Public Sector Institutions and Public Policy

Public health policy and public sector institutions such as CMS may be the most critical factors in the viability of telehealth. Private payers and healthcare organizations are less likely to invest in telehealth if Medicare and Medicaid do not lay the groundwork for support and regulation.  Fortunately, Medicaid currently covers telehealth, to some extent, in 46 states. (4) While influential policy in favor of telehealth is slow to emerge, there are multiple motivating factors.

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As previously discussed, health system reform is motivated by the Triple Aim – improve quality, improve outcomes, and decrease cost. This triple aim was most recently and notably acted on by the signing of the Affordable Care Act (ACA) in 2010. (3)  The U.S. is particularly motivated by our exorbitant health care expenditure and poor health outcomes. Quality and cost control are addressed in the ACA through improvements in not only the quality, but also the efficiency, and effectiveness of the medical care we provide. (3)

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Making strides in a profession notorious for resistance to change is challenging. A movement towards global payment models (where providers/healthcare organizations are rewarded based on improvements in the quality, efficiency, and outcomes of care) and away from the fee-for-service system (where rewards come from volume and quantity of services) are inspiring the needed changes. (4)

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Barriers Related to Policy


  • While progress has been made with Medicaid coverage, this pertains to very little of the population.
    • In AZ, 25% of the population has Medicaid coverage (43% are employer covered, 14% Medicare, and 12% uninsured). (2)
    • In NE, only 14% of the population is covered by Medicaid (53% are covered by their employer, 14% Medicare, and 10% are uninsured). (2)
  • While CMS leads the way, policy changes are necessary to make telemedicine “attractive” to all payers not just one particular payer (Medicare, Medicaid, and Private/Commercial). (4)
  • It is imperative to push private payers to reimburse at the same rate as a face-to-face visit in order for the investment of telehealth to pay off. (1)
  • As the system continues to move more towards the global payment model, the fee-for-service reimbursement will become less meaningful. Providers will be more willing to utilize any tools that increase their outcomes and patient satisfaction rather than just tools they can get paid for. (4)

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Licensure Restrictions

  • Requiring special or dual licensure for cross-state telehealth services negatively impacts the likelihood of telehealth adoption due to the complexity, length of time, and added cost. (1)
    • As more states relax the policy requirements on cross-state licensure, evidence on safety concerns will present itself hopefully allowing more states to comfortably follow suit. (1)

Limited Diagnoses Available for Coverage

  • CMS is very slow to implement new approved billing codes that would expand the eligible services through telehealth. (5)
    • Medicare generally only increases a few codes per year – even these minor expansions require significant efforts and lobbying by organizations such as the American Telemedicine Association (ATA). (5)

So, if you glazed over, let me summarize…

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Something cute to refocus your attention

Take Home Points:

  • Adoption of telehealth is more likely when policy change promotes private payer reimbursement in addition to CMS. (1)
  • The majority of Americans have private health care insurance. Only 22 states have passed policy requiring some type of private coverage parity. (2; 4)
  • CMS must be more proactive in expanding covered diagnoses for telehealth services. (5)
  • State level policies that restrict telemedicine through special licensure requirements need to change in order to increase telemedicine adoption and utilization. (1; 4)
  • Many of our legislators have very little knowledge regarding telehealth – we must educate and advocate to create progress in policy change (Senator Nicole Fox, personal communication, February 9, 2016).
  • Without policy change, telehealth is less viable and without viable programs to provide data, policy will not change. (4)



  1. Adler-Milstein, J., Kvedar, J., & Bates, D.W. (2014). Telehealth among US hospitals: Several factors, including state reimbursement and licensure policies, influence adoption. Health Affairs, 33(2), 207-215.
  2. Kaiser Family Foundation. (2016). Health insurance coverage of the total population. Retrieved from
  3. McDonough, J.E. (2014). Health system reform in the United States. International Journal of Health Policy and Management, 2(x), 1-4.
  4. Neufeld, J.D., Doarn, C.R., & Aly, R. (2016). Brief communication: State policies influence medicare telemedicine utilization. Telemedicine and e-Health, 70-74. doi: 10.1089/tmj.2015.0044
  5. Weinstein, R.S., Lopez, A.M., Joseph, B.A., Erps, K.A., Holcomb, M, Barker, G.P., & Krupinski, E.A. (2014). Telemedicine, telehealth, and mobile health applications that work: Opportunities and barriers. The American Journal of Medicine, 127(3), 183-187. doi: 10.1016/j.amjmed.2013.09.032.

