COVID-era waivers expanding telehealth reimbursements set to end this year

Health care providers supercharged their telemedicine offerings as a result of the pandemic—however, how those providers will be reimbursed for virtual care moving forward is in question.  

Prior to the pandemic, most providers did not receive enough reimbursements from insurance companies to justify expanding their telehealth coverage.  

That changed when the Centers for Medicare & Medical Services, a federal agency that oversees Medicare and Medicaid programs across the country, introduced leniencies on HIPPA requirements on video software and broadened access to Medicare telehealth services.   

Third party payers followed suit by expanding their telehealth service coverage, offering advanced payments to independent health care providers and waiving fees for members using virtual care.  

Coverage that was previously based on the discretion of insurance companies, has become common across insurers, said Andy Carter, president and CEO of the Hospital Association of Pennsylvania (HAP). 

“The number one impediment to telehealth expansion was that there was no payment model that you could get return on your investment because a lot of insurers wouldn’t pay for telehealth consults or appointments,” said Carter. “COVID changed that dramatically, where immediately public payers and private payers were paying for it across the board.”  

In a 2022 report on national survey trends in telehealth use, researchers with the US Office of Health Policy noted that from March to April 2020, telehealth use skyrocketed across the country from 1% to 80% in “places where the pandemic prevalence was high.”  

Today, patient usage of telehealth is significantly down from the days of quarantine, with the report finding that percentage had dropped to around 20% among adult respondents to a survey given between Sept. 29 and Oct. 11, 2021.  

Providers see telehealth usage remaining much higher than pre-pandemic levels with the focus now turning to how providers and insurers can work together to standardize telehealth.  

Standardizing telehealth  

HAP has spent years trying to standardize telehealth protocols and practices, particularly when it comes to reimbursing providers for telehealth services.  

Their most recent effort on that front has been backing Senate Bill 705, legislation that would require insurers to pay providers no matter if that provider is in that insurers’ network.  

Carter said that in the past, the association supported bills that would provide parity between in-person and virtual care, meaning that payers would need to reimburse providers equally for either service, but the association has now agreed to leave pricing to individual payers and providers.  

“We argue that standardization is hugely important,” said Carter. “Insurance is already complicated enough and a patient’s access to care through telehealth should not be a lottery. Parity was a nonstarter for our friends in the insurance community. We agreed to new language as an alternative.”  

HAP is also currently in support of House Bill 2419, which would allow for more flexibility for the state to allow providers to offer mental health services through telehealth permanently.  

House Bill 2419 has been passed in the House and is currently awaiting consideration in the Senate.  

Pennsylvania’s COVID-era waivers that explicitly authorized telehealth services to expand during the pandemic will expire this October. 

The waivers were set to expire at the End of June and were extended by the General Assembly on June 30.  

The waivers expand access to telehealth services, increase vaccine access, allow hospitals to quickly adapt to emergencies by altering space as needed for influxes of patients, and ease regulatory barriers to clinician licensing. 

Pennsylvania does not have any statutes that will prohibit the practice of telemedicine after the waivers expire but payers will be able to stop reimbursing for telehealth.  

“Absent the current COVID driven waivers and flexibilities, we won’t sustain telehealth the way we did before COVID,” said Carter. “It’s not supposed to go away. People got used to it.”  

Providing care in the virtual space  

In the two years since providers have embraced telehealth, virtual care has had a massive impact on how the industry cares for patients.  

Providers are now looking at how things like wearable technology and remote patient monitoring can keep tabs on patient health between visits, said Christopher LaCoe, vice president of virtual health at Penn State Health.  

“We’ve moved to the point where we have all these opportunities to do checkups for diabetes. We might be able to do that stuff here and then send (the diabetic patient) to the eye doctor and not make them drive to our office,” said LaCoe, adding that educators are now taking telehealth services into consideration when they teach incoming providers. “Medical schools are putting this in their curriculum. They used to say you need to see diabetic (patients) every three months and now they say once a year.”  

LaCoe, credited the waivers, calling the changes that happened to telehealth the pandemic’s “silver lining.”  

Pittsburgh-based Highmark Health was early to the market on allowing telehealth for its providers, but prior to the pandemic, providers had little guidance on what that should look like, said Dr. Tim Law, vice president and executive medical director at Highmark.  

“Highmark said you can do telehealth, but we won’t tell you how to do it—it wasn’t front and center,” said Law, noting that changed quickly during the pandemic. “We put together a virtual care playbook. Five years ago, I don’t think anyone would have thought of doing this. It includes where to find supplies, how to access Bluetooth technology so you can do remote patient monitoring and we show them what states allow providers to work across state borders.”  

Highmark provides parity for its covered providers using telehealth with some of the states the payer operates in mandating it.  

