Telehealth and Mental Healthcare Insurance Coverage After the COVID-19 PHE Ends

The COVID-19 public health emergency (PHE) period officially comes to an end on May 11, 2023. But for the many Americans who have come to rely on the expanded services provided by the PHE, it marks the start of a period of great uncertainty and change. Nowhere is this more apparent than the state of insurance coverage for telehealth treatment and mental healthcare.

To help navigate the forthcoming changes to insurance coverage after the PHE ends, Allegiant has compiled the following roadmap. Let’s start at the beginning.

How the pandemic increased adoption of telehealth treatment for mental healthcare

After the PHE was declared on March 17, 2020 — which included the loosening of certain Medicare restrictions on telehealth treatment — the U.S. Department of Health and Human Services (HHS) reports “beneficiaries used 88 times more telehealth services during the first year of the pandemic than they used in the prior year.” 

Telehealth treatment for mental healthcare also saw significant growth thanks to policy changes. The Kaiser Family Foundation (KFF) reports telehealth treatment for “mental health and substance use and other concerns” rose from 1% pre-pandemic to “40% of mental health and substance use outpatient visits and 11% of other visits (during the March-August 2020 period).” Even as outpatient treatment for primary and specialty care fell to just 5% in 2021, telehealth “remained strong for mental health and substance use treatment, still representing 36% of these outpatient visits.”

Timeline: Policy changes during the COVID-19 PHE

● March 17, 2020 — The COVID-19 PHE is declared; the Office of Civil Rights (OCR) and HHS agree to waive certain HIPAA restrictions for telehealth treatment

● March 19, 2023 — Blue Cross Blue Shield announces expanded telehealth coverage for members

● March 31, 2020 — The Drug Enforcement Administration (DEA) overrides prescription drug restrictions imposed by 2008’s Ryan Haight Act, which required providers of patients with opioid use disorders to conduct at least one in-person visit before prescribing medication

● June 1, 2020 — Cigna waives cost-sharing for primary, specialty, and mental health care

● December 27, 2020 — The Consolidated Appropriations Act of 2021 further expands Medicare coverage for telehealth, including approval for telehealth treatment for mental  healthcare

● March 15, 2022 — The Consolidated Appropriations Act of 2022 affirms Medicare will continue covering telehealth services and further delays the in-person visitation requirement for prescriptions

● July 28, 2022 — The U.S. House of Representatives votes to extend Medicaid coverage of telehealth services through 2024 (the bill has yet to pass in the Senate)

● December 29, 2022 — The Consolidation Appropriations Act, 2023 extends many Medicare policy changes to telehealth coverage through December 31, 2024

● January 30, 2023 — The Biden administration announces the COVID PHE will end on May 11, 2023

What happens to insurance coverage for telehealth and mental healthcare once the COVID PHE ends

Facing the end of the COVID-19 PHE — and the disenrollment of millions of Medicare beneficiaries — HHS has identified three categories of change to telehealth coverage: permanent, temporary through 2024, and temporary through the duration of the PHE. Let’s take a closer look at each.

Permanent changes

Increased telehealth usage — which proved especially effective in rural communities — led to Medicare making several policy changes to telehealth coverage permanent. The most significant of these changes pertains to the location of telehealth treatment. As the National Center for Biotechnology Information (NCBI) explains, pre-pandemic telehealth treatment could only originate and be dispensed from “prespecified sites (designated rural areas, certain medical facilities)” or the physician’s “place of practice.” State licensure further restricted telehealth treatment.

Now, HHS reports that Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) will be considered “distant site” providers — meaning these qualified practitioners can provide telehealth treatment across state lines. Medicare has also eliminated any “geographic restrictions for originating site for behavioral/mental telehealth services” and will continue to allow patients to “receive telehealth services for behavioral/mental health care in their home.”  

Temporary changes through 2024

HHS has also identified some temporary changes to Medicare coverage through 2024, the most significant of which is the continued suspension of the pre-pandemic requirement mandating “an in-person visit within six months of an initial behavioral/mental telehealth service, and annually thereafter.”

Temporary changes through the PHE’s end on May 11th

The most significant telehealth policy that ends with the PHE is the classification of telehealth as an “excepted benefit.” Current policy treats telehealth as an excepted benefit — which means it does not have to comply with many ERISA or ACA group health plan mandates. This enables employers to offer telehealth to otherwise benefits-ineligible employees like part-time or seasonal workers.

In anticipation of this reversal, a bipartisan group of legislators are attempting to pass the Telehealth Benefit Expansion for Workers Act of 2023, which “would let all employers offer excepted-benefit stand-alone telehealth arrangements to all employees (including benefit-eligible optouts), not just those ineligible for benefits.”

