(1)Existing law defines telehealth as the mode of delivering health care services and public health via information and communication technologies to facilitate the diagnosis, consultation, treatment, education, care management, and self-management of a patients health care while the patient is at the originating site and the health care provider is at a distant site, and that facilitates patient self-management and caregiver support for patients and includes synchronous interactions and asynchronous store and forward transfers. Existing law requires that prior to the delivery of health care via telehealth, the health care provider initiating the use of telehealth inform the patient about the use of telehealth and obtain documented verbal or written consent from the patient for the use of telehealth.

This bill would add video communications, telephone communications, email communications, and synchronous text or chat conferencing communications and telephone communications to the definition of telehealth. The bill would also provide that the required prior consent for telehealth services may be digital as well as oral or written.

(2)Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law prohibits health care service plans and health insurers from limiting the type of setting where services are provided for the patient or by the health care provider before payment is made for the covered services appropriately provided through telehealth, subject to the terms and conditions of the contract entered into between the enrollee, insured, subscriber, or policyholder and the plan or insurer, and between the plan or insurer and its participating providers or provider groups.

This bill would also prohibit a health care provider from requiring the use of telehealth when a patient prefers to receive health care services in person it is not appropriate and would require health care service plans and health insurers to include coverage and reimbursement for services provided to a patient through telehealth to the same extent as though provided in person or by some other means, as specified. The bill would prohibit a health care service plan or health insurer from limiting coverage or reimbursement based on a contract entered into between the plan or insurer and an independent telehealth provider. The bill would prohibit a health care service plan or a health insurer from interfering with the physician-patient altering the provider-patient relationship based on the modality utilized for services appropriately provided through telehealth. The bill would provide that all laws regarding the confidentiality of health care information and a patients right to his or her medical information shall apply to telehealth services.

Because a willful violation of the bills provisions by a health care service plan would be a crime, it would impose a state-mandated local program.

(3)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

(1)Existing law defines telehealth as the mode of delivering health care services and public health via information and communication technologies to facilitate the diagnosis, consultation, treatment, education, care management, and self-management of a patients health care while the patient is at the originating site and the health care provider is at a distant site, and that facilitates patient self-management and caregiver support for patients and includes synchronous interactions and asynchronous store and forward transfers. Existing law requires that prior to the delivery of health care via telehealth, the health care provider initiating the use of telehealth inform the patient about the use of telehealth and obtain documented verbal or written consent from the patient for the use of telehealth.

This bill would add video communications, telephone communications, email communications, and synchronous text or chat conferencing to the definition of telehealth. The bill would also provide that the required prior consent for telehealth services may be digital as well as oral or written.

(2)Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law prohibits health care service plans and health insurers from limiting the type of setting where services are provided for the patient or by the health care provider before payment is made for the covered services appropriately provided through telehealth, subject to the terms and conditions of the contract entered into between the enrollee, insured, subscriber, or policyholder and the plan or insurer, and between the plan or insurer and its participating providers or provider groups.

This bill would also prohibit a health care provider from requiring the use of telehealth when a patient prefers to receive health care services in person and would require health care service plans and health insurers to include coverage and reimbursement for services provided to a patient through telehealth to the same extent as though provided in person or by some other means, as specified. The bill would prohibit a health care service plan or health insurer from limiting coverage or reimbursement based on a contract entered into between the plan or insurer and an independent telehealth provider. The bill would prohibit a health care service plan or a health insurer from interfering with the physician-patient relationship based on the modality utilized for services appropriately provided through telehealth.

Because a willful violation of the bills provisions by a health care service plan would be a crime, it would impose a state-mandated local program.

(3)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Date of Hearing: May 4, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 2507

Author:(Gordon) – As Amended Ver:April 26, 2016

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill amends the definition of telehealth service, and requires health plans and insurers to cover telehealth services. Specifically, this bill:

1. Allows a patient to consent to telehealth digitally
2. Specifies video and telephone communications are included in the definition of telehealth.
3. Requires plans and insurers to include in its contracts coverage and reimbursement for services provided to a patient through telehealth to the same extent as though provided in person or by some other means.
4. Requires plans and insurers to reimburse health care providers for diagnosis, consultation, or treatment of the enrollee when the service is delivered through telehealth at a rate that is at least as favorable to the health care provider as those established for the equivalent services when provided in person or by some other means. Restricts enrollee and insured copayments, deductibles, and coinsurance to be no more than the amount that would apply to an in-person visit.
5. Prohibits plans and insurers from limiting coverage or reimbursement based on a contract entered into between the plan or insurer, and an independent telehealth provider.
6. Prohibits plans from altering the provider-patient relationship based on the modality utilized for services appropriately provided through telehealth, but specifies utilization review is allowed.

