Research & Commentary: California Brings Telehealth Reforms to Medi-Cal

Published October 7, 2019

Over the past year, the Centers for Medicare and Medicaid Services (CMS) has aggressively shifted its policies in favor of increasing the use of telemedicine and telehealth services in Medicaid.  In November 2018, CMS introduced a rule that would expand telehealth for Medicaid and the Children’s Health Insurance Program (CHIP). The rule makes it easier for providers and plans providing telehealth services to receive approval under Medicaid and CHIP.

Telehealth—the use of information technology to remotely diagnose, treat, or monitor patients—can transform health care by making it more affordable and available. Unfortunately, government regulations (such as strict licensing standards) and inability to properly reimburse doctors providing telehealth services are preventing telehealth from becoming widely available. States should reduce unnecessary regulatory barriers to telehealth providers.

Brittany La Couture of American Action Forum argues major reforms are needed to expand telehealth, which is hindered by excessive rules for licensing. “Though it is important to recognize the right of states to protect the health, safety, and welfare of their citizens, mutual recognition and portability would still largely give states the ability to continue to monitor the care that is provided by physicians licensed in their state while creating incentives for states to build competitive regulatory systems that will attract physicians to those states,” La Couture wrote.

California is leading the way for telehealth expansion. Indeed, the California Department of Health Care Services (CDHCS) recently released new guidelines recently undertook several major steps towards expanding the use of telehealth in Medi-Cal, California’s Medicaid program. The new guidelines allow health care providers to determine what type of telemedicine services to use in conjunction with Medi-Cal, so long as they meet Medi-Cal guidelines. This includes both real-time audio-visual communication or asynchronous communications where medical information is stored and forwarded to another party for evaluation.

The new guidelines also add a patient’s home as an originating point for telehealth and removing previous restrictions that require a care provider to be physically with the patient at the time that telehealth is used. The only limit is that asynchronous consultations initiated by the patient, such as an app, do not qualify for reimbursement. These are all positive steps toward normalizing telehealth within Medicaid and will expand health care access for thousands of Californians.

One important area covered in the new guidelines is reimbursement. According to the Center for Connected Health Policy, the new guidelines set three main standards for a telehealth service to be eligible for Medi-Cal reimbursement, it must:

  • Be a service Medi-Cal reimburses for in general.
  • Meet the general definition and components of the CPT (Current Procedural Terminology) or HCPCS (Healthcare Common Procedure Coding System).
  • Meet all laws regarding confidentiality of health care information and patient’s rights to medical information.

Unfortunately, despite these much-needed improvements, there are still many barriers preventing telehealth from flourishing across the country. First, only live video and store-and-forward are available modalities for reimbursement under the new rules. Store-and-forward is a telecommunications technique in which information is sent to an intermediate station where it is kept and sent at a later time. Second, remote patient monitoring is not included. Third, patients cannot initiate asynchronous communications through a health app. Asynchronous communication is another method of communication where both parties can interact with each other at different times, including email and secure messaging, instant messaging, secure file exchanges and over a health app.

Telemedicine has the potential to provide routine health care services to more patients than traditional in-person delivery. Unfortunately, unnecessary and burdensome government regulations continue to stifle access to telemedicine services for most Americans. These limits notwithstanding, California’s reforms will help bring lower cost, high quality, and convenient care to the state’s vulnerable Medicaid population. Hopefully, more states will follow the Golden State’s lead on this important issue.

The following documents examine telemedicine and various barriers blocking its expansion.

AHRQ Finds Telemedicine Clinically Effective
Politico’s Mohana Ravindranath examines a new study from the Agency for Healthcare Research and Quality that finds telemedicine is clinically effective.

The Promise of Telehealth For Hospitals, Health Systems, and Their Communities
This study from the American Hospital Association examines the potential benefits of telehealth. The study’s researchers focus on how telehealth is being used by hospitals and considers how this important innovation helps patients and providers alike.

Telemedicine Facts that May Surprise You
In this article published by Chiron Health, Lauren Cranford examines several research studies and polls that prove telemedicine is popular and effective.

Telemedicine … Across State Borders
Shirley Svorny, professor of economics at California State University at Northridge, discusses the value of using telemedicine services, how allowing telehealth care across state lines would improve the availability of care, the barriers to telehealth expansion, and some reforms state and federal legislators should consider that would expand telemedicine services.

The Traveling Doctor: Medical Licensure across State Lines
Brittany La Couture of American Action Forum examines the licensing process for doctors in several states and argues for reform. “Though it is important to recognize the right of states to protect the health, safety, and welfare of their citizens, mutual recognition and portability would still largely give states the ability to continue to monitor the care that is provided by physicians licensed in their state while creating incentives for states to build competitive regulatory systems that will attract physicians to those states,” La Couture wrote.

Telemedicine: Changing the Landscape of Rural Physician Practice
Writing in the New England Journal of Medicine, Bonnie Darves argues new applications of telemedicine have enabled rural physicians to manage a wide range of acutely ill patients, improve accessibility to specialists, and reduce barriers to care in underserved regions: “With advances in technology, plummeting costs, and governmental health care system partnerships, telemedicine is now used by more than half of U.S. hospitals and has reduced rural practice isolation. Be sure that health plan and hospital credentialing, privileging, licensure, and malpractice issues are addressed before practicing telemedicine.”

Physician Care and Telemedicine
Devon Herrick of National Center for Policy Analysis examines the benefits of telemedicine in providing health care at a lower cost and outlines the current barriers to expansion: “Entrepreneurs are using the telephone, the Internet and personal computers for innovative solutions to traditional problems of health care delivery. These advances are not only making care more accessible and convenient, they are also raising quality and containing medical costs.”

Convenient Care and Telemedicine
This study examines the contribution of telemedicine and other information technology to innovative solutions to some of the problems patients and health care providers encounter under the traditional model of health care delivery. It also identifies obstacles to progress and the public policy changes needed to remove them.

3 Solutions for Major Telemedicine Barriers
This article from Becker’s Hospital Review discusses a recently published study in Telemedicine and e-Health which found three major barriers to telemedicine implementation and use that must be addressed.

Crossing the Telemedicine Chasm: Have the U.S. Barriers to Widespread Adoption of Telemedicine Been Significantly Reduced?
Widespread telemedicine adoption has been stymied by unnecessary technological, financial, and legal barriers for 40 years. In addition, business strategy and human resources have contributed to the delay of implementation. Cynthia LeRouge and Monica J. Garfield canvass recent events and activities in these areas and overall U.S. health care reform that might help to break down these barriers.


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