Telehealth saw a significant boom during the COVID-19 pandemic out of necessity, with estimates showing a 766% increase in telehealth utilization during the first three months of the shutdown. In order to keep it as a sustainable practice, bipartisan governmental protections followed: CMS issued emergency waivers expanding access to care across alternative delivery channels, and virtual visits rapidly became a standard of practice across nearly every specialty. For patients and physicians alike, this was monumental to maintaining continuity of care when in-person visits were impossible.
Federal Protections Were Built to Expire
Many of these protections, however, were temporary by design. While some provisions remain active, they have been preserved solely through a series of legislative extensions, acting as stopgap measures rather than permanent policy. Federal efforts focused primarily on access: expanding which services could be delivered via telehealth, and to whom. What they did not address was payment. Reimbursement parity, the principle that a service should be paid the same regardless of whether it is delivered in-person or virtually, was largely left off the table at the federal level.
Why State Parity Laws Can't Solve a Federal Problem
That gap has been partially addressed at the state level, though inconsistently. Roughly half of U.S. states have enacted telehealth payment parity laws requiring that insurers reimburse telehealth services at rates equivalent to in-person care. These laws represent meaningful progress toward normalizing virtual care as a legitimate and financially sustainable modality. However, these exist within a limited scope: state parity mandates apply to government insurance programs. There are no analogous obligations for commercial payers, which fall outside state jurisdiction on this issue. Moreover, even where these laws exist, the Employee Retirement Income Security Act (ERISA) preemption exempts self-funded employer plans, leaving the majority of privately insured Americans outside their reach entirely. Private insurers retain the discretion to reimburse telehealth at whatever rate they choose.
The Financial Penalty for Doing What's Best for Patients
This matters enormously, because commercial payers are where healthcare revenue is made. With the bulk of physician income derived from private insurance, the absence of commercial parity creates a direct financial disincentive to deliver virtual care. Providers offering telehealth for the same clinical service are effectively penalized at the billing level — not because the care is less complex, but because the channel is different. This misalignment is particularly consequential for the patients who stand to benefit most from telehealth: those in rural geographies, those with limited mobility, and those in lower socioeconomic conditions for whom an in-person visit carries significant logistical burden.
As Trek Health’s Transparency in Coverage data includes granularity such as Place of Service associated with each billing code’s negotiated rates, we were able to investigate commercial payer differences for identical billing codes across office and telehealth settings for Aetna, BCBS, Cigna, and UnitedHealthcare. Be on the lookout for our findings – later this week we’re coming back with what the data shows about telehealth reimbursement.
