Expanding Access to Virtual Behavioral Care: Navigating State and Federal Regulations

2024 could prove pivotal for virtual behavioral health as the federal government considers making COVID-era telehealth flexibilities permanent. 

Federal and state regulations can heavily influence the availability of behavioral telehealth appointments. For behavioral health providers who provide care to Medicaid beneficiaries, or who prescribe controlled substances for conditions like substance use disorders (SUDs), regulations can be even more restrictive.

Several regulations that have created flexibility for behavioral health providers offering virtual care may change or expire later this year. Still, the federal government is signaling that telehealth is likely here to stay.

“We can’t allow those flexibilities to expire,” U.S. Health and Human Services Secretary (HHS) Xavier Becerra told the U.S. House Ways and Means Committee on Wednesday. “When the pandemic hit, a lot of folks thought it wouldn’t work on the mental health side, but it’s actually one of the areas where we had the greatest success. The last thing we need to do is allow them to expire.”

Telehealth offers patients extensive benefits. Research shows that telehealth can help pregnant people with opioid use disorder (OUD) stay in treatment, increase access to the limited behavioral health clinician workforce and allow patients to access highly specialized clinicians who may not be available in their area. 

Behavioral telehealth appointments skyrocketed in popularity during the onset of the COVID-19 pandemic. Even after social distancing efforts relaxed and in-person visits became available, many patients chose to continue utilizing telehealth appointments, according to a new study published in JAMA Network Open. 

Federal and state telehealth regulations

Federal regulations are crucial for providers to understand because they determine the baseline for what is and is not permissible via telehealth.

The federal government decides about coverage and reimbursement determinations for TRICARE, the health care program for active-duty military personnel and their families, the Department of Veterans Affairs, the Indian Health Service and Medicaid and Medicare.

However, there are some gaps at the national level of regulation. The federal government lacks a permanent framework for prescribing controlled substances, according to Kyle Zebley, senior vice president of public policy at the American Telemedicine Association.

“The [U.S. Drug Enforcement Administration] is on the hook to come up with a permanent framework for remote prescribing of controlled substances without a prior in-person requirement,” he told Behavioral Health Business. “For four years, the DEA has waived in-person requirements and this has been a game changer for those who are seeking care in this manner. … This is not something that you can interrupt and expect it to move forward seamlessly. We’re talking about people’s lives.”

The American Telemedicine Association is an organization that specifically seeks to advance telehealth through advocacy and education. Its member network includes leading healthcare delivery systems, academic institutions, technology solution providers and payers.

States cannot be more lenient than federal baseline regulations, but state regulations may be more critical to health care providers offering digital care. State legislature determines standards of care, how clinicians are licensed, commercial insurance coverage restrictions and what technology is used to deliver care, as well as what Medicaid will cover.

Providers who offer telehealth appointments must carefully consider state-by-state regulations to maintain compliance or expand their geographic footprints.

Digital SUD treatment provider Affect Therapeutics evaluates compliance at several levels, including state facility licensing, individual provider licensing, Medicaid and supervision, Dr. Jon Peeples, chief medical officer at Affect Therapeutics, told BHB in an email.

Virginia-based Affect provides treatment for alcohol, marijuana, cocaine, methamphetamines and prescription stimulants, such as Adderall, in 20 states. The company raised $16 million in Series A funding in July 2023. 

Affect speaks with each state’s licensing body where it operates to understand restrictions and ensure telehealth SUD services are allowed. Most of Affect’s patients are covered through Medicaid, so the company must also evaluate Medicaid rules regarding telehealth and reimbursement.

The company requires all of its counselors, social workers, nurse practitioners and physicians to be licensed in the state where they are located and where their patients are located.

“There’s variation from state to state on the actual requirements of individual licensing, but we believe our approach is a best practice that offers protection both for providers and patients,” Peeples said.

“States may have specific requirements for whether supervision can be conducted via telehealth,” Peeples continued. “This is an important consideration for counselors or social workers who don’t have independent licensure and for nurse practitioners in states that require them to have a collaborative relationship with a physician.”

To cope with ever-changing telehealth regulations, digital behavioral health provider Lyra Health maintains a dedicated team that ensures clinicians are up-to-date on requirements, training and expectations.

Founded in 2015, Lyra provides workforce mental health benefits to more than 17 million people worldwide. The company recently expanded to treat people with complex mental health issues, a relatively untouched segment of the behavioral health industry. 

“Because Lyra has built a large and diverse network and actively curates that network based on the needs of the individuals we serve, we can provide both general and specialty mental health care with providers that hold the appropriate license,” Alethea Varra, senior vice president of clinical care at Lyra Health, told BHB.

