Dorsey Health Law

On March 9, 2020, the Centers for Medicare and Medicaid Services (“CMS”) Quality, Safety and Oversight Group (“QSO”) issued a memorandum, QSO-20-15, providing guidance to health care providers related to the Emergency Medical Treatment and Labor Act (“EMTALA”) implications regarding the COVID-19 pandemic. EMTALA is a Federal law that requires all Medicare-participating hospitals (including critical access hospitals (“CAHs”)) with dedicated emergency departments (“EDs”) to perform an appropriate medical screening exam (“MSE”) for all individuals who come to their EDs to determine if the individual has an emergency medical condition (“EMC”), regardless of their ability to pay.  If there is no EMC, the hospital’s EMTALA obligations end.  If there is an EMC, the hospital must treat and stabilize the EMC within its capability or transfer the individual to a hospital that has the capability and capacity to stabilize the EMC. Hospitals with specialized capabilities may not refuse an appropriate transfer under EMTALA if they have the capacity to treat the transferred individual. In the wake of the COVID-19 pandemic, many hospital EDs are under increased strain due to an influx of patients with suspected or confirmed cases of COVID-19.  Hospitals are concerned not only about their ability to handle this unprecedented increase in ED patients but also about their ability to minimize the risk of exposure of COVID-19 to other ED patients as well as healthcare workers.  CMS released their guidance to address these concerns and to remind hospitals of their EMTALA obligations during the COVID-19 pandemic. On March 13, 2020, the Secretary of the U.S. Department of Health And Human Services (“HHS”) waived certain EMTALA requirements following President Trump’s declaration that the COVID-19 pandemic constitutes a national emergency. The HHS waiver specially waives sanctions for the “direction or relocation of an individual to another location to receive medical screening pursuant to an appropriate state emergency preparedness plan or for the transfer of an individual who has not been stabilized if the transfer is necessitated by the circumstances of the declared Federal public health emergency for the COVID-19 pandemic.” Below is a FAQ of the guidance for Medicare-participating hospitals (including CAHs) issued by CMS as well as a summary of the EMTALA waivers issued by HHS. What do the screening, stabilization, and transfer requirements for hospitals under EMTALA look like in light of the implications of COVID-19? Generally speaking, Medicare-participating hospitals must, at a minimum, (1) provide a MSE to every individual who comes to the ED for examination or treatment for a medical condition to determine if they have an EMC (an EMC is present when there are acute symptoms of sufficient severity such that the absence of immediate medical attention could reasonably be expected to result in serious impairment or dysfunction); (2) provide necessary stabilizing treatment for individuals with an EMC within the hospital’s capability and capacity; and (3) provide for transfers of individuals with EMCs, when appropriate. Every hospital with a dedicated ED is required to conduct an appropriate MSE for all individuals who come to the ED, including individuals who are suspected of having COVID-19, regardless of whether they arrive by ambulance or are walk-ins, unless an EMTALA waiver applies (see FAQ #7 below). Every ED is expected to have the capability to apply appropriate COVID-19 screening criteria when applicable, to immediately identify and isolate individuals who meet the screening criteria to be a potential COVID-19 patient, and to contact their state or local public health officials to determine next steps. Is my hospital required to accept transfers of patients with suspected or confirmed cases of COVID-19 from small or rural hospitals that do not have appropriate or sufficient isolation facilities or equipment? Yes.  If your hospital has the capacity and the specialized capabilities needed for stabilizing treatment, then you are required to accept appropriate transfers from hospitals without such capacity and capabilities.  Hospitals should continue to coordinate with state and local public health officials regarding placement of individuals who meet COVID-19 assessment criteria and the most current standards of practice for treating COVID-19 as this situation continues to develop. The situation continues to change on a near-hourly basis. How will CMS determine whether an EMTALA violation has occurred? CMS has stated they will evaluate the capabilities and capacity of both the referring and recipient hospitals to determine whether a violation has occurred.  Because of the dynamic situation, this evaluation would include the recommendations of the Centers for Disease Control and Prevention (“CDC”) at the time the suspected violation occurred.  At the time of this writing, the CDC’s recommendations focus on factors such as the individual’s recent travel, exposure history, and presenting signs and symptoms in differentiating the types of capabilities hospitals should have to screen and treat individuals who have or may have COVID-19.  