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Telehealth in Light of COVID-19: Overcoming Regulatory Roadblocks to Allow Widespread Adoption

Healthcare Alert | March 18, 2020
By: Lori S. Smith, Richard M. Borden and L. Stephen Bowers

Telehealth (or telemedicine, virtual care, or any of several other ways to refer to nontraditional delivery of healthcare services through use of digital tools rather than in person interaction) has been a developing area for several years as healthcare providers, payers and others within the healthcare ecosystem try to devise ways to improve access and quality of care while reducing costs and enhancing the patient experience. Regulatory roadblocks, as well as privacy concerns, reimbursement issues, interoperability hurdles impacting access to information and concern over efficacy and potential safety concerns have impeded widespread adoption and use to date. The onset and spread of the COVID-19 virus, and the associated social distancing requirements, however, have demonstrated the clear need for use of such tools and in turn created an opportunity for those with existing telehealth businesses as well as those developing new and innovative approaches to bringing healthcare out of the doctor’s office and into the community. Telehealth solutions also allow patients to have better control over their own healthcare.

Many healthcare systems and providers are considering adopting, or have already adopted virtual care, remote monitoring and other digital health tools to provide better services to especially vulnerable patient populations. Relieving stress on healthcare systems is becoming critical. However, regulation has not kept pace with technology. While some regulatory action to ease telehealth services has already taken place, the current crisis presents an opportunity for state and federal regulators across the various agencies and departments with oversight of the healthcare system to thoroughly review existing legal roadblocks and work with developers of telehealth solutions to remove impediments to widespread adoption of tools that could improve the healthcare system and reduce costs of care.

This alert provides a brief discussion of a few of the major issues that telehealth service providers may encounter. The application of these issues to any particular service can be complicated and extremely factually dependent. With the COVID-19 pandemic dramatically increasing the need and value of medical services performed remotely, regulators have begun to relax certain legal requirements, both through formal action and exercise of informal discretion in applying existing rules. Accordingly, developers of telehealth solutions, as well as physicians and other medical care providers incorporating telemedicine into their practices, need to keep apprised of the rapidly changing landscape in consultation with qualified legal counsel.

Reimbursement

Reimbursement for medical services is always complicated. When those services are offered via a nontraditional medium, additional issues can arise. The federal government recognizes this issue, and this week has acted to significantly broaden the types of telemedicine services which are reimbursable by Medicare. However, other payers, including employer-sponsored insurance, which covers most Americans, are subject to different rules. Many cover some telehealth services, but the rules and scope of coverage differ by state and by plan. A slim majority of states have implemented so-called “payer parity” laws, which require an insurer to cover telehealth services in the same manner as they would cover an in-person service of the same type. However, where a telehealth program provides for a different manner of treatment (for example, digital coaching or the use of AI), comparable services can be difficult to assess.

Additionally, reimbursement from other payers (Medicare or certain employer-sponsored plans governed by federal law) may not receive the same treatment as payments from private insurers, regardless of state law. Payments from Medicaid are subject to individual state requirements, some of which limit telehealth reimbursement to traditional physician visits conducted by video.

However, over the course of the last several days, some payers have announced initiatives to encourage use of telemedicine by, for example, waiving co-pays for telehealth visits for a limited period of time and in some cases solely related to COVID-19 diagnosis and testing. Certain jurisdictions such as the Commonwealth of Massachusetts are mandating that all payers cover medically necessary telehealth testing and treatment for the novel strain of coronavirus. It remains to be seen if these emergency initiatives to address the current situation will remain in effect or extend to broader coverage of telehealth services once the immediate crisis passes.

Licensing

Nearly every state requires that an individual providing medical services via a technological medium be licensed to provide such services in the state in which the patient resides. This can cause issues for service providers situated close to state borders, or who otherwise service patients in multiple states. Medical providers who have traditionally provided services on-site may not have considered the need to become licensed in bordering states. At least eight states have formally relaxed state licensing laws in response to the current pandemic in order to facilitate the use of telehealth services across state lines, and many more have indicated a similar intent. Again, note that these may be temporary measures solely to address the immediate crisis. Additionally, it is important to note that each state provides limitations on the types of services to which the relief applies.

The Department of Health and Human Services announced today (March 18) that it would issue a regulation which permits physicians to practice medicine across state lines. It is likely that this regulation will include the practice of medicine via technological means, but the specifics are not yet clear.

HIPAA

HIPAA’s health information privacy and security rules have created a cottage industry of services which exist to permit HIPAA compliant communications for medical professionals. The federal government recently acted to relax some of HIPAA’s more burdensome administrative requirements. However, restrictions on methods of electronic communication have not been relaxed. The increased demand for telehealth may overload approved or compliant services, leaving providers with the difficult choice of limited communications with their patients, or running the risk of violating federal law. Medical providers who have not previously provided telehealth services, or who may want to add health professionals who are not on their compliant solutions, may consider turning to more broadly available communications methods, such as FaceTime or Skype, which may not be designed around HIPAA compliance.

Service Limitations

A few states impose restrictions on medical service providers which, in effect, make many services unlawful when delivered electronically. For example, Ohio prohibits a physician from issuing a prescription for a patient without performing a physical examination. Although there are legitimate and valuable reasons for these restrictions, they present a significant barrier to the provision of some of the most needed telehealth services.

Conclusion

As noted above, technological innovation in telemedicine has advanced faster than the regulations. All involved in the healthcare ecosystem recognize the utility of such innovative solutions in achieving the triple aim of better quality care, at lower cost while improving the patient experience. However, innovation comes with risks that need to be weighed and evaluated, including ensuring the efficacy and safety of utilizing such new tools. Many of the legal requirements that exist were adopted exactly for this purpose, but the need for speed and communication during this pandemic may be the impetus behind finally moving the needle for telehealth.

For now, healthcare service providers (and regulators overseeing them) need to balance the risks of strict compliance with legal requirements against the increased need for flexibility in providing necessary medical services. Balancing these risks must be done in a thoughtful manner at a time of extreme stress. Although certain discrete actions by regulatory agencies have begun to loosen the legal roadblocks, coordinated action to loosen additional restrictions would go a long way toward ensuring access to medical services not just with respect to addressing the spread of the COVID-19 virus, but potentially in addressing our broader healthcare needs. 

If you have questions or would like further information, please contact Lori Smith (smithl@whiteandwilliams.com; 212.714.3075), Richard Borden (bordenr@whiteandwilliams.com; 212.631.4439), Stephen Bowers (bowerss@whiteandwilliams.com; 215.864.6247), Dana Petrillo (petrillod@whiteandwilliams.com; 215.864.7017) or a member of our Corporate and Securities or Healthcare Groups.

As we continue to monitor the novel coronavirus (COVID-19), White and Williams lawyers are working collaboratively to stay current on developments and counsel clients through the various legal and business issues that may arise across a variety of sectors. Read all of the updates here.

This correspondence should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult a lawyer concerning your own situation and legal questions.
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