Regulatory bodies have provided relief for providers in many forms as a response to the current state of emergency. The government agencies implementing these sweeping changes have caveated they are temporary and only applicable during the declared emergency period. However, many in the industry believe the changes implemented related specifically to telehealth will have a longer-lasting impact on telehealth adoption going forward. This article addresses current and potential future legal issues, including fair market value (FMV) considerations related to the sweeping changes implemented to facilitate the use of telehealth services.
Current Environment and Significance aof Telehealth: COVID-19 Paving the way for Telehealth Utilization and Adoption
Telehealth is the practice of medicine via technology and telehealth refers broadly to all services used to provide care and services at a distance.1 With President Trump’s declaration of COVID-19 as a national emergency, Congress has enacted legislation to ultimately expand telehealth and treat patients in isolation and equip the healthcare workforce with tools to promote social distancing to the extent possible.2 COVID-19 is a respiratory illness that is easily susceptible to spread via person to person. The first case was reported on January 21, 2020.3 As of May 8, 2020 there were 1,219,066 reported cases according to the Centers for Disease Control and Prevention (CDC).4 Due to the nature of the current pandemic and emergency authority order, telehealth can be used to help improve access to care, accelerate diagnosis and treatment, and limit the in-person risk of spreading the virus because of its ability to leverage technology via isolation.5 Telehealth keeps people at home, which slows the spread of the disease. This not only protects those who are home, but also prevents providers from further exposure by seeing patients through technology from either their home or a designated space. Additionally, it allows care to be delivered to rural areas, where smaller hospitals are closed or facing permanent closure and medical needs tend to run highest. Ultimately, telehealth can be used by hospitals, health systems, practice groups, and start-ups in any theater to connect patients and doctors (and all levels of providers). The government has implemented new rules directed at breaking down many of the barriers to telehealth, including increasing access and allowing patients to receive necessary, but non-emergent services. On March 6, 2020, Congress submitted and passed a house bill to remove the rural and site limitations related to Medicare reimbursement for telehealth coverage.6 Telehealth services can now be provided regardless of where the Medicare enrollee is located geographically and regardless of type of site, which allows the home to be an eligible option for enrollees to receive care. Furthermore, the Department of Health and Human Services’ Office of the Inspector General (OIG) waived the cost sharing requirements (coinsurance and deductibles). Following suit, private insurance companies have also waived these requirements, thereby allowing telehealth services to become more appealing to providers.
In less than one month, the Centers for Medicare & Medicaid Services (CMS) and the OIG implemented other significant changes to continue to assist providers of all levels in delivering care to patients using telehealth technology. Below is a bulleted list of several substantial changes instituted by the aforementioned agencies, which sought to make telehealth a viable delivery of care during the pandemic (some of which will be discussed in more detail later in the article):
- Waived the provisions related to telehealth at 42 C.F.R. § 482.12(a) (8)–(9) for hospitals and § 485.616(c) for critical access hospitals (CAHs), making it easier for telehealth services to be furnished to the hospital’s patients through an agreement with an off-site hospital;.
- Expanded eligible provider locations to include federally qualified health centers (FQHCs)/rural health clinics (RHCs) (during the emergency period only);
- Added Medicare coverage of, and payment for, telephone evaluation and management (E/M) services (CPT 99441-99443). These services may be provided to new or established patients with discretion provided to the physicians to select the level of office/outpatient E/M services furnished via Medicare telehealth based on medical decision making (MDM) or time;
- Expanded the list of clinical services that can be provided via telehealth;
- Created complete reimbursement parity for Medicare services (i.e., they will be reimbursed at the same rate as an in person visit (billing requirements for place of service (POS) and -95 modifier required);7
- Allowed services via telehealth and remote patient monitoring and virtual check-in to new and established patients;
- Announced the exercise of enforcement discretion or the waiving of requirements for face-to-face/hands-on requirements for end stage renal disease (ESRD), dialysis, nursing home, and hospice patients;
- Removed frequency limitations on subsequent in-patient visits (once every three days), subsequent skilled nursing facility (SNF) visits (once every 30 days), and critical care consults (once a day);
- Allowed exceptions during this period to the Ryan Haight Act8 for telehealth that allows Drug Enforcement Administration (DEA)-registered practitioners to issue prescriptions for controlled substances to patients for whom they have not conducted an in-person medical evaluation;
- Issued broad Stark Law waivers: hospitals and other healthcare providers can pay above or below FMV to rent equipment or receive services from physicians; healthcare providers can support each other financially to ensure continuity of healthcare operations; and other waivers;9
- Added Audio-Only Telehealth to E/M services and specifically including CMS codes 99441, 99442, and 99443.10
As of this publication, many states such as Texas and Florida are lifting their stay at home orders, and non-essential and elective surgeries are slowly being added back to hospital operations. Embracing the opportunity, surgeons and their staff have elected to use telehealth to engage and assess patients for perioperative assessment and care. Another notable change CMS made (on April 30, 2020) detailed an expanded list of provider types eligible to bill Medicare for their services via telehealth, including physical therapists, occupational therapists, and speech language pathologists.11
Telehealth has been an enormous help to health systems, practitioners, and other healthcare entities to deliver care at a more effective pace and by helping to prevent further spread of the disease by limiting in-person interactions. These governmental changes can also enable doctors to tap into a new patient base previously unavailable to them, and to try to remain open and afloat. Organizations or groups previously utilizing telehealth have an advantage, but those that can mobilize and integrate telehealth into their practice will have the most success. The government waivers noted above were timely in the assistance of battling the pandemic on all fronts.
