BILL ANALYSIS Ó
AB 1771
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Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1771 (V. Manual Perez) - As Amended: May 6, 2014
Policy Committee: HealthVote:18-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires a health plan or insurer, after January 1,
2015, to cover physician telephonic and electronic patient
management services and to reimburse those services based on
complexity and time expenditure.
FISCAL EFFECT
This bill has been amended since the California Health Benefits
Review Program (CHBRP) analyzed it. Cost estimates from CHBRP
have been modified based on the amendments, and are estimated as
follows:
1)Costs of $1 million to $4 million for provision of services
through CalPERS benefit plans (GF/federal/special/local
funds). About 60% of this cost is state cost, while the rest
is a local cost. This range is based on assumptions related
to cost-sharing and percentage of visits billed.
2)Increased employer-funded premium costs in the private
insurance market of $13 million to $56 million.
3)Increased premium expenditures by employees and individuals
purchasing insurance of $11 million to $50 million, as well as
increased out-of-pocket expenditures of $5 million to $23
million.
COMMENTS
1)Purpose . According to the author, this bill is necessary
because although physicians can bill for telephone and online
evaluations, payer policies differ. The author believes
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coverage for these services is an effective strategy to
address access to care issues, and can increase efficiency and
productivity through the reduction of unnecessary office
visits, allowing physicians to treat more patients.
2)Telehealth versus Electronic and Telephonic Patient Management
Services . 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. 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).
In contrast, this bill requires coverage for physician
telephonic and electronic patient management services, which
is defined as "non-face-to-face telephone services and online
medical evaluation, as recognized by the American Medical
Association, Current Procedural Terminology (CPT) codes." CPT
codes, which are produced and copyrighted by the AMA, are
commonly used to identify and bill for medical procedures.
According to CHBRP, this bill would require reimbursement for
certain evaluation and management CPT codes that do not
specifically require a face-to-face encounter. CPT codes for
non face-to-face encounters relate to existing patients only
and have other restrictions, including, for example, that they
may not be simply a follow-up question related to a visit in
the previous seven days.
3)CHBRP Evaluation . CHBRP's main findings regarding the impact
of this bill are as follows (specific findings related to
costs are noted in the Fiscal Effect section):
a) About half of health insurance enrollees have coverage
for email and telephone encounters, and about 80% have
coverage for traditional telehealth.
b) Telephone and email-based encounters would increase by
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approximately 1 million statewide. 60% of the visits would
replace in-person services, while 40% would be new.
c) CHBRP was unable to identify whether medical care
provided via email and telephone is as effective as care
provided in person due to insufficient evidence.
d) CHBRP estimates this bill will increase health
expenditures by $55 million to $240 million statewide.
e) Patient experience may improve as travel time and
responsiveness to patient inquiries are increased.
f) Technology will continue to drive coverage and usage of
communications technology in health care.
1)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.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081