LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 2988
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: DECEMBER 16, 2024
SUMMARY
Synopsis: Extends certain pay parity regarding telemedicine and telehealth until
July 1, 2026.
Type of Impact: 18-month State expenditure and revenue increases.
Agencies Affected: Department of Human Services, Department of the Treasury,
Department of Banking and Insurance.
Office of Legislative Services Estimate
Fiscal Impact 18-Month Duration of Extension
State Expenditure Increase Indeterminate
State Revenue Increase Indeterminate
 The Office of Legislative Services (OLS) concludes that the bill will result in an indeterminate
18-month increase in State expenditures and revenues. NJ FamilyCare expenditures will
increase by an indeterminate amount in order to extend by 18 months the statutory requirement
that NJ FamilyCare reimburse for telemedicine and telehealth services at a rate that equals the
provider rate paid when the same services are delivered on an in-person basis, provided the
services are otherwise covered when delivered in person in the State.
 Any increase in NJ FamilyCare expenditures will result in additional State revenues, in the
form of federal reimbursements for eligible State expenditures under the federal Medicaid
program.
BILL DESCRIPTION
This bill amends P.L.2021, c.310 to extend the end date from December 31, 2024 to July 1,
2026, during which time a health benefits plan in this State is to provide coverage and payment for
health care services delivered to a covered person through telemedicine or telehealth at a provider
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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reimbursement rate that equals the provider reimbursement rate that is applicable, when the
services are delivered through in-person contact and consultation in New Jersey, provided the
services are otherwise covered by the health benefits plan when delivered through in-person
contact and consultation in New Jersey.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS estimates that the bill will result in an indeterminate 18-month increase in State
expenditures and revenues. NJ FamilyCare expenditures, in the form of monthly capitation
payments to State-contracted Medicaid managed care organizations for the cost of services
delivered to NJ FamilyCare enrollees, will increase by an indeterminate amount in order to extend
by 18 months the requirement, under P.L.2021, c.310, that NJ FamilyCare reimburse for
telemedicine and telehealth services at a provider rate that equals the rate paid when the same
services are delivered on an in-person basis, provided the services are otherwise covered when
delivered in person in the State. Because approximately 95 percent of NJ FamilyCare participants
are enrolled with a Medicaid managed care organization, and the specific reimbursement rates paid
by each managed care organization to contracted providers of telemedicine and telehealth services
are proprietary, the OLS cannot determine the magnitude of the NJ FamilyCare cost increase under
the bill.
The telemedicine and telehealth rate parity requirement was originally established under
P.L.2021, c.310, and was to expire on December 31, 2023. P.L.2023, c.199, however, extended
the expiration date for this rate parity requirement to December 31, 2024. If this requirement were
to expire at the end of 2024, NJ FamilyCare would reimburse for telemedicine and telehealth
services at a rate that does not exceed, but is not necessarily equal to, the rate at which such services
would be paid if provided during an in-person encounter in the State.
Increased State expenditures for NJ FamilyCare capitation payments to the Medicaid managed
care organizations will be eligible for additional federal Medicaid reimbursements, thereby
increasing State revenues, albeit by an indeterminate amount.
The OLS anticipates that extending provider rate parity for telemedicine and telehealth services
by 18 additional months will have no fiscal impact on Department of the Treasury expenditures
for the State Health Benefits Program and the School Employees’ Health Benefits Program, which
are required under P.L.2023, c.199 to have rate parity for telemedicine and telehealth services
through December 31, 2024. Both programs reinstated cost-sharing requirements, as of February
2022, for telemedicine and telehealth visits, which had been suspended during the State and federal
public health emergencies declared in response to COVID-19. Absent the provisions of P.L.2023,
c.199, the programs would reimburse for telemedicine and telehealth services at a provider rate
that does not exceed the rate paid for services delivered on an in-person basis.
The OLS, further, concludes that the Department of Banking and Insurance will not incur any
additional costs under the provisions of the bill.
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Section: Human Services
Analyst: Anne Cappabianca
Senior Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).