New California Law Aims to Level the Playing Field for Telehealth
Published: October 31, 2019
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Under new legislation, commercial health plans in California are now required to reimburse providers for telehealth services at the same rate as when those services are delivered in-person.
On October 13, California Governor Gavin Newsom signed a law requiring commercial health insurance coverage and payment parity for telehealth services. Assembly Bill 744 expands telehealth access to all California residents by requiring health plans to reimburse telehealth services at the same levels as when those services are delivered in-person. The bill was passed with overwhelming support in the California Assembly, with 79 votes for and none against, before making its way to Governor Newsom’s desk.
The new law will benefit patients by increasing access and availability to healthcare services, as well as catalyzing the growth of telehealth technologies throughout California. California is representative of a growing national trend of states across the country either enacting new telehealth laws or revisiting and improving their old ones. The state’s prior telehealth coverage law did not include a payment parity provision, so health plans were not required to reimburse providers for videoconference appointments at the same rate as in-person appointments.
“What [the bill] does is it strengthens and clarifies the existing telehealth statutes,” said Assembly member Cecilia Aguiar-Curry (D-Winters). Aguiar-Curry authored the legislation as part of her continued goal to improve the availability of public services for her rural constituents. “Now it makes it so that health plans and insurers in the state will follow the same things. The reimbursement of telehealth services is already covered under Medi-Cal, so this is basically saying, ‘Health plans, you now have to do the same thing.’” Indeed, the new law broadens the existing statute for Medi-Cal, California’s Medicaid program, to reimburse providers for more telehealth services.
Aguiar-Curry credits part of her success in passing this legislation to Governor Newson’s political platform, which includes expanding healthcare access across the state. The aftermath of recent disasters, such as wildfires, brought telehealth and other public services to the forefront of the California Legislature.
With the enactment of the new California law, approximately 36 states plus DC have laws requiring commercial health insurance plans to cover telehealth services, while approximately 11 of those states have payment parity language. Payment parity laws represent just one of many developing telehealth legislation categories, each of which represent a step toward bolstering telehealth’s status as a viable and accepted delivery model. As states continue to view telehealth as an opportunity to improve outcomes, reduce costs, and increase access, industry stakeholders should expect to see similar legislative activity elsewhere in the future.
California residents will start to see the impact of the new law after January 1, 2021, when healthcare plans and providers issue, amend, or renew contracts.
Source: The National Law Review