June 19, 2020 | Policy Cheat Sheet


By Matthew Ralls and Lauren Moran

The dramatic expansion of telehealth, and more specifically telemedicine, is allowing providers to safely serve patients at a distance while curbing the spread of COVID-19. In fact, the use of telemedicine has more than doubled across the U.S. in the last three months. Many stakeholders laud this expansion and are seeking more permanent use of telemedicine beyond the pandemic. Seema Verma, Administrator for the Centers for Medicare & Medicaid Services (CMS) recently noted “I can’t imagine going back,” suggesting that perhaps the genie is out of the bottle with regard to telehealth.

Yet, in rural communities, where it might seem that telehealth offers considerable promise, there is uncertainty about its effectiveness — both in responding to the pandemic and as a long-term solution to increasing access to care, especially for low-income Americans. Particularly now, as some rural communities are experiencing increases in the number of COVID-19-related cases and deaths, it is valuable to explore considerations for supporting telehealth in rural settings.

  • A quick note on rural health dynamics. Rural Americans face significant barriers that limit their access to health care, including geographic distances, lack of public transportation, and dire provider shortages. Over the last decade, more than 120 rural hospitals have closed, including 19 in 2019. Individuals in rural areas are also more likely to be unemployed and low-income, with approximately one in four covered by Medicaid. In addition to providing health coverage for a sizable segment of rural populations, Medicaid also finances a significant number of safety-net providers in these communities, including hospitals and rural health centers. 
  • What’s the telehealth landscape in rural America? The use of telehealth has grown in recent years, and rural health stakeholders have long seen telehealth as a potential solution for improving health care access in rural communities because it can reduce travel times and provide care in remote areas. However, reliable internet access is a prerequisite to telehealth services in non-metropolitan areas, where broadband (aka high-speed) internet often serves as a proxy for telehealth access in rural settings. It is estimated that approximately three-quarters of households in non-urban areas have broadband internet access, compared to 87 percent of urban households. 
  • Why is telehealth so appealing to providers in rural areas? Even before COVID-19, rural communities were losing providers, making telehealth increasingly appealing as a way to augment limited provider resources. Many rural hospitals are at risk of closing, plus recruitment is often difficult. Some efforts are seeking to increase provider capacity in rural areas through virtual initiatives, like Project ECHO. Furthermore, providers in rural communities, like many providers across the U.S., are typically compensated under a fee-for-service payment structure — which means lost revenue if they can’t see patients. There is also the added challenge that if, for example, a clinic in a rural area is forced to close, it is unlikely to be replaced, and thus individuals in a broad geographic area may lose access to essential providers. This very dynamic is playing out now across the nation due to the pandemic, increasing the risk of closure for some federally qualified health centers and rural hospitals.
  • What is Medicaid’s approach to telehealth during COVID-19? Prior to the pandemic, all state Medicaid programs paid for some type of telehealth services (e.g., video) but there was — and remains — variation in how telehealth is defined, implemented, and regulated. In response to COVID-19, most Medicaid programs expanded access to telehealth for beneficiaries through emergency policies such as loosening restrictions around “audio-only” services and allowing home access for telemedicine services. Similarly, CMS recently issued guidance reinforcing state Medicaid programs’ flexibility to increase telehealth services. The guidance eliminates the need for federal approval for states to reimburse telehealth services at the same rate as face-to-face services (i.e., payment parity). Also, states are relaxing their licensing requirements, allowing providers to see patients across state lines.
  • Why does this matter? Medicaid is essential to rural health care systems. Therefore, rural stakeholders should consider several potential impacts from these recent telehealth policy changes. First, the policy changes may reduce some access barriers by increasing telehealth opportunities and easing rules around out-of-state provider licensing. This can help expand access for individuals with complex health care needs who live in rural areas. For example, substance use disorder treatment providers can now offer virtual support services and allow buprenorphine treatment to begin without an in-person visit, which was historically challenging. Second, loosening restrictions around what qualifies as a reimbursable service — such as allowing for audio-only or text-based services — and allowing payment parity can provide a revenue stream for safety-net providers who are hit particularly hard by the pandemic. However, given impending state budget deficits and decreasing tax revenues, there is a possibility that payment parity will add to budgetary woes. Additionally, some stakeholders are concerned that patients’ lack of familiarity with telehealth technology or broadband access gaps will limit the spread of telehealth in rural communities.
  • Will it work? It’s still early to assess recent telehealth policy changes, although anecdotal data suggest a substantial increase in uptake by providers, and the majority of states have implemented policies that increase access and payment for telehealth. Providers, regardless of whether they are situated in a rural setting, are also seeing no-show rates decrease. However, some challenges persist. Broadband access continues to be an issue for rural Americans regardless of changes around licensing, payment parity, or reimbursable services. Federal funding to increase broadband access will likely be required to sustain changes, and the CARES Act included $200 million to increase telehealth access. Pre-COVID-19, the Federal Communications Commission also announced over $20 billion in funding to broadband access in rural communities.
  • What’s the bottom line? Rural communities have historically faced challenges accessing care. In many ways, the federal and state response to support telehealth during the pandemic aligns with what rural stakeholders were already advocating for pre-pandemic — to increase health care access in a rural setting and respond to growing provider shortages. While there are some early measures indicating increased uptake, longstanding barriers around internet access and patient comfort with telehealth technology persist. When the pandemic begins to wane, states and the federal government will be tasked with determining how to sustain the benefits of telehealth for the long-term.