Before the COVID‑19 pandemic, most OECD countries allowed at least some form of telemedicine, but policies on remote care services effectively disincentivised their use. After the start of the pandemic, governments quickly adopted new policies to promote the use of telemedicine, essentially mainstreaming, and partly or fully paying for, remote care services. This chapter provides a detailed overview of how telemedicine services are regulated and financed across OECD countries, both before and during the pandemic. The chapter calls attention to the fact that, in around a third of OECD countries, changes to the regulation and financing of telemedicine services are temporary, and that it is possible that, despite significant demand from patients for remote care services, these may soon become unavailable or, as before the pandemic, subject to strict regulations.
The COVID-19 Pandemic and the Future of Telemedicine
2. The regulation and financing of telemedicine in the OECD, before and during COVID‑19
Abstract
Before the COVID‑19 pandemic, most OECD countries allowed at least some form of telemedicine. However, policies varied widely regarding the types of telemedicine allowed, the funding and provider payment schemes used, requirements in terms of distance between participants, eligibility of health workers and patients to participate, patient consent, and integration with traditional in-person health care services (Oliveira Hashiguchi, 2020[1]). As discussed in the previous chapter, after the start of the pandemic, governments quickly adopted new policies to promote the use of remote care, essentially allowing, and partly or fully paying for, telemedicine services. Consequently, telemedicine services have become more widely available across OECD countries. This is not to say that there has been a homogenisation of regulations concerning care delivered via telemedicine across countries. There are still meaningful differences in how remote care is organised, regulated, and financed across the OECD.
While there are certainly benefits to decentralisation (e.g. telemedicine services that are more patient-centred and designed to fit the needs of local communities), countries with decentralised governments and devolved responsibilities face unique challenges in the promotion and use of telemedicine services. These include limited central government legislative and regulatory powers, as well as narrow visibility of the utilisation of services at local levels of government (see Box 2.1).
Box 2.1. Subnational variation in how telemedicine is regulated, funded, and delivered in decentralised countries can create administrative challenges for central governments
Decentralisation is a key characteristic of many OECD health systems, with subnational governments often responsible for the delivery and financing of health services. Australia, Canada, Germany, Spain, and the United States all devolve some regulatory authority to regions, provinces, and states. While decentralisation can have benefits, it can also create administrative challenges. It can be difficult for central governments to have visibility into the collection and reporting of data on telemedicine use, as well as to understand what types of telemedicine services are available and what restrictions are in place. In Canada, for instance, provinces and territories have primary jurisdiction over the administration and delivery of health care, so that policies, guidelines, and regulations will differ from province to province. As such, answers from Canada to the OECD Survey on Telemedicine and COVID‑19 are based on information and data available for one or more jurisdictions, and they are not representative of every Canadian jurisdiction. In the United States, the specificities of telemedicine regulation differ from state to state. In Austria, Israel and Switzerland, information and data on telemedicine services are collected by regional authorities or insurance providers and are not always available to central governments.
Note: See OECD (2019[2]), Making Decentralisation Work: A Handbook for Policy-Makers, https://doi.org/10.1787/g2g9faa7-en, for a more detailed discussion of the benefits and risks of decentralisation.
2.1. Although questions remain regarding jurisdiction and medical liability, since the start of the pandemic more health workers can perform teleconsultations
In most countries that participated in the OECD Survey on Telemedicine and COVID‑19, regulations regarding patient consent and responsibility for deciding whether a teleconsultation is appropriate have not changed after the start of the COVID‑19 pandemic (see Figure 2.1 and Figure 2.2). Since the start of the pandemic, three more countries (Hungary, Luxembourg, and the United States) joined a majority of countries stating that it is the sole responsibility of the health care worker to determine whether a teleconsultation is appropriate. Three countries (Estonia, Hungary and Luxembourg) joined a majority of countries requiring that patients give their written or oral consent before participating in teleconsultations. In all 28 countries who responded to this part of the questionnaire, in-person appointments are not required after a teleconsultation (which was not the case in Lithuania pre‑pandemic; see Figure B.1 in Annex B). In 23 countries, provider-to-provider telehealth services are allowed (only Estonia and Mexico do not allow these; see Figure B.1 in Annex B).