The Actors Involved & the Policy They Create

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As you likely know, we are in the middle of healthcare reform.  Our healthcare delivery is changing with three main goals as the driving force: improve quality, improve outcomes, and reduce cost — the Triple Aim (2).  Telehealth and mHealth have been embraced by many as potential solutions — innovative deviations from the traditional ideas of healthcare.  However, state and federal policy formation, implementation, and modification have been slow and ineffective inhibiting the full adoption of telehealth (2).  The inconsistent, unclear policy and regulation and insufficient resources have sparked action and advocacy from various players in the telehealth world.

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Solid evidence, consumer demand, leadership, commitment, and technology advancements are critical in optimizing telehealth services (2).  Large organizations such as Nebraska Medicine, Kaiser Permanente, or Mayo Clinic play a vital role in meeting these demands by designing, implementing, and evaluating telehealth projects.  It is pilot studies like those developed at these organizations that provide this solid evidence, demonstrate leadership, and make the consumer demands known.

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Special interest groups such as the American Telemedicine Association (ATA) and the International Society for Telemedicine & eHealth also play a fundamental role in challenging outdated ideas of healthcare delivery, advocating for change, and providing insight and recommendations to policymakers.

Another important supporter of telehealth is the Center for Connected Health Policy (CCHP); a nonprofit, nonpartisan organization that acts as a catalyst for change by bringing policymakers together with private health care sector, health plans, academic researchers, and consumer health advocates to gain ground in the Triple Aim objectives through telehealth (1).

These groups provide expert opinions to executive branches of government such as the Department of Health and Human Services (DHHS) where policy is designed, rules are made, the policy is put into operation, and subsequently evaluated (3).  In an interview with Senator Nicole Fox, a committee member of the DHHS, she discussed the reliance that committee members have on expert advocate groups to inform them of the current status of telehealth and the future needs.  Senator Fox provided examples of committee members not understanding the clinical pathways for many diagnoses, what services are appropriate for telehealth delivery, or what types of medical technology are available and how they can be useful to patients and providers.  It is often difficult for government representatives and stakeholders such as CMS to see beyond the upfront costs of telemedicine; it is because of this that solid evidence is so vital in order to make forward progress (Senator Nicole Fox, personal communication, February 9, 2016).

Regulatory Mechanisms

Some of the most commonly debated regulatory efforts include reimbursement rates, limited services, cross-state licensure, and distance between provider and patient among others.  Nebraska has been quite progressive in the expansion of telehealth.  LB 1076 – the Nebraska Telehealth Act addressed many of the issues other states continue to battle (4).  They have:

  • revised the definition of telehealth to include telemonitoring and medical information electronically exchanged from one site to another whether synchronously or asynchronously (i.e. store and forward messaging through secured email is reimbursable)
  • expanded the eligible telehealth providers to include all Medicaid enrolled providers
  • clarified that a relationship can be established between patient and provider without a face-to-face visit
  • required managed care contracts with managed care plans to include coverage of healthcare services delivered through telehealth.

There are plenty of regulatory mechanisms that continue to be debated — interstate licensure (expedited multi-state licensure), parity laws for private insurance coverage (see image below for U.S. report card), expansion of covered diagnoses, and more.  These issues will need to be addressed in a timely manner if telehealth is to be fully adopted and available to everyone in need of access to care.  Unfortunately, regulatory mechanisms need to be updated as frequently as the technology itself.  Thankfully, there are a lot of actors advocating for the cause.

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While changing public and private policy is important in advancing telehealth, it is “insufficient for achieving widespread adoption of telehealth care” (2).  Institutions and special interest groups are integral in creating partnerships in research, practice, technology, consumer support, policy, and financing.



Center for Connected Health Policy (CCHP). (2016). About CCHP. Retreived from

Gutierrez, M. (2014). The role of telehealth in the triple aim. Retrieved from

Longest, B.B. Jr. (2016). Health policymaking in the United States (6th ed.). Chicago, IL: Health Administration Press.

Nebraska Legislature. (2014). Legislative bill 1076. Retrieved from