Dorsey Health Law

On March 17, 2020, the Centers for Medicare and Medicaid Services (“CMS”) and the Department of Health and Human Services Office of the Inspector General (“OIG”) each issued policy statements which expand access to telehealth services for Medicare beneficiaries and permit physicians and other practitioners to reduce or waive beneficiary cost-sharing obligations for Medicare telehealth services during the COVID-19 public health emergency. Immediately following the enactment of the Coronavirus Preparedness and Response Supplemental Appropriations Act, available here, CMS issued a temporary expansion of the Medicare telehealth benefit beginning as of March 6, 2020 and effective until the public health emergency declared by the Secretary of the Department of Health and Human Services ends.  The CMS policy statement can be found here. A key element of this telehealth expansion is that payment will be made for office visits and other covered Medicare telehealth services furnished to beneficiaries located in any part of the U.S.  Moreover, the CMS waiver facilitates payment for telehealth services furnished while the beneficiary is located in their home or in any care setting.   Without this emergency expansion, current Medicare rules at Social Security Act § 1834(m) generally limit coverage for telehealth services to beneficiaries located in rural areas, and only when the beneficiary is within a hospital, clinic, or other medical facility at the time of the telehealth visit. Clinicians who may offer telehealth services to Medicare beneficiaries include physicians, nurse practitioners, physician assistants, clinical social workers, clinical psychologists, and registered dieticians.  CMS also states that to the extent Medicare reimbursement for a telehealth service requires a prior relationship between the clinician and beneficiary, CMS will use its enforcement discretion and not audit claims submitted during the public health emergency to determine if such a prior relationship existed. The CMS waiver explicitly permits clinicians to use telephones with audio and video capabilities to furnish Medicare telehealth services during the COVID-19 public health emergency.  Together with the new waiver of certain HIPAA privacy rules (addressed in our prior blog post found here), this now will permit clinicians to conduct visits with Medicare beneficiaries using common communications tools such as personal phones, devices and computers, and common technologies such as FaceTime or Skype. CMS issued a FAQ document on this temporary and emergency telehealth benefit expansion, which can be found here. In tandem with CMS’ expansion of the Medicare telehealth benefit, the OIG issued a policy statement to address the potential anti-kickback and beneficiary inducement issues that providers may face during this emergency.  OIG states that it will not sanction physicians or other practitioners for reducing or waiving cost-sharing obligations that a beneficiary may owe for telehealth services furnished during the COVID-19 public health emergency and furnished in accordance with the then-applicable Medicare rules (which would include the CMS telehealth benefit expansion during the emergency).  Normally, the routine reduction or waiver of Medicare beneficiary cost-sharing obligations would implicate the federal anti-kickback statute and the civil monetary penalty law prohibiting beneficiary inducement. Clinicians are not obligated to reduce or waive Medicare beneficiary coinsurance and deductible obligations, but may do so in accordance with the OIG policy statement without risk of anti-kickback or beneficiary inducement enforcement.  Moreover, the OIG states that it will not view providing future services that may occur as a result of any free telehealth services to, by itself, be evidence of beneficiary inducement. The OIG Policy Statement can be found here. These CMS and OIG issuances are intended to give providers added flexibility to combat the COVID-19 emergency.  Hospitals and other providers should consider how the temporary Medicare telehealth expansion and the flexibility in dealing with beneficiary cost-sharing can help them keep clinicians and beneficiaries safer, alleviate some of the burden on provider staff and space, and help reduce the spread of COVID-19. If you have any questions, please contact the author or any member of Dorsey’s healthcare transactions and regulations practice group.