See the CDC website for the most current infection prevention and control recommendations for hospital patients with suspected or known cases of COVID-19 (https://www.cdc.gov/coronavirus/2019-ncov/hcp/clinical-guidance-management-patients.html). All hospitals are required to accept appropriate transfers of individuals with EMCs if the hospital has the specialized capabilities an individual requires for stabilization and the capacity to treat these individuals. This obligation applies regardless of whether the hospital has a dedicated ED. What are the requirements for alternative screening sites our hospital sets up on campus? Hospitals may set up alternative screening sites on campus.  CMS highlights that the MSE does not have to take place in the ED. A hospital may set up alternative sites on its campus to perform MSEs.  Individuals may be redirected to these sites after being logged in. The redirection and logging in can even take place outside the entrance to the ED.  The person doing the directing should be qualified (e.g., an RN) to recognize individuals who are in need of immediate treatment in the ED.  The content of the MSE varies according to the individual’s presenting signs and symptoms. It can be as simple or as complex, as needed, to determine if an EMC exists.  MSEs must be conducted by qualified personnel, which may include physicians, nurse practitioners, physician’s assistants, or RNs trained to perform MSEs and acting within the scope of their State Practice Act. Finally, the hospital must provide stabilizing treatment (or appropriate transfer) to individuals found to have an EMC, including moving them as needed from the alternative site to another on-campus department. What are the requirements for alternative screening sites our hospital sets up off campus? Hospitals may set up screening at off-campus, hospital-controlled sites.  CMS guidance states that hospitals and community officials may encourage the public to go to these sites instead of the hospital for screening for influenza-like illness (“ILI”).  However, a hospital may not tell individuals who have already come to its ED to go to the off-site location for the MSE unless it is done pursuant to a state emergency preparedness plan. Unless the off-campus site is already a dedicated ED (“DED”) of the hospital, as defined under EMTALA regulations, EMTALA requirements do not apply. The hospital should not hold the site out to the public as a place that provides care for EMCs in general on an urgent, unscheduled basis. They can, however, hold it out as an ILI screening center.  The off-campus site should be staffed with medical personnel appropriately trained to evaluate individuals with ILIs. If an individual needs additional medical attention on an emergent basis, the hospital is required, under the Medicare Conditions of Participation, to arrange referral/transfer. Prior coordination with local emergency medical services is advised to develop transport arrangements. What if a screening suggests possible COVID-19? If an individual “comes to the emergency department” (as defined at 42 C.F.R. § 489.24(b)), the hospital must provide that individual with an appropriate MSE.  It is a violation of EMTALA for hospitals with EDs to use signage that presents barriers to individuals suspected of having COVID-19 from coming to the ED.  However, use of signage to direct individuals to alternative screening locations on campus would be acceptable. If, consistent with applicable standards for COVID-19 screening, a hospital determines an individual who has come to the ED may have COVID-19, the hospital is expected to isolate the patient immediately and coordinate with their state or local public health officials.  CMS expects all hospitals to, within their capability, provide MSEs and initiate stabilizing treatment while maintaining isolation in accordance with COVID-19 standards of practice. How do the EMTALA waivers relating to the COVID-19 outbreak change my hospital’s obligations under EMTALA? On March 13, 2020, the Secretary of HHS waived certain EMTALA requirements following the President’s declaration that the COVID-19 pandemic constitutes a national emergency. The HHS waiver specially waives sanctions for the “direction or relocation of an individual to another location to receive medical screening pursuant to an appropriate state emergency preparedness plan or for the transfer of an individual who has not been stabilized if the transfer is necessitated by the circumstances of the declared Federal public health emergency for the COVID-19 pandemic.” The new EMTALA waiver permits a hospital to (1) redirect an individual to another location — including another hospital — to receive an MSE without first performing an MSE at the hospital if it is done pursuant to a state emergency preparedness plan, or (2) transfer an individual who has not yet been stabilized to another location if such actions are necessary and the result of circumstances due to the COVID-19 pandemic. HHS makes clear that the EMTALA waivers do not apply to any actions taken by a hospital that discriminate against individuals on the basis of their source of payment or ability to pay. The EMTALA waiver under Section 1135 does not appear to be a blanket waiver, so providers wishing to use the waiver may require “case-by-case” requests and approvals from your CMS Regional Office. “ The waiver is retroactively effective back to March 1, 2020 and will remain in effect for the duration of the national emergency period, unless terminated sooner.

