Telemedicine providers can sell their services in a number of ways. Consumers, self-funded health plans, and health insurance companies are all important and growing customers for many telemedicine providers. Telemedicine providers have taken a wide range of approaches to contracting with these customers. Many of these approaches have included pricing that is not fee-for-service, and can create risks under state insurance law. Although the number of pricing models is nearly infinite, it is useful to think about three models for pricing telemedicine services:
- Unlimited — users pay a fixed amount and receive unlimited access to telemedicine services.
- Hybrid — users pay a fixed amount and receive a fixed, limited amount of telemedicine services. These models may also include access to services beyond the fixed amount at additional cost.
- Fee-For-Service — users pay a fixed amount for each consultation, potentially with discounts for greater volume.
Offering telemedicine services through these three approaches involves varying amounts of risk, which varies both by approach and by customer (i.e., selling to consumers comes with greater risk than selling to health insurers). This article identifies the insurance law risks faced by telemedicine providers and also identifies how those providers can reduce or eliminate their risk by tailoring their product design based on the state and type of customer.