FISCAL EFFECT:

1. This bill has been amended since the California Health Benefits Review Program (CHBRP) analyzed it. Original cost estimates have been modified based on the amendments, and are estimated as follows:
   1. $25.6 million to Medi-Cal (GF/federal) and $2 million to CalPERS (GF/federal/special/local).
   2. Increased employer-funded premium costs in the private insurance market of approximately $28.3 million.
   3. Increased premium expenditures by employees and individuals purchasing insurance of $22.7 million, and additional total out-of-pocket expenses of $14.9 million.
2. Costs to the California Department of Insurance (CDI; Insurance Fund) and the Department of Managed Health Care (DMHC; Managed Care Fund) to verify plans and insurers comply with this requirement, at a minimum of $50,000-$100,000 to DMHC and $10,000 -$50,000 for CDI.
3. Additional state costs to DMHC and CDI are possible for the following: 1) addressing additional disputes between plans and providers about coverage and reimbursement; 2) addressing additional consumer complaints and inquiries; and 3) issuing regulations, if necessary to clarify how reimbursement and coverage must be operationalized in contracts. The likelihood and magnitude of these activities and costs are unknown.
4. Unknown state GF fiscal risk if this mandate is deemed to exceed Essential Health Benefits (EHBs) as described in greater detail in "Essential Health Benefits," below.

COMMENTS:

1. Purpose. According to the author, this bill removes barriers to health care services provided via telehealth and ensures patient access, choice, and convenience. The author states the modality, or how the service is delivered, should not determine whether a service should be covered or reimbursed. Furthermore, a fully developed and supported telehealth infrastructure will provide California with economic and social benefits by reducing the needs of patients to leave their home or work to obtain health care services, helping to maintain a healthy and productive workforce and overall population, and using the same modern technologies California is pioneering.
2. Background. Existing law defines "telehealth" as a mode of delivering health care services and public health via information and communication technologies to facilitate aspects of a patient’s health care, while the patient is at the originating site and the health care provider is at a distant site. Telehealth includes synchronous interactions, such as live video consultations, as well as asynchronous “store-and-forward” transfers, such as a radiologist at a distant site reading an x-ray. Telehealth services are used and often covered by insurance now, but there are limitations. The fee-for-service Medicare program, for example, only covers telehealth that uses an interactive audio and video telecommunications system that permits real-time communication between a distant site and the beneficiary at the originating site (which must be a health care facility).

Existing state law prohibits plans from requiring in-person contact for a health care service appropriately provided through telehealth, and also prohibits plans from limiting the setting of services. However, it also indicates coverage is subject to the terms and conditions of contractual agreements between plans and providers. The law does not, however, establish a patient right to access telehealth services or explicitly require telehealth services to be covered—instead, it prohibits certain requirements that could otherwise restrict coverage of services provided through telehealth. This bill instead requires contracts to include coverage for services provided through telehealth to the same extent as provided in person or by some other means, and it specifies requirements related to reimbursement and patient cost-sharing.

