Early in the Pandemic, Private Insurers Paid Similarly for Common Telehealth and In-Person Claims

Telehealth use surged with the COVID-19 pandemic as patients sought access to services while providers implemented social distancing protocols. 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. Alternatively, if telehealth encourages the use of more services, total spending could increase.

This analysis compare payments for physician medical service claims delivered via telehealth and in-person in 2020 using data from the Health Care Cost Institute (HCCI). It find that private insurers paid similarly for telehealth and in-person physician claims for evaluation and management and mental health therapy services, on average, in 2020. This is after accounting for variation across regions, providers, and severity level, among privately insured. Among providers who offered both telehealth and in-person care, a large share received similar payments for service provided in-person or through telehealth.

The analysis is available through the Peterson-KFF Health System Tracker, an online information hub that monitors and assesses the performance of the U.S. health system.

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