Using Medicaid to Support Working Age Adults with Serious Mental Illnesses in the Community: A Handbook. Telemedicine


As treatment options progress, technology will play an ever greater role in the delivery and administration of mental health services to individuals with serious mental illnesses. The President’s New Freedom Commission on Mental Health pointed out that “in a transformed mental health system, advanced communication and information technology will empower consumers and families and will be a tool for providers to deliver the best care.”22 One important component of such technology is the use of telemedicine to deliver services. While virtually all states use telemedicine for general medical purposes (e.g., it is extremely common in radiology), telemedicine as a mental health services delivery mechanism in Medicaid has been slower to evolve. However, some states are capitalizing on telehealth technologies to provide mental health services, especially in difficult-to-serve rural, outlying areas.

CMS recognizes telemedicine as a legitimate method for delivering Medicaid services.23 Telemedicine is not treated as a distinct Medicaid coverage but rather as an allowable method for delivering a service a state already offers in its Medicaid program. Telemedicine, in the form of phone and/or videoconferencing, can be a cost-effective option for providing mental health consultations, examinations, or even routine services. Explicitly providing for telemedicine entails a state’s recognition that services may be furnished on a basis other than a literal physical face-to-face encounter between a practitioner and individual, a requirement frequently found in state coverage specifications.

Generally, telehealth programs consist of a “hub” site, where the physician or other provider is located and transmits a service by phone or video, and a “spoke” site, generally home to administrative staff, where the individual receives telehealth services. In rural areas where there may be a shortage of providers and access to specialists is often a problem, telemedicine can be a valuable tool in meeting individuals’ needs. Currently, at least eighteen states26 povide for the use of telemedicine as a general Medicaid delivery mechanism and six27 of them specifically address its use for the provision of mental health services.

Utah and Colorado Telemedicine Provisions
Utah’s rehabilitative services coverage provides that

“Telehealth mental health is a complementary method of delivering traditional mental health services. The telehealth mode of delivery is reserved for rural clients where distance and travel time create difficulty with access to needed psychiatric and other mental health therapy services. Telehealth is designed to improve client access to mental health care in rural areas of Utah.”24

Utah limits the use of telehealth services as follows:

  1. It is only available to consumers residing in rural areas of Utah.
  2. Services must be provided at a site that offers both audio and video communication between the provider and consumer.
  3. Services are limited to psychiatric evaluations, on-going physician medication management service, and individual therapy sessions. There is no preauthorization requirement for these services.

Similarly, Colorado state rules provide that

“Telemedicine is defined as the delivery of medical services, and any diagnosis, consultation, treatment, transfer of medical data, or education related to health care services using interactive audio, interactive video, or interactive data communication instead of in-person contact.

No Mental Health Assessment and Services Agency, on or after January 1, 2002, may require face-to-face contact between a provider and a client for services appropriately provided through telemedicine if the client resides in a county with a population with one hundred fifty thousand residents or fewer, and if the county has the technology necessary for the provision of telemedicine. The use of telemedicine may not be required of an enrolled client when in-person care by a participating provider is available to the enrolled client within the service area of the community mental health center serving the client’s place of residence.”25

In providing for the use of telehealth as a Medicaid mental health service delivery mechanism, a state should consider the types of services it wishes to provide, provider qualifications and locations, and the types and quality of equipment used. As with any Medicaid service, states must comply with the federal principles of economy, efficiency, and quality of care. States can choose to reimburse for both “hub” and “spoke” locations or only “hub” sites, although most states do allow payments for both. Additionally, states can obtain Medicaid FFP dollars for expenses such as line-connection charges and hub-related administration as long as they meet all other Medicaid reimbursement requirements. Utah and Colorado provide examples (see above) of how states use telemedicine as a delivery method for mental health services.

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