1. CHBRP findings on medical effectiveness. CHBRP indicates that the evidence related to medical effectiveness of telehealth varies by modality. The scope of this bill applies to virtually all diseases and conditions. Key findings include:
   1. Live video: There is clear and convincing evidence that these modalities are at least as effective as in-person care for both mental health services and dermatology. However, this evidence may not be generalizable to live video usage in other specialty areas.
   2. Telephone: For the areas studied (e.g., mental health), the studies of the effect of telephone consultations on subsequent utilization are inconsistent. Therefore, the evidence that medical care provided by telephone compared to medical care provided in person is ambiguous. Furthermore, it is unknown whether diagnoses made using these technologies are as accurate as diagnoses made during in-person visits.
2. Essential Health Benefits (EHBs). The federal Patient Protection and Affordable Care Act (ACA) requires health plans offered in the individual and small group markets, both inside and outside of health insurance exchanges, to offer a comprehensive set of services termed EHBs. The ACA specifies that if states require plans in the exchange to offer additional benefits that go beyond the defined EHBs, then states must pay the additional cost related to those mandates. CHBRP found this coverage mandate does not interact with EHBs, but there is disagreement. Plans dispute this finding, indicating their belief that this bill requires them to cover services they do not cover today. For example, they indicate telephone transactions are currently not a covered service and this bill mandates coverage for telephone services. Proponents point out that services appropriately delivered by telephone should be covered just like in-person visits, and it is a change in modality of service delivery, not a new benefit. It is unclear whether this mandate would be interpreted to exceed EHBs, but if it were, there could be significant unknown fiscal risk to the state.
3. Support. According to the sponsor, Stanford Health Care, this bill seeks to fulfill the promise of telehealth and further improves access to health care by ensuring that providers and recipients of telehealth services have guaranteed coverage and reimbursement for telehealth services that are physician or practitioner-guided and retains patient choice. A number of other health care providers also support this bill.
4. Opposition. Plans and insurers oppose this bill indicating they have taken important steps over the last decade to address the critical issues of increasing access to innovative, quality health care products, and cost control mechanisms that better allow individuals and small businesses to obtain coverage in the private market. This bill threatens the efforts of all health care stakeholders to provide consumers with meaningful health care choices and affordable coverage options, and could exceed EHBs.
5. Staff Comments. This bill could be clarified and narrowed to be clear about what services are covered, which would remove any concern about exceeding EHBs as well as offer greater ability to contain costs. As noted above, current law prohibits plans from requiring that in-person contact occur between a health care provider and a patient before payment is made for the covered services appropriately provided through telehealth, but makes this subject to the terms and conditions of a contract between plans and providers. This reliance on contractual agreements to determine the nuanced details, processes, and circumstances under which reimbursement is made offers greater ability for the plan to manage utilization and costs.

At the same time, proponents raise legitimate issues like, for example, allowing a person's normal primary care provider to be reimbursed for performing a service like a normal office visit for evaluation and management, through telehealth. Currently, contracts may prohibit reimbursement for a patient's primary care provider and only reimburse for telehealth services through a centrally contracted telehealth provider. It could be argued the spirit of the law implies telehealth should be treated similarly to in-person visits, and it is generally agreed that maintaining continuity of care is beneficial for patients. But the current bill language lacks key protections that could keep costs in check, and applies to many visits that would not maintain continuity of care from regular providers. For example, it does not require the patient to be an established patient of the provider. It appears to leave it in the provider's hands to decide when a service is appropriately provided through telehealth, instead of requiring this to be a contractual agreement. By removing the contractual requirement, it is unclear whether a plan would have recourse to deny reimbursement for a visit they thought was not appropriate to provide through telehealth. It does not ensure providers are not paid double for, say, a telephone visit that leads to an in-office visit. Finally, CHBRP notes it is not clear that all telehealth services are as effective as in-person services. A mandate to treat all visits equally, inability to distinguish services based on effectiveness, and a total reliance on the provider to decide what should be reimbursed does not seem consistent with promoting high-quality cost-effective care.

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing: April 19, 2016

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 2507

Author:(Gordon) – As Introduced Ver:February 19, 2016

SUBJECT: Telehealth: access.

SUMMARY: Requires health care service plans (health plans) and health insurers to reimburse telehealth services to the same extent as services provided through in person. Specifically, this bill:

1. Requires a health plan or health insurer to include in its plan contract coverage and reimbursement for services provided to a patient through telehealth to the same extent as though provided in person or by some other means.
2. Requires a health plan or health insurer to reimburse a health care provider for the diagnosis, consultation, or treatment of the enrollee when the service is delivered through telehealth at a rate that is at least as favorable to the health care provider as those established for the equivalent services when provided in person or by some other means.
3. Authorizes a health plan or health insurer to subject the coverage of services delivered via telehealth to copayments, coinsurance, or deductible provided that the amounts charged are at least as favorable to the enrollee as those established for the equivalent services when provided in person or by some other means.
4. Prohibits a health plan or health insurer from limiting coverage or reimbursement based on a contract entered into between the health plan or health insurer and an independent telehealth provider or interfering with the physician-patient relationship.
5. Revises the definition of telehealth to include video communications, telephone communications, email communications, and synchronous text or chat conferencing.
6. Provides that the requirement of telehealth shall not be interpreted to authorize a health care provider to require the use of telehealth when a patient prefers to be treated in an in-person setting. Requires telehealth services to be physician or practitioner guided and patient-preferred.

