Evaluating Telehealth Risks in Claims

“Telehealth” and “telemedicine” have different meanings across jurisdictions, but for our purposes we will synonymously refer to health care delivered digitally. Such technology represents significant advancement in medical care with respect to safety, health care accessibility, and cost efficiency.

The novel COVID-19 pandemic brought about an unprecedented spike in telemedicine use, rendering some existing telemedicine regulations archaic and impractical for pandemic needs. The federal government responded by temporarily waiving past restrictions and requirements to make telemedicine use easier and more widespread.

Although these policies were redacted in July 2021, post-quarantine demand for telehealth care indicates it is here to stay. One study noted that telehealth visits still account for 30-40% of all health care visits, with nearly 75% of patients expressing desire for its use to continue. Indeed, American Medical Association Vice President of Digital Health Strategy Meg Barron was correct in stating, “All signs point to more health at home.”

 In the absence of post-pandemic federal telehealth legislation, state governments are assuming responsibility for defining and enforcing valid uses of telemedicine. Some states are returning to pre-pandemic policies, while others have permanently adopted COVID-19 regulations or developed new policies altogether.

As vast as they are unfamiliar, post-pandemic telehealth policies are difficult to navigate. Going forward, it is imperative that such policies balance the benefits of increased health care accessibility with the disadvantages of new fraud vulnerabilities.

Technology in Telehealth

Since the 1990s, telemedicine has referred to a myriad of virtual provider-patient interactions, including telemonitoring, store-and-forward technology, and real-time audiovisual encounters. Each with its own benefits and shortcomings, these modes of communication are often used in tandem with one another to maximize the value of virtual health care.

Telemonitoring is a process by which patients record vital signs throughout the day at home. Providers can rapidly diagnose and prescribe appropriate treatment in the event of a medical crisis, which is safer and more cost effective than resorting to expensive emergency care.

Store-and-forward technology is the transmission of images, documents, and video to an intermediary facility that stores and forwards them to a receiving patient or provider. In this case, treatment is provided more quickly because providers can review patient data at their leisure.

Synchronous audiovisual encounters allow providers to verify patient identity, gauge general appearance and mood, address patient concerns, and prescribe treatment in real time. This increases health care accessibility for remote, low-income, or elderly patients who have difficulty traveling to in-person appointments.

Different states may refer to these modes of communication several ways. New York, for instance, uses “telehealth” to refer to a broad umbrella of terms, including telemonitoring, store-and-forward, and audio-only communication, while the term “telemedicine” only refers to audiovisual encounters. Understanding such differences is important during a review of multiple state and federal telehealth regulations.

Generally, the use of telemedicine has represented an improvement in health care quality. This may not always be the case in instances where providers choose telehealth options because it is convenient, rather than what is optimal for their patients.

When certain procedures are objectively better performed through a certain medium, holding providers to appropriate guidelines is effective in ensuring quality treatment. States such as New York have not only outlined such protocols, but also have ceded choice of platform to the patient in the absence of valid medical rationale.

Following COVID-19 waivers, some states no longer require video transmission during synchronous audiovisual telehealth appointments, benefitting individuals who do not have the bandwidth, funds, or technical knowledge necessary for live video transmission.

However, fraudulent audio-only appointments can elude traditional investigative strategies because they do not require patient or provider compliance. For example, fraudsters can attend telephonic appointments using a stolen identity in exchange for kickbacks when pharmaceuticals or durable medical equipment are correctly prescribed.

Contemporary policies attempt to reconcile such vulnerabilities by requiring initial evaluations to be made in-person. When a provider has a live experience with a patient’s appearance and voice, it becomes more difficult to convincingly imitate him or her digitally. However, advancements in digital imaging threaten the efficacy of such policies.

Conservative states that want to limit fraud vulnerability may seek to increase health care accessibility without permitting audio-only phone calls to be billed as telehealth visits. For example, Texas’ House Bill 3853, which was signed on June 15, 2021, expands broadband internet access for its rural population, making real-time, audio-visual encounters available to more individuals.

California and New York also have similar bills in the works. California is not only seeking to increase broadband access, but also to provide computer equipment and digital literacy training to underserved communities.

Service and Payment Parity

Reimbursement of pre-pandemic telehealth appointments at lower rates than in-person visits initially spurred concerns about decreased income among providers and low health care quality among patients. Policymakers sought to fully realize telemedicine use through implementation of service and payment parity.

Service parity prohibits insurers from denying coverage based on the medium by which treatment was administered, i.e., if the meeting was virtual or in-person. Since service parity increases insurance coverage of telemedicine, patient utilization increases with decreased out-of-pocket expenses. Providers can use the platform that will provide the best quality of care to the patient without limitations on which services can be provided.

Payment parity requires insurers to reimburse providers for telehealth visits at the same rate as an analogous in-person visit. By eliminating financial bias, providers are incentivized to administer care through the platform that represents the greatest benefit to the patient. In the same vein, patients are motivated to use the platform that is most beneficial rather than most cost effective.

Under service and payment parity, the patient and insurer costs may increase as telehealth appointments are billed for the same amount as in-person visits but are held with greater frequency. This shift from substitutive to additive care can be either patient or provider initiated.

