The evolution of telehealth and the potential for sustainability

The surge in use of telehealth services seen during the pandemic has slowed, but telehealth remains a key modality amid policy changes that will help set the course for the future of virtual care.

“There’s no alternative,” said Kyle Zebley, senior vice president for public policy with the American Telemedicine Association (ATA) and executive director with the association’s advocacy arm. “We’ve got a limited healthcare workforce and have to make the most of it. How do you do that without telehealth?”

The increase in telehealth utilization rates is not linear, but segments of the industry continue to see growth from pre-pandemic rates. For instance, outpatient telehealth use increased from less than 1% of visits to 13% in the first six months of the pandemic, based on KFF and Epic Research analysis of Cosmos data. During the next six months, the rate declined to 11%, then to 8%.

Yet telehealth appears to have stabilized as a part of the care delivery infrastructure. According to FAIR Health’s monthly tracker, telehealth’s overall share of commercial claims increased from 0.38% in February 2020 to an estimated 5.4% in May 2023. 

And telehealth especially has boosted access to behavioral healthcare, with a new study showing telehealth visits for mental healthcare were 10 times higher from March 2020 through August 2022 than they were pre-pandemic. As a result, overall utilization of mental health services was nearly 39% higher.

Patient experience is a key factor in the expanding role of telehealth. A December AHIP survey reported that 69% of telehealth patients use the technology for its convenience compared with in-person appointments, and 78% noted telehealth made the process of finding healthcare easier.

A focus on payment parity

The Consolidated Appropriations Act of 2023 extended Medicare telehealth flexibilities through the end of 2024, and with financial viability issues in mind, stakeholders are keeping close watch on legislative discussions regarding appropriate reimbursement.

“A health insurer should compensate the healthcare provider for telehealth services at a fair payment rate that considers the ongoing investment necessary to ensure that telehealth platforms are continuously maintained, seamlessly updated and expanded as needed,” Zebley said. 

Intermountain Health, based in Salt Lake City and comprising 33 hospitals and 385 clinics, grew its telehealth offerings during the pandemic and currently is focused on scalability. The organization began its telehealth program in 2014 when leadership identified ways to avoid transferring critical patients unnecessarily.

After building the technology and integrating telehealth operations with its transfer center, Intermountain Health launched virtual ICU, neonatal resuscitation, neurology, crisis, infectious disease, hospitalist and oncology programs, as well as urgent care, behavioral health, primary care and nutrition services.

During the PHE, the health system expanded telehealth operations to include remote patient monitoring and acute care at home. Intermountain Health leaders are cautiously optimistic that progress will continue from a regulatory perspective.

“Payment parity laws passed at the federal level would be helpful, but there remains the question of what’s covered by commercial payers, which is regulated by state law,” said Adam Hornung, vice president for air medical, telehealth, transfer centers and outreach. “The stage has been set for its being possible, but across the board, we’re not there yet.”

There’s a range of opinion on how parity is defined, which impacts viewpoints on progress.

“This is a nuanced issue, but at the end of the day: If you’re carrying in-person overhead and investments to facilitate the same or better care, then parity makes sense,” Rob Ricketts, U.S. CFO with Teladoc Health, said in emailed comments. “Outside of brick and mortar, the flexibility to contract in a way that leverages the value and cost savings of care delivered virtually is the way to go.”

A shifting regulatory landscape

In July, as part of a proposed rule for Medicare physician payments, CMS released updates to telehealth payment policies.

“We were glad to see CMS continue to value providers with an appropriate rate for delivering virtual care at least through 2024, allowing providers to continue investing in needed technology and infrastructure,” Ricketts said. “We were also pleased to see CMS propose a more consistent and transparent approach to how codes are made eligible for payment when using telehealth and what stakeholders need to have new virtual services covered under Medicare.”

The Drug Enforcement Administration and the Substance Abuse and Mental Health Services Administration have extended telemedicine prescribing flexibilities adopted during the PHE while fielding comments on proposed rules.

“We’re advocating for parameters that would allow organizations with internal process controls, [that] have a good eye for compliance and want to do things in the right way, to be able to do that,” Hornung said.

Telehealth has become an integral part of the healthcare ecosystem, and upcoming rules and regulations will help define the future of these services. Stakeholders will continue to engage with regulatory bodies while fine-tuning their day-to-day operations to better deliver care.

“We’re a lot further along the road than we have been,” Hornung said. “There’s some runway to go, but I’m encouraged about the direction things are headed.”