TechHealth Perspectives


Recent Telehealth Survey: Providers Are Catching On

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EHRA recent survey conducted by the Robert Graham Center, the American Academy of Family Physicians, and Anthem caught my attention. The survey was conducted to gauge the attitudes of primary care physicians regarding telehealth.  And the results make for interesting reading— providing great insight into how certain providers view and use telehealth. What struck me most is that while great progress has been made in the rate of telehealth adoption among providers, we still have a way to go. According to the survey report, state legal and regulatory issues, reimbursement, and provider training and education continue to be serious barriers to wider adoption of telehealth.  And until the landscape evolves to address these barriers, telehealth adoption is likely to stagnate despite the great promise of telehealth holds as a tool to improve quality and access.

By way of quick background, approximately 1,500 family physicians responded to the survey with 15% responding that they use telehealth in their practices (although almost nine out of 10 family physicians indicate that they would use telehealth if they were appropriately reimbursed).  Here are some other interesting takeaways from the survey.

Users of Telehealth

As you might expect, the survey report confirms what most of us in this space suspect.  First, the survey finds that physicians practicing in rural areas are far more likely to use telehealth in their practice than urban physicians (almost 29% to 11%).  Second, physicians who use telehealth are younger and in practice fewer than 10 years. Third, almost all telehealth users reported that they use EHRs in providing care to their patients.

Generally, both telehealth users and non-users agreed that telehealth has the potential to improve health care access, improve continuity of care, and decrease travel time for patients.  And while there was general agreement that patients preferred to see their physicians in-person, there was also an acknowledgment that telehealth “may represent an alternative to seeing a physician at all.”  In other words, even those physicians who did not use telehealth saw the value in its use almost to the same level as telehealth adopters.

Form of Telehealth

Among users of telehealth, approximately half have used telehealth one to five times in the past year and about a quarter report using telehealth more than 20 times in the past year. The form of telehealth used most:

  • 48.7% used real-time video
  • 30.7% used store-and-forward or text
  • 10.8% shared a computer screen using images with audio
  • 9.6% used other forms

Uses of Telehealth

More surprising for me was the variety of ways in which telehealth is being used by primary care physicians.  Survey results show the following uses:Telehealth Licensure

  • 55% for diagnoses or treatment
  • 26% for chronic disease management
  • 20% for second opinion
  • 21% for follow-up
  • 13% for other reasons
  • 16% for emergency care
  • 6% for administrative purposes

So, what does this all mean? For me, it is further confirmation that telehealth is widely accepted by physicians generally but that many barriers will need to be overcome for telehealth to become more routine among physicians and other providers. The survey report notes that “creating guidelines for the use of telehealth services in clinical practice, definitions of quality, and measurable outcomes” are a must for greater adoption. The report also underscores the need to establish “standardized reimbursement procedures” for telehealth including the development of new billing codes and reimbursement mechanisms. I wholeheartedly agree with all of those conclusions. Many stakeholders are working on solutions to one or more of these barriers. Ultimately, however, I think significant change will come from consumers and patients themselves, who will continue to demand better access and more innovative delivery models outside the conventional office visit.

The Boom in Telemental Health

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Telemental health seems to be emerging, even booming.  Also referred to as telebehaviorial health, e-counseling, e-therapy, online therapy, cybercounseling, or online counseling, for purposes of this post, I will define telemental health as the provision of remote mental health care services (usually via an audio/video secure platform) by psychiatrists, psychologists, social workers, counselors, and marriage and family therapists.  Most services involve assessment, therapy, and/or diagnosis.   Over the last few years, I have seen a wider variety of care models—from hospitals establishing telepsychiatric assessment programs in their emergency departments to virtual networks of mental health professionals providing telemental health services to underserved areas to remote substance abuse counseling being provided to inmates in state prisons.VA telehealth

Even the federal government is in on the act.  For example, in 2010, the Veterans Health Administration established a National Telemental Health Center. In 2013, the center provided almost 3,000 video encounters to 1,000 patients at 53 sites in 24 states.  The scope of the services the center provides includes all mental health conditions with a focus on post-traumatic stress disorder, depression, compensation and pension exams, bipolar disorder, behavioral pain and evidence-based psychotherapy.

