BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 1771
AUTHOR: Pérez
AMENDED: June 9, 2014
HEARING DATE: June 18, 2014
CONSULTANT: Boughton
SUBJECT : Telephone visits.
SUMMARY : Requires health plans and health insurers, with
respect to plan contracts and insurance policies issued,
amended, or renewed on or after January 1, 2016, to cover
telephone visits provided by a physician.
Existing law:
1.States legislative intent to recognize the practice of
telehealth as a legitimate means by which an individual may
receive health care services from a health care provider
without in-person contact with the health care provider.
2.Prohibits a health plan or health insurer from requiring
in-person contact between a health care provider and a patient
before payment is made for the covered services appropriately
provided through telehealth, subject to the terms and
conditions of the contract entered into between the enrollee
or subscriber and the health plan or the insured and health
insurer, and between the health plan or health insurer and its
participating providers or provider groups.
3.Prohibits a health plan or health insurer from limiting the
type of setting where services are provided for the patient or
by the health care provider before payment is made for the
covered services appropriately provided through telehealth,
subject to the terms and conditions of the contract entered
into between the enrollee or subscriber and the health plan or
the insured and the health insurer, and between the health
plan or health insurer and its participating providers or
provider groups.
4.Applies 2) and 3) above to health care and Medi-Cal managed
care plan contracts with the State Department of Health Care
Services (DHCS).
5.Prohibits existing law from being interpreted to authorize a
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AB 1771 | Page 2
health plan or health insurer to require the use of telehealth
when the health care provider has determined that it is not
appropriate.
6.Establishes the Department of Managed Health Care (DMHC) to
regulate health plans and the California Department of
Insurance (CDI) to regulate health insurers, and other
insurance carriers and insurance agents.
This bill:
1.Requires health plans and health insurers, with respect to
plan contracts and insurance policies issued, amended, or
renewed on or after January 1, 2016, to cover telephone visits
provided by a physician.
2.Prohibits this bill from being construed to authorize a health
plan or insurer to require the use of telephone visits when
the physician has determined that providing services by
telephone is not medically appropriate; alter the scope of
practice of a health care provider or authorize the delivery
of health care services in a setting, or in a manner, that is
not otherwise authorized by law; and, prohibit a health plan
or health insurer from requiring reasonable documentation
specific to telephone visits.
3.Requires all laws regarding the confidentiality of health
information and a patient's rights to his or her medical
information to apply to telephone visits.
4.Makes this bill inapplicable to a patient under the
jurisdiction of the Department of Corrections and
Rehabilitation or any other correctional facility.
5.Prohibits a health plan or insurer from being required to
reimburse separately for any of the following:
a. A telephone visit that is related to a service
or procedure provided to an established patient within
a reasonable period of time prior to the telephone
visit, as recognized by the American Medical
Association (AMA), Current Procedural Terminology
(CPT) codes;
b. A telephone visit that leads to a related
service or procedure provided to an established
patient within a reasonable period of time, or within
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an applicable postoperative period, as recognized by
the AMA, CPT codes;
c. A telephone visit provided as part of a bundle
of services for which reimbursement is provided on a
capitated or prepaid basis or for which reimbursement
is provided using an episode-based payment
methodology; or,
d. A telephone visit that is not initiated by the
patient.
6. Establishes the following definitions for purposes of this
bill:
a. "Established patient" means a patient who,
within the three years immediately preceding the
telephone visit, has received professional services
from the provider or another provider of the exact
same specialty and subspecialty who belongs to the
same group practice; and,
b. "Telephone visit" means evaluation and
management services that meets all of the following
criteria:
i. Do not require a face-to-face visit
with the physician;
ii. Are provided remotely through live
voice communication to an established patient, or
parents or guardians of a minor who is an
established patient;
iii. Are initiated by the patient, or
the parents or guardians of a minor who is a
patient. For purposes of this section, "initiated
by the patient" excludes a visit for which a
provider or staff contacts a patient to initiate
a service; and,
iv. Are recognized by the AMA, CPT
codes.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, estimated costs are as follows:
1.Costs of $500,000 to $2 million for provision of services
through California Public Employees' Retirement System benefit
plans (General Fund (GF)/federal/special/local funds). About
60 percent of this cost is state cost, while the rest is a
local cost. This range is based on assumptions related to
AB 1771 | Page 4
cost sharing and percentage of visits billed.
2.Increased employer-funded premium costs in the private
insurance market of $6 million to $25 million.
3.Increased premium expenditures by employees and individuals
purchasing insurance of $5 million to $23 million, as well as
increased out-of-pocket expenditures of $2 million to $10
million.
