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March 13, 2019

In February, the American Hospital Association (AHA) issued a statement in favor of boosting telehealth and telemedicine use for rural hospitals. This includes improved reimbursement programs and financial support through the Centers for Medicare and Medicare Services (CMS), as well as access to reliable infrastructure.

Rural hospitals are key points of care in the communities they serve and are often the only care facility accessible to patients in remote areas. Patients living in rural regions don't have many options when it comes to shopping around for the right care facility or provider, and those who frequent their local hospitals may form close personal connections with the staff that improve trust and engagement. However, rural hospitals are closing at an alarming rate due to lack of resources and dwindling patient populations, leaving patients at risk without access to early or consistent medical intervention.

Telehealth and telemedicine are methods by which healthcare providers (HCPs) are hoping to bolster their care offerings and ensure rural patients have access to necessary and specialized healthcare services. Though the terms are often used interchangeably, there are subtle differences between the two. Telemedicine refers to the remote delivery of healthcare services and consultations. Telehealth is a broader reference that includes non-clinical care offerings like provider trainings, remote meetings, and educational services.

Most people think of telehealth as a video call with a physician or care provider, much like how one would use FaceTime or Skype. Telehealth services can also take other forms, such as:

  • Remote patient monitoring
  • Mobile health (mHealth) applications
  • Patient data transmission

Wearable devices and remote patient monitoring are becoming a larger part of telehealth services, allowing patients to send vital information directly to their providers. This aids in chronic care management, readmission reduction, and decreasing patient mortality.

 hospital telehealth statistic

Telehealth trends in rural hospitals

Though technology is more omnipresent than ever, only one-third of rural hospitals reported using telehealth services in 2014. Definitive Healthcare tracks nearly 2,400 hospitals classified as "rural," though only about 450 serve populations under 50,000. Approximately 1,250 of these rural hospitals are critical-access hospitals, a strict designation indicating that a hospital is the only active facility in a 35-mile radius (with exceptions for difficult terrain).

Due to their remote locations and distance from other care facilities, rural hospitals are considered vital for their communities. These are the HCOs that would most likely benefit from increased use of telehealth services, which could connect patients in remote areas with specialists that would otherwise be inaccessible. 

Here are some trends we've seen in telehealth adoption and use in rural hospitals:

1. Rural and urban hospitals use telehealth differently

According to the Rural Health Information Hub (RHIhub) rural hospitals are more likely than urban hospitals to use telehealth to provide radiology, emergency, and trauma care to patients. Urban hospitals are more likely to use telehealth for multiple specialties, including heart health programs, obstetrics and NICU, and neurology.

Additionally, facilities labelled as academic medical centers, nonprofit organizations, and health system members are the most likely to have instituted telehealth systems.

2. Barriers to telehealth expansion

Though implementing telehealth could benefit a facility and the local patient population, technology if any kind requires significant funding, training periods, and infrastructure. Some of the largest impediments to telehealth adoption are Medicare coverage restrictions, licensing conflicts, broadband access, and the cost of implementation and maintenance.

Telehealth reimbursement varies by state and by payor, with only some private insurers offering coverage. Medicare coverage has been criticized for limiting HCPs eligible for provision of telehealth services and for providing a low reimbursement rate in the fee-for-service system. Additionally, Medicare reimbursements are only available in rural areas and in regions impacted by staffing shortages.

Physician licensing is also a barrier to providing telehealth services. Currently, physicians practicing medicine in multiple states must hold a license in every state they serve. This complicates telehealth delivery, as these services could easily be offered across state lines, but are restricted due to existing licensure laws. One potential solution is to offer a telehealth-specific license that allows physicians to offer consults remotely, regardless of location. 

Of course, in order to access and transmit information electronically, HCOs must have access to reliable internet connections. Rural areas, in particular, may struggle with availability of affordable, consistent broadband connections. Nearly one-third of rural households did not have access to the internet last year, which would prevent data transmission from remote monitoring and other devices, impeding care management and healthcare access.

Regardless of these barriers, implementing telehealth is cost-prohibitive for many hospitals. Though telehealth services have been shown to increase revenue through higher patient volumes, the up-front investment is often too much for smaller facilities. Care centers are responsible for software application subscriptions, technology infrastructure, data security, training, and maintenance costs. Some telehealth funding services do exist to help alleviate these costs, including the Rural Broadband Access Loan, the Telehealth Network Grant Program, and the USDA Community Facilities Loan and Grant Program.

3. "Originating Site" rule

The growth of telehealth is also impeded by the CMS "originating site" rule, which requires patients to receive telehealth services at a hospital or non-clinic care facility. This does little to relieve the patient burden of getting to their closest care site and minimizes the impact telehealth could have on remote patient treatment. Critics say the rule is counter-intuitive, as remote medicine is supposed to improve access by making care more widely available without the need for travel.

To maximize the impact of telemedicine, experts suggest patients should be able to receive consultations in their homes. While this does have implications for data security and HIPAA compliance, it could also improve the return on investment for telehealth platforms. Benefits of widespread telehealth implementation include increased patient volumes, higher care quality, lower readmission rates, and reduction of unnecessary emergency department visits.

4. Impact on staffing shortage

One of many reasons for the steady shuttering of rural hospitals is the lack of HCPs willing to take jobs in remote areas. Telehealth platforms can relieve some of the strain from healthcare staffing shortages by connecting patients to remote providers. This is most impactful when patients are referred to specialists — particularly psychiatrists, cardiologists, obstetricians, and oncologists  and could prevent long-distance and expensive travel that would otherwise be a barrier.

In addition to video consultations, telehealth could also open the doors for other services such as remote interpreting, chronic care management, and video counseling. However, there is some recent controversy surrounding what kind of patient information should be discussed via video consultation versus through an in-person conversation. An article from Fast Company reported that one patient received a terminal diagnosis over a remote call, prompting discussion among patients and medical professional regarding what is appropriate to disclose in such a setting.

5. New CMS rules

The number of telehealth visits for Medicare recipients increased more than 14x between 2004 and 2013, from about 7,000 to 108,000 annually, according to RHIhub. Medicare reimbursements for telehealth providers still hasn't caught up to demand, with providers growing increasingly frustrated with the seemingly outdated payment guidelines listed earlier.

In November, CMS released its updated Physician Fee Schedule outlining changes that aim to modernize healthcare delivery through telehealth services. For many industry professionals, these changes reflect an intentional shift to regularly reimburse telehealth offerings that would otherwise be in-person consultations. The list of covered services only covers about 100 codes, up from 98 for calendar year 2018. Covered services include psychiatric diagnostic evaluations (code 90791), end stage renal disease services (codes 90951-90970), standard outpatient visits (codes 99201-99215), and more.

To better understand diagnosis and procedure analytics from rural and urban hospitals, including CMS reimbursement data, request a free trial of Definitive Healthcare's hospitals & IDNs platform.


Interested in learning more about healthcare IT trends? Register for our webinar on Thursday, March 14! Join Definitive Healthcare CEO Jason Krantz in analyzing the top right industry trends that will have the most impact in 2019 — including an emphasis on wearable technology, telehealth, and cybersecurity.

Save Your Seat: 2019 Healthcare Trends


Alanna Moriarty

Alanna Moriarty is a healthcare industry writer and content strategist. As the Content Marketing Manager for Definitive Healthcare, she most enjoys connecting the dots between data and care delivery. ...

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