Legal Actions Taken to Facilitate Telehealth Use, and Potential Implications of These Actions
Cross-State Medical Practice and Provider Licensing
Due to COVID-19, a number of steps have been taken at the federal and state levels to permit cross-state practice for providers via telehealth, including waiver of licensure requirements. First, Medicare has expanded the list of services and options of telehealth delivery of which it will reimburse to include broader, cross-state telehealth services, including those given in patients’ residences.12
As mentioned above, CMS’s rule that geographic boundaries do not apply means that providers do not necessarily need to be licensed in an individual state in order to provide services in that state, thrusting the door wide open for telehealth services. States have followed this action with their own steps to ensure cross-state practice, with 47 states waiving in-state licensure requirements for telehealth practice.13 These licensing permissions are specific to COVID-19 in that they are for the duration of the declared pandemic. However, one common theme is that these waivers do not currently apply solely to COVID-19 patients, as many would perceive the intention of the other waivers to do.14 States have also applied for Medicaid waivers to facilitate and accelerate enrollment and licensing requirements for providers, including waiving of prior authorization and provider enrollment requirements, delaying certain nursing home pre-admission reviews, and facilitating reimbursement to providers for care delivered in alternate settings. These items are usually not compensated or a compliance requirement for reimbursement for Medicaid services, but with the waivers in place, this has been expedited.15
As noted above, CMS has expanded not only the providers eligible to receive reimbursement for services, but also the individual telehealth services for which it offers reimbursement. First, CMS has allowed FQHCs and RHCs to serve as eligible providers.16 The additional services permitted include telephone codes, e-visits, and remote patient monitoring. Furthermore, CMS has removed the frequency limitations on Medicare telehealth services.17
CMS has taken further actions to broaden the circumstances under which reimbursement is available. These additional circumstances include services provided to nursing home and hospice patients, broadening pre-existing relationship requirements typically placed on patients to receive services, and allowing for physicians to supervise care via live video.18 Telehealth services will be reimbursed at the same rate as in-person visits.19 Private payors such as United Healthcare, Cigna, and Aetna are following suit and have provided some if not all of the same reimbursement relief. They have also actively encouraged the use of telehealth.20
In March, the Office for Civil Rights (OCR) issued a Notification of Enforcement Discretion to apply during the COVID-19 public health emergency. The Notification alerted the public that OCR would exercise its enforcement discretion not to penalize organizations or individuals for Health Insurance Portability and Accountability Act (HIPAA) violations in connection with the good faith provision of telehealth services over non-public-facing technologies such as Zoom or Skype.21 Still, some restrictions apply; for example, these platforms must offer end-to-end encryption, and it is recommended that providers do not provide services to patients who are located in public settings.22 These waivers do not protect providers in the event of a breach due to acts such as provision of services over public-facing communication products (such as Facebook Live or TikTok), through criminal activity, or by violating ethical standards of telehealth care .23
As noted above, the DEA has released prescribing guidance to allow providers to prescribe controlled substances without an in-person visit.24 If a patient has not yet had an in-person visit with the provider, the provider must be evaluated either in-person or through use of a real-time, two-way, audio-visual communications device.25 This applies to all controlled substances except for buprenorphine for maintenance or detoxification treatment for opioid use disorders, in which case the prescribing practitioner must be a Drug Addiction Treatment Act (DATA) waivered physician, which means that the practitioner must have been approved by the DEA to treat opioid addictions through the use of narcotics.26 If the physician meets such criteria, he or she may continue to conduct the patient visit and to prescribe controlled substances via real-time, two-way, audio-visual communications.27
Informed consent is typically required to be obtained from patients prior to the provision of telehealth services, though states vary on when exactly consent must be obtained, how this must occur, and how often the provider must obtain consent.28 Until now, there have been disputes over the purpose behind obtaining consent for telehealth services, as informed consent is typically not required for similar in-person services; opponents of this practice have argued this misrepresents the nature of telehealth.29 Though there have been some changes, with providers still required to obtain consent (though verbally only), this area of law has not seen requirements lifted significantly.30
In addition to other actions it has taken during COVID-19, the Department of Health and Human Services (HHS) has expanded liability immunity31 to a large number of “Covered Persons,” which include the United States, those that manufacture, distribute, administer, prescribe, or use Covered Countermeasures, as well as a significant number of other organizations, entities, and individuals during the COVID-19 pandemic. This immunity would apply to activities “related to medical countermeasures against COVID-19.”32 This immunity would apply to “any claim of loss caused by, arising out of, relating to, or resulting from the manufacture, distribution, administration, or use of medical countermeasures…except for claims involving ‘willful misconduct.’”33 Consequently, immunity is strictly and narrowly limited to countermeasures taken in the fight against COVID-19. Such covered countermeasures are defined as a “qualified pandemic or epidemic product” or a “security countermeasure,” or “a drug, biological product or device authorized for emergency use….”34 This allows for providers to try new products or devices, even if not yet approved by the Food and Drug Administration (FDA), in the fight against COVID-19 without liability repercussions. Ultimately, this allows for drastic life-saving measures, often requiring telehealth as distant providers consult with one another and with patients, or monitor patients from remote locations, and provides much-needed security for providers continuing to practice or prescribe and to treat patients during this pandemic. 35
