On Tuesday, April 7, 2020, the California Department of Managed Health Care (the “DMHC”) released a guidance letter (the “Letter”) to all health care service plans regarding billing for and delivering telehealth services during the COVID-19 state of emergency.  The Letter provides  follow-up guidance to previous guidance the DMHC released on Wednesday, March 18, 2020 (the “Initial Guidance”).  The DMHC has also provided additional information regarding the most frequently asked telehealth questions it has received (the “FAQs”).

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In the Initial Guidance the DMHC directed all health plans to (i) reimburse providers at the same rate for the same services regardless of whether they are provided in-person or through telehealth; (ii) abstain from subjecting enrollees to greater cost sharing for telehealth services than in-person services; and (iii) provide the same amount of reimbursement for telephone vs. video services, as long as the method used was medically appropriate.

In the Letter, the DMHC expands on its telehealth guidance, providing further information on coding, services, and eligibility of providers with regards to telehealth.


The Letter provides guidance regarding coding that the DMHC hopes will decrease the burden on both plans and providers.  The Letter specifies the process for providers to follow when delivering a telehealth service that would normally be delivered in-person.  More specifically the provider must (1) thoroughly document the visit as the provider would have during an in-person visit; (2) use the CPT codes for the service rendered; (3) use “02” for the place of service, in order to indicate the service was provided through telehealth; and (4) use modifier 95 for synchronous rendering of services or modifier GQ for asynchronous rendering of services.

Health Plan Direction:

A health plan may not exclude coverage for certain services based on the fact that they are being rendered via telehealth, presuming that the provider determines the services can be properly delivered as such. Moreover, a health plan may not limit covered services because those services are being delivered via telehealth instead of in-person.

Additionally, a health plan may not require enrollees to use the health plan’s contracted telehealth vendor or a provider different from the one the enrollee usually visits, if the usual provider is willing to deliver services via telehealth and believes they can effectively do so.  The enrollee must consent to receiving such services via telehealth. The health plan must continue to cover the services as if they had been provided in-person.  Importantly, while Governor Newsom has relaxed certain state privacy and security laws for medical providers providing telehealth services, providers must still be cognizant of their confidentiality obligations.

The FAQs also clarified that while a plan may not impose telehealth-specific credentialing or approval requirements on a provider, a plan may retain credentialing and approval requirements for a provider to be a part of the plan network.

Lastly, a provider does not need to be physically present in their office when providing services via telehealth.  In keeping with the spirit of social distancing, providers are permitted to be in any location where they can effectively deliver services via telehealth, while also maintaining the patient’s privacy. A health plan is not permitted to deny coverage for the reason that the services were provided away from the provider’s office.

We will continue to provide updates regarding the Department’s position and guidance. 

For further discussion on previous DMHC guidance regarding telehealth, please see our recent blog post here.

This article is not an unequivocal statement of the law, but instead represents our best interpretation of where things currently stand.  This article does not address the potential impacts of the numerous other local, state and federal orders that have been issued in response to the COVID-19 pandemic, but which are not referenced in this article.

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*This alert is provided for information purposes only and does not constitute legal advice and is not intended to form an attorney client relationship.  Please contact your Sheppard Mullin attorney contact for additional information.*