When the Centers for Medicare and Medicaid Services announced seven new codes for reimbursing telehealth services, the change was welcomed more or less universally in the healthcare realm.

Indeed, there’s little argument that it’s forward progress. The more services CMS covers, the thinking goes, the better equipped hospitals and doctors are to make patients healthier, not to mention happier, and to do so at a lower cost to everyone.

But that’s not the whole picture. A number of serious impediments remain. And reimbursement codes for telehealth only make sense in a few very specific cases, said Lars Kurkinen, a senior analyst at Berg Insight.

Technological diversity
National reimbursement codes can be very appropriate for certain use cases when the procedure in question is relatively standardized. Codes for remote consultations with general practitioners, for instance, make sense in the same way that there are reimbursement codes for regular office visits, Kurkinen said.

But the plot thickens when trying to encompass the large diversity of telehealth products and services available, and the differences in implementation have a major impact on the benefits that can be achieved in terms of cost efficiency and quality of care.

When a general reimbursement code is established, it typically includes a definition of the characteristics of the telehealth solution so that eligibility can be determined. A potential pitfall is that this can lead to situations where market mechanisms favor minimum viable products - for example, the least costly telehealth solutions that meet the eligibility criteria for reimbursement, Kurkinen said.

The challenge is that a 'minimum viable product' might not be the best choice, either for quality of care or cost-efficiency. Furthermore, this may stifle innovation, as market mechanisms drive telehealth technology vendors to develop solutions in line with the reimbursement eligibility criteria.

"The adverse effects that reimbursement can have on the market are often overlooked," Kurkinen said. "I’m not saying that ways around this can’t be found, just that establishing general reimbursement codes requires great caution, especially in immature markets where the technology and solutions still are developing at a fast pace."