Special Legal Considerations for Telehealth Care Providers

This article proceeds in three parts. First, it provides background on remote health care and the legal and regulatory framework that is developing to govern this field. Second, it discusses certain tort risks that are particular to remote health operations. Finally, it describes the risk of potential enforcement actions, as federal prosecutors are paying increased attention to telehealth providers and are sending a clear message that they will seek to impose criminal and civil penalties for failure to abide by relevant statutes and regulations.

Background

About 59 million Americans lived in so-called Health Professional Shortage Areas (HPSAs) with limited access to primary care providers as of 2016. See U.S. Dep’t of Health & Human Servs. (HHS), Report to Congress: E-health and Telemedicine 4 (Aug. 12, 2016). Health care providers and government agencies believe telehealth or telemedicine could help address those shortages. Mississippi, for instance, has the worst physician shortage in the country—only 186 physicians for every 100,000 people—and patients there could face trips that last hours simply for initial consultations with specialists, not to mention follow-up visits. See Arndt, supra. Now, though, the state’s only academic hospital, the University of Mississippi Medical Center, has a Center for Telehealth linked up with 200 satellite locations around the state, allowing those specialists to consult with patients and discuss treatment options without the need for an in-person visit. Id.

The terms “telehealth” and “telemedicine” are often used interchangeably, but telehealth is slightly broader than telemedicine. See Rita M. Marcoux et al., “Telehealth: Applications from a Legal and Regulatory Perspective,” 41 Pharmacy & Therapeutics 567 (Sept. 2016). Telemedicine refers to traditional clinical care, such as diagnosis and monitoring, performed remotely, while telehealth can encompass other services like patient education, wellness promotion, and even monitoring of wearable devices. See id. There are four basic types of telehealth: (1) live video (“synchronous”) communication between a person and a provider; (2) store-and-forward transmission (SFT) of data, including digital images; (3) remote patient monitoring (RPM) of vital signs; and (4) mobile health (“mHealth”), usually in the form of smartphone apps. See HHS, Report to Congress, supra, at 5.

Telehealth still represents a comparatively small slice of health care spending in the United States. For example, the Medicare fee-for-service program spent only $14.4 million on telehealth services in 2015—less than 0.01 percent of total health care spending. See HHS, Report to Congress, supra, at 6. That figure is certain to rise as telehealth becomes a greater focus for both health care providers and government agencies.

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As spending rises, however, there remains no universal regulatory scheme that applies to telehealth. Rather, it is governed by a complicated web of federal and state statutes and regulations—with some overlap, some gaps, and even some contradictions.

The Office of the National Coordinator for Health Information Technology (ONC), established by a federal executive order in 2004 to coordinate health information technology and electronic health information exchange nationwide (see HealthIT.gov, About ONC), has identified key policy challenges for all forms of telehealth: privileging and licensure, reimbursement, and improved broadband connections, especially for rural users and providers. See HHS, Report to Congress, supra, at 6. Agencies in various states have also worked to address various telehealth-related issues, such as licensing and improved broadband connections.

But the patchwork of federal and state rules governing telehealth remains difficult to navigate, and “health care providers continue to encounter conflicting and confusing policies.” See Marcoux, supra. For instance, states vary even when defining the scope of the term “telemedicine,” with some states excluding audio-only telephone or email communications, while others broadly encompass any telecommunication-based interaction. See, e.g., D.C. Code § 31-3861 (excluding services provided via audio-only telephone conversations or emails from the definition of telehealth); Va. Code Ann. § 38.2-3418.16 (defining telemedicine services to include the delivery of health care via interactive media, but not audio-only phone calls).

Professional organizations like the American Telemedicine Association have produced comprehensive annual summaries of practice standards, licensure, coverage, and reimbursement for telemedicine providers. See, e.g., Latoya Thomas & Gary Capistrant, Am. Telemedicine Ass’n, State Telemedicine Gaps Analysis: Coverage & Reimbursement (Feb. 2017). Such associations also monitor state and federal legislative activity in the field (see, e.g., Am. Telemedicine Ass’n, Federal Activity) because the landscape is rapidly evolving. In 2019, for instance, state legislatures and agencies across the country finalized nearly 120 statutes or regulations involving remote health care. See Ctr. for Connected Health Policy, Roundup of 2019 Approved State Telehealth Legislation (last updated Dec. 9, 2019). The finalized regulations touch on various aspects of telemedicine, including licensing, provider-patient relationships, reimbursement, prescriptions, broadband connectivity, and other access concerns, mirroring the policy challenges seen at the federal level. Like federal legislation, state telehealth legislation is expected to increase in the coming years.