Since the start of the pandemic, three countries (Germany, Hungary and the United States) joined another ten countries in allowing group teleconsultations to be performed, for example such as for pulmonary rehabilitation or cognitive behavioural therapy (Banbury et al., 2018[3]). The most significant change has been in allowing health care workers other than doctors (such as nurses, for example) to perform teleconsultations. Six countries (Estonia, Germany, Iceland, Luxembourg, Portugal and the United States) have changed their policies on which medical staff can perform teleconsultations since the start of the pandemic, bringing the total number of countries allowing teleconsultations to be performed by health workers other than doctors to 23 countries.
Despite the rapid adoption of policies to promote the use of telemedicine, just over half of countries participating in this part of the survey (17 out of 30 countries) state that jurisdiction and medical liability in telemedicine services are well established and clear (see Figure 2.2). In Belgium, for example, legislation is still developing and the growth in teleconsultations has been driven by changes to provider payment. In New Zealand, jurisdiction and liability in the context of telemedicine services are open to interpretation. While this may give providers some freedom, it also leads to uncertainties and may make it difficult for some providers to offer remote care services. One example is the notion that the quality of care delivered by telehealth services should be the same as in an in-person interaction, a requirement that is often difficult to assess.
In Canada, a review of licensing requirements for physicians providing virtual care, which are determined at the provincial and territorial level by regulatory authorities, found that differences in requirements across provinces may make it difficult to provide care for patients across Canadian borders (Sweatman and Laviolette, 2021[4]; CMA, CFPC and RCPSC, 2022[5]). While there have been discussions in Canada regarding a pan-Canadian license, such a licensing arrangement is not currently available and provinces such as Ontario require that physicians providing virtual care be licensed with the College of Physicians and Surgeons of Ontario (there is room for the provision of virtual care from an unregistered physician if this is considered in the patient’s best interest). The situation is similar in the United States, where most states temporarily accepted licenses from other states to allow COVID‑19 telehealth services, but many such waivers are now or soon expiring.
Figure 2.1. More health care workers, besides doctors, can now perform teleconsultations
Note: Agreement with statements is shown for both before March 2020 (i.e. before the start of the pandemic) and after March 2020 (i.e. after the start of the pandemic). Finland did not respond to this section of the survey.
Source: OECD Survey on Telemedicine and COVID‑19 (2022).
Figure 2.2. A third of countries do not consider that jurisdiction and medical liability in telemedicine services are well established and clear, even after the start of the COVID‑19 pandemic
Note: Agreement with statements is shown for both before March 2020 (i.e. before the start of the pandemic) and after March 2020 (i.e. after the start of the pandemic). Finland did not respond to this section of the survey.
Source: OECD Survey on Telemedicine and COVID‑19 (2022).
2.2. More funding for telemedicine since the start of the COVID‑19 pandemic
Both before and throughout the COVID‑19 pandemic, in more OECD countries key purchasers use fee‑for-service to pay providers of telemedicine services than use global budgets (see Figure 2.3).
Figure 2.3. Fee‑for-service is the preferred model to pay for telemedicine services in the OECD
Note: Agreement with statements is shown for both before March 2020 (i.e. before the start of the pandemic) and after March 2020 (i.e. after the start of the pandemic). Austria, Canada, Iceland, Slovenia, Sweden and Türkiye did not respond to this section of the survey. * Answers for England are for Secondary Care only, and for General Practice the answers are “yes” as these services are provided by GPs that are funded by the government.
Source: OECD Survey on Telemedicine and COVID‑19 (2022).
Since the start of the pandemic, in 16 OECD countries, key purchasers of telemedicine services use fee‑for-service to pay providers, compared to seven OECD countries where key purchasers use global budgets. In Belgium, Germany, Japan, Portugal, and the United States, key purchasers use both fee‑for-service and global budgets to pay providers of telemedicine services. This is not uncommon since, as highlighted by Estonia, telemedicine is an umbrella for different types of services, for which financing can vary significantly. In England, only the financing of telemedicine used in the context of secondary care has changed after the start of to the pandemic. Since general practitioners that are funded by the government provide primary care, telemedicine services were and are covered by government financing schemes before and after March 2020. In secondary care, the funding of telemedicine services has been mostly financed through voluntary schemes and out-of-pocket payments before the pandemic, and only changed to government/compulsory financing after the start of the pandemic.