Any casual reader of healthcare news in recent years has taken note of the upheaval and financial uncertainty facing healthcare providers. Take for example a recent Bloomberg story detailing the closure of Hahnemann University Hospital in Philadelphia – “Philadelphia Hospital Collapse Highlights Healthcare ‘Anarchy’”. Anarchy or not, closures, consolidations, and financial restructuring are all too common for healthcare providers across the care continuum. To get a better sense of how financial restructuring is impacting healthcare providers and what options a provider facing a restructuring may have, Kristen Barlow, a Dorsey Health Strategies consultant, recently spoke to Annette Jarvis, a Partner with Dorsey’s Finance & Restructuring Group. Annette is a national expert in insolvency and one of the nation’s leading bankruptcy and restructuring lawyers. Kristen: Annette, are there particular segments of the healthcare industry that you think are especially vulnerable to financial restructuring – and if so, why? Annette: While all healthcare providers face financial challenges, some providers face particular challenges. For example, hospitals in rural areas have lower profit margins and may serve more uninsured patients than their urban counterparts. These rural hospitals are more at risk for closure – the Government Accountability Office recently reported that in the five years through 2017, 64 rural hospitals closed compared to 49 hospitals located in urban areas. Another segment of the healthcare industry particularly vulnerable to financial restructuring is post-acute and long-term care providers. Recent years have seen the bankruptcies of a number of large skilled nursing facility providers and many long-term acute care hospitals. Expensive overhead, reductions in Medicare reimbursement rates, and pressure to invest in care quality improvements all help create an environment that puts post-acute and long-term care providers at particular risk for financial restructuring. Annette: Kristen, from your perspective, how have you seen providers change and adapt their strategic plans to respond to these financial pressures? Kristen: Annette, providers are absolutely trying to change and adapt their strategic plans to succeed in a more financially constrained environment. One strategic response providers may pursue is to find financial security through increased scale. The rise of M&A activity for healthcare providers is well documented – a recent Commonwealth Fund report found that the vast majority of provider markets (~90%) are either highly concentrated or super concentrated. Providers may find that consolidation permits them to gain negotiating leverage with insurers and realize efficiencies through economies of scale – all considerations that make consolidation an attractive strategy in the face of a financially worrisome outlook. Kristen: Annette, consolidation is just one strategic response providers may have to financial pressures – what other strategies have you seen providers pursue? Annette: Other strategies I have seen implemented include the reduction of services in rural hospitals or the roll up of certain services into larger hospital systems.  This can occur through distressed acquisitions in or out of receiverships or bankruptcies or through less traditional combinations allowing sharing of services and patient care. Kristen: Annette, how would you advise a company that may be worried about their financial outlook to think about their options? Annette: Providers may want to remember that hospitals and other facilities are, by their nature, capital intensive. Often, by deferring capital investments (and unless their loan documents have covenants that are tripped by early substandard performance), the company can put off facing financial problems by deferring capital investments until a cash crisis hits.  Then the options for saving the business are more limited.  Facing financial problems early and getting professional help are essential for restructuring. Kristen: Annette, are there common mistakes that companies facing a financial restructuring should avoid? Annette: Facing financial problems early means providers must often come to terms with a scary and uncertain future. The most common mistake I see is avoiding facing problems, including changes that are necessary for long term financial viability, as soon as they arise. Early intervention is important for maximizing all potential solutions. By working with counsel and financial advisors experienced in restructuring, the company may be able to take care of a number of problematic issues outside of bankruptcy. The company will quite frankly be better off for approaching financial issues early with a proactive mindset and the appropriate legal and financial advice.   If you would like additional information on how Dorsey can assist healthcare organizations facing financial restructuring, please contact the authors directly at jarvis.annette@dorsey.com or barlow.kristen@dorsey.com or your regular attorney at Dorsey & Whitney.  