Medicare reimbursement for remote patient monitoring has taken a number of steps forward throughout this year. New and proposed rules from the Centers for Medicare and Medicaid Services both expand the billing options available to health care providers and also build in additional flexibility in the provision of remote patient monitoring in order to further the health industry’s push to value-based care. Remote patient monitoring (“RPM”) is a form of digital health in which medical data from individual patients is collected in one location and electronically transmitted to health care providers in a different location for assessment and recommendations. RPM differs from other digital health services in that there is not necessarily a live, or “real-time”, interaction between the patient and their health care provider. Instead, RPM is used by health care providers to monitor various aspects of their patient’s vital signs, including: weight, blood pressure, blood sugar, heart rate, and oxygen levels. RPM is not only a useful tool for health care providers to use during a patient’s hospitalization, but it is also useful in reducing the number of hospitalizations altogether. For example, RPM can be used to allow older or disabled individuals to live at home longer and avoid having to move into skilled nursing facilities, since their vitals can be monitored without having to see a health care provider in person. Until this year, Medicare reimbursement for RPM services was difficult to come by. While Medicare previously offered reimbursement for RPM services billed under CPT code 99091, the code did not take current technology and staffing models into account (likely because the language from the code dates back roughly 16 years). In order to address this issue and further incentivize health care providers to use RPM, the Centers for Medicare and Medicaid Services (“CMS”) finalized three new RPM billing codes that were effective January 1, 2019 (“Final Rule”). The new codes are titled, “Chronic Care Remote Physiologic Monitoring” and included the following descriptions: CPT code 99453: “Remote monitoring of physiologic parameter(s) (e.g., weight, blood pressure, pulse oximetry, respiratory flow rate), initial; set-up and patient education on use of equipment.” CPT code 99454: “Remote monitoring of physiologic parameter(s) (e.g., weight, blood pressure, pulse oximetry, respiratory flow rate), initial; device(s) supply with daily recording(s) or programmed alert(s) transmission, each 30 days.” CPT code 99457: “Remote physiologic monitoring treatment management services, 20 minutes or more of clinical staff/physician/other qualified healthcare professional time in a calendar month requiring interactive communication with the patient/caregiver during the month.” Finalization of these new codes did not come without fair criticism and disparate interpretations of the level of required supervision. In creating the codes, CMS stated that RPM could not be delivered “incident to” a practitioner’s professional services. Therefore, RPM services could not be reimbursed if the services were furnished by auxiliary personnel (individuals acting under the supervision of a physician). Following backlash of this conclusion, CMS issued a technical correction to the Final Rule on March 14, 2019, that allows “incident to” billing of RPM services by auxiliary personnel if they are under direct supervision. This was overall a win for RPM reimbursement; however, through separate codes (CPT 99487, 99489, and 99490), CMS allows reimbursement for Chronic Care Management under general supervision. The difference being that general supervision does not require a physician to be in the same building at the same time as the auxiliary personnel delivering the services. This contradictory treatment resulted in commentators arguing that CMS’s approach hinders, rather than increases, a patient’s access to digital health services by limiting where a physician may be located during the supervision of such services. CMS seems to be addressing this concern in the proposed 2020 Physician Fee Schedule that was published August 14, 2019 (“Proposed Rule”). The Proposed Rule would allow “incident to” RPM services to be reimbursed under general supervision rather than limiting reimbursement to direct supervision. By way of example, this means RPM could be reimbursed when the auxiliary personnel use RPM with patients who are in a hospital while the auxiliary personnel are supervised via other telemedicine modalities by a physician at their home. This change would greatly improve a patient’s access to RPM by enabling physicians to bill for such services delivered in a more flexible manner. In addition to this change, the Proposed Rule revises CPT code 99457 and adds yet another code to allow for additional reimbursement for each 20-minute interval that RPM services are provided.  This is in contrast to the Final Rule’s version of CPT code 99457, which allowed only one reimbursement for RPM services delivered for 20 minutes or more. CMS is accepting comments on the Proposed Rule until September 27, 2019. If you would like to submit comments or have any questions, one of the authors or your regular Dorsey attorney would be happy to assist you.    

The Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) has identified the anti-kickback statute (AKS) and beneficiary inducements civil monetary penalty (CMP) as potential barriers to arrangements that could promote better patient care coordination and value-based arrangements.  On August 27, 2018, the OIG published a Request for Information (RFI) seeking input from industry stakeholders on how the agency could modify existing or add new safe harbors to the AKS and exceptions to the beneficiary inducements CMP definition of “remuneration” in order to “foster arrangements that would promote care coordination and advance the delivery of value-based care, while also protecting against harms caused by fraud and abuse.”     The RFI describes how transforming the healthcare system into one that better pays for value is a key priority for HHS, and that HHS has launched what it calls a “Regulatory Sprint to Coordinated Care” to accelerate this transformation, with a focus of removing “unnecessary obstacles” to coordinated care. This OIG RFI is part of HHS’s Regulatory Sprint. As we described in our blog post here, the Centers for Medicare & Medicaid Services (CMS) also recently published an RFI related to reforms to the federal physician self-referral law (or “Stark Law”) as part of HHS’s Regulatory Sprint. Comments are due from stakeholders to the OIG RFI by 5 PM on October 26, 2018. Specifically, OIG is seeking input on the following topics: Promoting Care Coordination and Value-Based CareThe OIG would like information about potential arrangements that the healthcare industry is interested in pursuing, which may implicate the AKS and CMP, such as care coordination arrangements, value-based arrangements, alternative payment models, arrangements involving innovative technology and other novel financial arrangements.  The OIG requests a detailed explanation of the proposed structure and terms of the arrangements, and a description of how the arrangement promotes care coordination or value-based care.  The description should also include an explanation of how the proposed arrangement prevents potential harms such as increased costs, inappropriate utilization, poor quality of care and distorted decision-making.  For each detailed description, the OIG requests that stakeholders describe the new or modified AKS safe harbors or exceptions to the beneficiary inducements CMP definition of “remuneration” that may be necessary in order to protect the described arrangement.  The OIG is also seeking input on several key definitions that are used in the regulatory provisions related to health care delivery reform, payment reform and the AKS, such as the definition of coordinated care, care coordinator and care coordination services. Beneficiary Engagement, including Beneficiary Incentives and Beneficiary Cost-Sharing Obligations  The OIG is seeking feedback on the types of incentives that providers, suppliers and others want to provide to beneficiaries.  For each incentive, the OIG wants to know how providing the incentive would contribute to or improve quality of care, care coordination and patient engagement (including adherence programs).  The OIG published several specific questions in the RFI such as whether beneficiary incentives connected to medication adherence and medication management should be treated differently than other types of beneficiary incentives, and if so, how and why.  Further, the OIG is seeking input regarding what disclosures the offer or should be required to make to beneficiaries regarding an incentive, such as the source of the incentive, as well as input regarding the risks and benefits related to certain types of incentives such as cash equivalents, gift cards, in-kind items and services, and non-monetary remuneration.  Additionally, the OIG is also seeking input on whether the “nominal value” threshold under the CMP should be increased from $15 per item and $75 in the aggregate per patient on an annual basis, whether a similar nominal value “policy” should be applied to the AKS, and if so, how such policy would contribute to care coordination or value-based care.  The OIG is also requesting information about how reducing or eliminating patient cost-sharing obligations might improve care delivery and promote quality of care. Other Related Topics of Interest  The OIG is seeking feedback on a number of related topics of interest. These include: (a) current fraud and abuse waivers developed for purposes of carrying out the Medicare Shared Savings Program; (b) donated or subsidized cybersecurity-related items and services; and (c) new exceptions under the Bipartisan Budget Act of 2018 related to (i) incentive payments under the ACO Beneficiary Incentive Program and (ii) telehealth technologies. The Intersection of the Stark Law and the AKSFinally, the OIG would like feedback regarding circumstances in which Stark Law exceptions and AKS safe harbors should align for purposes of the goals of the RFI and circumstances in which Stark Law exceptions related to care coordination/value-based care should not have a corresponding AKS safe harbor. The OIG noted that, where relevant, it intends to review comments submitted in response to the CMS RFI related to the Stark Law (described above), but that it urges commenters to resubmit any relevant comments to the OIG RFI to ensure that they are considered by the OIG, given the volume of questions included in the CMS RFI and the separate authorities of the OIG and CMS.   Please contact the authors or your regular attorney at Dorsey & Whitney if you want more information about the RFI process or desire to submit comments to the RFI by the October 26, 2018 deadline.  

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.

