What happened
Shares of Teladoc Health (TDOC -0.07%) surged on Wednesday, jumping as much as 9.2%. As of 2 p.m. ET, the stock was still up 8.3%.
The catalyst that sent the digital healthcare stock higher was the introduction of legislation that could benefit the entire telehealth industry.
So what
U.S. Sens. Catherine Cortez Masto of Nevada and Todd Young of Indiana introduced a bill this week that would extend several benefits for telemedicine providers enacted at the start of the pandemic. The Telehealth Extension and Evaluation Act would extend the existing Medicare telehealth reimbursement waivers for another two years.
Image source: Getty Images.
Regulatory bodies have made it easier for patients to use telehealth services in light of the challenges presented by the ongoing impact of COVID-19 on the medical landscape. Specifically, the proposed legislation would permit the Centers for Medicare & Medicaid Services to expand Medicare payments to a far-reaching variety of telehealth services including substance abuse.
This follows on the heels of a letter to Congress, sponsored by more than 330 healthcare organizations, petitioning the legislators to extend the existing waivers, while implementing a path to making these policies permanent.
Now what
Teladoc Health's stock has been in free fall over the past year, losing more than 60% of its value, as some investors labeled the stock a "pandemic play" and dismissed the potential for future adoption of telemedicine.
There's little question that many patients were introduced to digital medicine during the pandemic. A report by the U.S. Department of Health and Human Services revealed a 63-fold increase in telehealth services among patients, providing much-needed access to healthcare.
However, the potential for telemedicine isn't just about the global pandemic, but rather access to care. And while many patients found their way to telehealth during lockdowns and other pandemic-related restrictions, many plan to continue using virtual doctor visits. A survey conducted by the Harris Poll found that 65% of patients plan to continue using telehealth services in the future.
As the global leader in virtual care, Teladoc Health will no doubt benefit from this additional tailwind.
