OIG: Most states not doing enough to monitor Medicaid telehealth fraud for behavioral health services

Dollar bill with a hole in Washington's face on it and the word "Medicaid" in its place
A new survey of 37 states found that three didn't know which Medicaid behavioral health services are offered via telehealth compared to in person, an Office of Inspector General report found. (zimmytws/GettyImages)

Many states don’t monitor for telehealth fraud and fail to evaluate how telehealth has impacted patient access and care, a Department of Health and Human Services watchdog found.

The agency’s Office of Inspector General (OIG) released a report Tuesday that explored how states are evaluating the use of telehealth to treat behavioral health in Medicaid. While states have increasingly turned to telehealth during the COVID-19 pandemic, OIG found that a few don’t even know what services are offered virtually.

“As the nation confronts the psychological and emotional impact of COVID-19, the use of telehealth will be important in addressing behavioral health needs for Medicaid enrollees,” the report said.

Telehealth can be used to cover several behavioral health services such as mental health assessments and therapy. This reliance has increased since the pandemic that caused patients to stay home for fear of contracting the virus.

But the report finds states still have a way to go if telehealth flexibilities offered by the Centers for Medicare & Medicaid Services become permanent.

OIG spoke with Medicaid directors for 37 states that provide telehealth behavioral services.

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The agency found only two states have evaluated the effectiveness of telehealth on access to services for Medicaid enrollees.

One of the states found that 70% of enrollees who used telehealth for behavioral services resided in a rural area and would have to be transported a long distance to get care without it. Another found telehealth increased the types of providers beneficiaries could access such as psychiatrists, psychologists and nurse practitioners that specialize in mental health.

Only one of the 37 states evaluated the impact of telehealth on cost. It found that prior to the pandemic, telehealth generated $8,600 in savings for emergency room care avoidance in one managed care plan and $484,000 in reduced transportation costs for another plan.

OIG also found that three of the 37 states couldn’t say which services are provided to Medicaid beneficiaries via telehealth compared to in person.

“These states cannot do any analysis on the effects of telehealth, nor do they have the ability to perform basic monitoring and oversight specific to telehealth services, which are essential to ensuring the fiscal integrity of the Medicaid program and to protecting Medicaid enrollees,” the report said.

States are already providing a small amount of monitoring and oversight on telehealth. OIG found that 11 out of the 37 states perform monitoring and other actions to combat any fraud or waste in telehealth. But 23 out of the 37 states report fraud is a major concern surrounding telehealth use.

Even though Medicaid is a federal-state joint program, states are responsible for monitoring.

A few states told OIG it is difficult to verify that telehealth services are being provided appropriately.

States need to step up their efforts to evaluate and examine the impact of telehealth on their Medicaid programs, especially as flexibilities that emerged during the pandemic could be made permanent, OIG said.

“Evaluating the effects of telehealth on access, cost and quality of behavioral health services is particularly important in helping states make decisions about how best to use telehealth and about which populations benefit most from these services,” OIG said.

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An accompanying data brief from OIG (PDF) also found that states have had major challenges with implementing behavioral telehealth services. The brief looked at state challenges from January through February 2020 before the onset of the pandemic.

“Most states reported multiple challenges with using telehealth, including a lack of training for providers and enrollees, limited internet connectivity for providers and enrollees, difficulties with providers protecting the privacy and security of enrollees’ personal information, and the cost of telehealth infrastructure and interoperability issues for providers,” the brief said.

The findings act as a clarion call to states to prepare for potential permanent expansion of telehealth after the pandemic subsides. States can decide how to apply telehealth in their Medicaid programs.