DMHC says plans must reimburse for telehealth at same rate as in person services

March 18, 2020
Area(s) of Interest: Practice Management Public Health 

The California Department of Managed Health Care (DMHC) today issued an all plan letter instructing health plans to take immediate steps to allow people to obtain health care via telehealth when medically appropriate to do so.

Plans are required to reimburse providers at the same rate for telehealth services as they would for services provided in person. If the service is one that would otherwise have been provided in-person but is now being provided via telehealth, the plans should reimburse for that service as if it were provided in person. The letter (APL 20-009 – Reimbursement for Telehealth Services) also says that plans must reimburse a service provided telephonically at the same rate as services provided via video.

The letter requires plans to comply immediately. However, the California Medical Association (CMA) is seeking clarification from DMHC on how that affects services provided via telehealth as a result of the state of emergency prior to today.

Additionally, health plans were instructed that they may not subject enrollees to cost-sharing greater than the same cost-sharing if the service were provided in person.

DMHC has confirmed that health plans must ensure their delegated entities comply with these requirements as well.

It’s important to note that practices must ensure that their documentation matches the requirements of the CPT code they are billing and appropriate use of the place of service code, 02, telehealth.

The U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) will waive penalties for HIPAA violations against health care providers that serve patients in good faith through everyday communications technologies, such as FaceTime or Skype, during the COVID-19 nationwide public health emergency. 

CMA is also reviewing whether any state laws would need to be waived for these forms of telehealth to be utilized for California patients insured through Medi-Cal and commercial payors.

Note Re: Telehealth and ERISA Plans

These requirements do not apply to self-funded ERISA plans. CMA is advocating for parity at the federal level to require self-funded ERISA plans to recognize and reimburse telehealth services, including telephonic visits, at the same rate as they would for in-person visits. CMA has also learned that some self-funded plans are only covering telehealth if it is provided through the plan’s third-party telehealth vendor. The cost sharing waivers also do not apply to ERISA plans. It is currently up to individual employers to decide whether they will waive cost sharing.


The California Medical Association (CMA) has set up a COVID-19 resource page, where you will find links to the latest news, research and developments on the COVID-19 outbreak for physicians and other health care providers.


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