How the Pandemic Continues to Shape Medicaid Priorities: Results from an Annual Medicaid Budget Survey for State Fiscal Years 2022 and 2023
Telehealth can be an important component of facilitating access to care for Medicaid enrollees during and beyond the COVID-19 pandemic. States have broad authority to cover telehealth in Medicaid without federal approval, including flexibilities for allowable populations, services and payment rates, providers, technology, and managed care requirements. Prior to the pandemic, the use of telehealth in Medicaid was becoming more common. However, while all states had some form of Medicaid telehealth coverage, policies regarding allowable services, providers, and originating sites varied widely;1 further, Medicaid telehealth payment policies were unclear in many states.2 To increase health care access and limit risk of viral exposure during the pandemic, all 50 states and DC expanded coverage and/or access to telehealth services in Medicaid. For example, states expanded the range of services that can be delivered via telehealth; established payment parity with face-to-face visits; expanded permitted telehealth modalities; and broadened the provider types that may be reimbursed for telehealth services. As of July 2021, most states reported covering a range of services delivered via audio-visual and audio-only telehealth in their Medicaid fee-for-service (FFS) and managed care programs.
These telehealth expansions contributed to substantial growth in Medicaid and CHIP services delivered via telehealth during the public health emergency (PHE).3 However, telehealth access may not be equally available to all enrollees. For example, research indicates that video telehealth rates have been lowest among Black, Asian, and Hispanic individuals, potentially due to more limited internet or computer access—leading researchers to conclude that “policy efforts to ensure equitable access to telehealth, in particular video-enabled telehealth, are needed to ensure that disparities that emerged during the pandemic do not become permanent.” Similarly, while telehealth has the potential to facilitate access to care for Medicaid enrollees in rural areas with fewer provider and hospital resources,4 inadequate and/or unaffordable broadband access can be a barrier. Research suggests that telehealth utilization during the pandemic has been lower for rural Medicaid enrollees versus those living in urban areas.5
This section provides information about:
- Telehealth policy adopted in response to COVID-19 (audio-only coverage)
- Telehealth utilization trends during the pandemic
- Telehealth quality and other challenges
- Permanent telehealth policy changes and key issues to watch
Telehealth POLICY ADOPTED IN RESPONSE TO COVID-19
To increase health care access and limit risk of viral exposure during the pandemic, all 50 states and DC expanded coverage and/or access to telehealth services in Medicaid. Because states previously reported somewhat less coverage of audio-only telehealth and indicated that continued coverage of this modality was under consideration, on this year’s survey we asked states to report prior changes to and current coverage of audio-only telehealth.
Nearly all responding states added or expanded audio-only telehealth coverage in Medicaid in response to the COVID-19 pandemic. Twenty-eight states reported that they newly added audio-only coverage (i.e., had no audio-only Medicaid coverage prior to the pandemic) while 19 states expanded existing coverage.6 We also asked states to indicate whether, as of July 1, 2022, Medicaid provided any coverage of specified services delivered via audio-only telehealth, when within the provider’s scope of practice. For each service type, a majority of states reported providing audio-only coverage (at least sometimes) (Figure 8). In particular, nearly all states reported audio-only coverage of mental health and substance use disorder (SUD) services. States least frequently reported audio-only coverage of home and community-based services (HCBS) and dental services. Two states (Mississippi and Wyoming) reported no coverage of audio-only telehealth for the services in question.
Telehealth Utilization Trends
To better understand the impacts of telehealth policy changes during the pandemic, we asked states to report notable trends in Medicaid telehealth utilization in FY 2022 or anticipated for FY 2023. Notable trends reported included telehealth utilization over time, top services with high or increased telehealth utilization, and populations most likely to use telehealth.
States report that telehealth utilization by Medicaid enrollees has been high during the pandemic but has decreased and/or leveled off more recently. These trends are consistent with preliminary CMS data showing that per-enrollee telehealth use in Medicaid and CHIP spiked in April 2020, stabilized from June 2020 through March 2021, and has since declined (but remains substantially higher compared to the pre-PHE period).7 Many states noted that telehealth utilization trends over time correspond to COVID-19 outbreaks, with higher utilization during COVID-19 surges and lower utilization when case counts are lower. States reported that telehealth helped maintain access to care during the surges, when in-person service utilization decreased. In general, states reported that telehealth utilization was projected to continue at higher levels than before the pandemic, at least for some service categories, but at a lower level than during peak COVID-19 surges.