Studies show that the convenience of telehealth visits motivates patients to seek medical attention more often. This can be beneficial when treating chronic disorders like diabetes or mental illness, but can drive up costs unnecessarily for self-limiting conditions that do not improve with increased treatment, such as the common cold.

Similarly, providers may schedule telehealth appointments out of concern for personal convenience and appointment volume rather than patient well-being. For example, patients who have been recently prescribed blood thinners must have their blood pressure monitored through subsequent in-person visits if they do not use at-home telemonitoring services.

Payment parity can make telehealth fraud more appealing because it is just as lucrative, but more vulnerable, than traditional health care fraud. Unsurprisingly, service parity expands opportunities for fraud when more telehealth services can be reimbursed by insurers.

Combining service and payment parity allows providers to bill telehealth visits with in-person codes and associated fees. Regardless of cause, increased appointment frequency can drive up costs unnecessarily. New American Medical Association guidelines address this by requiring telemedicine billing to be performed cumulatively on a weekly basis rather than per appointment. Additional billing in a week is only warranted for treatment of a different issue.

Alternative solutions, like health maintenance organizations or accountable care organizations, have yet to be widely implemented but have had success at smaller scales for nearly a century in the U.S. These institutions hold providers accountable for the cost of caring for their patients, and may also provide bonuses for optimizing preventative treatment, care coordination, and patient experience. Thus, providers are motivated to use telemedicine when it facilitates the highest quality health care at the lowest possible cost.

Location Changes

Telemedicine has been historically limited to patients at a “valid originating site.” Eligible sites included rural health clinics, hospitals, and federally qualified health centers. Under federal law, at-home telehealth visits are only permitted for individuals with renal dialysis, risk of acute stroke, substance use disorders, or specific mental illnesses.

These regulations reflected the belief that telemedicine decreased the quality of care and should only be used with patients who are remote or have difficulty traveling. The COVID-19 pandemic demonstrated the increase in health care quality and accessibility that telemedicine offers to all individuals, such as immunocompromised patients who can better avoid exposure to deadly pathogens from in-person doctor appointments.

Without requiring telehealth visits to be conducted at valid originating sites, patients and providers can feasibly receive and administer care from anywhere in the world. While this can prove beneficial for those who are traveling, it may also represent a decrease in quality of care because of background distractions.

Additionally, such policies may allow providers to administer care across state lines. This can be foreboding to providers who might unintentionally violate the laws of the patient’s state or federal interstate commerce regulations even when interstate telemedicine is allowed by their own state.

As demonstrated during the pandemic, increasing the regional boundaries of telehealth care can spur greater opportunities for fraud. For example, federal waivers facilitated one of the largest health care fraud rings in Department of Justice history in 2019 when unnecessary cancer testing racked up $2.1 billion in dozens of states. Fraud is limited to much smaller scales when interstate treatment is prohibited.

If not already permitted, most states are in the process of passing bills that allow at-home telehealth visits. More liberal states, like California, have permanently expanded telemedicine access across state lines. Benefitting those who travel regularly, such policies alleviate the responsibility to find new health care providers every few months.

However, regulations in other states still apply and may prohibit such treatment. Many providers are hesitant to risk inadvertent violations of interstate commerce regulations, which can lead to an overall decline in telemedicine treatment and health care accessibility.

Providers

Pre-pandemic policies limited telemedicine to specific in-state providers, predominantly physicians and nurses licensed in a patient’s state. However, the expansion of services eligible for telemedicine combined with the increasing demand for virtual care has spurred many states to permanently permit more providers to provide services via telemedicine.

Telemedicine has become so prominent amongst certain providers that new terms like “teledentistry” and “telemental health” are being used to describe its use in their fields. Specifically, chronic therapy treatment was transformed forever when pandemic waivers allowed for speech, physical, occupational, mental health, family, and intellectual disability therapy to be conducted via telemedicine.

Because many forms of therapy do not require recording vitals, telemedicine can often vastly improve patient and provider convenience by facilitating regular meetings regardless of location. Travel times and prices disappear when one can receive treatment at his or her current location.

Expanding telemedicine use to new providers can allow services to be conducted via telemedicine that are more beneficial when conducted in-person. Additionally, allowing non-physicians to use telemedicine makes it easier to commit insurance fraud.

During the pandemic, providers were permitted to prescribe Schedule II controlled substances for pain management through telemedicine, albeit with heavy regulation. Understandably, the risk of abuse and crime has deterred state legislatures from permanently waiving restrictions on providers’ ability to prescribe via telemedicine.

States are currently at various stages of approving certain providers to administer treatment via telemedicine. California’s service parity essentially permits all providers to use telemedicine if the service is analogous to in-person care, while New York has several pending bills that will increase the types of providers that can use telemedicine.

Some states use the type of provider administering treatment via telemedicine to determine whether it is a telehealth or telemedicine visit. In Texas, “telemedicine” is a service that must be administered by a licensed physician, while “telehealth” services are available to health care professionals in general.

Calling All Parties

Ultimately, a closer examination of the relationship between health care accessibility and fraud vulnerability is needed to make concrete statements about the objective value of one policy over another. Until then, it is essential that policymakers, individuals, providers, and law enforcement are aware of the implications of new policies and practices. 

Editor’s Note: The content within this article are those of the authors alone and do not necessarily represent their companies’ positions, strategies, or opinions.