Telehealth: How the Pandemic Is Shaping the Future of Remote Healthcare

March 25, 2021

As of late March 2021, 475 million people worldwide have received a COVID-19 vaccine. Although a return to normalcy is drawing closer, it is unclear how state and federal governments will regulate and reimburse for telehealth services when temporary telehealth policies expire at the end of the COVID-19 public health emergency (PHE). This alert summarizes proposed federal regulatory and legislative trends and state legislation that offer clues into telehealth’s post-pandemic future.

The PHE prompted a series of changes to federal, state and private-payer policies that quickly allowed telehealth to meet patient demand. Some of the most significant changes included providing Medicare reimbursement for patients receiving telehealth services in their homes and expanding the ability to use telehealth to non-physician practitioners who bill Medicare directly. Additionally, many states removed interstate licensure restrictions to allow out-of-state providers to see patients in other states.

Removal of these historical barriers to telehealth delivery has been a huge success. During the last week of March 2020, there was a 154 percent increase in telehealth visits compared to the same period in 2019, which the Centers for Disease Control and Prevention indicated may be due in part to pandemic-related telehealth policy changes.

In light of this success, state governments are considering codifying temporary changes to make them permanent after the pandemic. In June 2020, Idaho Gov. Brad Little signed an executive order that permanently adopted the telehealth changes Idaho made during the pandemic. According to Gov. Little, “if waiving these regulations was deemed necessary to improve public health and welfare during the declared emergency, there is a rebuttable presumption that the regulations are unnecessary or counterproductive outside of the declared emergency.” The critical question for all digital health companies and investors is whether other states and the federal government will follow this trend.

Federal Policy Trends

The Biden administration has stated that it views telehealth services as key to continuing to provide care beyond the PHE. The Medicare Payment Advisory Commission (MedPAC), a congressionally appointed advisory committee that makes recommendations to Congress, in its March 15 report to Congress, did not provide for a long-term path forward for telehealth policy, but did recommend Congress:

  • continue some of the PHE telehealth expansions temporarily (one or two years after the PHE) to gather additional evidence about the impact of telehealth on beneficiary access to care, quality of care and program spending;
  • continue Medicare coverage for telehealth services regardless of where a beneficiary is located;
  • cover audio-only services “if there is potential for clinical benefit”; and
  • pay the physician fee schedule facility rate for telehealth services provided by providers in distant sites when the PHE ends while collecting data on the costs that practices incur in using telehealth, as was done before the PHE.

MedPAC also recommends discontinuing allowing providers to reduce or waive cost-sharing for telehealth services. In addition, MedPAC made the following recommendations related to fraud and security:

  • apply additional scrutiny to outlier clinicians who bill many more telehealth services per beneficiary than other clinicians;
  • require clinicians to provide an in-person, face-to-face visit with a beneficiary before they order expensive durable medical equipment (DME) or expensive clinical laboratory tests; and
  • prohibit “incident to” billing for telehealth services provided by any clinician who can bill Medicare directly.

Although the current Congress has just begun, members of the House and Senate are already considering how to leverage the recent success of telehealth. Dozens of bills were introduced in the last Congress, and many are in the process of being reintroduced. In addition, many stakeholders argue that to successfully incorporate telehealth into care post-PHE, these efforts must also include investments to improve broadband access, especially for rural areas.

Protecting Access to Post-COVID-19 Telehealth Act (H.R. 366) seeks to codify many of the PHE changes as well as expand the use of telehealth after the end of the PHE. Introduced in the House of Representatives by Rep. Mike Thompson (D-Calif.), the bipartisan legislation would:

  • eliminate most geographic and originating site restrictions on the use of telehealth in Medicare and establish the patient’s home as an eligible distant site so patients can receive telehealth at home and doctors can still be reimbursed;
  • prevent a sudden loss of telehealth services for Medicare beneficiaries by authorizing the Centers for Medicare and Medicaid Services to continue reimbursement for telehealth for 90 days beyond the end of the PHE;
  • make permanent the disaster waiver authority, enabling the Department of Health and Human Services to expand telehealth in Medicare during all future emergencies and disasters; and
  • require a study on the use of telehealth during COVID-19, including its costs, uptake rates, measurable health outcomes and racial and geographic disparities.

Some of the legislation being introduced addresses specific purposes for telehealth. For example, several bills would expand use for substance use disorder treatment specifically, and mental health generally (see, e.g., Expanding Student Access to Mental Health Services Act and Telehealth Response for E-prescribing Addiction Therapy Services (TREATS) Act). Two legislative efforts seek to integrate telehealth into models of care targeted at maternal health (see Tech to Save Moms Act and Black Maternal Health Momnibus Act of 2021).

