Legislation passed in December 2020 changed some telehealth requirements for mental health services. The change has prompted concern over false claims.

  • The new law requires an in-person visit before telehealth can be used.
  • The change does not apply while the public health emergency continues.
  • Switching to the new requirement will be important after the pandemic waivers expire.

The COVID-19 pandemic prompted several changes to telehealth laws and rules, most of them representing an expansion of remote patient care options and a relaxing of requirements. However, one legislative change has caused some confusion and concern over an apparent tightening of telehealth rules.

Passed in December 2020, Section 123 of the Consolidated Appropriations Act of 2021 included a statement that appeared to restrict who can receive telehealth services for mental health:

“Payment may not be made under this paragraph for telehealth services furnished by a physician or practitioner to an eligible telehealth individual for purposes of diagnosis, evaluation, or treatment of a mental health disorder unless such physician or practitioner furnishes an item or service in person, without the use of telehealth.”

The phrase “unless such physician or practitioner furnishes an item or service in person, without the use of telehealth” caused some hospital leaders to think the law stops the use of telehealth as it has been used during the pandemic.

The new law states that a practitioner must see the patient in person in the six months before the telehealth service. (The full text of the legislation is available online at: https://www.congress.gov/116/bills/hr133/BILLS-116hr133enr.pdf.)

The act changes the Medicare telehealth coverage statute, expanding Medicare payment beyond substance use disorder treatment to more broadly cover treatment of mental health disorders, explains Chad Anguilm, MBA, vice president of in-practice technology services with Medical Advantage in Ann Arbor, MI.

“It’s been well documented that the need for access to mental healthcare is high, especially considering the shortage of mental health practitioners nationwide, particularly in rural areas,” he says. “Under this new law, Medicare will cover the telehealth mental health service only if the practitioner has conducted an in-person consult with the patient in the prior six months and subsequently continues to conduct in-person exams. Otherwise, Medicare will not pay for the service.”

Waivers Still Protect

The legislation may be complex, but the good news is it does not interfere with the current use of telehealth during the pandemic, says Jacob J. Harper, JD, an attorney with Morgan Lewis in Washington, DC. In fact, the legislation is meant to expand the availability of telehealth services.

“This is the first step in the growing expansion of telehealth services for Medicare beneficiaries. This particular provision is specific to mental health services, so it is limited,” Harper explains. “For mental health and substance abuse services, the federal government has long recognized that telehealth is an easier fit into those areas. I think that is why they’re looking at expansion.”

That expansion will happen soon, and Section 123 addresses the need to ensure quality care, Harper explains. Section 123 does not apply while the COVID-19 emergency continues.

“Whatever the provider has been doing during the public health emergency, those waivers are still in place, and there is not going to be a pulling back of telehealth services without a lot of ample notice from CMS and others,” Harper says. “By the time the public health emergency ends, there will be a fulsome, full-coverage option available so that all the investments hospitals have made to provide telehealth services aren’t going to go to waste.”

The legislation looks forward to a post-pandemic time in which telehealth services for mental health will need more oversight than during the pandemic, when allowances were made because patients could not make in-person visits to healthcare facilities.

“We’re all thinking now about off-ramps from how we operated during the public health emergency with the waivers. I view this as a first attempt at making a permanent solution,” Harper says. “They said we’re pretty comfortable now providing mental health services virtually, so we’re only going to require that it be for an established patient. Then, you can use telehealth in way very similar to what you did during the pandemic.”

Still Eased From Before

The Department of Health and Human Services and CMS will not go back to the pre-pandemic restrictions on telehealth, such as the originating site requirement and geographic area restrictions, Harper says. Doing so would make it impossible to continue providing current telehealth services.

“Needing to be in a physician’s office or hospital to receive telehealth services doesn’t really lend itself to the type of telehealth that we’ve grown accustomed to during the pandemic,” he says.