However, as telehealth continues to grow—and the patchwork regulatory schemes set up by federal and state agencies evolve—health care providers should be aware of the legal risks they could face, which include both the risks associated with traditional medicine and additional risks arising out of the unique and growing practice of delivering health care services remotely.

Civil Litigation Risks

Telehealth providers, like all health care providers, must administer care in ways that are consistent with their professional duties of care. That said, the way in which telehealth providers care for their patients gives rise to special considerations when evaluating litigation risks.

One of the more challenging issues for remote health providers is making sure they are compliant with licensing rules—which vary state by state. While a physician may be licensed in the state in which he or she physically sits, that licensure does not necessarily permit the physician to remotely provide or direct patient care if the patient is in another state.

For instance, the plaintiffs in one case sued several health care providers in Mississippi in December 2015 based in part on the fact that those health care providers administered medication and other care prescribed by a doctor in Louisiana. That case, Frazier v. University of Mississippi Medical Center, No. 3:16-CV-976-DPJ-FKB, 2018 U.S. Dist. LEXIS 182205 (S.D. Miss. Oct. 24, 2018), involved a young Mississippi girl who was treated in New Orleans, Louisiana, by a pediatric neurosurgeon. The girl’s health problems persisted after she returned home to Mississippi, and she wound up suffering permanent brain damage that required tube feedings and in-home nursing care for as many as 16 hours per day. The Louisiana doctor directed that care and communicated it electronically with care providers in Mississippi. Her parents filed suit against a slew of medical providers alleging various theories of liability.

The defendants moved to dismiss the case, but they were not entirely successful. The federal district court hearing the case permitted the plaintiffs to pursue a claim based on allegations that nurses in Mississippi are not permitted to administer prescriptions issued by a provider who was not licensed in Mississippi—in this case, a Louisiana-licensed physician. The court noted that the state’s Nurse Practice Act specifically defined various activities—including aiding or abetting someone not licensed in Mississippi in performing activities that require a professional license—as “[u]nprofessional conduct.” Id. at *17–18. In denying the defendants’ motion to dismiss on that point, the court allowed the plaintiffs to proceed to discovery on the issue of whether violations of the Nurse Practice Act set the standard of care for a negligence per se claim.

The court also allowed a claim of corporate negligence to proceed against corporate officers of the home-health agency. The plaintiffs argued that Mississippi regulations required such home-health agencies to have a governing body that sets agency policies for patient care. The court noted that the defendants did not respond to this argument and therefore forfeited their right to challenge the claim on a motion to dismiss. In October 2019, the court granted summary judgment in the defendants’ favor but did so without prejudice as to certain state law claims, leaving the plaintiffs the ability to continue pursuing those claims in state court. Frazier v. Univ. of Miss. Med. Ctr., No. 3:16-CV-976-DPJ-FKB (S.D. Miss. Oct. 8, 2019) (order at 1).

Some telehealth operations and entities associated with them may wind up in litigation even where they use in-state licensed physicians. For instance, Low Cost Pharmacy, permitted in Arizona, lost a battle with the Arizona State Board of Pharmacy where the business relied on an Arizona-licensed physician to prescribe various medications to patients without an in-person exam. Low Cost Pharm., Inc. v. Ariz. State Bd. of Pharm., No. 1-CA-CV 07-0547, 2008 Ariz. App. Unpub. LEXIS 790 (Ariz. Ct. App. May 20, 2008). The physician, employed by a related corporate entity, reviewed patient questionnaires submitted via telephone or the internet to decide whether to approve prescription requests; if approved, Low Cost provided the medications. While the doctor could ask follow-up questions via the internet or phone conversations, she did not perform in-person examinations of patients to confirm their physical health.

The Arizona State Board of Pharmacy revoked Low Cost but stayed the revocation pending five years of probation. The penalty was issued based on Arizona’s regulatory scheme, which required physical examination of patients before any medications could be prescribed and barred providers from relying on internet or mail questionnaires to diagnose what prescriptions might be warranted.

