State Policies Influence Medicare Telemedicine Utilization

Jonathan Neufeld, Charles R. Doarn, Reem Aly

Telemedicine Journal and e-Health · 2015 · 57 citations · 5 references

Concepts

TL;DR

Medicare telemedicine reimbursement policy has remained largely unchanged since 2000, but many states have expanded coverage for Medicaid and commercial payers, likely affecting program viability and utilization across all payers. The study examines how state Medicaid expansion and commercial payer parity policies influence Medicare telemedicine utilization. Using 2011–2013 Medicare claims from Great Lakes states, the authors extracted live‑interactive telemedicine professional fee claims, linked them to states, and calculated encounters and expenditures per 1,000 members per year. After state policy changes, Medicare telemedicine utilization surged—Illinois rose 173% in 2012 and Michigan 118% in 2013—while neighboring states without such changes showed no consistent growth pattern.

Abstract

Background:Medicare policy regarding telemedicine reimbursement has changed little since 2000. Many individual states, however, have added telemedicine reimbursement for either Medicaid and/or commercial payers over the same period. Because telemedicine programs must serve patients from all or most payers, it is likely that these state-level policy changes have significant impacts on telemedicine program viability and utilization of services from all payers, not just those services and payers affected directly by state policy. This report explores the impact of two significant state-level policy changes—one expanding Medicaid telemedicine coverage and the other introducing telemedicine parity for commercial payers—on Medicare utilization in the affected states.Materials and Methods:Medicare claims data from 2011–2013 were examined for states in the Great Lakes region. All valid claims for live interactive telemedicine professional fees were extracted and linked to their states of origin. Allowed encounters and expenditures were calculated in total and on a per 1,000 members per year basis to standardize against changes in the Medicare population by state and year.Results:Medicare telemedicine encounters and professional fee expenditures grew sharply following changes in state Medicaid and commercial payer policy in the examined states. Medicare utilization in Illinois grew by 173% in 2012 (over 2011) following Medicaid coverage expansion, and Medicare utilization in Michigan grew by 118% in 2013 (over 2012) following adoption of telemedicine parity for commercial payers. By contrast, annual Medicare telemedicine utilization growth in surrounding states (in which there were no significant policy changes during these years) varied somewhat but showed no discernible pattern.Conclusions:Although Medicare telemedicine policy has changed little since its inception, changes in state policies with regard to telemedicine reimbursement appear to have significant impacts on the practical viability of telemedicine programs that bill Medicare for telemedicine services.

References

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