A Comparison of Telemedicine and Office Visit Payments in a Commercially Insured Population

In recent years, commercial insurers have been slowly advancing coverage for telemedicine, raising questions regarding payment. Many states now have laws that address telemedicine reimbursement and as of 2019, 10 required full payment parity. Using a large commercial insurance claims database, this study conducted two natural experiments to better understand whether payment parity is effective in driving more telemedicine provision. Payments for common outpatient procedures provided by telemedicine and in offices during 2018-2019 were examined according to whether the service was subject to payment parity. For medical visits, evidence of payment incentives in promoting telemedicine was limited, and for psychotherapy telemedicine payments were comparable or greater than office visit payments. As telemedicine escalated during the COVID-19 peak and continues to grow beyond the pandemic, a valuable message is that payment parity laws may be a less effective strategy for encouraging telemedicine use than presumed by many state policymakers.