Behavioral health, especially mental health, remains a top category of services with high telehealth utilization across states, followed by evaluation and management (E/M) services and office/outpatient services generally. We asked states to list the top two to three categories of services that had the highest utilization in FY 2022 (we also asked states to list the top categories of services that had the greatest increase in telehealth utilization in FY 2022 compared to FY 2019; results were similar for both questions). More than three-quarters of responding states (37 of 47) reported that behavioral health services were among those with the highest utilization;8 this result is consistent with data from CMS and other sources. In particular, about half of states identified mental health services as the most utilized, particularly psychotherapy. Additionally, a majority of states reported high utilization of evaluation and management (E/M) services and/or other physician/qualified health care professional office/outpatient services, including primary care. Finally, services identified by a few states each as among those with highest utilization included: federally qualified health center (FQHC) and other clinic services; speech, hearing, occupational, and/or physical therapy; services to treat COVID-19; and case management. Four responding states indicated they did not have the requested FY 2022 telehealth utilization data available at this time.9
States reported telehealth utilization across all population groups during the pandemic, with considerable state-by-state variation in the groups with highest utilization (Figure 9). We asked states to indicate which Medicaid eligibility group was most likely to use telehealth services in FY 2022. States that responded most frequently identified ACA expansion adults as one of the groups most likely to use telehealth (about one-third of responding states), followed by children and individuals with disabilities (each identified by about one-sixth of responding states). A few states noted that within nonelderly, non-pregnant adult eligibility groups (with or without disabilities), telehealth utilization was higher among younger adults (e.g., under age 40). One-quarter of responding states reported that utilization trends by eligibility groups were unknown; several of these states noted that data analysis was planned or underway.
We also asked states to describe any other notable population trends in Medicaid telehealth utilization in FY 2022 or anticipated for FY 2023; just over half of states responded to this question. Among responding states, reported trends included varying telehealth utilization by:
- Geography (urban vs. rural). Six states reported that Medicaid enrollees living in urban areas were more likely to utilize telehealth compared to those living in rural areas, at least for some service categories.10 This finding is consistent with Government Accountability Office (GAO) research suggesting that telehealth utilization during the pandemic has been lower for rural Medicaid enrollees,11 who may face challenges with inadequate and/or unaffordable broadband access. In contrast, three states reported that enrollees in rural areas had higher utilization of telehealth.12
- Race and sex. Of the five states that indicated trends in telehealth utilization by race/ethnicity, all reported that utilization was higher among White enrollees compared to enrollees of color.13 Similarly, all six states that shared trends by sex indicated that telehealth utilization was higher among female versus male enrollees.14
- Health conditions. A small number of states reported that enrollees with disabilities, chronic health conditions, and/or behavioral health conditions were more likely to utilize telehealth.
Telehealth Quality and Other Challenges
Telehealth Quality: State Concerns and Initiatives
The rapid expansion of Medicaid telehealth policies and utilization during the pandemic has prompted questions about the quality of services delivered via telehealth. To fulfill a directive in the 2020 CARES Act to report on the federal pandemic response, in March 2022 the GAO released a report that analyzed states’ experiences with telehealth in Medicaid and evaluated state and federal oversight of quality of care and program integrity risks.15 In the report, the GAO raised concerns about the impact of telehealth delivery on quality of care for Medicaid enrollees and recommended that CMS collect information to assess these effects and inform state decisions; CMS acknowledged but has not yet acted on these recommendations. Further, the Bipartisan Safer Communities Act signed into law in June 2022 directs the agency to issue guidance to states on options and best practices for expanding access to telehealth in Medicaid, including strategies for evaluating the impact of telehealth on quality and outcomes.16 Given this federal interest in the quality of care delivered via telehealth, we asked states to list concerns related to telehealth quality and to describe recent or planned initiatives to assess telehealth quality in Medicaid.
More than three-quarters of responding states reported questions and/or concerns about the quality or clinical effectiveness of services delivered via telehealth. We asked states to list their top two to three concerns in this area; common areas of top concern included:
- Concerns about the quality of diagnoses when delivered via telehealth as well as the impact of telehealth on receipt of other services, most commonly preventive services (such as immunizations and screenings, for children and adults). For example, North Carolina reported concerns about potential delayed diagnoses should virtual care replace in-person visits, rendering vitals or full clinical examinations not possible. States also noted concerns about the quality of telehealth visits for maternity care, behavioral health care, dental services, and services for children.
- Concerns that audio-only telehealth may be less effective than in-person visits or audio-visual telehealth. Several states noted a lack of adequate data to assess the effectiveness of audio-only services. In some cases, these concerns about audio-only quality have resulted in limitations to coverage or payment of this modality, or states are considering such limitations in the future.
- Concerns that inadequate access to all forms of telehealth may negatively and inequitably impact quality of care, resulting in disparities and/or hampering continuity of care. States also emphasized the importance of ensuring that members always have a meaningful choice of receiving services in-person if that is their preference.