EXISTING LAW:

1. Defines telehealth as the mode of delivering health care services and public health via information and communication technologies to facilitate the diagnosis, consultation, treatment, education, care management, and self-management of a patient's health care while the patient is at the originating site and the health care provider is at a distant site. Telehealth facilitates patient self-management and caregiver support for patients and includes synchronous interactions and asynchronous store and forward transfers.
   
2. Requires prior to the delivery of telehealth, the health care provider initiating the use of telehealth to inform the patient about the use of telehealth and obtain verbal or written consent from the patient for the use of telehealth as an acceptable mode of delivering health care services and public health. Requires the consent to be documented in the patient’s medical record.
   
3. States that all laws regarding the confidentiality of health care information and a patient's rights to his or her medical information apply to telehealth interactions.
   
4. Exempts a patient under the jurisdiction of the Department of Corrections and Rehabilitation or any other correctional facility.
   
5. Notwithstanding any other provision of law and for purposes of 1) through 4) above, the governing body of the hospital, whose patients are receiving the telehealth services, may grant privileges to and verify and approve credentials for providers of telehealth services based on its medical staff recommendations that rely on information provided by the distant-site hospital or telehealth entity, as described in federal regulations. States legislative intent to authorize a hospital to grant privileges to and verify and approve credentials for providers of telehealth.
   
6. States that "telehealth" includes "telemedicine," as specified.
   
7. Makes the failure of a health care provider to comply with 1) through 6) above unprofessional conduct.
   
8. Provides that 1) through 7) above shall not be construed to alter the scope of practice of any health care provider or authorize the delivery of health care services in a setting or in a manner not otherwise authorized by law.
9. Prohibits a health plan from requiring in-person contact to occur between a health care provider and a patient and limiting the type of setting where services are provided for the patient or by the health care provider before payment is made for the covered services appropriately provided through telehealth, subject to the terms and conditions of the contract entered into between the enrollee or subscriber and the health plan, and between the health plan and its participating providers or provider groups.

FISCAL EFFECT: This bill has not been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, there have been rapid developments in recent years in the delivery of health care through telehealth. Whether through improved access to primary care physicians or cancer clinical trials, strengthening behavioral health services in hospital emergency departments and community clinics, or improving access to care for both rural populations and vulnerable populations, telehealth offers both the promise and the reality of improved access to quality health care for all. This bill removes barriers to health care services provided via telehealth and ensures patient access, choice, and convenience. Increased access to health care services through telehealth could also result in cost reduction and cost savings. This bill would provide a viable telehealth reimbursement infrastructure in California in order to improve access for the state’s residents to high quality health care at a time when more Californians have health insurance. This bill requires the same coverage and reimbursement for services provided to a patient through telehealth as though the patient received equivalent services in person. The modality or how the service is delivered should not determine whether a service should be covered or reimbursed. Patients will benefit through improved access to health care providers, the ability to receive health care services in a faster and more convenient manner, increased continuity and coordination of care, reduction of lost work time and travel costs, and the ability to remain near family and friends while receiving health care services. Providers will be able to offer services through telehealth with a guarantee they will be appropriately reimbursed. Providers will be incentivized to fully build-out a vibrant, fully accessible telehealth infrastructure to better serve Californians. A fully developed and supported telehealth infrastructure will provide California with economic and social benefits by: reducing the needs of patients to leave their home or work to obtain health care services, helping to maintain a healthy and productive workforce and overall population, and using the same modern technologies California is pioneering.
2. BACKGROUND.
   1. Telehealth. According to the Health Resources and Services Administration, telehealth is the use of telecommunications and information technologies to share information and provide clinical care, education, public health and administrative services at a distance. California law recognizes live video and store-and forward (capture of medical information and transfer to providers for later review).
      