Commercial reasonableness and FMV rules still apply to telehealth consults and, due to the complexity of these arrangements, issues within these consults are still prevalent. Several considerations impact FMV, including the time and availability of the provider giving the services, the structure of the services given, and the payor environment. It is important to note that payments to providers supporting COVID-19 should still be reasonable and based on an objective methodology, especially if an organization intends to keep utilizing telehealth services going forward. Organizations navigating the 18 various types of remuneration and referrals that were listed in the blanket waivers should take advantage of them, but also be steadfast in recognizing the list was illustrative, not exhaustive.
Furthermore, the Stark Law prohibits physicians from referring designated health services (including inpatient or outpatient hospital services) to entities with which they (or their immediate family members) have financial relationships, and entities are prohibited from billing for those services, unless all of the elements of a statutory or regulatory exception are fully met. Similarly, the federal anti-kickback statute prohibits the knowing and willful solicitation or receipt of remuneration in return for a referral or for certain services payable under federal healthcare programs.36
Some known safe harbors/exceptions did apply to these general prohibitions and would allow for organizations to contract for these services; however, the technical contracting requirements of these exceptions/safe harbors (e.g., set in advance, for at least a year, FMV requirements) created challenges for providers to act quickly to deliver care for patients during this global pandemic. As discussed above, HHS and other government agencies have recently taken actions to release providers from some of these regulations, meaning that, for the duration of the current pandemic, those strict contracting requirements (or at least some of them) will no longer apply during the emergency period.
Second, the OIG opted to exercise its enforcement discretion under the anti-kickback statute not to pursue administrative sanctions for certain actions that are normally prohibited. This was a necessary action, as many of the now-permitted acts under the Stark 1135 waivers would otherwise still be prohibited by the anti-kickback statute. However, the OIG has noted it is only refraining from administrative sanctions for those acts that are also covered by the existing Section 1135 waivers related to COVID-19 efforts. Other administrative sanctions still apply.37
Of importance, some of the more significant waivers issued by CMS and further elaborated on through a policy statement by the OIG include:
- Property or equipment rental by or to healthcare providers above or below market value, under defined circumstances;
- Permitting providers to offer designated health services in a patient’s home; and
- Furnishing medically necessary services such as MRIs or labs from mobile vans.
Some of the directives that might specifically impact FMV and telehealth include rental arrangements for buildings or other structures to prepare for emergency patients or to provide a pandemic-free space for other patients.
Additionally, the blanket waivers also addressed issues related to the rent or lease of equipment and technology, which will be of extreme significance in the telehealth realm. This implies that organizations may offer certain telehealth equipment to providers at or below FMV. This allows providers to step into telehealth by releasing them from costly burdens of purchasing or leasing the equipment themselves. Consistent with the other provisions, these accommodations are limited for the emergency period and providers will be required to either return or lease the equipment at FMV after the end of the pandemic. Further guidance was provided by the OIG through its FAQ. The OIG indicated that the provision of telehealth equipment to physicians is permissible in unique and exigent circumstances resulting from the COVID-19 outbreak. The OIG expanded further and stated the provision of telehealth equipment to physicians is permissible so long as the telehealth platform is:
- Provided for free to physicians to furnish medically necessary telehealth services;
- Provided only when necessary as a result of the COVID-19 outbreak and during the period subject to the COVID-19 declaration;
- Not conditioned on the physician’s past or anticipated volume or value of referrals to, or other business generated for, the hospital for any items or services that may be reimbursable in whole or in part by a federal healthcare program; and
- Offered to all physicians on the medical staff on an equal basis.38
Broader Implications of Temporary Legal Changes in Response to COVID-19
The pandemic has instigated necessary and substantial discussion within the industry regarding whether some of these changes amy become permanent after the state of emergency (e.g., reimbursement and geographic and place of service requirements), which would allow for further broader advancement and utilization of the telehealth adoption. This would be consistent with the slow but progressing trend observed over the past five years.39 Specifically, Medicare reimbursement for telehealth generally has been limited, which has stymied the adoption and implementation of telehealth into practice. Adequate compensation has not been awarded to all sites of care. That is why the recent expansion in response to the pandemic is important because uniform adoption is a significant step toward a path to increased reimbursement. According to a fact sheet issued by the American Hospital Association (AHA), 70 percent of U.S. hospitals utilize telehealth or other virtual services to connect with patients.40 Medicare coverage is essentially impeding the expansion of telehealth services, and that is why these waivers are so important. They even the playing field, so-to-speak, with the current reimbursement given to providers for in-person visits.