Additional reported quality concerns included: privacy (e.g., that lack of privacy may inhibit quality of engagement in treatment), billing and coding challenges, and the potential for fraud and abuse. Many states also acknowledged the need for more data on the effectiveness of telehealth services compared to in-person modalities, as well as data on telehealth quality for particular services or conditions.
Most states have implemented or are planning initiatives to assess telehealth quality, though many report ongoing considerations and uncertainty over how to effectively evaluate quality. When asked to describe initiatives to assess telehealth quality, two-thirds of states reported that such initiatives were in place or planned. States report a range of initiatives to collect, analyze, and/or publish data related to telehealth quality, including data from member or provider surveys and utilization data. Several states indicated they also planned to use demographic data to understand which members use telehealth and evaluate potential impacts on equity. Several states are partnering with universities or other external partners to collect and analyze telehealth utilization and quality data. Additionally, a few states report working with providers to better understand and address telehealth quality, such as collecting provider feedback and issuing coding guidance to help the state differentiate telehealth services in its encounter data. A few states emphasized that their evaluations will inform future telehealth policy decisions. Examples of state initiatives to assess telehealth quality in Medicaid include:
- Arizona included supplemental telehealth questions in its 2021 Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey. Findings included that most members viewed services delivered via phone or video telehealth as about the same or better quality than in-person services. Additionally, most members reported no privacy concerns during telehealth visits and indicated that telehealth technology was easy to use.17 Similarly, Maine added a telehealth section to its annual CAHPS survey and North Carolina stratifies CAHPS results by the telehealth-utilizing population to understand their satisfaction compared to others.
- State legislation in Maryland directed the state’s Health Care Commission to submit a report in December 2022 that evaluates the impact of telehealth on service utilization and quality, which will include Medicaid data. The report will include an assessment of patient satisfaction with telehealth and a review of the appropriateness of telehealth across the continuum of care. The goal of the report is to inform policy decisions on coverage of and payment for services delivered via telehealth.
- Massachusetts reported evaluating member experiences with telehealth as well as utilization data to better understand how telehealth is complementing in-person services. The state is seeking opportunities to utilize standard quality metrics to better understand the quality of services delivered via telehealth. The Medicaid agency is also partnering with external researchers to better understand telehealth utilization, qualitative member experience, and disparities in telehealth utilization among enrollees by social risk factors.
- In addition to conducting stakeholder surveys, South Carolina has hired additional staff to improve oversight and monitoring and understand any differences in service quality between telehealth and in-person services.
State Initiatives to Address Other Telehealth Challenges
States report undertaking many different Medicaid and cross-agency initiatives to mitigate telehealth-related challenges. In 2021, states reported a range of telehealth challenges faced by members, providers, and the state Medicaid agency, including access to internet and technology and the need for education and outreach. This year, we asked states to describe any initiatives in place or planned for FY 2023 to mitigate challenges with outreach/education, program integrity/fraud, broadband access, technology availability, or equity of access. In response, more than two-thirds of responding states (33 of 48) reported an initiative in at least one of the specified areas. About half of all responding states reported outreach/education initiatives, while just under half of states reported initiatives in each of the other areas (Exhibit 6). Some initiatives were Medicaid-specific, whereas others were broader and might utilize other funding, such as by connecting enrollees to grant programs to facilitate access to technology and broadband. Five states (Arizona, Colorado, Maine, Nebraska, and New Hampshire) reported plans to use ARPA funding to address telehealth challenges.18 Several states reported statewide initiatives to address telehealth challenges across the health care system. For additional examples, see Exhibit 6.
Permanent Telehealth Policy Changes and Key Issues to Watch
During the COVID-19 pandemic, many states used temporary Medicaid emergency authorities to expand telehealth coverage and also took advantage of broad authority to further expand telehealth without the need for CMS approval. As discussed above, these policy expansions resulted in high telehealth utilization across populations, though many states have raised concerns about the quality of telehealth visits as well as the need to address other telehealth challenges. Looking ahead, permanent telehealth policies are under consideration in many states, as states weigh expanded access against quality, equity, program integrity, and other concerns. In 2021, most states reported that future changes to telehealth policies were undetermined, though some states had already implemented permanent expansions, especially to allow telehealth for behavioral health services, and a few had already implemented limitations to pandemic-era telehealth policy (e.g. to limit coverage of or payment parity for audio-only). This year, we asked states to report expansions and limitations to fee-for-service (FFS) telehealth policies implemented in FY 2022 or planned for FY 2023, and to describe such changes and key considerations.
Most states have or plan to adopt permanent Medicaid telehealth expansions that will remain in place even after the pandemic, though some are considering guardrails on such policies. Two-thirds of responding states reported expansions to FFS telehealth policies implemented in FY 2022 and/or planned for FY 2023, including permanent (i.e., non-emergency) adoption of telehealth policy expansions that were initially enacted during the pandemic on a temporary basis. One-quarter of states reported limitations to telehealth policies that had been temporarily expanded during the pandemic (Figure 10).
