On April 13, 2020, the California Division of Workers’ Compensation (DWC) issued a Newsline adopting changes to telehealth regulations effective for all telehealth dates of service on or after 4/15/2020. This blog post examines the California workers’ compensation telehealth reimbursement regulations that are effective for dates of service prior to 4/15/2020 when the DWC changes referenced in the above-noted Newsline become effective.

As medical practices transition to telehealth, we’re looking at the impact of inconsistent and contradictory policies that California regulators established in response to the current crisis.

Edit 5/14/2020: The California Division of Workers’ Comp Administrative Director, George P. Parisotto, has issued several new Orders changing the reimbursement calculation for telehealth services. Some of the information on this page may not be correct, depending on the date of service. For the latest reimbursement rules, consult the latest Administrative Orders here and check our dedicated COVID-19 page for updates.

Let’s start off with the unfortunate fact that for telehealth services prior to 4/15/2020, California workers’ compensation pays providers substantially lower amounts for telehealth services as compared to the reimbursements allowed when injured workers are treated in providers’ office locations. Compare this to Medicare and California private group health insurers, both of which reimburse providers for telehealth services at a rate equal to the rate for office visits.

Unlike Medicare and California health insurers, the California DWC allows workers’ comp insurers and payers to monetarily penalize providers for furnishing telehealth services. In today’s post, we examine the disparity between telehealth reimbursements by Medicare, California health insurers, and California workers’ compensation.

Medicare Telehealth Reimbursement

On April 3, 2020, Medicare corrected its telehealth reimbursement instructions with an announcement that retroactive to dates of service on or after March 1, 2020, all telehealth visits will be reimbursed the same amount as if the patient were treated in the provider’s office.  

In its April 3rd announcement, Medicare corrected two rules for billing telehealth services with the following revised instructions:

1. During the Public Health Emergency, for telehealth services the Place of Service should equal the same Place of Service as if the provider furnished the medical service in-person.
2. A modifier 95 is required when providers furnish medical services via telehealth.

While Medicare restricts both the type of provider allowed to furnish telehealth services and the treatment allowed to be furnished via telehealth, when a provider furnishes these essential telehealth services to Medicare patients, the provider’s reimbursement is equivalent to the reimbursement the provider would have received for delivering the medical service in-person.

California Health Insurer Telehealth Reimbursement

On March 30, 2020, the California Insurance Commissioner, Richard Lara, released a notice mandating that all health insurers doing business in California must reimburse providers for telehealth services at a reimbursement amount equal to the provider’s in-office reimbursement.

Specifically, for health insurers doing business in California, Commissioner Lara requires “parity between in-person and telehealth reimbursement.” Furthermore, Commissioner Lara forbids health insurers from restricting the services that providers furnish via telehealth by demanding that all consumers “should be able to access medically necessary health care without physically visiting their provider in person, when clinically appropriate.”

So, in California, a health insurer may not restrict telehealthcare and when a provider does furnish care via telehealth services, the reimbursement must equal the reimbursement allowed for an office visit. While each health insurer may issue different instructions for reporting telehealth via a billing modifier or other identifier, the insurer is not allowed to monetarily penalize the provider for furnishing the services via telehealth.

California Workers’ Compensation Telehealth Reimbursement

Unfortunately, the California Division of Workers’ Compensation (DWC) penalizes providers with much lower reimbursements for telehealth services. For services rendered prior to April 15, the Physician Fee Schedule requires providers to report these services using the 02 Telehealth Place of Service Code. The DWC assigns this place of service the lower facility reimbursement rather than the higher office (non-facility) reimbursement.

The impact on the provider’s reimbursement is substantial. Below is a table that reflects the reimbursement for common evaluation and management code CPT 99214 across the state of California. The table shows the office reimbursement compared to the telehealth reimbursement. The table demonstrates that the provider is reimbursed, depending on location, up to 31% less for telehealth services compared to the reimbursement for the same service in the provider’s office.

To learn more about the rules and reimbursements discussed in this blog post watch our most recent webinar:  Telehealth for California: Medicare, Health Insurers & Workers’ Compensation, April 7th, 2020.

CPT 99214 - California Workers’ Comp Reimbursement

Level-IV established patient visit reimbursement by county-locality

Edited: 4-14-2020 for new information

For more on telehealth rules for Medicare, California health insurers, and California workers’ compensation, look through the free resources available on our COVID-10 page.

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