Iowa Lawmakers Debate Payment Parity for Telemental Health Services

Iowa lawmakers are debating a bill that would mandate payment parity for mental health services delivered by telehealth.

The state’s House of Representatives has approved HF 294, which would require health plans to reimburse telemental health services “on the same basis and at the same rate” as in-person services. It defines telehealth as the use of real-time interactive audio and video or other interactive electronic media, but not audio-only platforms such as the telephone.

Rep. Joel Fry, the bill’s sponsor, told the Osceola Sentinel Tribune the bill would make permanent an emergency measure enacted in 2020 by Gov. Kim Reynolds to expand access to telehealth services during the coronavirus pandemic.

“I have focused a great deal of my time in the State House on health care needs for rural Iowans and this is another step in securing high quality mental health options in rural Iowa,” he said. 

Payment parity is a contentious issue. Proponents say it’s needed to spur telehealth adoption and prevent payers from undervaluing virtual care, while those against the concept argue that payers should be able to negotiate their own reimbursement rates with providers.

In a recent op-ed in the Des Moines Register, Mark Roth, director of the Federation of Iowa Insurers, argued that payment parity wouldn’t lower costs.

“While Iowa insurers absolutely recognize the benefits of telehealth, we caution that such a mandate could financially incentivize some providers to push services they offer virtually over an in-person visit, possibly negatively impacting Iowans and their health outcomes,” he said.

Roth said payers should have the authority to incentivize providers by negotiating payments based on value.

“Under a payment model that rewards value (measured by outcomes) over volume, providers are incentivized to be creative, and patients see better results,” he said. “Indeed, nearly all the active Iowa insurers who are our member companies already have effective telehealth solutions in place and are prepared to build on that success. By contrast, ‘one-size-fits-all’ legislation could actually disrupt existing payment contracts with providers, undermining Iowa insurers’ flexibility to address evolving situations while driving up costs for consumers.”

The bill is now before the State Senate.