Are Narrow Networks the key to telemedicine growth?

While we keep hearing telemedicine is the future of healthcare and ready to register exponential growth at any moment, advocates are still waiting for that one unifying factor that could push it to the mainstream.

That factor could be the advent of accountable care networks. As the healthcare industry continues to move away from fee-for-service reimbursement and toward accountable care, it is likely beneficiaries will increasingly find themselves in narrow network arrangements.

Accountable care networks by design work more efficiently if patients are receiving care within a closed network of providers as opposed to an open system that lacks interconnectivity. Also, insurance regulators have been encouraged to keep a closer eye on provider adequacy standards as narrow networks become more common.

Therefore, as more narrow networks form, we are seeing an increase in states developing quantitative standards (such as time and distance requirements or provider-to-enrollee ratios) that insurers must meet in order to fulfill these tightening adequacy standards, according to an April 2016 report from the Urban Institute.

Telemedicine is a tool available to insurers to not only help them meet network adequacy standards, but also help providers deliver care to underserved areas more efficiently (“Can Telemedicine Help Address Concerns with Network Adequacy?” The Urban Institute & Robert Wood Johnson Foundation, April 2016).

While telemedicine has generally been recognized as having great potential, details on how to deliver on that potential to date have been murky at best. As the report states, the field has yet to reach a tipping point in terms of broad acceptance.

That tipping point should arrive with the continued movement away from fee-for-service. And indications are that this is occurring in programs nationwide.

The Boston Globe recently reported, for example, how Massachusetts officials want to shift MassHealth, the state’s Medicaid program, toward accountable care models. This means many MassHealth members could find themselves in narrower networks, making it more difficult to see certain specialists (The Boston Globe, April 16, 2016).

While there haven’t been indications yet that officials have considered an increase in telemedicine services as they move MassHealth away from fee-for-service, they could certainly, and feasibly, go that route.

Telemedicine still has a way to go toward fulfilling widespread acceptance and recognition, however. As the Urban Institute notes, “operational, medical, legal and financial barriers” have hindered providers from widely adopting its use. Indeed, of the six states the Urban Institute’s study covered, only Colorado has explicitly identified telemedicine as a factor to consider in assessing whether a plan meets the state’s network adequacy standards. Remember, as more narrow networks are developed, the greater scrutiny regulators will place on the standards. So its recognition of telemedicine is paramount to the field’s continued growth.

But there’s no denying the use of telemedicine is growing among hospitals and physicians. The global market is expected to be worth more than $34 billion by the end of 2020. This continued growth should only increase the incentives for regulators, providers and payers to all get on the same page.

Follow Chris Silva on Twitter @ChrisSilvaDRG