In Australia, Medicare – a national insurance scheme that pays for some or all the costs of necessary health care – is the key purchaser of telemedicine services. The Medical Benefits Schedule under Australia’s Medicare, through which most of the funding for medical practitioner and allied health professional services is provided, is for the payment of patient rebates. Health professionals may choose to accept the value of the rebate as the sole payment for a service by bulk billing, or they can charge a co-payment. Health professionals are free to determine their fees and are private businesses that are directly responsible for their own revenue, and the selection of services they offer. In the Czech Republic, there is no systematic approach to assessment and classification of telemedicine services for reimbursement. In Norway, a combination of capitation and global budgets is used.
In Belgium, Hungary, Korea and Latvia, before the COVID‑19 pandemic, there were no government payments for telemedicine service providers. All four countries introduced new mechanisms to pay for telemedicine services, including both global budgets and fee‑for-service. In Latvia, both global budgets and fee‑for-service are used to pay telemedicine providers. Fee‑for-service is used by key purchasers to pay for teleconsultations provided by general practitioners and some specialists, while global budgets are used by specific specialists (e.g. specialists providing care for patients with rare diseases, patients with cystic fibrosis, children with mood disorders, among others). In Finland, Israel, and the Netherlands, telemedicine service providers are paid through the same mechanisms that are used to pay providers for in-person care.
In most reporting countries (13 out of 25 countries), telemedicine services are classified for payment using national procedure classification systems (see Figure B.2 in Annex B). In 12 countries, telemedicine services are classified for payment using current procedural terminology, and in five countries ICD‑9‑CM is used to classify telemedicine services for payment (in Norway, ICD‑10‑CM is used, in Costa Rica, ICD‑10 is used, and Lithuania uses ICD‑10‑AM). In more than a third of reporting countries (Czech Republic, Estonia, Hungary, Israel, Latvia, Lithuania, New Zealand, Norway, Poland, and the United States) multiple classification systems are used, while Belgium, Finland, Germany, Ireland, the Netherlands and Portugal reported that neither one of the mentioned classification systems is used in their country to classify telemedicine services for payment. In Switzerland, telemedicine service providers seeking coverage from compulsory health insurance must negotiate with payers; and reimbursement schemes, procedural terminology and classification systems may all vary across services. Agreements are typically confidential and are thus outside the purview of the Swiss Federal Office of Public Health.
2.2.1. Countries used financial incentives to boost telemedicine during COVID‑19
A number of countries adopted financial incentives to promote the use of telemedicine services after the start of the COVID‑19 pandemic, from introducing payment parity with equivalent in-person care (i.e. paying for telemedicine and equivalent in-person services at equal rates), to additional fees for teleconsultations and payment add-ons to separately reimburse ancillary costs (e.g. technical support, equipment, connectivity) associated with providing telemedicine services (see Figure 2.4). In five countries (Australia, England, Finland, France and the Netherlands), there was payment parity between telemedicine services and equivalent in-person care before March 2020. After the start of the pandemic, five more countries (Hungary, Korea, Norway, Poland, and the United States) introduced payment parity. In most countries (13 out of 25 countries), however, there is no payment parity.
Figure 2.4. Some countries used financial incentives to promote telemedicine during COVID‑19
Note: Agreement with statements is shown for both before March 2020 (i.e. before the start of the pandemic) and after March 2020 (i.e. after the start of the pandemic). Austria, Canada, Slovenia and Sweden did not respond to this section of the survey. Payment parity means paying for telemedicine and equivalent in-person services at equal rates.
Source: OECD Survey on Telemedicine and COVID‑19 (2022).
