NJ Governor Shoots Down Telehealth Pay Parity Bill
The bill, which requires insurers to pay for telehealth services at the same rate as in-person care, could result in high costs to taxpayers and thus warrants closer examination, Gov. Phil Murphy said.
New Jersey Gov. Phil Murphy has rejected a state senate bill that would require telehealth payment parity, stating that the cost to taxpayers could be "substantial."
The bill, which was first introduced in the New Jersey Senate in June 2020, requires any carrier that offers a health benefits plan in the state to pay for all forms of healthcare, including behavioral health, delivered through telehealth at the same rate as in-person care.
In addition, the bill bans payers from placing restrictions on locations from where services are provided, the technological platforms used, and from denying coverage for routine patient monitoring performed using telemedicine.
"After careful consideration, I am not confident that this bill achieves the necessary equilibrium between continuing to prioritize in-person care and incentivizing telehealth when it will increase access and improve outcomes for patients," Murphy said in the conditional veto message he sent to the senate.
The legislation tips the scale in favor of providers versus insurers, as the cost borne by the latter, and in turn by those paying premiums and taxpayers, would be high. Meanwhile, providers could gain significant cost savings over the long term, as expanding telehealth options might result in a reduced need for clinical space, support staff, and other expenses, according to Murphy.
The advantage to providers is only one of the reasons for Murphy's rejection. Another is the lack of understanding of whether pay parity could negatively affect patients and how.
"…I am concerned that in the long term, pay parity could over-incentivize telehealth, further limiting in-person options," said Murphy in the veto message. "This could be especially detrimental for those in underserved communities."
Murphy also points to the fact that the Centers for Medicare & Medicaid Services has not yet taken a permanent position on pay parity, further underscoring his concerns that there is a potential for a negative impact on care quality.
"While I wholeheartedly support expanding telehealth and telemedicine access and believe that New Jersey should be a national leader in innovative health care policy, I have reservations about making permanent a measure that was intended as a stopgap to preserve public health during an unprecedented emergency," he said.
Murphy conditionally vetoed the bill, which means that he has sent it back to the senate with recommended amendments. If the senate does not adopt his recommendations, he will not sign the bill. His suggested amendments include requiring the state's health department to assess pay parity within the next 18 months and make a policy recommendation as to whether, and under what circumstances, it should be enacted into law.
But, to support healthcare stakeholders, Murphy is recommending that telehealth pay parity remain in place through the end of 2023. This will give policymakers time to review the results of the health department's assessment, he said.
The move comes as states consider which temporary telehealth policies enacted during the COVID-19 pandemic to make permanent. State legislators are already facing pressure from industry to keep certain flexibilities, including those pertaining to telehealth licensure.