There are many reasons for the recent boom.  First, telehealth is a good fit for providing mental health services because providers rarely have to lay hands on the patient in conventional face-to-face encounters.  Second, telemental health is accepted by a large number of payers as a legitimate use for telehealth—more so than other telehealth disciplines. As an example, most Medicaid programs and many private insurers cover and reimburse for telemental health services.  Finally, patients surveyed have consistently stated that they believe telemental health to be a credible and effective practice of medicine, and studies have found little or no difference in patient satisfaction as compared with face-to-face mental health consultations.

The Need for Telemental Health

In essence, we are stuck in a vortex of sorts with millions of Americans suffering from mental illness or substance abuse disorders combined with a shortage of qualified mental health providers to address these issues.  The numbers speak for themselves.

In addition to the high numbers described above, there is a critical mental health provider shortage creating significant access to care issues.  Here is a snapshot:

You get the idea.  And even with mental health parity laws, cost of care remains an issue—not to mention the social stigma and mistrust of mental health providers that exists in many communities.Mobile phone

Telemental health is bridging the gap.  Numerous studies have shown the effectiveness of telemental health services.  For example, a recent study showed that providing telemental health services to patients living in rural and underserved areas significantly reduced psychiatric hospitalization rates.  Another study concluded that the effects of telemental health on low-income homebound older adults were sustained significantly longer than those of in-person mental health services. Many other studies arrive at the same conclusion.  Note, however, obstacles remain, including how to properly assess non-verbal cues by video, technical difficulties, and the lack of proper training of many providers regarding telehealth.

Practice Guidance

There is also good news in that, unlike other telehealth subspecialties, there is a well-developed library of practice guidelines available regarding telemental health.  The American Psychiatric Association, American Psychological Association, National Association of Social Workers, Association of Social Work Boards, TeleMental Health Institute, for example, all have guidelines or statements related to telemental health.  The American Telemedicine Association has developed a series of practice guidelines over the years related to telemental health, including its latest regarding using real-time videoconferencing to provide online mental health services. There are also other resources such as the telehealth resource centers that provide guidance on telemental health.

Legal & Regulatory Issues

As with all things telehealth, however, there are a number of significant legal and regulatory issues implicated by the use of telemental health, including privacy and security, follow-up care, emergency care, treatment of minors, and reimbursement. While telemental health touches on some federal laws and regulations (e.g., HIPAA), most of the significant issues involve state law.  And as you might imagine, the result is an inconsistent patchwork of laws and regulations that vary widely by state.

We recently completed a 50-state survey of laws and regulations that may be implicated by the use of telemental health services to assess a variety of issues such as privacy, follow-up care, treatment of minors, and provider scope of practice.  Here are a few nuggets:

  • Psychiatrists, as practicing physicians, must comply with all the obligations that apply to physicians practicing telehealth generally. Very few states exempt mental health from physician requirements despite the fact that many psychiatrists never lay hands on patients. Ironically, Texas is one of the few states that explicitly carves out mental health services from other telehealth requirements.
  • In Delaware, an individual practicing “telepsychology” must conduct a risk benefit analysis and document findings specific to issues such as whether a patient’s presenting problems and Skype 4apparent condition are consistent with the use of telepsychology to the patient’s benefit; and whether the patient has sufficient knowledge and skills in the use of technology involved in rendering the service or can use a personal aid or assistive device to benefit from the service.
  • Kansas requires psychologists and social workers providing telemental health services to obtain the informed consent of the patient before services are provided.
  • In Maryland, physicians (psychiatrists) are required to develop a procedure to prevent access to data by unauthorized persons through password protection, encryption, or other means; and develop a policy on how soon an individual can expect a response from the physician to questions or other requests included in transmission.
  • Montana psychologists can initially establish a “defined professional relationship” electronically so long as the means of communication involves a two-way, real-time, interactive platform providing for both audio and visual interaction.
  • To regulate marriage and family therapy therapist, South Dakota relies on the American Association for Marriage and Family Therapy’s Code of Ethics which provides that therapists evaluate whether electronic therapy is appropriate for individuals and inform them of the potential risks and benefits associated with electronic therapy.

As I look over the telehealth landscape, I predict that telemental health will continue its significant growth.  Demand for mental health services will not recede, and coupled with the mental health provider shortage, telemental health will be viewed as a viable solution by more and more clinicians, payers, and policymakers.  There are, however, significant legal and regulatory considerations—especially at the state level— with which stakeholders must wrestle.

