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Sustainability Strategies for Rural Telehealth Programs

There are several different strategies for sustaining telehealth programs that may be useful for rural healthcare systems and providers. The Rural Community Health Toolkit also provides information about general Sustainability Strategies and Sustainability Strategies for Specific Issues. Additional information about funding for rural telehealth projects and systems can be found in the Telehealth Use in Rural Healthcare topic guide.

Reimbursement for Telehealth Services

Several rural telehealth programs rely on reimbursements from Medicare, Medicaid, and private insurers to finance telehealth services.

Medicare requires the “originating site” of telehealth, which refers to the location of the Medicare beneficiary at the time they receive telehealth services, to be a county outside of a Metropolitan Statistical Area (MSA) or to be a rural Health Professional Shortage Area (HPSA) located in a rural census tract. The Health Resources and Services Administration's Medicare Telehealth Payment Eligibility Analyzer tool can help communities determine their eligibility for Medicare reimbursements. CMS provides guidance to clarify reimbursement policies for Medicare fee-for-service providers. CMS also developed a booklet called Rural Providers and Suppliers Billing.

Medicaid and private payer reimbursement rates vary widely from state to state. The Center for Connected Health Policy monitors current state laws and reimbursement policies and provides a report on state telehealth laws and reimbursement practices.

When planning for long-term sustainability, rural communities should be aware of the following considerations for reimbursements:

  • Parity laws at the federal and state level determine whether telehealth visits are reimbursed at the same rate as in-person visits.
  • Payers may place different restrictions on the originating site for telehealth services. Rural programs should assess whether originating site restrictions will allow them to provide telehealth services outside of healthcare settings, such as in patients' homes or in schools.
  • Payers may also limit reimbursements for certain telehealth applications. For example, some payers may only reimburse live-video telehealth consultations, while others may also fund store-and-forward and remote patient monitoring services.
  • Reimbursement restrictions on provider type also vary from state to state. Eligible providers may include physicians, advanced practice clinicians, and other licensed healthcare workers.

The American Telemedicine Association provides a state-by-state breakdown of coverage and reimbursement gaps. The regional Telehealth Resource Centers also provide information about reimbursement in specific states.

Value-Based Payment Mechanisms

Some rural communities are financing telehealth programs through value-based payment mechanisms, such as accountable care organizations (ACOs), that value quality over volume of care. These programs seek to use telehealth to achieve quality, outcome, and cost targets, including reductions in hospital readmissions, lengths of stay, and transfers to larger care centers. For example, Oregon's Coordinated Care Organizations (CCOs) receive global budgets to integrate physical, behavioral, and dental healthcare for members. CCOs have invested in several telehealth initiatives to improve the health of Oregonians, including telemental health services, remote patient monitoring, and telementoring.

Telehealth User Fees

A key feature of telehealth is connecting rural sites to remote providers and specialists. Some rural sites contract directly with a remote provider who can offer telehealth services. Other rural programs pay user fees to subscribe to a telehealth center, which is typically located in a larger hospital or academic medical center. The fees to connect to these telehealth services can strain facilities with limited budgets. Considerations for rural programs seeking to make the case for investing in telehealth user fees include:

  • Staffing flexibility – Telehealth allows some rural facilities to implement less expensive or more feasible staffing models. For example, some Critical Access Hospitals may have difficulty recruiting qualified physicians to staff emergency departments in rural locations. These hospitals may choose to instead recruit advanced practice nurses to staff emergency departments while using telehealth to enable access to remote case consultations and telementoring.
  • Return on investment – Rural communities can consider if the return on investment from telehealth services justifies the cost of paying for consulting fees. Factors that may affect return on investment include increased revenue from keeping patients in the community and billing for encounters. Programs may also consider cost reductions associated with traveling for professional development and conducting recruitment activities.
  • Alignment with mission of the facility or organization – Some rural programs may consider how telehealth allows them to work towards the mission or vision of their organization by improving quality of care, access to care, health outcomes, or patient satisfaction.

Working with Payers and Policymakers

Some rural communities may choose to work directly with policymakers, Medicaid officials, and private insurers to make changes to reimbursement policies and achieve long-term sustainability for their telehealth programs. Rural programs may consider approaching insurers to determine if they can use telehealth to achieve shared goals for improving outcomes and decreasing costs. For example, a private health plan interested in reducing diabetes-related hospitalizations might be willing to fund a remote patient monitoring program to improve patient self-management. The South Carolina Telehealth Alliance encourages partners to meet with payers to offer telehealth solutions for high-cost issues.

Rural programs may need to build relationships with state medical and pharmacy boards in order to address additional factors that affect telehealth sustainability, including regulations for licensure and certification. Rural programs may also consider joining or establishing coalitions in order to mobilize diverse stakeholders to support telehealth policies.

Resources to Learn More

Barriers and Facilitators for Sustainability of Tele‐Homecare Programs: A Systematic Review
Examines barriers and enabling factors related to sustaining tele-homecare programs for chronic disease management in home health nursing agencies.
Author(s): Radhakrishnan, K., Xie, B., Berkley, A., & Kim, M.
Citation: Health Services Research, 51(1), 48-75
Date: 6/2015

Telehealth Service Implementation Model (TSIM™): A Framework for Telehealth Service Development, Implementation, and Sustainability
Describes how to establish an open-access telehealth network. Discusses four stages of operational maturity with examples from South Carolina.
Organization(s): MUSC Telehealth Center of Excellence
Date: 2021

Electronic Consult Reimbursement Roadmap
Describes state of reimbursements for eConsults and store-and-forward services. Discusses future opportunities for CMS and state programs to support eConsult and offers recommendations to engage eConsult stakeholders in discussions regarding reimbursement, incentives, and pilot programs.
Organization(s): Blue Shield of California Foundation, Center for Connected Health Policy, BluePath Health
Date: 3/2016

Facilitating Telemedicine Project Sustainability in Medically Underserved Areas: A Healthcare Provider Participant Perspective
Describes factors affecting the long-term sustainability of teleconsultation projects from the perspective of providers. Discusses how project design can address these factors.
Author(s): Paul, D.L. & McDaniel Jr., R.R.
Citation: BMC Health Services Research, 16, 148
Date: 2016

Telehealth Private Payer Laws: Impact and Issues
Analyzes the body of state-level telehealth reimbursement policies and the impacts on telehealth utilization. Covers information on payment parity laws, modalities, site restrictions, Medicaid policies, and more.
Organization(s): Center for Connected Health Policy, Milbank Memorial Fund
Date: 8/2017

The State and Sustainability of Telepsychiatry Programs
Examines the sustainability of telepsychiatry programs to identify current practices and trends. Discusses factors contributing to successes and challenges of telepsychiatry programs.
Citation: Journal of Behavioral Health Services & Research, 43(2), 305-318
Date: 4/2016