Another area being examined is the use of audio-only telehealth. Consistent with MedPAC’s recommendation to provide audio-only coverage if there is a clinical benefit, a variety of stakeholders are considering this issue with the intent of introducing legislation to incorporate audio-only coverage for some services. For example, Ensuring Parity in Medicare Advantage for Audio-Only Telehealth Act of 2021, bipartisan legislation introduced by Sens. Cortez Mastro (D-Nev.) and Tim Scott (R-S.C.), would include audio-only in Medicare Advantage plans’ risk adjustment payments during the pandemic only.

Federal action is ongoing, as evidenced by the House Committee of Energy and Commerce Subcommittee of Health’s recent hearing regarding the future of telehealth delivery. In this hearing, Chairman Frank Pallone Jr. stated an interest in “working with members of the Committee to examine the data and ultimately provide certainty to patients and providers on future telehealth policy,” teeing up the possibility of future legislation that “ensures that these critical telehealth tools are used appropriately to advance health equity and improve quality of care for all Americans.

It is likely that, post-PHE, Congress will move to address telehealth in some manner; meanwhile, states are addressing telehealth issues in their own legislation and policy statements, many following the trends set by the federal government.

Proposed State Policy Changes

Lawmakers have introduced a flurry of telehealth bills at the state level. Here are a few trends in states across the country:

  • new or revised telehealth practice standards such as definitions, permissible technologies, recordkeeping and eligible providers;
  • licensure portability and flexibilities including compacts and reciprocity akin to what existed under waiver authorities;
  • private payor coverage and reimbursement;
  • public payor coverage; and
  • broadband connectivity and grants to address the digital divide.

For example, below are descriptions of California, Illinois, New Jersey and New York policies.

California. On Feb. 2, 2021, the California Department of Health and Human Services proposed a new telehealth policy that would: (1) allow specified Federally Qualified Health Centers and Rural Health Centers to establish a new patient through synchronous telehealth; (2) make permanent the removal of site limitations on these providers; (3) add audio-only services to the State Plan Drug Medi-Cal; (4) require payment parity between in-person face-to-face visits and synchronous telehealth modalities; and (5) expand the use of clinically appropriate audio-only patient monitoring.

Illinois. On Feb. 22, 2021, Illinois introduced H.B. 3498, joining other states in the push for telehealth payment parity and removal of reimbursement limitations. This bill would make permanent payment parity rules and remove geographic restriction to telehealth reimbursement after the PHE has expired. It would also prohibit requiring use of telehealth services in an effort to protect patient preference. A previous iteration of this concept died in committee in May 2020. Groups like AARP Illinois and others have joined to form a Coalition to Protect Telehealth in support of the bill.

New Jersey. On Jan. 14, 2021, the New Jersey Senate Committee approved a proposed bill, S.B. 2559, that, if signed into law, would require Medicaid and other insurance providers to reimburse providers for services rendered via telehealth in the same amount that they would for services provided in person. Currently, these rates undergo a negotiation process, meaning they usually result in a lower payment than in-person service. The bill also prevents New Jersey Family Care and Medicaid from requiring telehealth services to be provided at certain locations for reimbursement.

New York. Gov. Andrew Cuomo proposed a plan to reform New York law that includes making permanent the state’s PHE measures on eliminating originating site requirements for Medicaid reimbursement and the in-person evaluations requirement. The plan includes four categories of reforms: (1) “Unlocking the Benefits of Telehealth Through Policy Modernization,” (2) “Ensuring Coverage and Reimbursement for Telehealth,” (3) “Expanding the Use of Technological Advancements in Health Care,” and (4) “Supporting Patients and Providers Through Professional Development, Education, and Innovative Support Programs.”

The PHE opened the door to changes that allow for greater access and delivery of telehealth services, but as the PHE expires, so will these changes. In response, many federal and state officials are codifying or otherwise promoting the expansion or permanence of changes made during the PHE, allowing improved access and delivery in the long term. In the coming weeks and months, actions like those described here will continue to expand the telehealth industry. Contact the authors of this alert for more information regarding these and other telehealth law and policy changes.

McGuireWoods has published additional thought leadership analyzing how companies across industries can address crucial business and legal issues related to COVID-19.

Healthcare Headlines Video Series

Check out the first episode of McGuireWoods’ relaunched and retitled video series “Healthcare Headlines,” hosted by McGuireWoods partner Amber McGraw Walsh, chair of the firm’s nationally recognized Healthcare Department. This episode focuses on current and future trends in telehealth, with special insights from partner Andrea Lee Linna, who recently joined McGuireWoods’ newly formed digital health team.

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