PRIOR VOTES :
Assembly Health: 18- 0
Assembly Appropriations:12- 0
Assembly Floor: 76- 1
COMMENTS :
1.Author's statement. According to the author, this bill is
needed because insurers in the state currently vary in
reimbursing for telephone services and often deny physician
requests for coverage, depriving patients of a reasonable
alternative to face-to-face physician evaluations. Utilizing
telephone patient management services is a cost-effective and
efficient strategy to addressing access to care issues,
especially in underserved areas. At a time when we have
increased insurance coverage for millions of Californians,
this bill ensures that all patients, regardless of location
and income level, can receive the care they need in the most
productive way possible.
2.California Health Benefits Review Program (CHBRP) analysis.
AB 1996 (Thomson), Chapter 795, Statutes of 2002, requests the
University of California to assess legislation proposing a
mandated benefit or service and prepare a written analysis
with relevant data on the medical, economic, and public health
impacts of proposed health plan and health insurance benefit
mandate legislation. CHBRP was created in response to AB 1996.
CHBRP's analysis is based on a previous version of this bill,
which mandated coverage for multiple forms of telehealth. As
amended, this bill mandates coverage for telephone visits.
Below are major findings of CHBRP's analysis that are relevant
to this version of AB 1771. However, CHBRP's analysis in some
cases links telephonic and electronic patient management but
as indicated, the bill now deals only with telephonic patient
management. For the Benefits Coverage, Utilization and Cost
estimates, CHBRP has provided updated estimates based on the
current version of this bill.
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a. Medical effectiveness. There is insufficient
evidence to determine evaluation and management services
provided via telephone or email are as effective as
medical care provided in-person. It is unknown whether
diagnoses made using these technologies are as accurate
as diagnoses made during in-person visits. There are
studies showing telephone encounters did not reduce
hospital or emergency visits. CHBRP notes that the
absence of evidence does not mean there is no effect.
b. Benefit coverage. Approximately, 49 percent of
California's 23.4 million enrollees with state-regulated
health insurance currently have some form of benefit
coverage for telephone-based patient management. With
regard to telephone-based evaluation and management,
CHBRP indicates approximately 11 million currently have
coverage and an additional 12 million will gain
telephone-based evaluation and management coverage under
AB 1771.
c. Capacity and access. CHBRP estimates overall
increase of between 2.3 percent and 9.9 percent physician
encounters, which includes both in-person and telephonic
or electronic visits. However, based on the prior
version of this bill, CHBRP finds limited evidence that
this bill would increase the capacity of physicians to
see additional patients because of a limitation that is
no longer in the bill and because the bill limits
coverage and reimbursement to physicians, and does not
include non-physicians who are part of a practice. CHBRP
assumes that physicians' personal bandwidth to respond
using any of the telehealth modalities is limited.
d. Utilization and cost. CHBRP's updated analysis
estimates that the number of telephone-based evaluation
and management services would increase by 115 to 126
percent under AB 1771 depending upon adoption. The
average per-unit cost of telephone-based evaluation and
management is estimated at approximately $90.38. CHBRP
assumes 60 percent of telephonic would substitute
in-person visits and 40 percent would supplement visits
that were otherwise unreimbursed because physicians could
not bill for them. CHBRP provides the following example
of a visit that would be reimbursed under this bill: A
patient calls the doctor with suspected new-onset urinary
tract infection. Doctor refers patients for a lab visit
and prescribes antibiotics over the phone.
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e. Impact on expenditures. According to CHBRP's
updated analysis of the current version of this bill,
premium increases per member per month would range from
$.43 for DMHC plans to $1.06 for CDI policies in the
large-group market, based on a high adoption scenario or
from $.44 for DMHC plans to $1.11 for CDI policies per
member per month in the individual markets, depending
upon adoption. Overall, premium costs would increase by
$115 million and enrollee expenses would increase by
almost $13 million for a total impact of approximately
$128 million. Note: with these estimates CHBRP assumes a
$5 copayment for telephone visits.
f. Interaction with EHB. CHBRP indicates that this
bill does not interact with EHBs. EHBs are mandated
coverage for specific health care services, and
telehealth is not a health care service, but a method by
which to deliver services.
3.CPT Codes. These codes are used to report episodes of patient
care initiated by an established patient or guardian of an
established patient. If the telephone service ends with a
decision to see the patient within 24 hours or next available
urgent visit appointment, the code is not reported; rather the
encounter is considered part of the preservice work of the
subsequent evaluation and management service, procedure, and
visit. If the telephone call refers to an evaluation and
management service reported within the previous seven days or
within the postoperative period of the previously completed
procedure, then the services is not reported. There are also
CPT codes for telephone services provided by a qualified
non-physician who may report telephone assessment and
management services with similar criteria as described above.