Telehealth: The Medicaid Reimbursement Landscape

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medicare1As many of you know, reimbursement for telehealth services is a mixed bag.  On the one hand, private payers generally seem ahead of the curve.  Many leading private insurers reimburse for telehealth.  Generally these coverage policies provide reimbursement for telehealth services when they involve the use of real-time interactive audio, video, or other electronic media for diagnosis and consultation.  Just as significantly, more than half the states and the District of Columbia have passed telehealth parity statutes which require health insurers to provide coverage for services provided via telehealth if those services would be covered if provided in-person.  The picture for private insurer telehealth coverage is generally good and getting better.

On the other end of the scale is Medicare.  I think it is fair to say that no payer lags further behind in reimbursing for telehealth than Medicare.  The numbers tell the story.  The Center for Telehealth and eHealth Law reports that in calendar year 2014, Medicare reimbursed approximately $14 million under its Part B telehealth benefit—or about .0023 percent of total Medicare spending in 2014—a mere pittance.  The real reason for this is that the Medicare telehealth benefit was primarily intended for rural patients.  In addition:

  • The definition of “telehealth” is limited to real-time audio visual communication between provider and patient (in other words, there is no coverage for so-called asynchronous or “store and forward” technology).
  • Fewer than 100 codes are reimbursable under the telehealth benefit.
  • Other restrictions exist related to type of facility where a patient may present, and what kind of provider may deliver services (e.g., physicians, nurse practitioners).

Medicare Advantage offers more opportunities for telehealth coverage, but overall the current Medicare telehealth reimbursement picture is relatively bleak.

medicaidMedicaid Reimbursement for Telehealth

Medicaid telehealth reimbursement exists somewhere in the space between private payers and Medicare.  As you know, Medicaid provides health coverage to about 70 million low-income adults, children, pregnant women, and others.  The program is administered by states who are required to cover certain mandatory services (such as hospital and physician services, home health), but is funded jointly by the states and the federal government.  States do have flexibility to decide what optional services (such as telehealth) to cover beyond the mandatory services.  This has resulted in a patchwork of different coverage policies that vary by state.

Fortunately, there a number of stakeholders that closely track Medicaid telehealth coverage policies by state.  One of these is the Center for Connected Health Policy, which issues a quarterly report reviewing various telehealth legal and regulatory issues for all states.  In its last report (July 2015), the Center found the following regarding Medicaid telehealth coverage:

  • 47 states and the District of Columbia provide some coverage for telehealth (Iowa, Massachusetts, Rhode Island do not according to the report).
  • In many Medicaid programs, the definition of “telemedicine” or “telehealth’ for purposes of reimbursement is limited to services that take place in real time—thereby excluding asynchronous or remote patient monitoring from coverage.
  • Live video is the most predominantly reimbursed form of telehealth with almost all of the states that cover telehealth offering some type of live video reimbursement in their Medicaid programs.
  • Services provided via telephone, e-mail, or fax are seldom covered unless they are used along with other forms of care delivery.
  • Only 9 states (including Illinois, New Mexico, and Virginia) currently reimburse for store-and-forward services. Even in states that do cover store-and-forward, covered services may be iStock_000043291394_Smalllimited—such as in California, where only store-and-forward services related to teledermatology, teleophthalmology and teledentistry are reimbursable under Medicaid.
  • 16 states (including Colorado, Maine, and South Carolina) provide Medicaid coverage for remote patient monitoring although many restrictions exist. For example, in some states, coverage for remote patient monitoring is limited to home health agencies. There are also restrictions regarding the conditions which may be monitored and the type of monitoring devices that may be used.
  • 29 states reimburse a transmission and/or facility fee.
  • 29 states (including Connecticut, Kansas, and Maryland) require some form of informed consent prior to the use of telehealth.

All in all, the picture for Medicaid reimbursement for telehealth is far better than it has been in the past. Each state Medicaid program is different, so stakeholders need to carefully analyze each state’s telehealth coverage policies. My sense is that given the serious fiscal and clinical (e.g., provider shortages, network inadequacy) issues faced by many Medicaid programs, telehealth will increasingly be viewed as a means to seriously address these challenges. We are starting to see this play out in the Medicaid managed care space.