More than half of reporting countries noted that cost-sharing for telemedicine services is similar to cost-sharing for equivalent in-person services both before the start of the pandemic (14 out of 25 countries) and after (16 out of 25 countries). In the United States, the COVID‑19 public health emergency waivers allowed federal and state governments as well as private payers to encourage the use of telehealth through reduced patient cost-sharing. In Belgium, the extent of cost-sharing depends on the kind of health care provider. There are plans to introduce new cost-sharing arrangements for teleconsultations to limit the difference between remote and in-person consultations. In New Zealand, hospital based public health services are free, so that telemedicine outpatient visits, in-hospital telemedicine support, and the National Telehealth Service are free to all New Zealanders (and in the case of the National Telehealth Service, free to all residents). Primary care services, on the other hand, have a co-payment, which depends on the primary health organisation and is differentiated by age and income. Private specialists and Allied Health professionals set their own costs but generally, the cost of an in-person consultation and a specialist appointment are similar.
In five countries (Australia, Germany, Iceland, Israel and Portugal), there were financial incentives for providers to offer telemedicine services even before the COVID‑19 pandemic. In Portugal, from 2013 onwards, hospital teleconsultations contracted nationally with National Health Service hospitals were priced at a 10% higher rate than in-person consultations. In Germany, there was an additional fee that providers received for video consultations between October 2019 and September 2021. This additional fee was eligible for each video consultation if the medical practice had at least 15 video consultations in a quarter, with a capped budget for a medical practice of 50 video consultations per quarter. After March 2020, financial incentives to telemedicine providers were also adopted in Estonia, Korea, Norway, Poland, and the United States. Australia expanded the range of telemedicine services subsidised on a fee‑for-service basis to enable GPs, specialists and other providers to maintain care for patients during the pandemic and temporarily doubled the incentive fee payable for GPs to see certain categories of patients without any upfront cost. Furthermore, there were two additional temporary incentive payments established to provide further incentives for GPs to see patients at risk of COVID‑19 without any upfront cost. However, in most reporting countries (15 out of 27 countries), there are no financial incentives for telemedicine service providers.
Eight countries already had payment add-ons to separately reimburse ancillary costs (e.g. technical support, equipment, connectivity) associated with providing telemedicine services before the COVID‑19 pandemic. After the start of the pandemic, three more countries (Estonia, Ireland, and the United States) began paying for ancillary costs separately. In France, for example, health insurance finances the equipment of certain health care professionals (e.g. doctors and nurses), via a fixed sum (EUR 350), so that they can carry out telemedicine services. In almost half of reporting countries (11 out of 26 countries), there are neither financial incentives nor payment add-ons offered to telemedicine providers, even after the start of the pandemic.
Since the start of the COVID‑19 pandemic, in 10 countries (out of 28 reporting countries) prices for telemedicine services are set unilaterally by payers, while in 13 countries prices for telemedicine services are negotiated between payers and providers (see Annex B, Figure B.3). In the United States, prices can be both set unilaterally and negotiated. There have not been many changes in how countries set prices for telemedicine services since the start of the COVID‑19 pandemic.
2.3. In more than half of reporting countries, telemedicine policies introduced at the start of the pandemic are temporary and may end up being reversed
In 16 reporting countries (out of 29 countries) changes to regulations are temporary and subject to ongoing or periodic review, while in 12 countries changes in financing were or are temporary and may be subject to review. In Austria, temporary regulations have been extended multiple times since the onset of the pandemic. In Korea, the use of teleconsultations is strictly limited to exceptional situations such as pandemics and is a temporary service put in place to prevent the spread of infectious diseases in hospitals. In eight countries (Belgium, Costa Rica, Czech Republic, Hungary, Iceland, Lithuania, Mexico, and the United States), work is ongoing to assess and develop frameworks for legislating and regulating the use of telemedicine services. In Costa Rica, for example, a technical group has been formed to work on long-term telemedicine policies. In the Czech Republic, work on the legislation of telemedicine is part of the national COVID‑19 Recovery and Resilience Plan and was expected to start in 2022. In Mexico, different initiatives are seeking to reform the General Health Law or to establish a Digital Health Law. Although they have not yet been approved, they have been influential since the start of the pandemic.
