December 1, 2016


Key materials

Telemedicine is commonly defined as the use of telecommunications technology for the remote diagnosis and treatment of patients. Increasingly, practitioners are finding that telemedicine can be used to supplement or substitute for face-to-face contact between patients and providers, and that care delivered via telecommunications technology often can be of the same quality as care delivered in the traditional way. Many observers believe that increased use of telemedicine could also lower healthcare system costs while improving healthcare accessibility for many patient populations.

As a new and rapidly developing technology, telemedicine has the potential to transform healthcare delivery. Nevertheless, some third-party payers do not reimburse for telemedicine, and a lack of reimbursement on the part of government payers in particular has hindered its adoption. In telemedicine’s early days, opponents argued with some justification that there was insufficient evidence that telemedicine was safe, secure, and effective. Pioneers, however, have shown that in a variety of clinical areas (including psychiatry and the management of diabetes and other chronic diseases), it is possible to deliver good care using telemedicine.

Acting as a healthcare payer—as states do under Medicaid—is not typically associated with limited government. However, given that Medicaid does exist, the physicians and clinicians who participate in the program ought to be able to use current technologies and techniques and receive usual and customary payment when they do. Provided that a technology is likely to be effective, as telemedicine has been shown to be, physicians should be reimbursed for care delivered using it.

The HOAP index’s Telemedicine Subindex evaluates states in four areas: (1) whether the state reimburses Medicaid providers at parity for telemedicine, (2) how restrictive the state’s telepresenter requirements are, if it has any, (3) whether the state reimburses Medicaid providers at parity for remote patient monitoring, and (4) whether the state allows online prescribing. 

The first indicator evaluates the extent to which states reimburse for services provided via telemedicine (primarily live video) at the same rates as for comparable services provided in another way. Some states reimburse at full parity, while others restrict reimbursement by geography, service, or setting—or do not reimburse for telemedicine at all. For this indicator, states whose Medicaid programs reimbursed for telemedicine received higher scores.

The second indicator assesses the requirement enforced by some states that an assistant (termed a “telepresenter”) be physically present with the patient during a telemedicine encounter. Some states require that a telepresenter be in the room with a patient, while other states require that a telepresenter be available on site but not necessarily with the patient. Some states do not require a telepresenter. While it can be desirable and even necessary to have such assistance in some cases, the decision whether to use a telepresenter should be left to the physician and patient. States without telepresenter requirements received higher scores for this indicator.

The third indicator evaluates states’ Medicaid reimbursement policy with respect to the specific service of remote patient monitoring. States place varying restrictions on this type of telemedicine, in some cases limiting its use to the treatment of certain conditions or limiting the type of devices that can be used or the information that can be collected. For this indicator, states with fewer restrictions received higher scores.

The fourth and final indicator weighs whether a physician is allowed to prescribe a drug to a patient on the basis of an online visit, encounter, or interaction. As a protection, all states require that physicians and patients must establish a relationship before the physician may write a prescription; however, states vary in what they require and whether they allow the relationship to be established using telemedicine. Some states do not allow online prescribing at all. For this indicator, states that allowed more freedom for online prescribing scored higher.