Telehealth use surged with the COVID-19 pandemic as patients sought access to services while providers implemented social distancing protocols. Early in the pandemic, many payers eased restrictions on the use of telehealth and increased reimbursement rates to encourage its use.
An ongoing question is how the growth of telehealth will affect health spending. If payers reimburse services provided through telehealth at a lower rate, there could be cost savings. Conversely, total spending could increase if telehealth services require more follow-up and are duplicative of in-person care.
In 2021, as was the case in 2020, private insurers continued to pay providers similarly for telehealth and in-person professional claims, on average. This is true for both evaluation and management and mental health therapy services. Among providers who offered both telehealth and in-person care, the vast majority of providers received similar payments regardless of whether the service was provided in-person or over telehealth.
Note: Average paid amount after controlling for variation across providers. Average paid amounts are for evaluation and management professional claims for established patients, severity level 3 (CPT code 99213) and mental health therapy professional claims for psychotherapy sessions, 60 minutes (CPT code 90837).
Source: KFF analysis of HCCI data
In 2021, the second year of the COVID-19 pandemic, private insurers continued to pay providers a similar amount regardless of whether that care was delivered in person or via telemedicine. For a mid-level severity evaluation and management of an existing patient, the average payment was $99 when delivered via telehealth and $98 for in-person care. This represents the average amount paid by the health plan combined with the out-of-pocket payment by the enrollee, after controlling for providers and regions (see methods for more detail). Evaluation and management claims are the most common claims included as part of an outpatient medical visit and cover the charge for a physician or qualified provider to diagnose and treat a patient. One encounter may include multiple evaluation and management claims, depending on the services rendered.
Note: Average paid amount after controlling for variation across providers. The CPT code for severity level 1 for new patients (99201) was deleted starting in 2021.
Source: KFF analysis of HCCI data
During the pandemic, telehealth became a key way by which people access mental health care, in particular. In 2021, most mental health therapy (54%) was delivered by telehealth. Before the pandemic, a small share of claims were delivered over telehealth.
Across all evaluation and management claims, which include physical and behavioral evaluation and management services, 11% of care was delivered via telehealth in 2021.
Note: Average paid amount after controlling for variation across providers.
Source: KFF analysis of HCCI data
For common mental health therapy claims, the average payment was about the same regardless of whether the service was delivered by telehealth or in-person in 2021, as was the case in 2020.
Higher severity or longer duration mental health therapy claims were delivered in-person and over telehealth at similar rates.
Note: Average paid amounts were compared within provider offering both in-person and telehealth care for evaluation and management established patient severity level 3 (99213) and psychotherapy 60 minutes (90837) claims. Numbers may not add to 100% due to rounding.
Source: KFF analysis of HCCI data
Among the overwhelming majority of providers offering the same service by telehealth and in-person, the average paid amount for claims delivered over telehealth was within plus or minus 10% of the payment for in-person claims. For 5% of providers offering other evaluation and management services and 10% of providers offering mental health therapy, the payment for telehealth was lower than in-person care by the same provider by at least 10%. Conversely, for about 1 in 10 providers, the payment for telehealth claims was more than 10% higher than that for in-person care by the same provider.
Note: A specialized telemedicine provider may include organizations such as Teladoc, Doctor on Demand, or MDLIVE. Among firms offering heath benefits, the plan with the largest enrollment at 87% of small firms (50-199 workers) and 96% of large firms (200 or more workers) cover telemedicine. Small firms have 50-199 workers and Large Firms have 200 or more workers. Percentages may not add up to 100% due to rounding.
According to the 2022 KFF Survey of Employer Health Benefits, most employers (59%) provide telemedicine coverage exclusively through their health plans or administrators. Large firms (32%) are more likely to use a specialized telemedicine provider than small firms (21%).
Note: Tests found no statistical difference for all other firms not in the indicated category within each firm size (p<.05). Among firms offering health benefits, the plan with the largest enrollment at 87% of small firms (50-199 workers) and 96% of large firms (200 or more workers) cover telemedicine. Small firms have 50-199 workers and Large Firms have 200 or more workers. Percentages may not add up to 100% due to rounding.
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