Amid Unwinding of Pandemic-Era Policies, Medicaid Programs Continue to Focus on Delivery Systems, Benefits, and Reimbursement Rates: Results from an Annual Medicaid Budget Survey for State Fiscal Years 2023 and 2024

Telehealth

Context

States have broad authority to determine whether and how to cover telehealth in Medicaid. While all states had some form of Medicaid telehealth coverage prior to the pandemic, policies regarding allowable services, providers, and originating sites varied widely;¹ further, Medicaid telehealth payment policies were unclear in many states.² To increase health care access and limit risk of viral exposure during the pandemic, all 50 states and the District of Columbia expanded coverage and/or access to telehealth services in Medicaid. For example, states expanded the range of services that can be delivered via telehealth; established payment parity with face-to-face visits; expanded permitted telehealth modalities; and broadened the provider types that may be reimbursed for telehealth services. These telehealth expansions contributed to substantial growth in Medicaid and CHIP services delivered via telehealth during the first months of the PHE. States reported and CMS data show that behavioral health services delivered via telehealth increased dramatically during the PHE. Overall, per-enrollee telehealth use in Medicaid and CHIP spiked in April 2020, stabilized from June 2020 through March 2021, and then decreased through July 2022.

A key issue to watch going forward will be CMS rulemaking. CMS is expected to finalize rules in the months ahead that relate to enrollees’ ability to access services, and are specifically designed in part to “strengthen standards for timely access to care,” which may have implications for telehealth policy.

This section provides information about:

• Telehealth policy changes implemented in FY 2023 or planned for FY 2024
• State strategies to assess/improve telehealth quality used in FY 2023 or planned for FY 2024

Findings

Telehealth Policy Changes FY 2023 AND FY 2024

During the COVID-19 pandemic, many states used temporary Medicaid emergency authorities to expand telehealth coverage and also took advantage of their existing broad authority to further expand telehealth without the need for CMS approval. By 2022, states reported making permanent a broad range of temporary policies that were adopted to expand the use of telehealth during the pandemic as well as limiting certain telehealth policies (e.g., coverage of or payment parity for audio-only) that were implemented on an emergency basis. In this year’s survey, states were asked to indicate whether telehealth policy changes were implemented in FY 2023 or were planned for FY 2024 in key telehealth areas where states have discretion including services covered via telehealth, provider types reimbursed, allowable modalities, originating site policies, and reimbursement parity. States were asked to include any changes to current policy – even if the policy being changed was temporary due to the COVID-19 PHE.

While state responses suggest telehealth policy has largely stabilized after rapid expansion during the pandemic, states that reported telehealth policy changes in FY 2023 or FY 2024 reported more expansions than limits. The most frequent expansions to telehealth policy reported were for allowable modalities, services covered via telehealth, and provider types reimbursed. The most frequent limits reported were for services delivered via telehealth. Examples of state telehealth policy changes implemented in FY 2023 or planned for FY 2024 are described below:

• Services Covered. Several responding states indicated some service limitations went into effect at the end of the federal PHE (which ended on May 11, 2023). For example, Colorado reported temporary coverage of well-child visits via telehealth ended at the end of the PHE. Pennsylvania reported ending temporary Appendix K flexibility for remote/telehealth services in the state’s aging and physical disabilities waivers. Several responding states also reported expanding services covered via telehealth in FY 2023. For example, Texas reported an expansion of telehealth coverage for mental health and Substance Use Disorder treatment services in FY 2023.
• Provider Types Reimbursed. While few states reported changes to provider types allowed to be reimbursed for telehealth services, most provider type policy changes reported were expansions. For example, Michigan reported that during the PHE the state expanded allowable providers to physical therapy (PT), occupational therapy (OT), speech-language pathology (SLP), audiologists, and dentists and at the end of the PHE the state made these allowable provider types permanent. In FY 2024, Kansas reported plans to expand telehealth policy to cover out of state providers. North Dakota reported plans to cover certain teledentistry services in FY 2024.
• Allowable Modalities. While a few states reported expanding coverage of audio-only services in FY 2023, a few states reported discontinuing reimbursement of audio-only for some services. Hawaii reported audio-only modality was limited to behavioral health services (in accordance with 2023 Hawaii state legislation) at the end of the federal PHE. During state interviews, a number of states noted the ongoing evaluation of the efficacy and appropriateness of services delivered by audio-only modality as well as the modality’s impact on disparities. Four states (California, New York, Texas, and Vermont) cited remote patient monitoring (RPM) as a modality expansion in FY 2023, while Massachusetts noted considering expansion of RPM in FY 2024. Three states (Colorado, Massachusetts and New York) reported expanding coverage to allow for e-consults in FY 2023 or FY 2024.

Few states reported originating site or reimbursement parity policy changes. Most policy changes reported in these areas were expansions (i.e., liberalizing originating site definitions (to allow patients to receive telehealth services from their homes) or establishing or making telehealth payment parity permanent).

Telehealth Quality

The rapid expansion of Medicaid telehealth policies and utilization during the pandemic prompted questions about the quality of services delivered via telehealth. To fulfill a directive in the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act to report on the federal pandemic response, in March 2022 the Government Accountability Office (GAO) released a report that analyzed states’ experiences with telehealth in Medicaid and evaluated state and federal oversight of quality of care and program integrity risks.³ In the report, the GAO raised concerns about the impact of telehealth delivery on quality of care for Medicaid enrollees and recommended that CMS collect information to assess these effects and inform state decisions. CMS acknowledged but has not yet acted on these recommendations. Further, the 2022 Bipartisan Safer Communities Act directs the agency to issue guidance to states on options and best practices for expanding access to telehealth in Medicaid, including strategies for evaluating the impact of telehealth on quality and outcomes.⁴

The survey asked states to identify Medicaid agency strategies to assess/improve telehealth quality used in FY 2023 or planned for FY 2024 (Figure 16). Most responding states reported requiring providers to differentiate telehealth and in-person claims using place of service codes and/or modifiers. Slightly fewer, but more than half of responding states reported requiring providers to differentiate audio-visual and audio-only claims using codes and/or modifiers. About one-third of responding states reported state-required analysis of evaluation or utilization or other data, and a similar number of states reported collecting telehealth utilization data stratified by race/ethnicity (which may assist states in better understanding disparities in telehealth use and access by race/ethnicity).