Another noticeable statistic is the recent adoption and projected growth rate of the telehealth market, estimated to be valued at $155.1 billion by 2027.41 In 2019, the market was valued at $41.4 billion.42 Obviously, many of these changes will be scaled back and revisited; therefore organizations should be thoughtful and proactive with how they are developing these initiatives – even if it’s after emergent implementation. As state “shelter in place” directives are lifted, people will be hesitant to resume normal day-to-day life as once before. It will be a slow trickle, especially for the elderly population, to integrate back into society, and telehealth will continue to be a vital tool in the coming months and years after the national declaration of emergency is terminated.
If telehealth continues to grow at its current pace, the U.S. healthcare system will more than likely see substantial growth in specialty service offerings using technology to deliver care. Providers should be cognizant that CMS guidance only applies to services payable by Medicare, and, although the federal government is breaking down barriers to allow for the use and expansion of telehealth services some states are much slower to respond, and some states will not expand their services or change laws to include all levels of providers. The goal would be for commercial payors to follow in the shoes of the potential expansion via state agencies because uniformity in reimbursement and application of services is imperative moving forward if telehealth utilization is to be maximized.
Although the long-term impact of these changes is unclear, it is unlikely all changes will completely disappear after this pandemic subsides. For example, while it is not likely the Section 1135 waivers and anti-kickback administrative sanction refrains will continue following COVID-19, the extent to which these acts have initiated telehealth growth and made coordinated care services possible will not go unnoticed. It is likely that the federal government will evaluate other methods for easing restrictions — perhaps in other areas of law, even — to continue to facilitate growth while maintaining the original intent of the Stark and anti-kickback statutes. Telehealth, as well as the Stark and anti-kickback statutes, will assuredly not look the same when this nation settles into its new normal.
Questions also have begun to percolate among providers regarding licensing and reimbursement. For example, will geographic licensing and practice restrictions become laxer following COVID-19, if not lifted completely? After all, this has been an issue under scrutiny for some time.43 Additionally, if the current permitted services for reimbursement continue, will accelerated Medicare payments also remain in place, even if to a narrower extent? What about the expansion of telehealth services? How easy will it be to roll back these arguably inevitable innovations once permitted so broadly? With the potential for a resurgence of the virus, as well as the likelihood for an extension of waivers, these questions become more prominent.44
The recent regulatory initiatives around telehealth related to the COVID-19 outbreak will likely lead to broader adoption and utilization of telehealth services, both from a provider and consumer standpoint. However, some may argue these changes were inevitable; it’s simply that the timing of their implementation has been sped up by this pandemic. Regardless, telehealth continues to uphold the status quo of evolution at breakneck speeds, often outpacing the laws required to support them. This time, however, the law has arguably begun to catch up.
Moving forward will not be so easy regarding compliance and telehealth. These legal considerations, many of which are waived currently, remain important. Telehealth will continue to be a complex practice to navigate Thus, providers should take advantage of the leniency afforded to them while maintaining an eye toward the future to ensure they remain in compliance with legal and regulatory changes, particularly within the Stark Law and anti-kickback statutes. Compliance related to commercial reasonableness and FMV implications will be a focal point as telehealth continues to grow even though regulations continue to evolve and change with broader adoption.
The goal of the changes proposed by Medicare and private insurers are intended to supplement short-term COVID-19 purposes, and health systems and other providers must be prepared to return to a state where adherence to strict contracting requirements and compliance with issues that have been temporarily waived during this period. What is unknown is what the government’s perspective will be once the storm around COVID-19 passes – or how long the state of emergency will be in place. It will be interesting to see how these changes impact the broader adoption and implementation of telehealth as a mode of care in the future, as it would be hard to imagine federal and state governments scaling back every item post COVID-19.