However, even though some insurers are ahead of the curve with how they support and pay for telehealth with their covered providers, providers outside of a network may find themselves without telehealth reimbursements, said Carter.  

“Some insurers will say we provide telehealth to our covered lives. It’s only to the telehealth providers they’ve enrolled in their network,” said Carter. “That’s a model that leaves a lot of people without access to their preferred provider. Someone they know and trust.” 

Pa. hospitals continue to face lasting issues well into the pandemic

Between March and July, Pennsylvania hospitals experienced $5 billion in losses resulting from a sharp decline in patient volume and despite federal relief fund payments.

Hospital systems statewide have yet to return to pre-pandemic patient volumes and are facing potential workforce shortages and the possibility of a surge of COVID-19 cases during flu season, according to a report published this month by the Harrisburg-based Hospital and Health System Association of Pennsylvania (HAP).

HAP announced earlier this month that it commissioned national research and consulting firm Health Management Associates (HMA), to conduct interviews with hospital leaders from 12 different Pennsylvania health systems. The interviews were compiled in a report the organization will offer to legislators as a tool to understand the current needs of Pennsylvania hospitals.

While systems returned to offering a majority of services since the state mandated them to pause some offerings like non-emergent surgeries, the report found that the effects of the pandemic on hospital systems are expected to stay until the virus is no longer a major public health concern.

The systems surveyed represented about 28% of patient revenue at hospitals within the state and included health systems such as Lehigh Valley Health Network in Lehigh County and Penn Medicine Lancaster General Hospital in Lancaster County.

The other systems in the report included: Penn Medicine, Jefferson Health and Einstein Medical Center in Philadelphia, Excela Health in Westmoreland County, Holy Redeemer Hospital in Montgomery County, Meadville Medical Center in Crawford County, Doylestown Health and Grand View Health in Bucks County, Mount Nittany Medical Center in Centre County and Monongahela Valley Hospital in Washington County.

“We wanted to maintain geographic diversity and get a mix of rural, urban and suburban hospitals so that the report was as representative as possible,” said Jeff Bechtel, senior vice president of health economics and policy at HAP.

From March to April, hospitals in the state were restricted from performing non-emergent treatments and had to focus their resources on emergency visits and treatments. The report found that while hospitals were able to return to providing all of their elective surgeries in May, systems have yet to return to their pre-pandemic patient populations.

Surgeries down

From March through July, the hospitals reported that the number of surgeries at their facilities were down 36% below expectations and emergency room visits were down by 29%.

The hospitals in the report also noted that their emergency room visits and surgeries were expected to remain 13% under their pre-COVID numbers for the next six months.

Bechtel attributed the continued loss of patient numbers to a continued hesitancy to access care and social distancing requirements. The report also notes that mass business closures resulting from the pandemic forced many people into unemployment, leaving more patients without insurance and unable to pay out-of-pocket costs.

“These outcomes have an increasingly negative direct impact on hospital financial performance through changes to payer mix and increasing levels of uncompensated care,” the report goes on to mention. “Other impacts of a poor economy, such as housing instability and food insecurity, negatively affect population health and place more burden on hospital’s community support.”

HAP’s researchers found that the pandemic’s effect on the economy also made its way to the health care workforce with many employees moving up their retirement dates, partially due to the possibility of contracting the virus.

Many of the report’s respondents were forced to lay off staff or reduce staffing hours to make up for lost revenue across facilities. For the employees that stayed on at the facilities, many had to worry about caring for their children now that a majority of schools shifted to virtual learning.

“School districts across the commonwealth, many in larger urban areas, have all gone virtual,” said Bechtel. “There is a large number of employees who are parents and the report points out that parents have to make tough choices that are affecting the workforce.”

Last year, the Pennsylvania Health Care Cost Containment Council, found that more than one third of Pennsylvania general acute care hospitals, or 34%, operated with negative margins. Another 29% reported operating margins of zero to 4%.

HAP’s report speculates that many hospitals, particularly those in rural areas, will have difficulty making up for 2020’s operating losses in subsequent years and will be unable to keep up with rapid changes in medical equipment and information technology.

“Many hospitals have been struggling financially for years and entered the pandemic period with weak cash and investment positions,” HMA wrote in the report. “The recent financial stress may be greatest for rural, safety net and independent community hospitals.”

Warren Kampf, senior vice president of advocacy and external affairs at HAP, said that the association wants a substantial amount of the state’s remaining $1.2 billion CARES Act funds used to help hospitals weather the storm, particularly given the possibility of further outbreaks of COVID-19 prior to the widespread use of a vaccine.

“We ask that a substantial amount of that be put in a need-based fund where hospitals and other medical providers could seek these resources to get through the next six months and beyond,” Kampf said.