For years, CMS has informally applied restrictions for hospitals which share space, equipment, staff or services in the same physical location (i.e., “co-locate”) with other hospitals or health care entities.  Although these sub-regulatory interpretations by CMS were not formal guidance, the penalties were so severe that many hospitals unwound the co-location or shared services arrangements they had in place with physician groups or other health care providers.  The American Hospital Association and others have urged CMS to develop and publish its co-location policy in order to provide clarity for hospitals- in particular out of concern for increasing access to care and improving care coordination in rural parts of the country. On May 3, 2019, CMS finally issued draft guidance to State Survey Agency Directors to use when evaluating hospital co-location arrangements.  CMS is seeking comments from stakeholders on the draft guidance by no later than July 2, 2019. In the draft guidance, CMS emphasizes that co-location of public areas and pathways is permitted as long as each entity demonstrates separate, independent compliance with the Medicare Conditions of Participation.  For a hospital, this means that the hospital must have distinct spaces (including clinical spaces) and maintain control over those spaces at all times.  The parties to the co-location arrangement can share public lobbies, waiting rooms, reception areas, restrooms, staff lounges, elevators, main entrances to a building, and main corridors through non-clinical spaces.  CMS has, however, outlined restrictions regarding the sharing of physical space, contractual arrangements with entities that are co-located with a hospital, the sharing of staffing and staff contracts, and the provision of emergency services in spaces that are co-located with hospitals. We are monitoring the developments of this draft guidance closely and will provide updates as they are published from CMS. If you have any questions about how the draft co-location guidance could impact your organization, please contact the author or your regular Dorsey & Whitney attorney.  

Last week the Centers for Medicare & Medicaid Services (“CMS”) released its first Rural Health Strategy. The strategy is intended to improve the agency’s service to individuals living in rural areas. CMS’ Rural Health Council, created during the Obama Administration, developed the strategy by examining current rural-focused programs at CMS, reviewing the methods used by CMS Centers and Offices to integrate rural issues in agency policies, and hosting several listening sessions with stakeholders, including healthcare providers and consumers. CMS notes in the strategy that approximately one in five Americans live in rural areas, and that rural communities are plagued with many issues: higher poverty, more chronic conditions, greater levels of uninsured and underinsured, a shrinking healthcare workforce, lack of specialty services, and fragmented care. The information gathered was grouped into eight themes, including: improving reimbursement; adapting and improving quality measures and reporting; improving access to services and providers; improving service delivery and payment models; and improving affordability and accessibility of insurance options. From the themes, the Rural Health Council drafted five key objectives that constitute the goals of the Rural Health Strategy: apply a rural lens to CMS programs and policies; improve access to care through provider engagement and support; advance telehealth and telemedicine; empower patients in rural communities to make decisions about their health care; and leverage partnerships to achieve the goals of the CMS Rural Health Strategy. According to CMS, applying a rural lens to the agency’s actions aims will ensure rural communities’ unique needs are considered in CMS policymaking and program creation. Improving access to care will focus on transportation, the move away from volume and toward value, technical assistance to providers, and scope of practice. Advancing telehealth and telemedicine will build on CMS’ recent support of such measures, including improved reimbursement, easing cross-state licensure, and reducing related administrative and financial burdens. The strategy concludes that the latter two objectives, empowering rural patients and leveraging partnership, will require better engagement and communication with patients and collaborations with stakeholders, respectively. CMS noted it was already working on several of these initiatives, even before the Rural Health Strategy was announced. The extent to which, and how quickly, these initiatives are adopted and implemented, however, is unclear. We will continue to monitor any future developments and progress of CMS’ Rural Health Council and Rural Health Strategy and provide additional analysis of related legal changes.  

