AMA Identifies a Digital Health Disconnect Among Payers

There is inconsistent adoption of digital health among commercial insurers, Medicaid and Medicare, according to new research conducted by Manatt Health for the American Medical Association (AMA). Researchers found that Medicare and Medicare Advantage plans cover all 21 digital medicine services that were assessed. But private health plans in Medicare Advantage program do not offer the same coverage in the commercial market. Coverage by Medicaid is more limited, though it has been expanding over time.

Jesse M. Ehrenfeld, M.D.

“While the United States has entered an era when digitally enabled care is integrated with in-person care, the potential of this hybridized care model is not yet fully realized,” said AMA President Jesse M. Ehrenfeld, M.D., M.P.H., said in a press release. “The lack of commercial coverage can be a roadblock or bottleneck to affordable access to digital medicine services for more than half the U.S. population who count on private health insurance. Barriers to clear and consistent coverage policies must be addressed for the pace of digital health progress in medicine to match the technology’s promising potential.”

To assess coverage policies, Manatt looked at CPT codes of 21 digital medicine services, including remote physiologic monitoring, remote therapeutic monitoring, electronic consultations, and electronic visits. They assessed 16 commercial plans, including Aetna, Cigna, Elevance Health, Regence Health, Tufts Health Plan and UnitedHealth Group, as well as several plans affiliated with Blue Cross Blue Shield.

The analysis found that traditional Medicare and Medicare Advantage plans provide coverage for the CPT codes studied. Within Medicaid, 34 states provide coverage for remote physiologic monitoring, according to The Center for Connected Health Policy.

But within the commercial market, there is an inconsistent adoption of digital healthcare, and there are various processes and timelines for adoption. Some plans have added strictions beyond what Medicare requires.

Most commercial payers cover remote physiologic monitoring, but coverage of electronic consults and electronic visits is less consistent. Additionally, commercial plans have different levels of transparency, which researchers said prevents patients and physicians from making informed decisions.

Additionally, physician use of digital health is low. The AMA analysis noted barriers to physician adoption. One barrier is that in order to be paid for physiologic monitoring and remote therapeutic monitoring, physicians must evaluate the technology that is supplied to patients to ensure it is accurate and reliable. Additionally, because of inconsistent coverage, physicians are hesitant to invest in the infrastructure to effectively use remote monitoring.

Researchers also found that health plans often partner with technology companies directly to provide digital health services for specific areas, such as hypertension, behavioral health, and physical therapy. But these are often not connected with patients’ primary care physician.

Despite coverage challenges and lowered investments, digital health is still seen driving the future of healthcare, and new companies are forming and technology acquisitions continue. For the first half of 2023, U.S. digital health startups raised $6.1 billion across 244 deals, according to Rock Health.

As a whole, digital health has struggled to gain traction after the gains made during the COVID-19 pandemic. But consultants at Rock Health believe Medicaid is one of the more promising areas for digital health. According to Rock Health’s 2022 Consumer Adoption of Digital Health survey, 80% of respondents with Medicaid as their primary insurance reported having used telemedicine. A small but growing number of digital health startups offering virtual or hybrid care delivery for Medicaid enrollees, often with a focus on key underserved patient communities such as women, children, or individuals with substance use disorders.