Now, post-pandemic, the industry side of telehealth is witnessing a different type of wave with several reports of companies ending short-lived telehealth services. Last month, UnitedHealth Group’s Optum confirmed the end of their virtual care business, originally launched in 2021, followed by an announcement from Walmart stating they would be closing Walmart Health Virtual Care, also launched in 2021. According to a Yahoo Finance article, telehealth companies such as Amwell and Teledoc have also been facing recent layoffs and plummeting stocks. While the supply of telehealth-only providers has increased over the past few years, and telehealth utilization has reportedly decreased post-pandemic, it also appears the demand has shifted and is contributing to the additional market dynamics we are now seeing. As discussed in a Fierce Healthcare article regarding the recent Walmart and Optum news, the desire for telehealth amongst patients still exists, however the need is now focused more on continuity of care and ensuring patients have the option to receive both virtual and in-person services from their same providers. Policymakers seem to have taken note and are now increasing the prevalence of policies requiring providers to offer, or at least facilitate, in-person services along with virtual care. The growing demand for both forms of care (virtual and in-person) and the accompanying policies have contributed to the need for companies interested in the telehealth space to reflect both the patient needs and policy requirements in their business plans in order to appropriately respond to the ever-changing telehealth landscape.
Reimbursement challenges were one of the primary reasons cited behind Walmart’s Virtual Care closure. Typically, telehealth companies have offered care as a private-pay direct-to-consumer (DTC) service. For example, a Trilliant Health article regarding recent telehealth market changes reported that Walmart initially charged patients $67 per virtual visit, which they subsequently decreased to $49 in 2023, likely due to market fluctuations and the need to increase competition amidst the increase in similar telehealth-only providers. Health plans have also often contracted with virtual-only companies to offer their enrollees the option of 24/7 care outside of their normal in-network providers and urgent care clinics. Patients (and providers) may prefer, however, that insurance cover telehealth more similar to in-person services, and policies have seemingly followed that trajectory. For example, state private payer reimbursement parity requirements ensuring telehealth coverage and payment are on the same basis and at the same rate as the equivalent in-person service will sometimes include language that coverage can’t be limited to third-party telehealth organizations (such as in New Jersey law). Meanwhile, New Mexico law states no plan shall offer a telemedicine only benefit, and Arkansas’ law says that a health plan may not impose a requirement for a covered person to choose any commercial telemedicine service provider or restricted network of telemedicine-only providers rather than the covered person’s regular doctor or provider of choice. Such policies have sought to ensure that patients can receive both in-person and virtual care from their typical providers, rather than just a one-off service from a corporate provider they may never see again, and that is typically unaware of their medical history, and unconnected to their medical records. As noted in a statement within an mHealth Intelligence article on the Walmart and Optum closures, Arielle Trzcinski, principal analyst at Forrester, states “[c]onsumers want virtual care – but hybrid models are necessary to fully support their care needs.” Similarly, the Yahoo Finance article previously referenced is titled, “’Telehealth 1.0 is dead”’ – the title taken from a quote given by Owen Tripp, CEO of virtual health platform Included Health, where he discusses that the DTC telehealth model is “a single point of contact without any long-term health monitoring.” The Included Health model seeks to “connect the dots of the disjointed care system” by including the ability for patients to return to the same providers. Additionally, the Fierce Healthcare article reiterated the need for virtual care models to contemplate coordinated care and integrations with in-person providers to make it in the telehealth market.
Along with private payer laws regarding corporate telehealth providers are Medicaid policies that similarly limit telehealth-only companies seeking to virtually serve Medicaid enrollees through various policies. Most state Medicaid programs have individual provider enrollment processes that may require a provider to have an established place of business and address in the state to be eligible, which excludes telehealth companies with virtual-only providers. California Medicaid (Medi-Cal), for example, has such limitations but has also made an exception for remote-only mental health providers. Medi-Cal additionally has telehealth reimbursement policies that require providers to offer both in-person and virtual services, or have documented protocols in place to link patients to in-person care if needed.
Outside of reimbursement policies, states have also enacted professional requirements applicable to providers that additionally seek to promote established patient-provider relationships and continuity of care. Therefore, even if a telehealth company doesn’t seek reimbursement through public or private insurers, the requirements would still apply and impact their operation. For instance, Texas law requires telemedicine practitioners to provide patients with guidance on appropriate follow-up care and with the patient’s consent, forward the report of the encounter to the patient’s primary care physician within 72 hours. Utah professional requirements include first obtaining the patient’s medical history, the same provider remaining available to the patient for subsequent care, as well as providing information on the visit to the patient’s designated health care provider. Some states have laws requiring telemedicine organizations operating in the state to register with a certain state agency and provide additional information, such as Alaska and New Jersey. Navigating the myriad of policies applicable to telehealth and telehealth providers has, especially across state lines, become increasingly nuanced and requires careful attention to ensure compliance.
The focus on ensuring patients have continuity of care across providers and the healthcare system as a whole has led to this desire for policies to promote a hybrid model that balances and integrates the need for both virtual and in-person care, as well as primary and specialty care. For patients that may be able to self-pay, there is still a demand for more niche telehealth corporate providers and potential profitability, but for the Telehealth 2.0 era, businesses must first be aware of the complex policy impacts and overall holistic care needs of the populations they seek to serve. |
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