Harnessing existing digital health solutions to improve chronic care management was a prominent topic at HIMMS this year (amongst many others, including AI and cybersecurity, both of which we will cover in upcoming blog posts). While this is not a new topic, it was particularly “buzzy” this year due to the ever-increasing number of large technology and wearables vendors entering the healthcare space, and as medical device manufacturers look to pair services with their existing devices. Chronic care management, as its name denotes, involves higher-touch and ongoing communication between the patient and the provider. Since digital health solutions are a cost-effective means to connect patients and providers, and because providers can use them to reach patients at home to help correct behaviors that contribute to or ameliorate chronic conditions, digital health solutions hold great promise as an effective chronic care management tool – and, indeed, as HIMMS this year made apparent, digital health solutions are poised for exponential growth. As with any relatively new field, however, we have noticed that certain key issues tend to be overlooked, often at great cost. Here are the top 5 overlooked issues we have noted:   Value proposition in a crowded market: Make no mistake about it: this is a crowded market with many different types of vendors hoping to launch the next big thing in digital chronic care management solutions. So many of the pitch decks and conversations we have been privileged to be a part of tend to focus on the market size in terms of clinical need: that there are X number of patients with Y chronic condition who would welcome Z solution. The mistake, however, is presuming that this suffices to capture attention. The barrier to market entry is relatively low (FDA considerations, if applicable, notwithstanding!), and the customers – providers and patients – are relatively wary of yet another device, application, or website to manage. Investors and customers alike will ask, what, specifically, is your digital health chronic care solution’s real value proposition; what truly differentiates you? Effectively managing a chronic condition is the baseline minimum expectation. You must offer something more.   EHR integration – the how and where: Many sellers of digital health chronic care solutions tout the ability of the device or software program to integrate with a provider’s EHR and/or with a patient-facing application so that providers and patients can monitor the relevant condition. This is all to the good, as transparent, real-time results are a key facet of chronic care management. The item that is missed, however, is how that information will be displayed in the EHR; where, exactly, will it appear? Is that in readable and, importantly, reportable format for the providers? It does a provider little good if a blood viscosity result appears in the EHR as a pdf attachment that is not searchable as a discrete data element. It is important to ask vendors and potential partners this at the outset, and to obtain the answer in writing.   Process flow: Providers and medical device manufacturers alike are doing a good job of convening clinical experts to discuss particular care needs and associated care management regimen. This is then translated into the digital health offering. What is missed, however, is thinking through the end-to-end process between provider, patient, and both their interactions with the software, to ensure that it’s as seamless and hassle-free as possible. Patients who would be, well, patient with a clinician who is taking a few extra moments to answer a question would not necessarily be as patient with extra clicks or wait time from a digital health program. Providers, in turn, are looking for the least amount of clicks to enable them to do what they do best: offer the patients helpful advice. Mapping out the exact flow of when and how the software – and any integrated devices – will behave, and who is required to do what, is critical.   Data ownership and access: While vendors – medical device and software and analytics alike – race to develop in-house chronic-care solutions, many are looking to partner with providers to provide clinical input and data and to serve as a beta testing and initial customer site. Partnerships are proliferating, and while good attention is paid in the negotiating process to the typical business terms, we have noted that data flow, ownership, and access tends to be a secondary thought. To be clear, HIPAA, privacy, and cybersecurity are still at the front of everyone’s minds; however, the operational brass tacks of exactly what data will display where, which party will provide that data, and exactly who will access the data and its derivatives is still oft-overlooked. Just as we recommend process flows from the user-end perspective (see above point), we also have found that data maps are instrumental to a successful partnership. If you have created one for your organization for cybersecurity and breach incident response, you will find that to be a useful starting point; you will then want to discuss and create a new, macro-level flow that reflects the flow across the parties. Then, check with counsel, and ensure that the relevant contracts (e.g., partnership, services, and/or BAA agreement(s)) align with that data map.   Licensure – you probably need it: “Chronic care management” encompasses so many conditions that it can, at times, be used as a marketing lure to sell wellness-related devices and services. Any company that considers itself in the “wellness” sphere and employing people to provide ongoing advice – whether by phone, video, e-mail, or other means – should make a point to check with counsel as to whether professional licensure is required. It does not matter what label you give to those employees (e.g., “coach” vs. “counselor,” or “care guide” vs. “RN”), rather, it matters what type of care is being offered through the digital health solution and what condition(s) it is addressing. A digital health solution that addresses a specific clinical condition is likely one that is regulated, which means that the employees interacting with the patient are also likely to need some form of relevant licensure. This one is a mission-critical ask, so be sure to check with counsel early on (and title your employees correctly on your website and sales materials).   We welcome your suggestions for additional focus topics within this series on digital health-related issues. Please contact Shira Hauschen at Hauschen.Shira@Dorsey.com with any comments, suggestions, or questions.