On October 2, the Veterans Administration (VA) proposed a new rule that would expand access to quality care and availability of mental health, specialty, and general clinical care for VA beneficiaries through the use of telemedicine. In their proposed rule, the VA explains the difficulty it has faced attracting a sufficient number of providers to furnish telemedicine services because state professional licensure laws restrict telehealth activities to within state borders. Providers fear discipline from those states for the unlicensed practice of medicine for treating veteran beneficiaries outside of the state in which they are licensed. In addition, in the current telehealth program, many VA medical centers only allow telehealth on federal property out of concern regarding these state limitations, which has hindered the telehealth program from expanding and reaching beneficiaries who need treatment but are not on federal property (e.g., those who are in their homes). The proposed rule aims to address these issues by permitting all VA physicians to treat patients via telehealth across state lines, regardless of where they’re licensed. This federal law would preempt state restrictions on licensure and telehealth, as most states currently restrict providers (including VA clinicians) from treating patients located in that state if the provider is not licensed there. Relaxing these requirements will encourage greater provider participation in the VA’s telemedicine program. In addition, these new rules would allow veterans, from their home, to use a mobile app, called VA Video Connect, to connect with their healthcare providers and conduct a home videoconferencing session. The proposed rule explains that eliminating veteran suicide and providing access to mental health care is the VA’s “number one priority” and this proposed rule would improve the VA’s ability to reach some of its most vulnerable beneficiaries. The commentary in the rule explains that telehealth “empowers beneficiaries to take a more active role in their overall health” and that the program is “particularly important for beneficiaries with limited mobility, or for whom travel to a health care provider would be a personal hardship.” Rural connectivity, decreasing wait times for veterans, improving access to mental health services, and an overall increase in access to care is the driving force behind these efforts. In fiscal year 2016, VA practitioners saw 702,000 patients via telemedicine in 2.17 million episodes of care. Almost half of those who received telemedicine care were in rural areas. The VA has already seen improved patient care as a result of the VA’s expansion of telemedicine services. For example, the VA reports there was a 31 percent decrease in VA hospital admissions for beneficiaries enrolled in the VA telehealth monitoring program for non-institutional care and chronic care management. Additionally, the VA reports a 39 percent reduction in the number of acute psychiatric VA bed days of care. The commentary states, “This rule would ensure that VA health care providers provide the same level of care to all beneficiaries, irrespective of the State or location in a State of the VA health care provider or the beneficiary.” The AMA supports this proposed rule. In its statement supporting the proposed rule, the AMA emphasized that the rule is narrowly tailored to only apply the multi-state licensure pre-emption to VA-employed providers who are directly controlled and supervised by the VA, and does not cover contracted physicians or providers who are not directly controlled and supervised. Those interested in providing feedback can submit written comments until November 1, 2017.

New legislation recently signed into law in Texas paves the way both for digital health companies to expand, particularly direct-to-consumer (D2C) companies, and also potentially heralds an era of virtual care visits on a truly national scale. Over Memorial Day weekend, Texas Governor Greg Abbott signed Senate Bill 1107/House Bill 2697 (found here).  The bill adds video consults to the definition of telehealth and eliminates Texas’s previous requirement that a physician-patient relationship must be established first in person prior to any telehealth visit.  Provided that certain follow-up requirements are met (primarily, that the telehealth practitioner provide guidance as to appropriate follow-up care), patients and physicians in Texas now may initiate telehealth visits for even a first-time meeting. Patients in Texas have had a particular need for telehealth, and this regulatory change is being applauded by patients and businesses alike. Texas ranks 46th out of 50 states in primary care physicians per capita, and 35 of Texas’s 254 counties do not have a family physician.  For those living in less populated areas, access to primary care was typically not possible without a long drive to a doctor’s office.  By quashing the regulatory hurdle to offer telehealth visits for first-time patients, the now-signed bill opens up many more opportunities for new telehealth patients and easier access to care for those who are home-bound or in less populated areas.  It also encourages digital health companies that have been reluctant to offer services in Texas to expand, which could lead to more options for care. Finally, the bill’s passage also portends telehealth expansion at a national level. To date, telehealth companies and providers hoping to offer virtual care have been curtailed by the patchwork of state laws that make it difficult to expand beyond state lines, much less offer consistent types of telehealth services across the nation.  States vary significantly in whether and to what degree they regulate telehealth, and the applicable regulations themselves span a wide range of topics.  (For example, there are a wide variety of state laws pertaining to licensure, scope of practice, DEA registration, prescriptions, privacy, and requisite patient visit documentation – to name a few.)  Texas was the last state to require an in-person physician-patient interaction prior to a telehealth visit.  With this hurdle removed, a new patient can initiate a telehealth visit without a prior in-person visit in all states in the nation.  Although the other telehealth regulatory challenges persist, the Texas bill’s passage into law serves as an important signal of growing national alignment to support and incentivize digital health. What, then, are the business implications for telehealth companies and providers seeking to offer virtual care visits? The most prominent “win” is that direct-to-consumer (D2C) telehealth providers now have a much more viable path to market.  Previously, they would have needed to partner with a (non-telehealth) provider to ensure that the first-time visit requirement was met; now, they may work directly with patients from the outset.  In addition, the ability to initiate a telehealth visit with a first-time patient at a truly national level (with only minor exceptions for telephone-based visits in Arkansas and Idaho) significantly eases the path for telehealth initiatives to expand their businesses and contemplate national service.