Utah Expands Telehealth Coverage for Mental Health Services

Utah Governor Spencer Cox has signed into law a bill that allows coverage for mental healthcare services delivered by telehealth.

SB 41, sponsored by State Sen. Luz Escamilla, requires the state’s Medicaid program and commercial health plans to reimburse providers “at a commercially reasonable rate” for “medically necessary” telemental health services as long as they’re also provided in-person and they meet the appropriate standard of care.

The law also prevents payers from imposing any originating site, geographic or distance-based restrictions on connected health reimbursement.

“Mental health is becoming a big crisis and in our state we’re seeing an increase in needs, and access has become very limited,” Escamilla told State Of Reform following the bill’s passage last week. “The state moved, since last session, to be more practical with telehealth — it’s working well. Now, we’re bringing this telehealth component to mental health.”

With the coronavirus pandemic exacerbating already-high levels of stress, depression, anxiety and substance abuse, federal and state governments have moved to improve access to and coverage of telehealth service for mental healthcare.

Some states have made that coverage permanent, while the federal government, in the Consolidated Appropriations Act of 2020, now allows Medicare coverage as long as provider and patient have met in person within the prior six months and continue to meet in person at regular intervals.

While some states have opted to mandate strict payment parity – in which telehealth services are reimbursed at the same rate as in-person services – Utah joins a few that are allowing providers and payers to set rates for telehealth coverage, as long as the coverage is equal and the rates are “commercially reasonable.”

Nathaniel Lacktman, a partner with Foley & Lardner and chair of the firm’s Telemedicine & Digital Health Industry Team, says those kinds of arrangements might be best in the long run.

“Ideally, payment parity laws should not prevent the parties from negotiating for different reimbursement rates for telehealth vs. in-person services, so long as such negotiations are truly voluntary by the provider and not forced upon them,” he recently told mHealthIntelligence. “Well-drafted payment parity laws can level the field for providers to enter into meaningful negotiations with health plans as to how telehealth services are covered and paid. Model payment parity laws should not eliminate opportunities for cost savings, and should allow health plans and providers to contract for alternative payment models and compensation methodologies for telehealth services, so long as those negotiations are voluntary.”