Reported changes in FY 2022 or 2023 include expansions or limitations to:
- Allowable modalities. States most commonly report making changes to allowable telehealth modalities, either to permanently add or to limit audio-only telehealth. For example, in New York audio-only telehealth is currently authorized during the PHE and pending regulations will make this coverage permanent. Many states noted that expanded audio-only coverage is crucial to maintain access to care, especially in rural areas and for older populations; however, some states are also particularly concerned about the clinical effectiveness and quality of audio-only visits. For example, after the PHE, Michigan will largely eliminate coverage of audio-only services, but will keep some audio-only codes, such as for behavioral health counseling, to provide continued access for individuals with limited broadband.
- Allowable services. Many states report permanently expanding services allowed to be delivered via telehealth. For example, in FY 2023 Ohio expanded its telehealth coverage policy to include pregnancy education, diabetes management, and behavioral health services.19 A smaller number of states are eliminating telehealth coverage of specific services. For example, after considering utilization, clinical evidence, and stakeholder input, South Carolina will no longer cover telehealth delivery of certain behavioral health services after the PHE ends; however, the state will extend telehealth coverage of other services (including addiction-related services, physical and speech therapy, and well-child visits and EPSDT) for one-year post-PHE for further evaluation.20
- Allowable providers. States report permanent expansions of provider types allowed to utilize telehealth, such as to allow out-of-state providers. For example, July 2022 state legislation in Alaska makes several emergency telehealth policies permanent, including allowing out-of-state providers.21 Effective April 2022, Texas began allowing rural health clinic providers to receive facility fee reimbursement for services delivered via telehealth.22 (No states reported limiting allowable provider types in either year.)
- Allowable originating sites. States report permanent expansions of originating site policies to allow patients to receive services via telehealth from their homes. For example, several states adopted place of service code 10 to identify services provided in the enrollee’s home via telehealth. (No states reported limiting allowable originating sites in either year.)
- Reimbursement parity. In 2021, all responding states indicated that they ensured payment parity between telehealth and in-person delivery of FFS services (as of July 1, 2021), which may have been under emergency policy; this year, most states reported no changes in FY 2022 or FY 2023 to parity requirements. A small number of states reported that in FY 2022 or FY 2023 they established telehealth payment parity on a permanent basis. For example, Rhode Island state legislation enacted in July 2021 requires Medicaid telehealth coverage and payment parity,23 thus making permanent emergency flexibilities originally established in a 2020 executive order.24
Additionally, a few states that reported no changes in either year noted that they had already adopted permanent telehealth expansions in FY 2020 or 2021. For example, Mississippi previously made some emergency telehealth flexibilities permanent, but opted to continue allowing other flexibilities only during a state of emergency (including audio-only telehealth). Also, 18 states reported that FY 2023 telehealth policy changes were undetermined, with common areas of consideration including allowable services, modalities, payment parity, and/or other guardrails. For example, Delaware aims to keep most current flexibilities in place, but is considering requiring an in-person component for certain services. Delaware also plans to submit a SPA to remove telehealth from the State Plan and thus gain more flexibility in making telehealth policy decisions, as CMS considers telehealth to be a modality rather than a benefit.
Nearly all responding states that contract with managed care organizations (MCOs) reported that changes to FFS telehealth policies would also apply to MCOs. Several states noted that though they require MCOs to follow minimum FFS telehealth requirements, MCOs could opt to have a more expansive telehealth policy.
Looking ahead, key issues that may influence future Medicaid telehealth policy decisions include analysis of data, state legislation and federal guidance, and cost concerns. In addition to the implemented/planned expansions and limitations described above, many states reported that they remained undetermined about some or all potential telehealth policy changes in FY 2023 and beyond. For example, states hope that ongoing and future analyses of telehealth data—including utilization data, quality data, and feedback from members and providers—can help to inform policy decisions. Additionally, many states reported ongoing state legislative activity related to telehealth policy, including potential expansions and limitations that would apply to Medicaid—for example, one state referred to telehealth as “legislative sport.” States also await guidance from the federal government, including from CMS, related to HIPAA, and Medicare policies. While a small number of states report that budgetary concerns may impact telehealth policy due to increased service utilization, other states noted that telehealth has not substantially increased costs. Several states noted that telehealth policies related to FQHCs were under review, as such telehealth visits may be particularly costly given the prospective payment system (PPS) model unique to these providers. Finally, states reported that they are focused on protecting member choice: ensuring that enrollees have access to high-quality telehealth if preferred, but that they are not forced or pressured to use telehealth if they would rather receive services face-to-face.