Overview On February 9, President Trump signed the Bipartisan Budget Act of 2018 (“BBA”) into law. The BBA funds the federal government through March 23 and included a bipartisan agreement to increase annual spending authority for a two-year period. In addition, the legislation contains significant policy changes impacting Medicare, Medicaid and other federal health agencies. These changes include revisions to the federal physician self-referral law (commonly referred to as the “Stark Law”), expansion of coverage for telehealth services, funding extensions of several critical Medicare programs, and changes to the Medicare Shared Savings Program. A summary of some of these key health care policy changes is included below. Revisions to the Stark Law The BBA revised the Stark Law to codify certain regulatory changes that went into effect on January 1, 2016 and corresponding clarifications via preamble by the Centers for Medicare & Medicaid Services (“CMS”) in the 2016 Medicare Physician Fee Schedule Final Rule (the “2016 Final Rule”). Specifically, the BBA revised the Stark Law to indicate the following: The writing requirement of various Stark Law compensation exceptions can be satisfied “. . . by a collection of documents, including contemporaneous documents evidencing the course of conduct between the parties involved.” Previously, CMS had only indicated in preamble text in the 2016 Final Rule that a collection of documents could be relied upon to meet the writing requirement. This was not set forth in regulatory text, however. Now that this language is in the Stark Law itself, stakeholders can take greater comfort in relying on a collection of documents to meet the writing requirement. The signature requirement of various Stark compensation exceptions is met if the parties obtain the required signatures “not later than 90 consecutive calendar days immediately following the date on which the compensation arrangement became noncompliant” and the arrangement otherwise complies with all applicable criteria. This statutory language now aligns with regulatory language in 42 C.F.R. § 411.353(g) regarding temporary noncompliance with signature requirements. That regulatory language was revised in the 2016 Final Rule to provide organizations with greater flexibility and to eliminate the prior rule that included a confusing, and often unhelpful, distinction between inadvertent noncompliance not inadvertent noncompliance. The Stark Law itself, however, has not previously referenced any provisions with respect to temporary noncompliance with the signature requirements. A holdover lease or personal service arrangement can indefinitely meet the requirements of the Stark exceptions for rental of office space, rental of equipment and personal service arrangements, respectively. However, the immediately preceding arrangement must have expired after a term of at least one year, the arrangement must have met all requirements of the applicable exception when it expired, the holdover arrangement must be on the same terms and conditions as the immediately preceding arrangement, and the holdover arrangement must continue to satisfy the conditions of the applicable exception. This statutory language now aligns with regulatory language regarding holdovers in the rental of office space, rental of equipment and personal service arrangements exceptions in 42 C.F.R. § 411.357. That regulatory language was revised in the 2016 Final Rule which previously only permitted holdovers for up to six months. The Stark Law itself, however, has not previously referenced any provisions with respect to holdover arrangements. These Stark-related provisions of the BBA used the language from Section 301 of H.R.3178, titled the “Medicare Part B Improvement Act of 2017,” which we summarized in our blog post here. This bill, which includes many other non-Stark Law-related provisions, is still pending in the Senate. We note that, while the changes to the Stark Law under the BBA were fairly inconsequential, broader Stark Law reform initiatives, including in response to the move to value-based payments under Medicare, are also currently underway. See our blog post here for further details. Increase in Civil and Criminal Penalties for Violations of Fraud and Abuse Laws The BBA significantly increased civil and criminal penalties for federal health care program fraud and abuse. Specifically, existing maximum penalties under the Civil Monetary Penalties Law (“CMPL”) for improperly filed claims (under 42 U.S.C. § 1320a–7a(a)) increased to $20,000 (from $10,000), to $30,000 (from $15,000), and to $100,000 (from $50,000). Maximum penalties under the CMPL for payments to induce reduction or limitation of services (under 42 U.S.C. § 1320a–7a(b)) increased to $5,000 where they were previously $2,000 and $10,000 where they were previously $5,000. Additionally, criminal penalties for acts involving federal health care programs under 42 U.S.C. § 1320a–7b, including but not limited to the Anti-Kickback Statute, were increased to $100,000 (from $25,000), to $20,000 (from $10,000), and to $4,000 (from $2,000). Finally, maximum sentences for felonies involving federal health care program fraud and abuse under 42 U.S.C. § 1320a–7b, including but not limited to the Anti-Kickback Statute, were increased to ten years where they were previously five years. The effective date of these increased penalties is February 9, 2018 (the date of enactment of the BBA). We note that, in 2016, penalties under the CMPL and for criminal acts involving federal health care programs were adjusted for inflation in accordance with the Bipartisan Budget Act of 2015 (see 81 Fed. Reg. 61538 et seq. (Sept. 6, 2016)), and are adjusted on an annual basis under 45 C.F.R. § 102.3 (but have not yet been updated for 2018). So, the previous statutory maximum penalties had already been increased from the amounts set forth