COVID-19 has complicated in-person visits, but there also is a growing need for access to mental healthcare. There is a shortage of mental health practitioners nationwide, particularly in rural areas where it is more difficult to see a practitioner in person, says Heather Macre, JD, director with Fennemore Craig in Phoenix. The Section 123 change is not discussed in the legislative history for the act, so it is difficult to tell the impetus for it, Macre says, particularly considering recent actions to put mental health services on par with other services regarding telehealth.

Harper says the recent legislation is a step forward for the expansion of telehealth services in mental health, even though after the public health emergency it requires an in-person visit with the patient and physician before they can use telehealth. This is more restrictive than what the COVID-19 waivers allowed, but better than the pre-pandemic requirements.

“It goes part of the way to what the telehealth community is ultimately looking to achieve, but not all the way there,” Harper says. “There are going to be restrictions in place, but you’re not going to have the geographic area restrictions and the originating site requirement. I think it’s positive, but for a lot of people in telehealth it won’t go far enough.”

Only Mental Health

It is important to note this requirement only applies to mental health services provided via telehealth and not all services on the Medicare telehealth services list, says Joelle M. Wilson, JD, an attorney with Polsinelli in Chicago.

“Prior to the passage of the act, the provision of mental health services provided via telehealth was extremely limited. Hospitals and physicians should ensure that telehealth services provided, including mental health services, align with current regulatory requirements to limit False Claims Act implications,” she says. “Additionally, providers should be prepared to transition their current telehealth practices post-public health emergency, when many of the waivers and flexibilities instituted to expand access to care will expire.”

Any oversight in moving to more restrictive requirements could lead to false claims submitted to Medicare. “Fraud is a growing concern with telehealth, so there is always a concern about the False Claims Act overpayments with any service. There definitely is scrutiny of how these services have been implemented over the past year or so, and that scrutiny will continue after the public health emergency ends,” Harper says.

If providers suspect a false claims issue, they should report it. “Self-reporting is required and often leads to lighter sanctions, particularly where there is a change in the law, as is the case here,” she says. “In addition, providers should try to ameliorate this by arranging in-person visits for mental health patients on Medicare. It remains to be seen how this new language will be enforced.”

Some May Be Challenged

After the public health emergency, Section 123 could pose a problem for patients who have depended on telehealth for mental health services during the pandemic, says Andria Jacobs, chief operating officer of PCG Software, a solutions provider for healthcare organizations in Las Vegas. Once the rule goes into effect, patients might not be eligible for telehealth services until they can see the practitioner in person.

“This poses a very detrimental access to care problem, as most patients haven’t been physically seeing the doctor during the pandemic. They’ve been turning to telehealth and remote care services,” she says.

With one in five adults and one in six youth experiencing a mental health disorder each year, this rule puts mental health providers and their patients at extreme risk, Jacobs says. If patients are seen in the emergency department (ED) and referred to psychiatric care, they would have to see the provider in person before any remote services are rendered. The physical visit to the ED would not count for the in-person requirement.

When reviewing claims, software companies will scan through to look for an office visit with a place of service and no indicator that it was performed remotely within a six-month period, Jacobs explains. If this is not found, providers will be at risk for false claims. Adjusting expectations after the pandemic period will be crucial to avoiding liability.

“The changes made to the telemedicine law have definitely put hospitals and physicians at risk of False Claims Act allegations if they continue to not meet criteria of seeing the patient within six months,” she says.


  • Chad Anguilm, MBA, Vice President, In-Practice Technology Services, Medical Advantage, New Lothrop, MI. Phone: (800) 594-6115.
  • Jacob J. Harper, JD, Morgan Lewis, Washington, DC. Phone: (202) 739-5260. Email: jacob.harper@morganlewis.com.
  • Andria Jacobs, Chief Operating Officer, PCG Software, Las Vegas. Phone: (877) 789-1291.
  • Heather Macre, JD, Director, Fennemore Craig, Phoenix. Phone: (602) 916-5396. Email: hmacre@fennemorelaw.com.
  • Joelle M. Wilson, JD, Polsinelli, Chicago. Phone: (312) 463-6219. Email: jmwilson@polsinelli.com.