Impact of Government Reimbursement Policies on Telemedicine Use in California

Impact of Government Reimbursement Policies on Telemedicine Use in California

The U.S. government has pursued many reforms in recent years aimed at expanding telemedicine and the healthcare access benefits it offers. The uptake of telemedicine by healthcare providers has remained poor since its introduction because of prohibitive reimbursement policies from payers such as the government. Coupled with restrictive licensure regulations and requirements, the expansion of telemedicine has remained sluggish.

However, recent reimbursement policy reforms have increased the popularity of telemedicine in the State of California, boosting usage of the platform among State residents. The U.S. government recently implemented a reimbursement reform that expands access to telehealth services to Medicare beneficiaries under payment terms comparable to in-person visits. Physicians are now eligible for reimbursement for diagnosing and treating their clients remotely. In the policy, telemedicine services will be reimbursed at similar rates as in-person visits under the Physician Fee Schedule (CMS.gov, 2020). In addition, following federal approval, California’s Medicaid program, Medi-Cal, covers telehealth services provided via mobile technology and other personal devices.

As a result, telemedicine use has increased in the state since more primary care providers have the financial security to set up telemedicine infrastructure or hire vendors. For example, approximately 60% of California residents who needed physician services during the past year accessed them via telemedicine (CHCF, 2020). Accessibility of video and phone-visit alternatives under the current reimbursement policy has increased the use of telemedicine, particularly among low- and middle-income residents (CMS.gov, 2020). Reduced reliance on telehealth infrastructure due to options such as personal-device-based visits has also increased the usage of telemedicine. Telemedicine usage has also expanded in California’s rural communities, where limited Medicare and Medicaid coverage restricted health providers from setting up remote services (CHCF, 2020).

Nevertheless, telemedicine usage is still suboptimal because of inadequate technology penetration in some areas of the state (PPIC, 2019). Increasing access to technology in the future may further enhance telemedicine use. Additionally, current reimbursement reforms may be temporary because of the access barriers arising from the pandemic (CMS.gov, 2020). Retention of the current policy may maintain the current trends in telemedicine use beyond the pandemic.

References

CHCF. (2020). Listening to Californians with Low Incomes. Retrieved from California Health Care Foundation.: https://www.chcf.org/publication/listening-californians-low-incomes/#covid-19-related-stress

CMS.gov. (2020). Medicare Telemedicine Health Care Fact Sheet. Retrieved from CMS.gov: https://www.cms.gov/newsroom/fact-sheets/medicare-telemedicine-health-care-provider-fact-sheet

PPIC. (2019). California’s Digital Divide. Retrieved from Public Policy Institute of California: https://www.ppic.org/publication/californias-digital-divide/

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Analyzing Policy

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