BILL ANALYSIS Ó
AB 415
Page 1
Date of Hearing: May 18, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 415 (Logue) - As Amended: May 10, 2011
Policy Committee: HealthVote:16-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill, titled the Telehealth Advancement Act of 2011,
revises the Telemedicine Development Act of 1996 which governs
medical services provided through telehealth. Specifically,
this bill:
1)Eliminates requirements for written informed consent prior to
the use of telehealth, replaces them with requirements for
verbal consent, and applies laws governing confidentiality of
medical information to telehealth interactions.
2)Prohibits health plans, health insurers, and Department of
Health Care Services (DHCS) from limiting the type of setting
where medical services are provided.
3)Repeals a prohibition on health plans, health insurers, and
Medi-Cal from being required to pay for consultation provided
by the health care provider by telephone or fax.
4)Prohibits Medi-Cal from requiring documentation of a barrier
to an in-person visit for coverage of services provided using
telehealth.
5)Deletes the January 1, 2013 sunset date on existing law that
authorizes teleophthalmology and teledermatology by store and
forward in the Medi-Cal Program.
6)Repeals outdated definitions and obsolete provisions,
modernizes terminology, and makes other conforming changes.
7)Makes various findings and declarations related to the value
of telehealth.
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FISCAL EFFECT
1)Unknown one-time workload, unlikely to exceed $100,000, to the
Department of Health Care Services (DHCS) to modify
regulations, develop specific payment policies, and
communicate the new policies via provider bulletins. These
changes are related to (a) a provision in the bill that would
invalidate existing regulations requiring documentation of a
barrier before reimbursement could be claimed, and (b) the new
requirement to cover health care services provided by
telephone.
2)Potential unknown additional costs, or cost savings, for
telehealth services in the Medi-Cal program. The cost impacts
would depend on changes in payment policies developed by DHCS
and any resulting changes in provider billing behavior.
For example, the removal of the prohibition on Medi-Cal being
required to pay for telephone consultation has an unknown
fiscal impact. Providers may consider telephone consultations
as an appropriate way to perform certain services, and
regularly begin billing Medi-Cal for telephone consultations.
It is unknown to what extent telephone consultations would be
replace office visits (potentially saving the state money) or
be billed in addition to office visits (potentially costing
the state more) in fee-for-service Medi-Cal.
In addition, providers currently practicing telemedicine
through fee-for-service Medi-Cal can be reimbursed for
transmission costs under certain circumstances. If
reimbursement for transmission costs was allowed for
additional services and more providers began billing Medi-Cal
for these costs, Medi-Cal costs could increase. Cost impacts
in Medi-Cal managed care are difficult to estimate, as they
would be subject to the specific terms and conditions of each
plan contract.
3)A significant increase in the use of telehealth could have
indirect fiscal impacts on Medi-Cal and health plans and
insurers. However, these potential impacts are speculative,
and would be effects of the broader adoption of telehealth,
not specific impacts of this bill. For example, health
insurers surveyed about potential cost impacts of widespread
adoption of telehealth indicated their belief that increasing
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the ease of obtaining specialists' opinions could encourage
more referrals, leading to increased costs. There is also
potential for cost savings in Medi-Cal from reduced use of
medical transportation services, if more individuals were
served through telehealth.
COMMENTS
1)Rationale . According to the author, in 1996 California was
the first state to pass legislation to establish telemedicine
as a legitimate means of receiving health care services, and
provide parameters for reimbursement in both private and
public health coverage plans. The author indicates that the
provisions of the original Telemedicine Development Act,
although forward-looking at that time, are outdated and may
inhibit the full adoption of telehealth in this state and deny
the state potential benefits such as reduced costs, increasing
access and improved quality of care. This bill will update
and modernize California's statute, as well as encourage
increased use of telehealth in the state.
2)Background . This bill 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."
The most common means of telehealth used today are (1)
interactive remote consultations through live
videoconferencing and (2) asynchronous store-and-forward
communications. Store & forward communications primarily take
place among medical professionals, to aid in diagnoses and
medical consultations, when live video or face-to-face contact
is not necessary. An example might be a primary care provider
taking digital photos of their patients' skin conditions and
forwarding the images to dermatologists for review. In
addition, remote patient monitoring of vital signs such as
blood pressure, blood sugar, and electrocardiograms, are
becoming an increasingly common form of telehealth.
3)Work Group Recommendations . In 2010, the Center for Connected
Health Policy (CCHP) convened a diverse work group of 25
prominent health care and policy professionals to participate
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in a Telehealth Model Statute Work Group. This group examined
the barriers to the integration of telehealth as a tool into
California's health care delivery system, and made
recommendations. This bill implements some of the 13 workgroup
recommendations.
4)Medi-Cal fee-for-service and Managed Care . Medi-Cal contracts
with managed care plans to provide services to a majority of
its enrollees. Under managed care, providers are reimbursed
on a "capitated" basis or a predetermined amount per-person
per-month regardless of the number of services an individual
received. In contrast, under the fee-for-service system, the
other payment mechanism the Medi-Cal program uses to reimburse
providers, a provider receives an individual payment for each
medical service that is provided. Current law that applies to
fee-for-service reimbursement prohibits Medi-Cal from
requiring face-to-face contact between a health care provider
and a patient for covered services appropriately provided
through telehealth. Current law requires the same for managed
care plans, provided that the services are also covered
through fee-for-service Medi-Cal and that Medi-Cal contracts
are amended to add this coverage.
At this time, fee-for-service Medi-Cal program has payment
policies in place only for certain services, including
ophthalmology, dermatology, and psychiatry, despite the
requirement for reimbursement for any service appropriately
provided through telehealth.
5)Related Legislation . AB 386 (Galgiani), pending in the
Assembly, requires CDCR to have an operational telehealth
services program at all adult institutions. AB 386 is pending
in this committee.
SB 946 (Committee on Health) incorporates some of the same
terminology changes proposed in this bill and is pending in
the Senate.
AB 354 expands telemedicine provisions by providing that, from
July 1, 2006 through December 31, 2008, face-to-face contact
between a health care provider and a patient shall not be
required for the Medi-Cal program for "store and forward"
teleophthalmology and teledermatology services. AB 2120
(Galgiani), Chapter 260, Statutes of 2008 extended this sunset
until 2013. AB 136 (Yee) of 2011 would extend the sunset until
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2018. AB 136 is currently pending in the Senate
Appropriations Committee.
SB 1665 (Thompson), Chapter 864, Statutes of 1996, established
the Telemedicine Development Act 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.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081