Affect plans to increase its footprint to all 50 states. Peeples said that state regulations are a consideration in the company’s expansion strategy.

“In some states in which we operate, we’re the first and only fully telehealth SUD treatment provider to receive licensure,” he said. “Many states are still navigating telehealth themselves and can view telehealth as a repercussion of the pandemic instead of a beneficial service in its own right.”

Telehealth regulations in 2024

Generally speaking, the U.S. is in a “very good place with tele-mental health.”

“Virtually every major payer, be it the commercial or relay public, covers and reimburses for some degree of tele-mental health care,” Zebley told BHB. “Tele-mental health is seen as one of the very best, arguably the best, examples of ways that telehealth can be successfully done without any kind of in-person component.”

Telehealth is a bipartisan, or even nonpartisan, issue in the U.S. government, Zebley said.

“A lot of these payroll flexibilities at the federal level were put in place by President Trump,” Zebley said. “They’ve been kept in place by President Biden on a bipartisan basis. A lot could change with this presidential election, but one thing that won’t is the fact that we have a friend and ally in the White House and Congress. That’s true in state capitals, state governors’ mansions and regulators.”

The government’s commitment to telehealth was demonstrated in recent days when U.S. Health and Human Services Secretary (HHS) Xavier Becerra touted the federal government’s approach to telehealth and behavioral health during the COVID-19 pandemic.

Fluctuating inter-state regulations are a caveat to the U.S.’s positive view of behavioral telehealth.

Since no two states are alike in terms of telehealth regulations, providers seeking to deliver care across state lines “have their work cut out for them.”

Providers can expect major regulatory changes in 2024 as telehealth flexibilities established during the pandemic are set to disappear on December 31. Zebley called 2024 the “telehealth Super Bowl.”

“We want to give a sense of urgency to our federal policymakers,” Zebley said. “It would be great to give a sense of urgency [for behavioral health professionals] to know they should call their member of Congress and urge them to act on telehealth before it’s too late.”

Along with a decision about controlled substances from the DEA, federal policymakers must decide whether to permanently repeal an in-person requirement for tele-mental health in the Medicare fee-for-service program in 2024.

Telehealth activists will also push for states that are more restrictive than the federal government regarding the prescription of controlled substances to revert to federal standards.

“You have to stay on top of state legislators and regulators to make sure that they’re not going backward,” Zebley said. “That we’re building on top of the successes we’ve had and keep marching onwards into the 21st century, not yanking us back to a pre-pandemic 20th-century mindset.”

Interstate telehealth compacts

One method to improve access to telehealth behavioral health services is by adopting multi-state licensure compacts in which states agree on a uniform standard of care so providers can provide services to patients in other states.

“Interstate licensure compacts will be helpful to everyone, including people seeking care, communities with no providers, the providers themselves and organizations trying to reach those in need,” Varra said.

Compacts exist for many different types of health care, including nursing, physical therapy, speech-language pathology and psychology. Compacts range in how easy they make it for clinicians to practice in other states. The “gold standard” of compacts is the Nurse Licensure Compact, which allows nurses in good standing in any of the 41 states that have adopted the compact to practice in any other state.

The Psychology Interjurisdictional Compact (PSYPACT) is also highly adopted, with 39 states currently participating. It is specifically designed to facilitate telehealth psychology and temporary in-person psychology. 

Other behavioral health disciplines are not as comprehensive as PSYPACT.

“For example, the social work compact exists but isn’t actually active across multiple states and the social workers will still have to apply for licensure in each state,” Varra said. “This limits the utility of the state compacts outside of psychology.”

Approximately 45 states have adopted licensure compacts, Zebley said. The five states that have not adopted a compact represent an opportunity for future education, according to the ATA.

“We’ve had a lot of forward momentum in the adoption of these compacts,” Zebley said. “We’re going to continue to chip away and see what we can do. For instance, one of the states that have not adopted any compacts, California, last year adopted a piece of legislation that was really dipping their toe in the licensure flexibility water.”

While licensure compacts can help expand access to telehealth, not all patients benefit from these associations.

Nearly 12% of adult Medicaid beneficiaries are diagnosed with a SUD, and Medicaid’s site states that treatment that aims to manage SUDs provides substantial cost savings. However, Medicaid regulations may prevent some of its beneficiaries from receiving telehealth SUD treatment, according to Peeples. 

“Medicaid and licensing body regulations are often well-intentioned but can be out-of-date or misguided,” Peeples said. “States may also impose specific requirements for data collection, clinical processes, and staff training. These can vary widely, resulting in decreased access to care and difficulty scaling programs nationally.”

To increase access to virtual SUD treatment, states should reduce restrictions on provider Medicaid enrollment requirements, Peeples said, so more clinicians can be reimbursed for virtual behavioral health services.