastern Maine Medical Center

Thanks for an interesting discussion.

As a surgeon in a rural area (watch TEDx “iPodTeletrauma” at this is a conversation very “close to my heart”. The good news is that I’m an employed surgeon, so reimbursement is not a “direct major” issue to me in the short term, at least.

Having said this, it is helpful and certainly a main driver for adoption by the “administration”, not the users so much, that it is a reimbursable interaction nowadays.

To me, the answer to Nirav’s initial question is NO. It is not an excuse, and it should not be.

It is in a sense immoral to base NON-ADOPTION of a practice which certainly benefits patients and improves healthcare delivery, as well as outcomes (telemedicine and mobile-telemedicine) on the lack of monetary gain for “someone” (reimbursement).

If “iPodTeletrauma” was not reimbursed (now it is, because of the recent changes, as Roger explained), would it be excusable or smart not to use the device to communicate emergently with a provider in desperate need of advice to treat an acute patient, an instead use a telephone instead?

To me it is so intuitive and simple that it should be “the standard of care”.

It is the evolution of communications. “Video is the new voice”!

Carlos Carrasco – Director of Business Development at Orlando Health

Since it deals with money and sustainability of businesses, I think it is a very reasonable and fair excuse.

It is a shame that this is still the state of the industry, but until it changes, I think it is a very real barrier.

Desire for innovation and improving access to quality care will only take us so far.

As far as adoption drivers, I think that groups have to define the value that telehealth brings to your organization.

From what I have seen, where it has been sustainably successful, there has been some kind of value that the provider derives from the effort. That could be growing volume for you or your partner (in situations where it is legally appropriate), efficiency in capturing market share without investing in buildings, increase in quality, reduction in costs, etc., accomplishment of mission…

I think the presence and/or awareness of these variables and how they affect your business is what helps to drive adoption where telemedicine can be a solution.

If the effect is positive, then with or without reimbursement, investment makes sense.

If your primary business is to provide physician services, the variables are very different if you employ some physicians to serve a primary business of hospitals.

In the former, a revenue stream for services rendered is critical, unless the value is to use it as a market penetration tactic.

In the end I think you have to find a way that in total, the program creates more revenue somewhere or reduce expenses somewhere than it costs, or it will be unsustainable.

I think it is also reasonable that you can invest in telehealth as a speculative investment.

If you believe the tide will turn toward reimbursement (as most signs indicate it will eventually), then it is a reasonable idea to invest early before the free for all resulting from new reimbursement policies.

Then all you are doing is hoping that you can get your service deployed prior to reimbursement being available, but not too far out so that the cost of starting up cannot be recouped in your expected return timeframe.

Peter Caplan – Certified Health Advocate at HealthNation

There are numerous subscription based reimbursement models (telestroke, mental health, pediatrics) and call-as-you-go models that reduce the need for insurance reimbursement that offer great value add for physicians and hospital administrators

David Kuhnke – Principal at Telemed Benefit Advisors

Everyone seems to be discussing the issue from the standpoint of who is going to pay for or allow the service. Telehealth/Telemedicine by any name is an opportunity for patients to receive quicker, more convenient, more cost effective treatment in all cases while fully recognizing the limitations of whatever modality is in play.

When the conversation driver is which third party pays, you can make nothing or everything seem perfectly sensible.

It’s about time the healthcare monolith made room for physician patient interaction which can be accomplished with a little common sense and some personal responsibility on the part of the patient AND physician.

We can’t cure everything with telemedicine or telehealth but why wait for a universal cure when you can have such a positive impact on costs and patient lives by adopting what is possible and readily available.

It’s time to get out of the control, one size fits all business folks and back into medical care.

Kory Stetina – President and Founder, Torch Health Solutions

I think this is a very fair question, Nirav. While I echo Carlos’s comments from earlier regarding the fact that these barriers are real and necessary considerations and in many cases large barriers to telehealth adoption, I also agree that valuable and globally-beneficial models can be established in most markets, even without comprehensive reimbursement.

In my experience, most telehealth programs are able to generate at least some amount of reimbursement to help offset the necessary subsidies or value derived elsewhere.

Michael Smith – Director of Operations at HealthShare Bay Area

Good discussion!

My answer is to tie your organizations Strategic Planning efforts. Develop an in depth understanding of the regional healthcare ecosystem, identifying existing inefficiencies, opportunities for growth, unmet medical needs.

Now build a business case targeting the opportunities. Money can be found in new business, improved effciencies.

Ashley Boyd – Marketing Manager, SBR Health

Thanks for posing this question.

In talking with physicians, the interest in using telehealth to increase access and improve care coordination exists.

It’s incredibly disappointing that physicians aren’t able to use telemedicine tools available. In my experience, healthcare organizations and physicians are ‘thinking’ about telehealth but not moving forward due to reimbursement and available data.

We need innovators willing to test the water and show others that telehealth really can improve overall efficiency, quality and access to care.

David Lee Scher, MD – Senior Medical Advisor, Happtique

Physicians will embrace this IF:

1. Reimbursement models incentivize them to do it, whether fee for service or bundled payments.

2. If positive well-designed and implemented relevant clinical studies about telehealth are performed and presented widely at professional society meetings, not just HIMSS and mHealth conferences

3. If it decreases stress and increases efficiency.

Other responses

Follow this link to see the entire discussion.

Final Thoughts

Lack of reimbursement is indeed a barrier to telemedicine adoption.

But there are viable models that enable telehealth programs to get started despite reimbursement limitations:

  • Altruism
  • Grant funding – enabling clinicians to get paid
  • Employed physician models – because physician incomes are not necessarily tied to how many patients they see in one modality or another
  • Physician service organization models
  • Subscription-based models
  • Competitive drive
  • Simple applications that solve a patient care problem

When you’re trying to get telehealth solutions started in a facility, speak with the key influencers and decision-makers to figure out which of the above factors/solutions influence their support for telehealth.

You may find that lack of reimbursement is not as big a barrier as it seems.

What models have you seen that successfully overcome poor reimbursement for telemedicine? Please share your comments.



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