      This bill would expand the definition of telehealth to also include telephone, email and synchronous text and chat conferencing as billable telehealth modalities.
   2. California Health Benefits Review Program (CHBRP) analysis. AB 1996 (Thomson), Chapter 795, Statutes of 2002, requests the University of California to assess legislation proposing a mandated benefit or service and prepare a written analysis with relevant data on the medical, economic, and public health impacts of proposed health plan and health insurance benefit mandate legislation. CHBRP was created in response to AB 1996. SB 125 (Hernandez), Chapter 9, Statutes of 2015, added an impact assessment on essential health benefits, and legislation that impacts health insurance benefit designs, cost sharing, premiums, and other health insurance topics. As indicated in the CHBRP analysis, this bill would require reimbursement parity for telehealth visits as compared to equivalent in-person visits. This bill is not limited in scope to established patients, and may apply to any health care provider. CHBRP analyzed the potential impact of this bill related to the following telehealth modalities:
      • Live video (real-time interaction via video communication);
      • Store-and-forward (capture and secure transmission of medical information, such as photo or x-rays, for review by a health care provider at a later time);
      • Telephone; and,
      • Email, and synchronous text and chat.

In its review, CHBRP considered a 2013 survey from the California Public Policy Institute which indicated that most Californians (63%) use the Internet at least occasionally, an increase of 21 percentage points since 2000. Sixty-nine percent of Californians have high-speed broadband access at home but differences in access are apparent by income, education, race, ethnicity and geographic location. Nearly 93% of Californians report having a cell phone, and 58% have a smart phone, with younger age groups (18 to 34 years of age) more likely to use a smart phone. Smart phone usage also increases with higher education and income levels. Thirty-two percent of Californians use the Interne to contact a health insurance provider or medical professional (34%), whereas over half (55%) seek out medical information online.

• • 1. Medical Effectiveness. CHBRP indicates that the evidence related to medical effectiveness of telehealth varies by modality. The scope of this bill applies to virtually all diseases and conditions. The telehealth literature generally focuses on a limited number of conditions (e.g., dermatology, neurology, psychiatry/psychology) and may not be generalizable to other conditions. Furthermore, a major challenge in assessing medical effectiveness of telehealth is the speed of technological advancements in the field, which often outpaces the research literature about these technologies.
• Live video: There is clear and convincing evidence that these modalities are at least as effective as in-person care for both mental health services and dermatology. However, this evidence may not be generalizable to live video usage in other specialty areas.
• Store-and-forward: For the areas studied (e.g., in dermatology), there is a low preponderance of evidence that medical care provided by store-and-forward is at least as effective as medical care provided in person. The evidence suggests that store-and-forward technology reduces wait times for specialty outpatient care.
• Telephone: For the areas studied (e.g., mental health), the studies of the effect of telephone consultations on subsequent utilization are inconsistent. Therefore, the evidence that medical care provided by telephone compared to medical care provided in person is ambiguous. Furthermore, it is unknown whether diagnoses made using these technologies are as accurate as diagnoses made during in-person visits.
• E-mail, text and chat: There is insufficient evidence to determine whether services provided by synchronous text and chat are as effective as medical care provided in person. CHBRP notes that the absence of evidence does not mean there is no effect; it means the effect is unknown.
  • 1. Benefit Coverage, Utilization, and Cost. This bill would apply to all state-regulated insurance, including DMHC Medi-Cal managed care. CHBRP estimates that in 2017, all 25.2 million Californians with state-regulated coverage would be subject to this bill. CHBRP estimates that postmandate, usage of telehealth services with a low and high adoption scenario, ranging from 3.75% of total visits delivered via telehealth postmandate to 15% of total visits delivered via telehealth postmandate. CHBRP estimates that in the first year postmandate, THIS BILL would increase overall health expenditures (premiums and out-of-pocket expenses by between $96.8 million (0.07% change) and $402.6 million (0.28% change). CHBRP estimates premium increases to range from $0.24 to $1.33 per member per month (PMPM) for DMHC-regulated plans, depending on the rate of adoption. Increases range from $0.25 to $1.09 PMPM for CDI-regulated policies, depending on the rate of adoption. Lastly, CHBRP assumes that out-of-pocket expenses would increase by between $15.5 million (0.10%) and $64.8 million (0.40%), depending on the adoption of telehealth services. In reaching the above estimates, CHBRP points out that this bill is not limited in scope to established patients and assumed that postmandate telehealth visits that replace existing in-person visits (substitute) and new (supplemental) visits that would not have taken place in person or would not have been billed as a telehealth visit.
    2. Public Health. Patient experience would improve, as providers increase their e-mail and telephone responses to patient-initiated inquiries. The improvement is partly attributable to increased access to (specialty or primary) care, as well as improved convenience for patients, such as reduced wait times for some visits.
       
