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.

3 thoughts on “Public Sector Institutions and Public Policy

  1. There are so many elements involved in the connection between the public sector and telehealth. While I think it is fantastic that Medicaid (mostly) covers these services, there seems to still be a significant portion of people left in the dust. It is interesting to see what qualifications a patient must meet in order to qualify for telehealth (like you mentioned with the diagnoses). Medicare for example, requires the patient to live in either an area that has a shortage of health professionals or a rural area (HRSA, N.D.). Individuals who meet these requirements are generally very at need for the service but I also can’t help but think about patients who are essentially homebound and live in more urban locations. I also think you really hit the nail on the head regarding reimbursement. It seems that many providers are willing and able to perform this service but at the end of the day, health care is a business unfortunately and providers need to be reimbursed. It appears that we still have a long way to go until telemedicine becomes a standard but I am optimistic that we are at least heading in the right direction.


    Health Resources and Services Administration (HRSA). (N.D.). What are the reimbursement issues for telehealth? Retrieved from


  2. I am very interested in the topic of telehealth as it relates to mental health care. According to Bashshur Rashid, Shannon, Bashshur Noura and Yellowlees (2016) there is are 40,000 psychiatrists practicing in the U.S. with a shortage of 10,000 to 20,000. The shortage of child psychiatric providers is even more severe. Telehealth has been embraced by mental health providers because we rely less on “hands-on” assessment and can use audio/visual technology to therapeutically connect with our patients.

    A systematic review by Bashshur, et al. (2016) indicates that providing mental health care through telehealth is cost-effective and contributes to positive outcomes and high patient satisfaction. I share agree with your assertion that as Medicaid and Medicare authorizes wider coverage, private insurance companies will follow.

    Aside from the issue of reimbursement, one of the biggest public policy hurdles for providers who wish to use telehealth to care for patients is the different state licensure requirements. This is a very critical issue for nurse practitioners who may wish to use telehealth to care for patients in different states. One of the biggest barriers for psychiatric nurse practitioners who may want to provide patient care via telehealth is the need to be licensed in multiple states who may have different laws regarding physician supervision and collaboration. One way that we can remove barriers and provide better access to mental health care is for nurses to support legislation granting full practice authority to nurse practitioners in every state.

    Bashshur Rashid L., Shannon Gary W., Bashshur Noura, and Yellowlees Peter M.. Telemedicine and e-Health. January 2016, 22(2): 87-113. doi:10.1089/tmj.2015.0206.


  3. Telehealth seems to be increasingly popular as the reimbursement fee structures are changing. You brought up some excellent points regarding the issues facing telehealth such as multi-state licensure and lack of private insurance reimbursement. In a survey across all but four states in the United States, it was found that for those participants who billed for telehealth, about half of them were aware of which private insurance companies reimbursed for these services (1). Only just over half of the respondents actually billed for telehealth services with the reasoning that many payers did not reimburse for these services (1). This is definitely something that needs to be remedied as we move forward in this technological world.


    1) Antoniotti, N. M., Drude, K. P., & Rowe, N. (2014). Private payer telehealth reimbursement in the United States. Telemedicine Journal and e-Health : The Official Journal of the American Telemedicine Association, 20(6), 539-543. doi:10.1089/tmj.2013.0256


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