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Expanded telehealth services probably won’t lower health care costs: study

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Benefit may lie instead in expanding access to health care services

Contrary to widespread hopes, the growth in telehealth brought on by the COVID-19 pandemic probably won’t lower health care costs. But it may make some services more widely accessible.

A new Kaiser Family Foundation study compares average 2020 commercial insurance payments for evaluation and management and mental health therapy claims for services provided via telehealth with those provided in person. It finds that after controlling for regional, provider type and severity level variations, payments were about the same for both modes of care delivery.

For example, among 12 billing codes for mental health therapy, the largest payment difference was three dollars. Payment for five categories was identical, and for six the difference was one or two dollars. Slightly more than half (52%) of mental health claims in 2020 were for serviced provided via telehealth.

Along with comparing average claims payments, the study looked at variations in payment amounts for individual providers. It found that for the vast majority offering the same service by telehealth and in-person, the average payment for telehealth claims was within 10% of the payments for in-person claims.

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The study’s authors acknowledge that the eased restrictions and higher reimbursements for telehealth most payers instituted at the start of the pandemic may not last indefinitely. But if telehealth payments continue at parity with those for in-person care, it “raises questions as to whether telehealth will reduce spending on common health services,” they write.

Instead, they say, the main benefit of expanding telehealth may lie in the increased access to services and greater convenience for patients it provides. They note that by 2022 more than 90% of employers offered telehealth coverage as part of their benefits package, compared to less than a third in 2015.

Ultimately, however, telehealth’s future “will be shaped by its effect on total health spending, federal and state regulations related to scope of practice and reimbursement, and payer coverage and reimbursement policies.”


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