       For mental health and dermatology, evidence indicates that outcomes for live videoconferencing and store-and-forward were equivalent to in-person care; however these results may not be generalizable to other conditions. CHBRP estimates that utilization would increase from approximately 86,000 to 364,000 live videoconferencing encounters and from approximately 1 million to 4.4 million store-and-forward encounters. For those newly covered enrollees seeking mental health and dermatologic care via telehealth, CHBRP estimates that positive outcomes could occur for some with these conditions; however, the public health impact for other conditions is unknown.
       
       In the case of this bill, key social determinants of health that may be affected by the mandate include transportation, rural living, and socioeconomic characteristics (age, race/ethnicity, income, language).
       
       CHBRP estimates that, postmandate, travel costs and travel time would likely decrease for some urban and rural enrollees using newly-covered, patient-initiated telehealth services. As a result, some enrollees with transportation challenges may have better outcomes because they would no longer delay or avoid in-person visits by favoring telephonic or electronic communications with physicians; however, CHBRP is unable to quantify the exact impact due to a lack of data.
       
       It is unknown whether this bill would reduce disparities in access to care by ameliorating the effects of certain social determinants of health (transportation and geography). As noted, barriers to care could be reduced for some; however, this bill also could exacerbate disparities in access to care for some enrollees with certain socioeconomic characteristics (e.g., age, language, income, etc.) that impede the use of telehealth modalities. Lastly, it is unknown whether patient-initiated telehealth services would result in harms to patients. An unknown finding could result in a positive, negative or no impact.
    3. Impact on EHBs. This bill would not exceed EHBs. Services would be delivered in a different way, via telehealth, rather than be considered a new benefit.
    4. Long-term impacts. CHBRP assumes that technology will continue to drive changes in telehealth. This includes increased penetration of electronic health records (EHR), associated patient portals and office management systems; increased use of mobile and remote communication devices (such as cellular telephones and or medical devices) and their applications; increased broadband coverage, which not only allows better Internet coverage, but also easier and more rapid transfer of large data files; and, increased demand for these types of services from consumers, insurers, and providers. CHBRP projects that this trend, along with changes in reimbursement, would likely increase use of telephone, e-mail, and other telehealth services between patients and providers; however, the impact of telehealth on health outcomes requires further study.
  1. Other states. According to CHBRP, in 2015, state legislatures in 42 states introduced over 200 telehealth-related bills. States vary greatly in the definition and regulation of telehealth. Forty-eight states and the District of Columbia have a codified definition of telehealth (or telemedicine) in law, regulations or in their Medicaid programs while Rhode Island and New Jersey do not have an established legal definition for telehealth. The vast majority of states (47) and the District of Columbia reimburse for some type of telehealth service in their Medicaid programs. This is an increase from 44 state Medicaid programs in 2014. Among these states, live video is the most commonly reimbursed form of telehealth, with all 47 states reimbursing for live video. However, the terms and conditions related to live video reimbursement vary widely across states. As of July 2015, California is one of nine states that reimburses for store-and-forward in its Medicaid program; the other states are Alaska, Arizona, Illinois, Minnesota, Mississippi, New Mexico, Oklahoma, and Virginia. Sixteen states’ Medicaid programs reimburse for remote patient monitoring; California does not. Four states’ Medicaid programs (Alaska, Illinois, Minnesota, and Mississippi) reimburse for live video, store-and-forward, and remote patient monitoring.
     
