House panel advances telehealth pay parity bill with wage protections

The Alaska House Labor and Commerce Committee voted Friday to advance legislation requiring insurers to pay the same rates for telehealth services as in-person care. The bill now includes protections to prevent healthcare companies from relocating Alaska jobs to lower-wage states.

Senate Bill 83, sponsored by Senator Matt Claman, establishes payment parity between telehealth and in-person healthcare services. The committee adopted two amendments during the bill's second hearing before passing it without objection.

Nationally, 33 states had enacted some form of telehealth payment parity statute by 2024. Many included restrictions such as limiting parity to in-state providers or certain originating sites. Before the COVID-19 pandemic, only about 22 percent of U.S. states had such laws, according to a 2020 analysis in the New England Journal of Medicine.

"This bill provides in the most broad basis, it's pay parity between telehealth rates and in-person rates," Claman said.

The committee's most significant change came through an amendment allowing insurers to use geographic pay differentials when reimbursing out-of-state healthcare providers. The amendment addresses concerns that without such language, the bill could create incentives for multi-state healthcare companies to move providers to states with lower wages while still collecting Alaska reimbursement rates.

"Let's say it's Providence and they have a healthcare provider who earns $140,000 in Alaska and the same healthcare provider earning the same service earns $120,000 in Oregon," Claman said. "This just says that the insurer could basically take that differential into account when reimbursing for the service."

Representative Carrick said the geographic pay differential amendment changed his position on the bill. "I think this amendment makes me support the bill, and I was a little on the fence before because I do think costs for in-person care are constantly rising, and I didn't want to create an incentive for a provider who has the option to do telehealth from anywhere in the country have an incentive to do that over having an in-person facility," he said.

The committee also adopted an amendment extending the sunset date for Medicaid telehealth statutes from 2030 to 2040. Committee staff explained that the amendment pushes the repeal date out by a decade. The Department of Health had indicated that maintaining a sunset date gives the department flexibility to adjust regulations over time rather than locking in permanent rules.

Claman clarified that the provision maintains mandatory pay parity in Medicaid for telehealth and in-person services through 2040. At that point the legislature would need to revisit whether to continue the requirement.