Telehealth bill in jeopardy over cost concerns

A broadly bipartisan bill requiring insurers to cover telehealth visits even after the end of the pandemic could come under Gov. Phil Murphy’s veto pen.

The measure would require insurance carriers reimburse telehealth customers at the rates used for in-person visits and bar carriers from restricting telehealth coverage based on how it is delivered, among other things.

It cleared both chambers in unanimous votes but has sat unsigned on the governor’s desk for more than two months. Its top sponsor, state Sen. Vin Gopal (D-Monmouth), said it could be headed back to the Legislature via a conditional veto, which allows the governor to strike or alter portions of a bill and send it back to legislators for approval.

Gopal said he hopes to work with the administration and eventually see the bill signed.

“We’ve seen during the pandemic — especially on mental health cases — that telemedicine has worked,” he said. “Obviously, telemedicine can’t work for everything. If the doctor needs to touch the patient to feel where pains are or something, obviously that doesn’t make sense”

Gopal said the governor’s office had not told him in clear terms what action the governor would take. A spokesperson for the governor declined to comment, citing an oft-ignored rule that bars public statements on pending legislation

Though telehealth predated the pandemic in most states, its use was expanded during the past 18 months as doctor’s offices limited in-person appointments because of coronavirus restrictions. A study conducted by the Commonwealth Fund found at least 22 states expanded insurance coverage for virtual health services, though some of those rules are only in effect until the pandemic ends.

The American Hospital Association has cited a rise in the utilization of such services during the COVID-19 crisis, but it’s not clear how large that increase was.

New Jersey’s bill (S-2559) was subject to significant lobbying despite the unanimity of its passage through the Legislature. Lobbyists for a variety of groups engaged legislators, staff, and administration officials on the bill 87 times, putting it just outside of New Jersey’s top-10 most-lobbied bills.

The New Jersey Association of Health Plans is an insurance industry group that was among the few to oppose the bill outright amid worries over its rate mandates — the bill requires providers be reimbursed for telehealth services at the rate used for identical in-person services — and nebulous costs.

A fiscal estimate conducted by the Office of Legislative Services could not precisely peg new costs the state would face as a result of the expanded access public employees would have to telehealth services, but it did predict the new rule would cost New Jersey between $5 million and $50 million annually in increased consumption by public workers on two state health plans.

Added costs due to increased utilization of NJ FamilyCare, New Jersey’s publicly funded health insurance program, could also not be determined. Some of the new expenses would be defrayed by federal reimbursements through Medicaid, but the impact there could still be significant.

Just over 2 million New Jerseyans were enrolled in NJ FamilyCare as of June, more than twice the roughly 800,000 enrolled in the two public worker benefit programs.

“This is not insignificant dollars that would be borne by New Jersey taxpayers,” said Sarah Lynn Geiger, vice president of New Jersey Association of Health Plans. “It can then be inferred that the individual, small group, and large group markets will also experience similar increases, which then has an adverse impact on premiums for individuals and employers.”

An administration official granted anonymity because they were not authorized to speak about the bill said the governor’s office shares similar concerns about cost, adding no one knows about the potential for cost increases without a study of telehealth and its future.

The relative newness of telehealth was also a source of worry. Expanding the program before without first analyzing its long-term impact on health care systems would be premature, Geiger said.

The NJAHP has urged the state to have the Telemedicine and Telehealth Review Commission review the proposed changes.

The bill is not alone in its delay — there are more than 100 pieces of legislation awaiting Murphy’s signature even after a spate of recent signings — and it’s not clear that waiting to sign the measure or vetoing it will interrupt telehealth services.

If the bill does get sent back to the Legislature, it likely won’t be approved until after November’s election. Legislative leaders and top staff from both chambers have said they do not plan to return until the lame duck session, and that stance has shifted little as the state’s COVID-19 cases rise.

Gopal said he’d implored top Murphy administration officials to act if those services were interrupted, but a two-month delay isn’t likely to sink telehealth in New Jersey.

Though the state’s public health emergency lapsed in June, its state of emergency persists, and existing legislation requires insurers to cover telehealth and telemedicine services for 90 days after the end of both declarations. The election is only 61 days away.

“I don’t believe services will be interrupted in that time,” Gopal said, “But I don’t think there is a reason not to sign this bill. There’s only positives.”