     Thirty-one states and the District of Columbia have laws in place which regulate telehealth reimbursement among private payers. Washington State has passed such legislation scheduled to go into effect January 1, 2017. There is much variation among these laws; some do not require reimbursement while some require reimbursement parity between telehealth services and the same service delivered in-person. At least 23 states have “full parity” in place wherein both coverage and reimbursement for telehealth services are comparable to in-person services.
  2. Federal Requirements. Medicare payment for telehealth services is established in Section 1834 (m) of the Social Security Act. Medicare reimbursement for telehealth services is conditioned on the originating site (location of the patient) being located in a non-metro county or in a primary care or mental health geographic Health Professional Shortage Area. Medicare reimburses for synchronous live video and for in a demonstration program in Alaska or Hawaii, reimburses for asynchronous store-and-forward. Medicare does not pay for telephone or e-mail encounters.
  3. Department of Veterans Affairs. According to CHBRP, the federal Department of Veterans Affairs (VA) has an Office of Telehealth Services and is considered a leader in the integration and use of the technologies. The VA defines telehealth to include clinical video telehealth, store and forward, and home telehealth (chronic disease management through remote patient monitoring for conditions such as diabetes, chronic heart failure, chronic obstructive pulmonary disease, depression, or post-traumatic stress disorder. The VA also has secure messaging features that allow patients to communicate via a web portal or their mobile devices, and mobile health, defined as smart phone applications for self-management or health conditions. Email is not included in the VA’s definition of telehealth.
  4. Kaiser Permanente. Kaiser Permanente Northern California (KPNC) is a unique example of an integrated health care delivery system using all four telehealth modalities. KPNC serves approximately 3.4 million enrollees through 8,000 physicians and 21 hospitals. In 2008, KPNC implemented an inpatient and ambulatory care EHR system that includes more than 100 patient-centered Internet, mobile, and live videoconferencing applications enabling members to review disease-specific information; access personal health information; make appointments, order refills, exchange secure e-mail messages with providers; and participate in virtual care in lieu of an office visit. KPNC’s number of virtual visits grew from 4.1 million in 2008 to 10.5 million in 2013, and telephone visits increased from about 640,000 in 2008 to more than 2.3 million in 2013. KPNC estimates that by 2016, virtual visits (e-mail, telephone, video) would outnumber in-person office visits, which have remained constant since 2008.
  5. Rural Health Disparities and Travel Barriers in California. In its analysis, CHBRP must include a discussion of disparities under the broader umbrella of social determinants of health (SDoH). SDoH include factors outside of the traditional medical care system that influence health status and health outcomes. In the case of this bill, evidence shows that disparities in certain determinants including geographic location, (accessible) transportation and access to and use of technology.
     
     Residents of rural communities in California experience poorer health status compared to residents of urban communities, such as higher self-reported poor health status (6.1% in rural vs. 4.4% in urban), recent mental health issues (37.8% rural vs. 34.1% urban), physical health issues (52.8% rural vs. 40.3% urban) and recent inability to engage in work, recreation, or self-care (27.0% rural vs. 21.4% urban) (CalSORH, 2013). Travel barriers and inadequate provider–patient ratios are telehealth-relevant factors that contribute to rural health disparities (Iezzoni et al., 2006; Weinhold and Gurtner, 2014). About 14% (5.2 million) of California’s 37.7 million residents live in rural areas (CalSORH, 2013) and in about two-thirds of counties, the number of physicians per capita is less than what is considered adequate to meet demand (CHCF, 2012).
     
     Telehealth may help to overcome some of the disparities in health care by redistributing knowledge and expertise when and where it is needed, including rural areas of California (Nesbitt, 2012). However, telehealth has yet to meet rural demand according to one study. Of 60 California rural health clinics surveyed in 2012, less than half (47%) used telehealth; 47% used live videoconferencing, 5% used store-and-forward, and 3% used home monitoring. Cost of equipment and lack of arrangements with specialists were the primary obstacles to clinic participation (52% and 48%, respectively) (CHCF, 2012). About half of the clinics used the Internet to contact other providers, but just 12% did so to contact patients (CHCF, 2012). In recognition of the ongoing challenge to provide accessible clinical services to rural residents, the federal Office of Rural Health Policy established an Office for the Advancement of Telehealth to promote telehealth grants and programming for clinical care, education, and public health in rural areas.

1. SUPPORT. According to the sponsor, Stanford Health Care, this bill seeks to fulfill the promise of telehealth and further improves access to health care by ensuring that providers and recipients of telehealth services have guaranteed coverage and reimbursement for telehealth services that are physician or practitioner-guided and retains patient choice.
   
   The California Primacy Care Association points out that with this bill, providers will be incentivized to fully build-on a vibrant, fully accessible telehealth infrastructure to better serve Californians.
   
   The American Association for Marriage and Family Therapy, California Division, opines that the provision expressly prohibiting health care providers from forcing patients into telehealth services when the patient has a preference for in-person treatment forges a balance between ensuring access to health care via telehealth while protecting patients who wants to be seen in person.
   
   Adventist Health, John Muir Health El Camino Hospital indicate that existing law does not guarantee health care providers will be reimbursed for telehealth services, and this bill removes this barrier and improves patient access, choice, and convenience to quality healthcare.
   
