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Insurers, hospitals at odds in telehealth debate on Beacon Hill

How long should full reimbursements continue for virtual doctor visits?

Boston, MA - 5/14/20 - Melvin Makhni, MD, spine surgeon, Department of Orthopedic Surgery, Brigham and Women's Hospital demonstrates a telehealth follow up appointment with Nicole Dane, a patient who recently had motion-sparing fusionless surgery for spinal cord compression neurologic issues (pre-COVID-19). (Jessica Rinaldi/Globe Staff) Jessica Rinaldi/Globe Staff

Massachusetts lawmakers have debated for years how best to pay for telehealth. All it took was a pandemic to finally get something done.

Now, the Legislature is on the brink of finalizing a law that would mandate reimbursement rates for many virtual medical visits — a once-abstract concept to most of us that became all too real during COVID-19 lockdowns.

Nothing is ever simple on Beacon Hill, though.

A conference committee still needs to hash out the differences between health care bills passed in the House and Senate this summer. Chief among them: which kind of telehealth visits should be reimbursed at the same rate as in-person services, and for how long.


For now, all of them are — regardless of whether you see your clinician via Zoom or in person in Longwood. That’s thanks to an executive order mandating rate parity that Governor Charlie Baker adopted in the early days of the pandemic. But the order expires once the state of emergency ends. What happens next will likely be up to the Legislature.

Groups representing hospitals and doctors seek a strong reimbursement. They want to defray the costs of installing technology that makes telemedicine easily accessible.

The health insurers take a different view: Telehealth should, in the long run, be cheaper to deliver than traditional visits, they say. No expensive bricks or mortar are necessary, or so the thinking goes. They’re allied with advocates for small businesses who argue that the burden of health care expenses for employees was often their biggest threat before the coronavirus turned the world upside down.

The Senate’s version is more aligned with what the docs and the hospitals want to see. It would mandate that all remote medical visits be covered at the same rates as in-person appointments for two years. To Senator Cindy Friedman, who leads the Senate side of the negotiations, telehealth has been a lifeline during the pandemic. Clinics depend on it, as do consumers. She concedes that not every remote service should eventually be reimbursed the same way. But she said it will take a while for the system to return to some sense of normalcy — probably after a COVID-19 vaccine is widely available.


With the House legislation, meanwhile, behavioral health would get rate parity on a permanent basis, reflecting a general consensus that the experiment of providing mental health services remotely has proven to be a success. Primary care and chronic disease care would be reimbursed at the same level as in-person care for one year. All other kinds of care would lose the coverage once Baker’s state of emergency expires — unless the state Health Policy Commission intercedes.

Representative Ron Mariano, the lead House negotiator, said his side is taking a more cautious approach, in part out of privacy concerns and credentialing issues that arise in telemedicine. Saving money, he said, isn’t his primary motivator; he said he believes the benefits of telemedicine as a cure-all for high health care costs have been oversold.

But Jon Hurst, head of the Retailers Association of Massachusetts, sees the premiums paid by small businesses such as those in his trade group as the crux of the entire debate. He said hospitals and physicians are simply trying to use COVID-19 to their advantage, to keep rate parity at a time of widespread public acceptance of telehealth. What happened to the cost savings that were promised?


That’s why the retailers’ group and its compatriots at the National Federation of Independent Business have joined with the insurers’ lobbying group, the Massachusetts Association of Health Plans, in pushing for cost curbs for telemedicine, along the lines of the House bill. A few other major business groups are staying out of the fray, because they have hospitals and insurers as members.

The health insurance association backed the House bill, before changes were made in a floor debate. Lora Pellegrini, the group’s chief executive, said she remains largely in favor of the House plan — but now has some reservations. She sent a letter last week to the negotiators outlining those concerns. One example: the power the House bill would give to the Health Policy Commission to add to the list of fully reimbursable telehealth services. Another: a requirement that a patient has seen a particular doctor in person first before getting many prescriptions via telehealth.

However, Pellegrini said she is more concerned about the all-encompassing approach and the two-year window espoused by the Senate. She understands the need to give providers a ramp-up period. But she worries it will be tough for her members to negotiate lower rates after two years.

Patients, she said, shouldn’t need to pay as much for all the expensive overhead at hospitals and outpatient facilities: rent, utilities, staffing.

It’s not quite that simple, though. Dr. David Rosman, president of the Massachusetts Medical Society, said doctors still need to pay those bills regardless of whether they are seeing many of their patients virtually. Eventually, over many years, they may be able to shrink the physical footprint of their practices accordingly. But that’s not a change that happens overnight. And Steve Walsh, the Massachusetts Hospital Association’s chief executive, said the predictability of knowing doctors can continue to see patients remotely and be reimbursed has proven to be a game-changer during the pandemic.


So what’s next? Expect negotiations to heat up after Labor Day, with a goal of getting a bill done within the next few months, hopefully in time to fill in the gaps once the state of emergency order expires. Telemedicine has proven it can increase access to care, and provide flexibility. Whether it can help cure the state’s high health care costs, however, remains an open question.

Jon Chesto can be reached at Follow him @jonchesto.