Telehealth Guidance for Health Plans in California During the COVID-19 State of Emergency

The various regulatory bodies in California have separately issued telehealth guidance for health plan entities that fall under their jurisdiction, including requirements related to coverage, reimbursement parity, cost-sharing requirements, and permissible telehealth delivery platforms. This alert summarizes the information disseminated by the Department of Managed Health Care (DMHC), the California Department of Insurance (CDI), and the Department of Health Care Services (DHCS). 

California’s state-level guidance is in addition to the guidance already provided by federal regulators, including the Centers for Medicare and Medicaid Services (CMS), which has primary jurisdiction over Medicare Advantage and Medicare Advantage Prescription Drug (MAPD) plans, which we profiled in an alert last month. 

Below is an overall summary of telehealth coverage and reimbursement requirements for health care service plans regulated by DMHC, insurers regulated by CDI, Medi-Cal managed care plans regulated by DHCS, Medicare Advantage and MAPD plans, and self-funded plans regulated by the U. S. Department of Labor (DOL) . Readers should also note that the federal government has issued guidance related to enforcement discretion it plans to exercise with respect to enforcement of the HIPAA Privacy and Security Rules during the COVID-10 pandemic, which we discussed in a previous alert. 

DMHC-Regulated Commercial Plans 

On April 7, 2020, the DMHC issued an All Plan Letter (APL 20-013)to the health care service plans it regulates that clarifies the agency’s expectations regarding the coverage and payment of telehealth benefits for enrollees during the COVID-19 State of Emergency declared as of March 4, 2020 by Governor Gavin Newsom. 

Under APL 20-013, health care service plans must cover any service rendered via telehealth, notwithstanding any limitation in the enrollee’s benefit plan, as long as it would have been otherwise covered as an in-person service, and the service can be provided in a medically appropriate manner. The service does not need to relate to the treatment of an enrollee with or suspected of having COVID-19, and the enrollee’s cost-sharing for the service is the same as if the service is rendered in-person. 

The enrollee must consent to receiving the services via telehealth beforehand, but any provider can render the telehealth service – even providers that do not normally provide telehealth services to health plan members. The provider can be any contracted provider included in the member’s network, and the FAQ associated with APL 20-013 states that health plans cannot impose credentialing/approval requirements specific to telehealth if the provider is otherwise qualified to render the service. Furthermore, a health plan could neither limit telehealth services to a contracted telehealth vendor nor to a particular platform for the delivery of the service. And just as a health plan may not impose different cost-sharing amounts on enrollees for telehealth services as compared to those rendered in person, health plans must pay the same amounts for services rendered either in person or via telehealth during the COVID-19 State of Emergency.

CDI-Regulated Commercial Plans

On March 30, 2020, the CDI issued a Notice to health insurers regarding the provision and coverage of telehealth services during the COVID-19 State of Emergency to “consumers”. This Notice applies only to commercial health insurance coverage regulated by the CDI. 

CDI’s Notice states that telehealth services should replace in-person visits whenever possible and clinically appropriate. The service does not need to relate to the treatment of a consumers with, or suspected of having, COVID-19. Cost sharing for telehealth services should be consistent with, or no greater than, the cost sharing for in-person visits. 

The Notice advises that insurers should communicate to members about the options to receive services via telehealth, especially for at-risk and vulnerable populations. In light of the need to minimize in-person interactions when telehealth is clinically appropriate, failure to provide functional network availability through telehealth would constitute a failure to provide an appropriate network and would trigger an insurer’s obligation to provide services outside the network, with the consumer’s obligation limited to an amount equal to the in-network cost-share. 

In addition, the Notice states that reimbursement rates for telehealth services should mirror those for in-person office visits, in alignment with California Insurance Code § 10123.855 that will require parity in telehealth reimbursement as of January 1, 2021. The Notice advises that insurers should permit providers to use all available appropriate methods of telehealth delivery including synchronous video and telephone-based service delivery. Providers may provide telehealth services from their own homes and consumers may receive such services where they are physically present (e.g., home, nursing home, etc.).

Medi-Cal Managed Care Plans

On March 24, 2020, the DHCS issued Guidance¹ regarding telehealth services that includes guidance related Medi-Cal managed care health plans (MCPs). The DHCS previously issued a March 18, 2020 Supplement to its All Plan Letter (APL 19-009) on telehealth and a March 16, 2020 updated Memorandum regarding COVID-19. 

With respect to MCPs, any service that can be delivered in a clinically appropriate manner via telehealth is covered during the COVID-19 State of Emergency. As with the DMHC’s APL 20-013 and CDI’s Notice, this includes telehealth services unrelated to the treatment of COVID-19. The MCP member must consent to receiving the service via telehealth. 

Unless otherwise agreed to by the parties, MCP’s must reimburse providers rendering telehealth services at the same rate as in-person visits. The MCP provider may use any telehealth platform to render the service, as long as it is clinically appropriate. The MCP provider would need to be licensed consistent with the requirements in Business and Professions Code § 2290.5(a)(3). 

Medicare Advantage Plans

While the DMHC licenses health plans offering coverage under the Medicare Advantage program, CMS regulates the benefits, which includes the provision of telehealth. CMS issued guidance to MAPD and Medicare-Medicaid plans in a March 10, 2020 memorandum that addresses permissible flexibilities related to telehealth. Under this guidance, MA Organizations (including MAPD plans) are permitted to take the following actions during the current emergency: (i) provide enrollees access to Medicare Part B services via telehealth in any geographic area and from a variety of places, including beneficiaries’ homes; and (ii) waive or reduce enrollee cost-sharing for telehealth benefits or other services to address the outbreak (if they do so for similarly situated plan enrollees on a uniform basis). CMS is waiving its enforcement discretion with respect to the administration of MA Organization benefit packages to allow for adjustments in line with these flexibilities mid-plan year, which is ordinarily not permitted. We note that CMS has also added flexibilities related to circumstances where telehealth services may be used under Medicare Part B and added reimbursement codes for audio telephone-only evaluation & management (E&M) services for the duration of the emergency in an interim final rule formally published on April 6, 2020. 

Self-Funded Group Health Plans

The DOL does not dictate the terms of coverage under self-insured health plans in the same manner as other regulators. While certain federal laws have been added to ERISA that describe the types of benefits and benefit levels to be offered (such as mental health parity and certain coverage requirements under the Affordable Care Act), ERISA provides plan sponsors with wide latitude regarding the types of benefits that may be offered. The obligations of the self-funded plans to providers are dictated by applicable contracts with the welfare plan, between the welfare plan and an administrative services organization (ASO) that includes providers as part of its network, and between the welfare plan and its participants. Such contracts may or may not address telehealth directly as a category of service separate and distinct from the provision of the same service in-person. We believe most self-insured plans will likely follow the same approach as fully-insured commercial health plans, especially since many of the self-insured plans are administered by the same large health plans or their affiliates. Providers should monitor communications from their self-funded plans before deciding on an approach for delivering telehealth benefits to self-funded plan enrollees. 

Conclusion

California-specific agency guidance for health plans largely aligns with directives from the federal government to use telehealth benefits to support social distancing policies intended to minimize risks of COVID-19 exposure for the general public and enable front-line health workers to focus their efforts on those with emergent conditions. As the health care system shifts to a more permissive regime for telehealth, health plans and providers will need to remain vigilant to ensure that they adhere to the many coverage and documentation requirements issued by state and federal regulators.