California doctors can already connect to patients remotely through video conferencing, email or phone calls.
But sponsors of the Telehealth Advancement Act of 2011say the new law will remove barriers to health technology.
Steve Barrow of the California State Rural Health Association says that could save lives.
BARROW: "Many types of cancers and other types of illnesses now can be quickly gotten to within a very short amount of time with telehealth when a face to face is not available."
Starting next year, the new law will eliminate paperwork, expand definitions and allow for easier medical reimbursements for telehealth.
Co-author of the bill, Democratic Assemblymember and Doctor Richard Pan says state regulation needed to be brought up to date with health technology.
PAN: "We are now removing those barriers to sustaining the types of advances that we are making here in California in using information technology to improve the quality of care."
Supporters say the new law will create thousands of jobs and save Medi-Cal more than a billion dollars a year.