Arizona Passes Broad Telehealth Law With Audio-Only Coverage

June 17, 2021

In response to the COVID-19 public health emergency (PHE), many states expanded access to healthcare via telehealth through regulatory waivers. Experts have speculated how governments will regulate and reimburse telehealth services when these temporary telehealth policies expire at the end of the PHE.

On May 5, Arizona enacted HB 2454, one of the broadest telehealth laws promulgated in any state to date, codifying many of the temporary changes that Arizona implemented during the PHE. In a statement regarding the law, Arizona Gov. Doug Ducey expressed his intent in authorizing the legislation: “Telehealth expands access to medical services for low-income families and those living in rural areas, protects vulnerable populations, and allows snowbirds visiting our state to receive telemedicine from their home state. Patients and medical professionals know what’s best for their needs, and we’re working to make sure they have access to those services.”

The New Arizona Law

Arizona’s new law extends coverage for audio-only telehealth services covered by Medicare or the state’s Medicaid program through Dec. 31, 2021. Beginning in 2022, the state’s telehealth advisory committee will revisit this coverage determination and may limit or expand it. As currently enacted, Arizona requires coverage for audio-only telehealth services between a patient and provider with an existing provider-patient relationship where (i) access to audio-visual services is not reasonably available due to the patient’s functional status, lack of technology or telecommunications infrastructure limits, as determined by the healthcare provider and (ii) the audio-only telehealth encounter is initiated or pre-authorized by the patient. The requirement of a pre-existing provider-patient relationship is not necessary if the treatment involves behavioral health or substance use disorder services provided that items (i) and (ii) above are satisfied. To be eligible to submit a claim for an audio-only service, a healthcare provider must make telehealth services generally available to patients through the interactive use of audio, video or other electronic media.

The law requires payment parity for audio-visual care by default, making clear that payment parity is a requirement for telehealth services “whether provided through telehealth using an audio-visual format or in-person care.” However, for audio-only services, the law only requires payment parity for behavioral health and substance use disorders.

The Debate Over Audio-Only Coverage

Many states are debating audio-only coverage for telehealth. Proponents of its expansion cite benefits realized by rural and underserved patients and the efficiency and expediency of audio-only examination for certain types of care. Research from the Better Medicare Alliance, comprised of private payors and professional groups, has found that 34 percent of Medicare Advantage beneficiaries live below the federal poverty line and without internet usage, thus complicating any requirement for audio-visual care. Opponents of audio-only coverage cite concerns that expanding access and payment parity to audio-only telehealth will lead to overutilization, a lack of uniformity regarding clinical standards, lower-quality care and fraud.

Audio-Only Telehealth Coverage in Other States

As discussed in a previous post, some states have already enacted coverage for limited audio-only services. For example, pursuant to L.B. 400, Nebraska allows audio-only services for the delivery of individual behavioral health services for an established patient, when appropriate, or crisis management and intervention for an established patient as allowed by federal law. Pursuant to S.B. 673, Oklahoma removed “audio-only” from its exception to the definition of telemedicine. New York amended its definition of telehealth to include audio-only services under S.B. 8416 in the summer of 2020.

However, legislative changes such as these are not immune from reversion. New Hampshire’s H.B. 1623, enacted July 7, 2020, established Medicaid coverage for certain audio-only services and payment parity for those services, but S.B. 602, pending before the New Hampshire Health, Human Services & Elderly Affairs Committee, would reverse this change by removing audio-only services from coverage.

The Future of Audio-Only Coverage

Significant roadblocks still exist to reaching widespread coverage of audio-only telehealth services. Lawmakers will continue to disagree over concerns regarding abuse and methods of oversight to address them. What seems clear is that states will move forward ahead of the federal government on this topic, resulting in a patchwork approach not unlike the current state of privacy laws in the United States. In the coming weeks and months, laws akin to those described here will continue expanding or constricting coverage for telehealth services.

Contact the authors of this alert for more information regarding these and other telehealth laws and policy changes. The authors thank McGuireWoods summer associate Petra D. Walech for assistance preparing this article. She is not licensed to practice law.

McGuireWoods has published additional thought leadership analyzing how companies across industries can address crucial business and legal issues related to COVID-19.