Medicaid Managed Care Coverage

By way of quick background, a majority of states contract with managed care organizations to provide services to certain Medicaid beneficiaries. Generally, these managed care plans receive a monthly premium from the states for each enrollee, and have greater flexibility to cover more services and allows the states to better target and customize services. As the American Telemedicine Association noted in its report on telehealth and Medicaid managed care published last year, “states have increasingly used [Medicaid managed care] to create payment and delivery models involving capitated payments to provide better access to care and follow-up for patients, and also to control costs.” Because of this flexibility, a number of leading Medicaid managed care plans are either already covering telehealth or are developing telehealth initiatives and pilots—especially related to telemental health and teledermatology. In my view, the future looks bright when it comes to Medicaid managed care and telehealth.

Telehealth / Remote Care 2.0: The Coming Disruption

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As stakeholders, legislators and policymakers wrestle with the myriad of issues related to the provision of remote health care, clinical and technological advancements continue apace. What was once an industry focused primarily on the provision of primary care through existing remote platforms is morphing into a highly sophisticated brew of clinical and technological innovation.  In that regard, several trends have caught my attention. While these trends may not squarely fall within the accepted definitions of “telehealth”, they are worth noting because they raise many of the same legal and clinical issues with which we currently wrestle in the telehealth space.  I am limiting my discussion to three of these trends and will address others in a separate post.

iStock_000062830618_SmallWearable Devices

The wearables industry is projected to significantly increase in the next few years. Generally speaking, wearables are devices (which usually include microchips or sensors) that, among other functions, collect data, and track fitness and wellness.  A leading research firm projects that the global wearable devices market will reach $37 billion in 2020—a significant jump from $1 billion just a year ago. Moreover, wearable device shipments are projected to grow from about 20 million shipments last year to 135 million by 2018.  Wearables are part of a greater trend in which everything is connected to a network—the so-called Internet of Things.  There are about 12 billion Internet-connected devices currently in existence worldwide—the equivalent of 1.7 devices for every person.  That number will increase to a ratio of 4.3 by 2020 when 33 billion devices will be in use.

Many believe wearables are part of a continuum which will lead to wider use of nanotechnology and implantable medicine. As these devices become more sophisticated, they will be better able to integrate collected data into an individual’s EHR and perform more than basic diagnostic testing.

While wearables are essentially in early development, many legal and regulatory issues may be implicated.  Here are a few:

  • Data privacy and security (who has access to the data, who owns the data, how long the data will be used, etc.).
  • Potential changes to malpractice liability (clinicians having access to more information regarding a particular patient, providers ability to review the voluminous data, etc.).
  • Employer issues (wellness programs, ADA concerns, etc.).

These and other legal issues will become more relevant as the wearables sector grows and more sophisticated technological products are developed and deployed.  The real lesson here is that the healthcare ecosystem needs to be prepared to balance clinical and legal concerns with clinical and technological innovation.  That is a tall order especially given how legislators and regulators have approached the regulation of telehealth over the past few years.  Based on that experience, I find it unlikely that policymakers will adjust quickly to the wider use of wearables and the attendant clinical and legal implications that will be brought to bear.

Artificial Intelligence

AI, which uses complex computer algorithms to organize unstructured data, is increasingly being used in the healthcare space. Advocates of AI note that it will enable clinicians and researchers to make full use of the voluminous amounts of data that exists in databases (e.g., cancer registries), EHRs, journal articles, diagnostic images, and wearable devices. Through the use of AI, providers may be able to obtain real-time clinically useful information. For example, included among the more popular uses of AI are:

My sense is that the use of AI in healthcare will increase exponentially in the next few years.   Many of the same legal and regulatory issues implicated by wearables are relevant here. What may be different, however, is that AI presents a myriad of complex and novel issues that are deserving of more discussion and fall outside the scope of this post.

Text Therapy

The Department of Health & Human Services has concluded that only about 40 percent of all adults in need of mental health care actually receive the services. While many are referred for treatment, many barriers exist including costs. It has been estimated, for example, that the median cost of a psychologist’s session is $75.iStock_000019221924Medium

Text therapy is a recent trend that attempts to address the shortfall. Text therapy, through smartphone apps or websites, allows users to connect to a variety of mental health professionals (such as psychologists, social workers, counselors) via text-based or messaging sessions. While models vary, there are some similarities among the offerings:

  • A $25-45 per week subscription fee for unlimited chat.
  • Users must complete and submit a questionnaire.
  • A mental health professional is assigned to the user (some companies use a mental health professional to essentially triage and match the user with a fellow professional).
  • Users can request a different mental health professional than the one who has been assigned.
  • Phone sessions are available for additional fees.

