reimbursement for telemedicine

Medicare Falls Behind in Reimbursement for Telemedicine

You might think that the passage of the Affordable Care Act in 2010 and the resulting opportunities for telemedicine would have led to widespread telemedicine usage to increase access to healthcare while reducing costs, but the reality is that reimbursement from government agencies—such as Medicare—has fallen far behind the rhetoric. And when good intentions aren’t backed up with adequate funding, progress can become slower than molasses.

Telemedicine has certainly grown steadily, but the impact has been felt more significantly among those with private insurance that provides reimbursement for telemedicine visits. Among Medicare beneficiaries, less than 1% have coverage for telemedicine (1). And of those who are fortunate enough to enjoy such coverage, particularly those in rural areas, Medicare often requires the beneficiary to already be at a clinic. So much for making healthcare more convenient.

But why is Medicare so resistant to reimbursement for telemedicine? There are two main reasons for this:

1. Congress believes that telemedicine would raise costs.

According to the Congressional Budget Office and its analysts, encouraging the use of telemedicine could increase Medicare expenses. Supposedly, giving seniors easy access to physicians will only encourage them to use more services without replacing costly trips to urgent care centers and emergency rooms.

However, the telemedicine industry claims the opposite: Connecting more beneficiaries with their doctors through telemedicine would lessen emergency care and office visits, which in turn would lower overall costs. Health experts agree; the American Medical Association, the American Academy of Family Physicians, and the American Hospital Association, among others, are calling for Congress to expand its acceptance of telemedicine in Medicare. For instance, seniors frequently miss follow-up appointments due to transportation issues. If telemedicine were an option, the follow-up visits would become more convenient, which would raise compliance.

Last year, an analysis conducted by consulting group Towers Watson found that telemedicine services could save $6 billion in healthcare costs each year (2). And a review of academic literature found that monitoring patients via telemedicine after chronic heart failure resulted in lower death rates by 15 to 56 percent, compared to patients who did not receive telemedicine monitoring (2). Clearly, telemedicine offers a way to increase the quality of care while reducing costs.

Hopefully, Congress will review this new evidence and act for the good of doctors and patients all across America.

2. Medicare policy lags behind technology, resulting in too many restrictions.

Medicare imposes unwieldy restrictions on the use of telemedicine. For instance, just this year, Medicare expanded coverage for the use of telemedicine for annual wellness visits and mental health services, but only if the beneficiary lives in certain rural areas and goes to a health clinic. Such limitations may be warranted in a pilot program, but telemedicine is already a mature industry, according to the studies cited above; why not allow more people to reap the benefits?

Interestingly, NASA relies on telemedicine to keep tabs on astronauts’ health, in addition to using onboard medical systems. If telemedicine is dependable enough for such long-distance healthcare, surely it can handle mere miles from a patient’s home to a doctor’s office.

Like any new technology, the potential offered by telemedicine is not addressed adequately by existing legislation.We need to continue to supply Congress with hard data showing the benefits and risks of telemedicine—where it works miracles and where it isn’t a great fit. This kind of honest assessment makes parity, reimbursement and meaningful use inevitable for a wide variety of telehealth technologies.

After all, telemedicine is just another tool in a doctor’s arsenal—not a replacement for physicians. If you would like to learn more about swyMed and our approach to live video medicine, contact us today!


(1) Galewitz, Phil. (June 24, 2015). Medicare slow to adopt telemedicine due to cost concerns. Retrieved from

(2) Mitchell, John W. (June 29, 2015). Study finds telemedicine still not widely embraced by Medicare. Retrieved from

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