According to the CHBRP analysis, with a few exceptions, the
Centers for Medicare and Medicaid Services (CMS) do not
reimburse for telephone (and email) communications. Most
commercial insurance carriers follow CMS reimbursement
decisions.
4.Prior legislation. AB 415 (Logue), Chapter 547, Statutes of
2011, among other provisions, prohibits DHCS from requiring
that a health care provider document a barrier to an in-person
visit prior to paying for services provided via telehealth to
a Medi-Cal beneficiary. Repeals the prohibition of paying for
a service provided by telephone or facsimile and would instead
prohibit DHCS from limiting the type of setting where services
are provided for the patient. Prohibits health plans and
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insurers from requiring that in-person contact occur between a
health care provider and a patient before payment is made for
the services appropriately provided through telehealth,
subject to the terms of the relevant contract. Repeals the
prohibition for paying for a service provided by telephone or
facsimile and would instead prohibit health plans and insurers
from limiting the type of setting where services are provided
for the patient or by the health care provider.
SB 1665 (Thompson), Chapter 864, Statutes of 1996, established
the Telemedicine Development Act (TDA) 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.
5.Support. The California Medical Association writes that
payors in the state vary in reimbursing for these services and
often deny physician requests for coverage of this time spent
providing substantive medical advice, depriving patients of a
reasonable alternative to face-to-face physician evaluations.
At a time when access to health care is essential, this bill
ensures that all patients, regardless of location and income
level, can receive the care they need in the most efficient
and productive way possible. The Osteopathic Physicians and
Surgeons of California believe this bill is an important step
toward alleviating struggles in rural areas to provide care
quickly and efficiently by ensuring that physicians are
reimbursed for telephone visits by health plans. This will
allow physicians to treat more patients, which in turn will
increase access to care for health care consumers.
6.Support if amended. The California Association of Marriage
and Family Therapists requests this bill be amended to include
marriage and family therapists. Without adequate
reimbursement for these services, insurers and health plans
deprive patients of a reasonable alternative to face-to-face
mental health and medical services.
7.Opposition. Opponents write that this bill is unnecessary
because physicians and plans are free to negotiate if, and in
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what manner, these interactions should be reimbursed.
Opponents, such as the California Chamber of Commerce and
others, are opposed to efforts to impose new mandates on
health care coverage beyond those imposed by the Patient
Protection and Affordable Care Act (ACA) particularly while
the ACA is still being phased in. Additionally there are
concerns with the measure to the extent it seeks to expand
fee-for-service reimbursement for medical care.
8.Opposition unless amended. The California Society of
Health-System Pharmacists has concerns with this bill because
it excludes pharmacists. To exclude other health care
providers, including pharmacists, defeats the very purpose of
the bill, to make the provision of care efficient and
scalable. The Association of California Life and Health
Insurance Companies (ACLHIC) requests amendments to: 1)
provide a notice to consumers at the time of a telephone visit
between a provider and patient disclosing that the service is
subject to any cost sharing that would apply to a similar
in-person office visit; 2) a prior authorization request
should be required due to the additional expense; and, 3) in
the case of insurers who pay providers on a negotiated rate,
an amendment in the Insurance Code portion of the bill would
need to exempt such insurers from making a separate payment to
a provider for a telephone call.
9.Policy Comments and amendments. This bill requires coverage
for physicians for telephone visits. As indicated in the
CHBRP analysis this limitation could impact the extent to
which the policy increases capacity and access. Including
coverage for non-physician provider telephone visits could
make more of an impact on capacity. This bill should be
expanded to include qualified non-physician health care
providers. Additionally, since health insurers do not
reimburse based on capitation or prepaid episode based
payments, the health insurance code provisions should be
amended to reflect payment mechanisms more appropriate to
those carriers or remove these provisions from the bill.
SUPPORT AND OPPOSITION :
Support: California Medical Association (sponsor)
California Academy of Family Physicians
California Chapter of the American College of
Emergency Physicians
California Healthcare Institute
California Primary Care Association
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California Society of Anesthesiologists
Osteopathic Physicians & Surgeons of California
Planned Parenthood Affiliates
Oppose: America's Health Insurance Plans
Association of California Life & Health Insurance
Companies (unless amended)
California Chamber of Commerce
California Association of Joint Powers Authorities
California Association of Health Plans (unless
amended)
California Society of Health-System Pharmacists
(unless amended)
California Farm Bureau Federation
Health Net
Local Health Plan of California
National Federation of Independent Business
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