Many regulatory changes were initially introduced as a temporary response to the COVID‑19 pandemic (see Box 2.2 for a discussion of changes in the United States). In six countries (Estonia, France, Israel, Luxembourg, Portugal and Türkiye) at least parts of the regulations published after March 2020 are or have become permanent. In Estonia, teleconsultations were implemented temporarily during the first COVID‑19 wave in March 2020 but were made permanent as of September 2020. In France, the requirement that patients could only consult a provider via telemedicine if they had seen that provider in-person before was dropped during the pandemic, and eventually permanently removed. Türkiye, where teleconsultations were not allowed before the pandemic, has also permanently adopted the legislative and regulatory changes made after March 2020, although these may be adapted depending on future situations. Australia, England, Estonia, Lithuania, Luxembourg, Poland and Türkiye have all made changes to financing and/or provider payment mechanisms permanent, while in Switzerland, some changes have been made permanent but others have not. In Canada, the provinces and territories have primary jurisdiction over the administration and delivery of health care, which includes financing, so that changes and whether they are permanent or temporary vary by jurisdiction (see Box 2.1).
Box 2.2. Financing and provider payment of telemedicine in the United States
Before the COVID‑19 pandemic, telemedicine services were offered on a limited scale and key purchasers of remote care services set important restrictions. The federal Medicare programme restricted interactive telehealth to rural areas and required patients to be in a health care facility. State Medicaid programmes had site and visit type restrictions. Generally, private payers closely follow Medicare policies, although there is some variation across the country and across payers. Pre‑pandemic, practitioners were required to be licensed in the state they practice as well as the state where the patient is located. Private insurers may have contracted national telehealth platforms at negotiated prices to offer telemedicine services to their enrolees, but few networks of health care providers would offer telehealth visits to patients. Telehealth visits were not always paid at the same rate as equivalent in-person visits.
During the pandemic, public health emergency waivers allowed federal and state governments, as well as private payers, to encourage the use of telehealth through reduced patient cost sharing, provider payment parity, provider grants for setting up telehealth capabilities, and by relaxing previous restrictions on telemedicine use. Payment parity with equivalent in-person visits was introduced to ensure continued access to care, and pre‑pandemic restrictions on licensing were relaxed or waived.
Today, there is a range of financial arrangements in the United States. Health plans with capitation may offer contracted telehealth services as part of member benefits paid through premiums. Providers in value‑based payment arrangements may offer telehealth as part of their capitated payment arrangement, or as part of savings from reducing total costs of care. However, the limited use of telehealth pre‑pandemic among these providers suggests this was insufficient incentive to offer telehealth. Telehealth financing and coverage waivers are temporary for Medicare and Medicaid. The continuation of some of the flexibilities (e.g. removal of geographic/home restrictions, practitioner type, types of services eligible for telehealth, audio‑only visits) are currently under consideration to be made permanent through federal legislation for Medicare and Medicaid, as well by states, after the end of the public health emergency.
Source: OECD Survey on Telemedicine and COVID‑19 (2022).
COVID‑19 waivers, once lifted, may introduce some barriers to continued use of telemedicine services. In the United States (see Box 2.2), once the end of the COVID‑19 Public Health Emergency is declared, the Health Insurance Portability and Accountability Act (HIPAA) waiver – which allows health care providers to use “non-public facing” remote communication products (e.g. Zoom, FaceTime, Skype, Google Hangouts) – may reduce or stop telehealth services if a HIPAA compliant software cannot be afforded and if payment parity is challenged.
References
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[5] CMA, CFPC and RCPSC (2022), Virtual care in Canada: Progress and potential - Report of the virtual care task force.
[2] OECD (2019), Making Decentralisation Work: A Handbook for Policy-Makers, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/g2g9faa7-en.
[1] Oliveira Hashiguchi, T. (2020), “Bringing health care to the patient: An overview of the use of telemedicine in OECD countries”, OECD Health Working Papers, No. 116, OECD Publishing, Paris, https://doi.org/10.1787/8e56ede7-en.
[4] Sweatman, L. and C. Laviolette (2021), Telemedicine in Canada: what health care providers need to know, BLG, https://www.blg.com/en/insights/2021/06/cross-canada-virtual-care-licensure-requirements-and-best-practices (accessed on 16 May 2022).