As Telemedicine Use Explodes, Are We Certain the Service Is Properly Insured?

It seems clear that telemedicine is here to stay, which means the insurance industry has a need to fill to match this emerging exposure with policy language to suit and coverage to follow.
By: | September 21, 2020

Telemedicine services can happen in real time, such as through a Zoom call or another video call provider. They could even be asynchronous — for example, a patient uploads their health data for review and comment at a later time by their physician.

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Ongoing communications may then take place, including diagnosis and medication review. As well, physiological data, such as that tracked by a personal wearable like a Fitbit or Apple Watch, can be transmitted, stored and reviewed by a health provider asynchronously.

Telemedicine was initially used as a way to resolve challenges of physical distance between patient and provider, allowing for the treatment of isolated patients or consultation with far-away specialists.

However, these qualities that make it useful for resolving physical distance also make it well designed for a quarantined population limited by pandemic-induced isolation.

By seeking services virtually, healthy patients who are seeking routine services can avoid possible exposure by staying at home, and patients who are already ill or showing symptoms of COVID-19 can remain isolated from the rest of the population.

Telemedicine in a COVID-19 World

The CDC recommends that patients who may be ill should call their doctor before visiting the office or the hospital in person, noting on its website that many routine appointments can be postponed or performed by phone or video.

Many major hospitals and health care practices, such as Kaiser and the Mayo Clinic, list the same advice for patients, and the AMA has added to its resources for health care providers and patients wishing to utilize telehealth services.

With healthc are facilities recommending telemedicine as a viable option, its use since the beginning of the year has increased and is trending to continue being a source of health care even following the pandemic.

“Policy coverage triggers have stayed rigid and outdated despite the global rise of technology within health care. Medical malpractice policies will typically only trigger coverage which arises out of a ‘medical’ or ‘health care incident,’ leaving a gaping hole in coverage for patient harm arising (from) technology activities or cyber events.” — Tim Boyce, health care practice leader, CFC Underwriters

This is good news indeed as patients are found to be satisfied with their telemedicine options. A 2017 study following migraine sufferers who received telemedicine treatment noted the same levels of satisfaction with their treatment when surveyed at one year as compared with traditional patients.

In March 2020 the federal government expanded Medicare reimbursement for telehealth services to include allowing telemedicine visits to take place in a patient’s home and further approved various additional services and new patient visits rendered virtually for reimbursement.

This opened the door for expanded access to telemedicine for the approximately 62.4 million Americans using Medicare.

However, with this extended use among both private insurance patients and Medicare recipients comes increased risks.

Does Insurance Cover Telemedicine’s Risks?

Patient privacy through cyber security is a pressing concern with the rise in telemedicine use.

In March 2020, coordinating with the changes to Medicare policy, the Office for Civil Rights at the Department of Health and Human Services, which is responsible for enforcing certain regulations under HIPAA, waived potential penalties against health care providers using communication apps in good faith for telemedicine.

The notice allows for any non-public facing app to be used (for example, TikTok and Facebook Live are not considered acceptable as they are public facing). The guidelines also note health providers should notify patients of possible privacy risks and use encryption and privacy modes.

Tim Boyce, health care practice lead, CFC Underwriters

Since an integral part of telemedicine is the utilization of information and communication technologies, the security of telemedicine is only as sound as the technology platform being used.

The usual vulnerabilities in technological systems exploited by hackers can also be found in telemedicine use, leading to the risk of unintentional transmission of private health information. Individuals are a weak-link for hackers, too, especially patients who may be less than savvy or providers not used to technology safeguards.

In considering whether telemedicine is a long-term solution, Tim Boyce, health care practice leader of the UK-based CFC  Underwwriters, noted, “Many health care systems across the globe have been inching towards making more services available via telehealth for years, but now, many experts believe that the pandemic has pushed the inevitable telemedicine revolution forward by a decade.”

He continued, “As a result of this and the continued consumer confidence in the sector, we’re expecting governments, payers and providers to double down on the digital revolution gains within health care, making the dependence on telemedicine a certainty for years to come.”

It seems clear that telemedicine is here to stay, which means the insurance industry has a need to fill to match this emerging exposure with policy language to suit and coverage to follow.

A Heightened Use of Telemedicine

There are several areas in which risk may exceed coverage when it comes to the heightened use of telemedicine in the U.S.

To begin, traditional medical malpractice coverage often excludes unlicensed activities, for example health services rendered out of the physician’s licensed state. This means a potential coverage gap exists if doctors unwittingly treat patients through telemedicine who have temporarily relocated during the pandemic to quarantine elsewhere.

Another potential gap found in traditional medical malpractice policies lies in the coverage trigger itself.

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Boyce warned, “Policy coverage triggers have stayed rigid and outdated despite the global rise of technology within health care. Medical malpractice policies will typically only trigger coverage which arises out of a ‘medical’ or ‘health care incident,’ leaving a gaping hole in coverage for patient harm arising [from] technology activities or cyber events.”

The potential harm from cyber events is vast, and providers are exposed under traditional policies, perhaps where they felt they might be covered.

The insurance industry has an obligation to educate the public, and this is an emerging risk where brokers should approach policyholders to ensure the coverage they have purchased meets their new business structure.

Anytime a significant change to business practices occurs, coverage should be reviewed, and the rise in telemedicine is no different. &

Abi Potter Clough, MBA, CPCU, is a keynote speaker, author and business consultant focused on leadership and strategy, personal branding, Insurtech and international risk management. She has over 15 years of experience at a Fortune 500 company with expertise in P&C claims operational leadership, lean management consulting, digital communications and Insurtech. She chairs the International Insurance Interest Group of the CPCU Society and devotes time to many international risk management projects. She holds many insurance industry designations. Abi can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]