in the statute, and now have been increased even further. It is not clear how inflation adjustments will be applied in 2018 to the new statutory penalty maximums under these laws. Medicare Telehealth Expansion The BBA also included potentially far-reaching expansions to Medicare coverage for telehealth services. Telehealth Services for Stroke Patients Current Medicare coverage for telehealth services is limited to certain care locations that are either: (A) outside of any Metropolitan Statistical Area and designated as a rural health professional shortage area; or (B) participating in a Federal telemedicine demonstration project. The BBA eliminates this originating site requirement beginning January 1, 2019 for services to diagnose, treat, or evaluate symptoms of an acute stroke. The Medicare beneficiary receiving diagnosis, treatment, or evaluation of an acute stroke may be located at any hospital or critical access hospital, mobile stroke unit, or any other type of care site that CMS designates. Home Dialysis Assessments Similarly, beginning January 1, 2019 Medicare beneficiaries with End Stage Renal Disease (“ESRD”) may choose to receive monthly ESRD-related clinical assessments via telehealth. A face-to-face clinical assessment will be required monthly during the initial 3 months of home dialysis, and thereafter only once every 3 consecutive months. The statute also states that the provision of telehealth technologies to a Medicare beneficiary receiving home dialysis will not be considered remuneration under the beneficiary inducement statute, so long as the telehealth technologies are not offered as part of any advertisement or solicitation, are provided for purposes of furnishing telehealth services related to the beneficiary’s ESRD, and meet any other requirements CMS may adopt by regulation. The condition-based expansions in telehealth coverage for ESRD and stroke patients beyond rural health professional shortage areas signals an important recognition that service delivery via telehealth is both effective and increasingly common. Telehealth Services Provided Under Medicare Advantage Plans Beginning in plan year 2020, a Medicare Advantage Plan (“MA Plan”) may provide additional telehealth benefits to its enrollees. The telehealth benefits must be a service type available under Medicare Part B, and must be services that the MA Plan identifies as clinically appropriate to furnish using electronic information and telecommunications technology when a clinician is not at the same locations as the plan enrollee. CMS will adopt regulations regarding physician and practitioner requirements, coordination of benefits rules, and other requirements. If the MA Plan wishes to offer the service via telehealth, the MA Plan must offer the same benefit in-person and allow the enrollee to determine whether or not to receive the benefit via telehealth. The MA Plan’s bid to CMS must attribute the telehealth benefit cost to amounts attributable to the provision of benefits under the original Medicare fee-for-service program. Telehealth Services to ACO Beneficiaries Lastly, the BBA allows increased Medicare coverage for telehealth services provided to Medicare fee-for-service beneficiaries assigned to an Accountable Care Organization (“ACO”) participating in certain Medicare shared savings programs. After January 1, 2020, the existing Medicare telehealth geographic limitations will not apply when a physician or practitioner participating in an ACO provides telehealth services covered under Medicare to a Medicare beneficiary assigned to the ACO. The beneficiary’s home can be an originating site for the telehealth services, but the beneficiary’s home need not be located in a rural health professional shortage area. This expansion in telehealth coverage applies only to ACOs participating in a two-sided ACO model (in which the ACO shares in both savings and losses), or an ACO tested and expanded pursuant to authority granted to the Center for Medicare and Medicaid Innovation. No facility fee will be paid; only the professional service is paid pursuant to this telehealth expansion. And coverage does not extend to services appropriate only for hospital inpatients. Other ACO Changes The BBA includes a provision allowing ACOs to elect to have beneficiaries assigned to the ACO prospectively rather than having Medicare beneficiaries attributed to ACOs retroactively using encounter data based upon visits for primary care services. A beneficiary may also choose to align with an ACO in which his or her main primary care provider participates. The beneficiary can continue to receive services from any provider participating in Medicare even if he or she elects to align with a specific ACO. The BBA also establishes a new voluntary ACO beneficiary incentive program that allows certain two-sided risk ACOs to offer beneficiaries a payment of up to $20 per service for receiving select primary care services. ACOs that want to offer payment to beneficiaries will have to apply for approval to participate in the incentive program with Health and Human Services. Outpatient Therapy Payments The BBA repeals annual payment caps for outpatient hospital therapy services (including physical therapy, speech-language pathology services, and occupational therapy) effective January 1, 2018. Funding Extensions The BBA includes a number of funding extensions for critical health care programs, including: Extension of CHIP funding for four more years (Fiscal Year 2024 through Fiscal Year 2027); Five-year extension of the Medicare low-volume hospital payments through September 30, 2022; Five-year extension of the Medicare-dependent hospital (MDH) program through September 30, 2022. Two-year extension of funding for quality measure endorsement, input, selection, and reporting requirements. Five-year extension with reforms of the home health rural add-on until October 1, 2022.