California October 2019 Fact Sheet

On October 11, 2019, Governor Gavin Newsom signed AB-744 into law requiring telemedicine coverage and payment parity by commercial health groups throughout California.  Effective January 1, 2021, this law modifies California’s current telemedicine law and creates two notable statutes, Health & Safety Code Section 1374.14 and Insurance Code Section 10123.855, instituting significant changes to California’s telemedicine reimbursement.

Health & Safety Code Section 1374.14
Payment Parity

Health plans are required to reimburse services at the same rate for equal services, whether in-person or provided through telehealth.

“…Between a health insurer and a health care provider for an alternative rate of payment to specify that the health care service plan or health insurer reimburse a health care provider for the diagnosis, consultation, or treatment of an enrollee, subscriber, insured, or policyholder appropriately delivered through telehealth services on the same basis and to the same extent that the health care service plan or health insurer is responsible for reimbursement for the same service through in-person diagnosis, consultation, or treatment.”

Coverage

Health care plans must now provide coverage for telehealth services and include these services in their plan options.

“A health care service plan contract issued, amended, or renewed on or after January 1, 2021, shall specify that the health care service plan shall provide coverage for health care services appropriately delivered through telehealth services on the same basis and to the same extent that the health care service plan is responsible for coverage for the same service through in-person diagnosis, consultation, or treatment.”

Insurance Code Section 10123.855
Negotiated Rates

Health plans and providers are permitted to negotiate rates under participation agreements, however, if the services are determined to be the same, then they must be reimbursed at equal rates.

Additional Payments

Health plans are permitted to charge a deductible, copayment or coinsurance to telemedicine service as long as it does not exceed charges applicable to equal in-person services.

Only applicable for telehealth services provided by an in-network provider, out-of-network coverage is only required under other provisions.

Originating Site

Currently, California allows the home as an originating site, which is further referenced in the law.

For more information on telemedicine legislation in California, visit their Telemedicine & Telehealth Reimbursement Overview.