New Jersey to Embrace Only Part of Telemedicine’s Promise

Telemedicine is projected to exponentially grow through 2020, according to a recent report from Jackson Healthcare. But only if local governments allow it. Fortunately, New Jersey has begun to embrace telehealth services, though not without caveats.

The New Jersey Senate’s health committee unanimously approved a bipartisan bill late last month that would allow the growth of telemedicine, that is, the use of technology to provide healthcare remotely. According to the American Telemedicine Association, while New Jersey residents already use telemedicine, the state has no laws specific to the service. The legislation would rectify this and expand telemedicine’s use by laying the framework for how it must be practiced and compensated. The Senate Budget and Appropriations Committee will be next to review the bill, and they need to keep the parts of the bill that will make telemedicine accessible while amending the bill to take advantage of the service’s other promise: affordability.

The bill would allow patients to establish relationships with doctors remotely, eliminating the need for an in-person examination under most circumstances. The major exception would be when doctors need to prescribe “controlled dangerous substances”.

Further, the bill defines the originating site in comprehensive enough terms for patients to use telemedicine in home settings. That’s a big deal since some states such as Arkansas narrowly define the “originating site” and limit patients to receiving telemedicine in a healthcare setting.

The whole point of telemedicine is that it increases accessibility and lowers costs, so it wouldn’t make sense to restrict it to a clinic setting. After all, a patient can teleconference with her physician as effectively from home – a critical option for patients who have limited access to transportation or need immediate advice but not necessarily an emergency room visit.

One of the bill’s sponsors, Republican Sen. Diane Allen, explained it well:

“Telemedicine is especially vital for patients who suffer from chronic illness, seniors who are homebound, and families who live in rural areas where they would have to travel very far to receive medical care. No one should have to choose between paying for groceries and traveling to see a doctor. By legalizing telemedicine, we can bring the cost of healthcare down and expand access to a variety of health services for millions of new patients."

However, while lowering costs is part of its intent, the bill would also require insurance companies to compensate providers at the same rate whether an appointment is conducted remotely or face-to-face. This doesn’t make sense.

The requirement is meant to incentivize providers to offer telemedicine, but it kills savings for the patient. Given that telemedicine reduces costs for providers because they don’t have to provide office space, lower compensation for providers should at least be an option if payers and providers choose to negotiate it.

Indeed, only seven states have a similar requirement even though 31 have telemedicine legislation. Telemedicine has been shown to reduce cost for patients, so why prevent it from doing so? Moreover, a more open market will incentivize providers to be as cost-effective as possible when providing telemedicine rather than relying on government-mandated rates.

This could, in turn, further reduce costs for patients, and the less telemedicine costs, the more likely patients are to use it instead of turning to less reliable sources for medical advice.

When the Senate Budget and Appropriations Committee reviews — and hopefully approves — the bill, they should keep telemedicine available for the homebound and amend the bill to let providers and payers negotiate compensation for telemedicine on their own without intervention.

After all, more flexible, affordable, and accessible healthcare helps everyone.