Telehealth: Insurance & Legal Considerations

GoodTherapy | Telehealth: Insurance & Legal Considerations

by Connor D. Jackson, JD

Connor D. Jackson is a healthcare attorney based in Chicago who serves independent practices. Visit his firm’s website to learn more.

Telehealth: Insurance & Legal Considerations

When evaluating whether telehealth services are covered by insurance, three concerns should be top of mind. The requirements of individual states, insurance companies, professions, and claims vary widely. Thus, something that might cause one claim to be denied could be irrelevant to another claim’s approval. It’s important to know what questions to ask and what the answers mean for your practice’s procedures.

1. Is it covered, and will I get paid?

First, determine whether your state legislature has enacted telehealth insurance parity laws. These laws typically require parity between the types of services covered or the reimbursement value of the services. For example, coverage parity requires that insurers cover telehealth-based services that they already cover when offered in the office. If a state also requires payment parity, insurers reimburse providers for telehealth services at the same rate as in-person encounters. 

Many states have coverage parity laws, but achieving payment parity has been a tougher battle for providers. CMS has already announced that some payment parity changes will be rolled back once the COVID emergency ends. Legislation is pending in several states to protect temporary payment parity changes, but even if passed, these laws will apply only on a state-by-state basis.

2. Do I need to change how I file claims?

The second insurance-related consideration requires that the provider bill the services using the correct codes, including any modifiers. Most mental health providers are already familiar with the “95” CPT code modifier for telehealth services. 

During COVID, however, CMS reminded providers that claims should include “DR” (disaster-related) and “CR” (catastrophe-related) modifiers as needed to ensure payment.  DR/CR modifiers aren’t generally needed for outpatient mental health services, and they were used more by those whose underlying roles shifted during the pandemic. 

For example, an ambulance company could seek reimbursement for responding to a 911 call and rendering paramedic services, even if they didn’t transport the patient back to the hospital, because COVID requirements didn’t allow them to follow that protocol. When filing their claim with Medicare, the company would add a DR/CR code to identify COVID as the reason they didn’t take the patient to the hospital.

3. Does it matter where I’m licensed?

The provider’s license matters to insurance companies. They use it to determine if the provider is eligible to provide services in the state where the client received them, and they verify it during the paneling or credentialing process before allowing that provider to be in their network. A “place of service” code and office address on a claim form could also reveal that the provider is located out-of-state.

Licensing for Telehealth Care

Traditionally, providers were licensed in the state where they lived and offered care. The client’s state of residence was generally irrelevant because clients saw their clinicians at a physical location. 

The emergence of telehealth in recent years was accompanied by an all-too-common expansion of technology at a faster pace than legal developments. The majority of clients continued seeing their providers in person, and coverage parity laws became the norm only shortly before COVID began. When the pandemic forced providers to suspend in-person care, they faced a new and existential question: whom can I treat?

1. If I’m only using telehealth, am I restrained by my state license?

Under the framework in most states, the law considers a telehealth visit to take place where the client is located during the encounter. This means that the provider must be licensed in the state where the client is actually located — a requirement that theoretically ensures that the provider is regulated by the client’s state and is aware of that state’s practice requirements, such as:

In reality, an excellent therapist in Illinois is likely also an excellent therapist in California. Technology now allows them to bridge that geographic divide — if only the law followed suit.

For example, say that you’re licensed in New York, live in New York, and have always seen clients at your New York office. During COVID, some of your clients permanently moved out of the city and into suburbs in New Jersey and Connecticut. Unless New York has a border-state exception, the law prohibits you from treating your NJ and CT clients via telehealth. Some dense geographic areas, like the DC-VA-MD metro area, have recognized the challenges of regulating certain professionals individually and have implemented border-state licenses or waivers, 

Some of these requirements arise from the expectation that providers and clients do reside in the same place. Proximity may even be clinically necessary — if a provider determines that a client’s care necessitates an in-person visit, then they could schedule that appointment promptly. This is particularly a consideration in psychiatry or for therapists working with youth or those with significant mental illness. 

If providers and clients are in different locations, then an in-person visit would be impractical or impossible — even if the standard of care required it. COVID, however, upended some of these norms. Providers were forced to ask themselves whether a client was “safer” receiving teletherapy from home or risking COVID infection by entering their office. Providers also had to consider their own health and how in-person encounters could impact their families, staff, and other clients. Telehealth rapidly became the norm, and emergency orders allowed providers to continue treating their clients even if people had moved around a bit in response to the pandemic. 

2. My profession has an interstate licensure compact. Does that change things?

The Psychology Interjurisdictional Compact (PSYPACT) coordinates the practice of telepsychology across state lines, giving licensed psychologists more flexibility. Currently, over one third of U.S. states have effective PSYPACT legislation, and by the end of 2021, that number will jump to half of states.

Under PSYPACT, psychologists must be located within a compact state in which they are licensed. Meanwhile, the client must also be located within a participating state.  The authorization does not come automatically, however. To practice telepsychology under the authority of PSYPACT, psychologists must obtain an Authority to Practice Interjurisdictional Telepsychology (APIT) and possess an active ASPPB E.Passport. 

The pace of new PSYPACT legislation suggests that lawmakers recognize the value and the demand for teletherapy services that reach across state lines. Nonetheless, the laws still lag behind the technology. Therefore, therapists who wish to set up an interstate practice must understand the laws that apply to their situation.

Figuring out exactly what is required of you and what path makes sense for your practice isn’t something you have to do alone. Law firms like Jackson LLP Healthcare Attorneys specialize in providing counsel to mental health providers to help you get it right in your practice of psychotherapy.

This article is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between Jackson LLP Healthcare Attorneys and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.

© Copyright 2021 All rights reserved. Permission to publish granted by Connor D. Jackson, JD

The preceding article was solely written by the author named above. Any views and opinions expressed are not necessarily shared by Questions or concerns about the preceding article can be directed to the author or posted as a comment below.

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