   The Association of California Healthcare Districts indicates that rural and underserved areas have a difficult time recruiting health professionals to their areas, and this bill is one solution to this problem. A reliable reimbursement mechanism ensures that telehealth services are available across the state, particularly in rural areas where healthcare districts operate.
2. OPPOSITION. The California Association of Health Plans, the Association of California Life and Health Insurance Companies and America’s Health Insurance Plans indicate that they have taken important steps over the last decade to address the critical issues of increasing access to innovative, quality health care products, and cost control mechanisms that better allow individuals and small businesses to obtain coverage in the private market. This bill threatens the efforts of all health care stakeholders to provide consumers with meaningful health care choices and affordable coverage options.
3. RELATED LEGISLATION. SB 289 (Mitchell) of 2015, would have required health plans or health insurers to cover telephonic and electronic patient management services provided by a physician or non-physician health care provider and reimburse those services based on their complexity and time expenditure. SB 289 was held in the Senate Appropriations Committee.
4. PREVIOUS LEGISLATION.
   1. AB 1771 (V. Manuel Pérez), of 2014, would have required health plans and health insurers, with respect to plan contracts and insurance policies issued, amended, or renewed on or after January 1, 2016, to cover telephone visits provided by a physician. AB 1771 was held in the Senate Appropriations Committee.
   2. AB 809 (Logue), Chapter 404, Statutes of 2014, revises the informed consent requirements relating to the delivery of health care via telehealth by permitting consent to be made verbally or in writing, and by deleting the requirement that the health care provider who obtains the consent be at the originating site where the patient is physically located.
   3. AB 1733 (Logue), Chapter 782, Statutes of 2012, specifies that the prohibition on requiring in-person contact also applies to other health care service plan contracts with the Department of Health Care Services (DHCS) for services under the Medi-Cal program, and publicly supported programs other than Medi-Cal, as well as to the organizations implementing the PACE program.
   4. AB 415 (Logue), Chapter 547, Statutes of 2011, among other provisions, prohibits DHCS from requiring that a health care provider document a barrier to an in-person visit prior to paying for services provided via telehealth to a Medi-Cal beneficiary. Repeals the prohibition of paying for a service provided by telephone or facsimile and would instead prohibit DHCS from limiting the type of setting where services are provided for the patient. Prohibits health plans and insurers from requiring that in-person contact occur between a health care provider and a patient before payment is made for the services appropriately provided through telehealth, subject to the terms of the relevant contract. Repeals the prohibition for paying for a service provided by telephone or facsimile and would instead prohibit health plans and insurers from limiting the type of setting where services are provided for the patient or by the health care provider.
   5. SB 1665 (Thompson), Chapter 864, Statutes of 1996, established the Telemedicine Development Act (TDA) to set standards for the use of telemedicine by health care practitioners and insurers. TDA specifies, in part, that face-to-face contact between a health care provider and a patient shall not be required under the Medi-Cal program for services appropriately provided through telemedicine, when those services are otherwise covered by the Medi-Cal program, and requires a health care practitioner to obtain verbal and written consent prior to providing services through telemedicine.
5. Amendments. The author has agreed to amend this bill to do the following:
   1. Narrow the scope of this bill to apply only to video and telephonic communications;
   2. Clarify that the bill shall not be interpreted to prohibit a health plan to undertake a utilization review of telehealth services, provided the utilization review is equivalent in application when provided in person or by some other means;
   3. Clarify that this bill does not alter the scope of practice of any health care providers; and,
   4. Maintain the confidentiality of healthcare information and the patient’s right to his or her medical information applies to telehealth services.

REGISTERED SUPPORT / OPPOSITION:

Support

Stanford Health Care (sponsor)

AARP California

Adventist Health

ALS Association Golden West Chapter

American Association for Marriage and Family Therapy

Association of California Healthcare Districts

California Academy of Family Physicians

California Association of Health Plans

California Children's Hospital

California Life Sciences Association

California Medical Association

California Primary Care Association

Center for Information Technology Research in the Interest of Society

Center for Technology and Aging

The Children's Partnership

El Camino Hospital

Health Care Interpreters Network

John Muir Health

Lucile Packard Children's Hospital

National Multiple Sclerosis Society

Occupational Therapy Association of California

Providence Health & Services

Sutter Health

Opposition

America's Health Insurance Plans

Association of California Life and Health Insurance Companies

California Association of Health Plans

California Chamber of Commerce

California Right to Life Committee, Inc.

Analysis Prepared by: Rosielyn Pulmano / HEALTH / (916) 319-2097