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How to Start a Telehealth Business

John Riddle
John Riddle

The market and demand will only grow, but will the rules prove too difficult to overcome?

Between the "graying of America," the busy schedules of families these days, and the sudden pivot to virtual healthcare during the coronavirus pandemic, the telemedicine industry has surged.

Telemedicine connects patients with healthcare providers using secure telecommunications technology. Physicians are able to diagnose, treat and monitor patients remotely. An estimated 7 million people used telehealth services in 2018. Telehealth is projected to be a $266.8 billion by 2026, according to market research firm Fortune Business Insights.

If you're interested in starting a business in the growing telemedicine industry, this guide will help you get started.

Telehealth as an industry

You may be surprised to learn that telemedicine has been around for more than 40 years. Prior to the spread of COVID-19 in the United States, telemedicine granted people living in rural communities improved access to primary care physicians, specialists, and mental health professionals. 

The American Telemedicine Association (ATA) estimates that there are about 200 telemedicine networks currently in operation. More than half of all the hospitals in the country now use some form of telemedicine services, and the Veterans Health Administration is using digital health services to reach more than a half a million vets each year. 

At the present time, 34 states and the District of Columbia require that private insurers cover telehealth consultations the same as they would cover in-person services (though rules may be different for mental health service versus primary care or internal medicine).


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The two types of telemedicine services

If you're looking to start a telemedicine business, you should first familiarize yourself with the two types of telehealth practice you'll encounter.

A synchronous telehealth practice, according to definitions by the Office of the National Coordinator for Health Information Technology (ONC), the U.S. Department of Veterans Affairs (VA), and the ATA, requires a two-way connection between healthcare professionals and patients. Put more simply, a synchronous telehealth practice uses video conferencing, or a telemedicine app or platform, to simulate an in-person appointment.

The other major type of telehealth practice is an asynchronous telemedicine practice. According to ONC, VA, and ATA definitions, asynchronous virtual care involves the patient uploading their medical data via a telemedicine app or platform for healthcare professionals to access later. Put more simply, in an asynchronous telemedicine practice, healthcare professionals do not interact directly with patients, potentially eliminating the need for video conferencing tools.

Regulatory hurdles to launching a telehealth business

Experts in the medical community all agree that telemedicine will continue to grow. But just how easy is it to open your own telehealth business? Are there reams of rules and restrictions that make it insurmountable? 

According to Elizabeth Westbrook, government relations advisor at the law firm of Buchanan, Ingersoll & Rooney, many of the creative, forward-thinking entrepreneurs who seek to start new tech businesses aren't naturally inclined to consider the regulatory implications of their new venture, especially when it comes to the heavily regulated world of medicine. 

"Healthcare, and by extension health IT, is regulated not just by the federal government, but by state governments as well," said Westbrook. "Not only can state laws vary wildly, but many states have licensure laws that actually prohibit or at least hinder healthcare delivery across state lines where clinicians have not attained certain credentials, or corporate structures have not been appropriately established. So anyone looking to launch a telehealth business needs to consider the laws of the location(s) in which they will launch and whether their business will be tenable in more than one state." 

What regulations must a telehealth platform legally comply with?

Launching a telemedicine business isn't as simple as purchasing software and tools that allow you to offer virtual care and remote patient monitoring. It's also vital that your practice follow telemedicine law.

For starters, you must ensure HIPAA compliance for your telehealth platform. To adhere to HIPAA regulations, your telemedicine platform must guarantee that only authorized users can access electronic health records (EHR) and other electronic protected health information. Additionally, your platform should include security measures that minimize the risk of data breaches while maximizing secure communication among healthcare providers and between providers and patients.

Telemedicine law also stipulates that your platform operate at a bandwidth large enough to support the EHR system. The Federal Communications Commission offers guidelines on recommended bandwidths based on the size of your telemedicine practice.

Likewise, the Congressional Research Service suggests that telehealth platforms operate at a  4 Mbps downstream transmission capacity and 1 Mbps upstream transmission capacity to ensure proper service speed for both patients and providers.

Other considerations for starting a telehealth business

Jayme R. Matchinski, an attorney and member of the healthcare industry group at the law firm of Greensfelder, Hemker & Gale PC in Chicago, stresses that key considerations and issues must be addressed by any healthcare provider (or other entity or individual) seeking to start a telehealth business. 

"Given the scope of practice, licensure, state board disciplinary actions and malpractice considerations, healthcare providers should carefully navigate the provision of professional services through telehealth, and ensure regulatory compliance to avoid licensure and state board disciplinary actions," Matchinski said. [Looking for telemedicine software? Check out our best picks.] 

"Navigating telehealth requirements for licensing, scope of practice and reimbursement can be challenging for healthcare providers," Matchinski added. "Evolving technology and healthcare delivery systems will continue to expand and increase the use of telehealth. There are many initiatives underway by CMS, Medicaid and private insurance companies to provide telehealth. And the regulatory landscape regarding telehealth is continuing to change and evolve." 

You should also understand how to protect the telehealth technology and remote patient monitoring tools that you present to patients, said Heather Alleva, a healthcare attorney also with Buchanan, Ingersoll & Rooney

"Whether you are a developer of a health-related digital platform or a clinician who wants to utilize new technology with your patients, you will need to work with and contract with other parties before patients can interact with the telehealth technology," Alleva said. "Consider how to protect your intellectual property interests and limit liability that might result from technological 'bugs,' including those that might expose patient's health information to unauthorized use, and remember that payments between parties must usually reflect fair market value in the healthcare space." 

Telemedicine billing and payment

Perhaps most importantly when it comes to starting a telemedicine business is ensuring that you get properly paid. The Center for Connected Health Policy at the National Telehealth Policy Resource Center extensively outlines regulations and best practices for ensuring that your practice can properly bill for treatment and be paid for all services provided, with considerations given for practice type, place of service, and other factors.

Running afoul of healthcare regulations impacts your ability to share your telehealth technology with patients who could benefit from the services, so it is important to understand these regulations and the healthcare space before launching new projects. [Interested in opening your own private medical practice? Check out our advice.] 

If you've already got a plan in place and are looking for the best software and services to run your business, read our medical practice-related reviews.

Image Credit: Slonme / Getty
John Riddle
John Riddle
business.com Contributing Writer
John Riddle is the author of 34 books, including six business titles, and has worked as a ghostwriter on numerous projects. His byline has appeared in major publications all across the U.S., and he has written articles for over 200 websites. Since 1996, he has been working out of his home office in Delaware as a full-time freelance writer, author and ghostwriter.