Other possible changes to telehealth policy

In addition to the changes articulated by HHS, there are other progressive telehealth policies in jeopardy. For instance, the DEA recently proposed “appropriate safeguards” for remote drug prescription, effectively restoring limitations imposed by the Ryan Haight Act. “Teleprescribing has been touted as a robust tool for bringing medications for opioid use disorder (MOUDs) to rural areas in the ongoing treatment of the opioid epidemic,” reports Fierce Healthcare. The data backs this up; a 2022 study by JAMA Psychiatry found that increased telehealth services reduced “opioid overdoses regardless of the insurance they accept.” The DEA’s proposal would require an in-person visit before practitioners can prescribe Schedule II medications — including key MOUDs — while “Schedule III or higher medications, including buprenorphine, can be prescribed for 30 days via telehealth but would require an in-person visit before a refill.” This hotly debated change to telehealth policy will affect practitioners regardless of the insurance carriers they accept.

The biggest challenges to providing insurance coverage for mental healthcare

To predict the future of mental healthcare coverage — especially virtual mental healthcare — it’s important to understand the major challenges insurance providers, employers, and employees face:

● Increased demand. The stress of the pandemic certainly played its part, but the general destigmatization of mental health — especially among younger generations — is what’s really driving the increased demand for mental healthcare. Typically, mental healthcare makes up 1-5% of medical costs, but as Millennials and Gen Z begin to dominate the workforce over the next few years, we expect to see that percentage increase to 5-10%.

● High costs. Securing mental healthcare coverage comes down to finding affordable practitioners to contract. Insurance providers typically try to negotiate lower costs for in-network practitioners but given the high volume of patients seeking mental health treatment, practitioners have the advantage — and most elect not to contract with insurance companies if it means lowering their prices.

● Broadening services. Another significant hurdle is the broadening range of mental health services required to meet increasingly diverse needs. Mental healthcare is not one-size-fits-all. Therapists, counselors, psychologists, psychiatrists, and specialists all dispense different degrees of care and cost varying amounts of money. As more employees access mental healthcare services, this demand for varied practitioners will only grow.

How employers can provide their employees with better mental healthcare coverage

If mental health coverage hasn't hit your desk as an issue yet, you still have a chance to introduce a cost-effective strategy and prevent some of the aforementioned challenges. Here are our top three ways employers can improve employees' mental healthcare coverage:

1. Implement an Employee Assistance Program (EAP)

As defined by the U.S. Office of Personnel Management, an employee assistance program (EAP) is “a voluntary, work-based program that offers free and confidential assessments, short-term counseling, referrals, and follow-up services to employees who have personal and/or work-related problems. EAPs address a broad and complex body of issues affecting mental and emotional well-being, such as alcohol and other substance abuse, stress, grief, family problems, and psychological disorders.”

We like to think of EAPs as a big-box approach to healthcare. EAPs are large in scale and require an upfront investment but are ultimately a fraction of the monthly cost — making them an attractive solution for employers. The downside is an EAP’s fixed cost/deliverable system is built for acute, not long-term, care. However, this can be remedied by spending a little more upfront to increase the scale and scope of the treatment covered — which is still significantly cheaper than going outside the EAP.

Another key consideration when adopting an EAP is that mental healthcare is a personal relationship that involves trust. If you don’t implement an effective solution early — and get your employees accustomed to using the in-network practitioners — you run the risk of employees seeking treatment from expensive out-of-network practitioners.

2. Augment mental healthcare — and reduce costs — with technology

There are other technological advancements besides telehealth treatment that can help improve access to mental healthcare. Savvy employers can begin earmarking wellness dollars for virtual subscriptions to healthcare technology platforms like Headspace and BetterHelp. Licensing issues can create barriers to adopting certain healthcare tools, but many EAPs are able to circumvent this problem by identifying licensed vendors in-network.

Healthcare technology can also lower costs. For example, employers can use GoodRx — a free telemedicine platform designed to monitor and compare U.S. prescription drug prices, and distribute coupons and discount codes — to save employees money on their medications.

3. Consult an experienced insurance broker

If you’re still struggling to determine the best solution for your employees' growing mental healthcare needs, it’s always a good idea to consult an experienced insurance broker. This is the ultimate assurance you’ll get the most comprehensive, cost-effective coverage to meet your organization’s specific needs. 

If you’re looking for a trusted partner to navigate the forthcoming changes to the insurance landscape, the Allegiant Global Partners team is here to help.