In Arizona, they missed the point

Earlier this month, Arizona Governor Doug Doucey signed S.B. 1363 into law. When it goes into effect in January 2018, the law will require private health plans to pay for telemedicine services that occur anywhere in the state, altering a previous law that only required such coverage in rural areas. The law still only requires health plans to pay for virtual care services that would have been covered if the same service had taken place in-person with an in-network provider. Whether the patient sees the clinician at the brick-and-mortar clinic or via video chat, the patient is still responsible for any applicable co-pay, deductible, or coinsurance. 

Please, don’t get me wrong. This is a huge step forward for the people of Arizona. A patient’s access to care shouldn’t depend on their zip code. Whether you live in a rural area or a more urban one, everyone should have access to telemedicine because virtual visits help patients actively receive the right care at the right time from the right provider.

Many other states are passing similar legislation, which is an improvement on the status quo, but I think in many cases they are focusing on the wrong aspects of how to improve access to virtual care. Rather than pushing for healthcare organizations to cover telemedicine services, state legislatures should be following the example being set by the U.S. Senate as they work to pass the CONNECT for Health Act – which, among other things, would incentivize the implementation of payment reform and the transition to value-based care. This would automatically speed the growth of access to virtual care services because of better alignment of interests.

The current healthcare economic model is built around fee-for-service payments. So it’s generally in the clinician’s best financial interest to see the patient as often as possible and for as many issues as possible so they can bill for each instance. The payer requires co-pays, deductibles, and coinsurance from the patient in an effort to discourage them from agreeing with their doctor, who might be increasing the number of visits as a way to charge for follow-up care. Meanwhile, the patient is stuck in the middle trying to figure out the most efficient way to get better and stay healthy.

This misalignment of interests doesn’t provide a good experience for anyone. But if state lawmakers used their time to pass legislation incentivizing the transition to value-based care, they’d be able to change this dynamic. In a true value-based model, the office visit that doesn’t happen is profitable for the doctor thus economically aligning doctors, patients and payers. As a result, physicians and the health systems they work for are more willing to deliver services at the lowest cost point of care possible – virtually.

At CirrusMD we’re helping healthcare organizations provide better service to their policyholders and members by playing a vital role in their transition to value-based care – and we’re seeing the positive results. By removing barriers to care, like co-pays and fee-for-service payment structures, CirrusMD is seeing utilization rates as much as 10x higher than the industry average. More people are accessing telemedicine and getting the guidance and referrals they need to the most appropriate point of care for the situation – leading to lower costs for everyone.