California Governor Gavin Newsom recently signed Assembly Bill No. 744 (“Bill”) into law, which requires carriers to reimburse providers for telehealth services at the same rate as identical in-person services. The purpose of the bill is to expand access to healthcare to California residents, especially those in rural areas who lack access to care, and to clarify existing law on telehealth reimbursement. The new requirement applies to contracts issued, amended or renewed on or after January 1, 2021 between health plans/carriers and healthcare providers.
The Bill requires carriers to reimburse providers for the “diagnosis, consultation, or treatment” of plan participants appropriately delivered through telehealth services “on the same basis and to the same extent” that the plan would pay for the “same” in-person service. The provider’s description of the service will be used to determine whether services are the “same.” The Bill authorizes carriers to impose co-payments or co-insurance (collectively referred to as cost-sharing) for telehealth services, as long as the cost-sharing does not exceed that of the same in-person services.
The Bill does not limit the ability of a health care service plan and provider to negotiate the rate of reimbursement for the service provided, but states that in-person and telehealth services must be reimbursed at the same negotiated rate. It is important to note that the Bill’s price parity provisions are subject to the terms of the contract, meaning that the Bill would only apply if telehealth services were covered under the terms of the plan.
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