Low Cost filed an action in state court seeking a declaration that the state’s regulations were unconstitutional and that the board’s actions were not supported by substantial evidence. The court of appeals denied Low Cost’s arguments on both points. The court found nothing constitutionally suspect about the prohibition on issuing prescriptions over the internet without a physical examination. Moreover, the court rejected the pharmacy’s argument that the prescriptions were “facially valid” because Low Cost knew the physician’s practice did not involve physical examinations.

Although these cases do not provide definitive guidance on potential liability, they illustrate the types of legal challenges that telehealth providers may face, and they underscore the fact that telehealth providers need to understand the regulatory frameworks in which they operate to avoid undue risk.

Government Enforcement Actions

Telehealth providers should also be aware of legal and regulatory developments as prosecutors increase their scrutiny of telemedicine operations. For instance, in April 2019, federal authorities indicted numerous defendants, including companies involved in telemedicine and sales of durable medical equipment (DME), which includes devices such as back, shoulder, wrist, and knee braces that patients can use and adjust easily at home); among those charged were Video Doctor USA and Telemed Health Group. See Press Release, U.S. Dep’t of Justice, Federal Indictments & Law Enforcement Actions in One of the Largest Health Care Fraud Schemes Involving Telemedicine and Durable Medical Equipment Marketing Executives Results in Charges Against 24 Individuals Responsible for Over $1.2 Billion in Losses (Apr. 9, 2019). The indictments generally alleged a multimillion-dollar health care fraud scheme. The scheme allegedly involved telemedicine and DME companies, in concert with international call centers in the Philippines and Latin America, prescribing and billing for medically unnecessary braces. The indictment described the scheme as follows:  

Indictments were filed in multiple federal district courts, including the Central District of California, Middle District of Florida, District of New Jersey, Eastern District of Pennsylvania, District of South Carolina, and Northern and Western Districts of Texas. See U.S. Dep’t of Justice, Document and Resources from the April 9, 2019 Press Release on Health Care Fraud.

As an example, a licensed physician named Joseph DeCorso was indicted by the U.S. Attorney’s Office for the District of New Jersey. Dr. DeCorso worked as an independent contractor for Integrated Support Plus, Inc., a telemedicine company. See Indictment at 2, United States v. DeCorso, No. 3:19-cr-00249-PGS (D.N.J. Apr. 5, 2019). The indictment contends that Dr. DeCorso engaged in a conspiracy that involved “order[ing] [DME] regardless of medical necessity, in the absence of a pre-existing doctor-patient relationship, without a physical examination, and frequently based solely on a short telephonic conversation with the [Medicare] beneficiary or no conversation at all.” See id. at 8. Note that the indictment does not explain the length or contents of a provider-patient conversation that would be sufficient in the telemedicine context. Dr. DeCorso was charged with conspiracy to commit health care fraud under 18 U.S.C. § 1349 and three counts of health care fraud under 18 U.S.C. §§ 1347 and 2. See id. at 7, 9, 11. He reached an agreement with prosecutors, pleading guilty to the conspiracy charge on September 12, 2019. DeCorso, No. 3:19-cr-00249-PGS, ECF No. 16 (Sept. 12, 2019). Dr. DeCorso is scheduled to be sentenced in April 2020 but has already agreed to a criminal forfeiture money judgment in which he agreed to pay the federal government $209,455. Id. ECF No. 18 (Sept. 20, 2019).

Criminal cases can result in extraordinary consequences, including hefty monetary fines and penalties, potential exclusion from government programs, onerous corporate integrity agreements, and even jail time for individuals. It is not uncommon for providers to face both criminal and civil liability arising out of the same conduct. For example, performing health care services when not properly licensed or providing services that are not medically necessary may very well give rise to claims of medical malpractice and claims of health care fraud.

Conclusion

All health care providers must comply with professional, legal, and regulatory obligations to reduce—and hopefully eliminate—risks of civil or criminal liability. Telehealth and telemedicine providers face certain additional challenges. Telehealth providers have enormous potential to expand their reach, deliver quality health care, and improve health outcomes, especially in our most underserved communities. To reach this potential, they must deftly navigate the shifting legal landscape and take measures to mitigate the risk of litigation or an enforcement action. The statutory and regulatory frameworks governing such operations are rapidly evolving, and care providers must stay abreast of these legal issues as they continue to provide much-needed care for patients.

Sara Richman is a partner and Brian Callaway is an associate with Pepper Hamilton in Philadelphia, Pennsylvania.

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