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HHS OIG Studies State Medicaid Programs’ Use of Telehealth

The United States Department of Health and Human Services Office of Inspector General (“OIG”) recently issued a report concerning the use of telehealth to render behavioral health services to Medicaid enrollees, calling for greater evaluation and oversight in the hopes of encouraging states to implement changes to improve how their Medicaid programs use telehealth for behavioral health services, including mental health assessments, individual therapy, and medication management.

The report stems from a survey of Medicaid directors from 37 states and relevant stakeholder interviews, providing insight into states’ telehealth oversight efforts as of January and February 2020, before the expansion of telehealth due to the COVID-19 pandemic. The report highlights the urgent need for increased telehealth oversight because most states apparently had not adequately evaluated the impacts of telehealth in their state. By way of example, three states were unable to distinguish between services provided via telehealth versus in-person, and only a few states had conducted meaningful evaluations of telehealth in their state. Nevertheless, with respect to states that performed some type of telehealth assessment, they generally found that telehealth increased access to care while reducing service costs.

The report also notes concerns related to the quality of care provided, and the high potential for fraud, waste, and abuse. Indeed, the OIG found that many states did not conduct monitoring or oversight specific to telehealth, with only 11 states conducting telehealth-specific monitoring and oversight. These concerns are especially important because the DOJ recently charged numerous medical professionals with allegedly participating in telehealth fraud schemes damaging the government by more than $1 billion.

The OIG goes on to recommend the Centers for Medicare & Medicaid Services (“CMS”):

  1. Ensure that the three states unable to distinguish telehealth from in-person services implement indicators to differentiate those services;

  2. Conduct evaluations and support state efforts to evaluate the impacts of telehealth on access, cost, and quality of behavioral health services; and

  3. Monitor for fraud, waste, and abuse, and support state efforts to oversee telehealth for behavioral health services.

CMS responded to the report by concurring with the first recommendation, and noting that it has supported state telehealth efforts and is currently monitoring the impact of the COVID-19 public health emergency on behavioral health services delivered through telehealth.

This report highlights the fact that broader telehealth utilization likely will result in increased government scrutiny, as evidenced by recent government actions focused on the telehealth space. Providers should therefore implement best practices to address challenges associated with the provision of telehealth services in an effort to effectively withstand increasing government scrutiny in this space.

Copyright © 2023, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XI, Number 319

About this Author

Samuel Canales Litigation Attorney Sheppard Mullin Law Firm California

Samuel Canales is a litigator and regulatory attorney, and an associate in the firm's Century City office.

Areas of Practice

Sam represents private equity firms and leading companies in complex commercial disputes. His experience extends to practically every aspect of the litigation process, and he has played a lead role in dozens of disputes involving alleged contract violations, business torts, and violations of state and federal laws.

Sam leverages his litigation experience...