Among the legal and regulatory issues raised by the use of text therapy are licensure, scope of practice (minors, emergencies, follow-up care, etc.), data privacy and security, and reimbursement (many plans do not reimburse for the use of this type of therapy). As these types of services evolve, so too will the laws and regulations, albeit slowly.

Telehealth Crash Course Webinar Series

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headerAs telehealth legal and regulatory issues continue to evolve, stakeholders need to stay current on trending issues. With that in mind, we are offering a complimentary “crash course” webinar series in which we will discuss a number of significant legal and regulatory issues implicated by telehealth including reimbursement, state issues, and employers.

How Do I Get Paid?

During this first installment of EBG’s Telehealth Crash Course series, we will discuss the current reimbursement landscape, including distinctions between various payer models and the growing impact of state parity laws, and some of the current state-specific concerns regarding regulatory issues and risks that may impede development of reimbursement schemes for telehealth services in certain states. (Tuesday, September 8: 2:00 – 2:15 p.m. ET)

Do States Like Telehealth?

In the second installment of EBG’s Telehealth Crash Course series, we will discuss recent legal and regulatory developments in the states related to telehealth and the various initiatives underway to facilitate greater adoption of telehealth. (Tuesday, September 15: 2:00 – 2:15 p.m. ET)

How Do I Implement Telehealth in My Plan?

In the third installment of EBG’s Telehealth Crash Course series, we will examine all of those questions and the potential issues that employers may need to navigate throughout the process of implementing telehealth. (Tuesday, September 22: 2:00 – 2:15 p.m. ET)

How Will My Organization Absorb the Influx of New Patients?

In the final installment of EBG’s Telehealth Crash Course series, we will explore the potential health care immigration issues that employers should be aware of, as well as immigrant options that are available to help health care organizations recruit the foreign talent required to keep pace with a changing landscape. (Tuesday, September 29: 2:00 – 2:15 p.m. ET)

To register for this webinar series, please click here.

A Telehealth Tutorial: Legal & Regulatory Issues

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Hospitals and others are increasingly implementing telehealth programs as part of their service offerings. As health technology becomes more sophisticated and hospitals look to provide more services to more patients, telehealth technologies are being incorporated by hospitals by hospitals in diverse and innovative ways. As telehealth utilization continues to increase, however, hospitals should be aware that there are various significant legal and regulatory issues that must be closely analyzed to ensure that adoption of telehealth technologies is consistent and compliant with the various federal and state laws and regulations that may be implicated by telehealth. In conjunction with the American Hospital Association, my colleague Amy Lerman and I have co-written a white paper focusing on the some of the significant legal and regulatory issues implicated by telehealth including:

  • Provider licensure;
  • Online prescribing;
  • Medical malpractice;
  • Coverage and reimbursement;
  • Privacy and security; and
  • Fraud and abuse.

We also address the various federal and state legislative and other efforts underway. You can read the entire white paper by clicking here.

A Call to Comment for Telemedicine Stakeholders: The Cadillac Tax

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DOTAs discussed previously on this blog, employers are increasingly turning to telemedicine as a way to cut employee health care costs and improve bottom lines. The trend will be accelerated by the impending Cadillac Tax, a 40 percent excise tax on the excess of the cost of an employee’s applicable coverage over the employee’s applicable dollar limit. In February, the Treasury and IRS released Notice 2015-16 (the “Notice”), kicking off the process of developing regulatory guidance regarding the Cadillac Tax. Specifically, the Notice addresses the following issues:

  • Defining “applicable coverage,”
  • Determining the cost of applicable coverage, and
  • Applying the annual statutory dollar limit to the cost of applicable coverage.

To limit liability, employers will favor rules that result in a lower cost of applicable coverage or a higher applicable dollar limit. The former can be accomplished through rules that exclude more types of coverage from the definition of applicable coverage. This is one area on which telemedicine providers may want to submit comments. Although the Cadillac Tax will encourage employers to lower health care costs and potentially turn to telemedicine to do so, there are nonetheless certain areas where telemedicine may be negatively impacted.

Notably, the definition of applicable coverage includes coverage for on-site medical clinics. To reduce costs and absenteeism, more companies are opening on-site medical clinics to offer a number of services to employees. Employers frequently partner with telemedicine providers to offer services at these clinics. However, providing a comprehensive set of services at on-site clinics can be expensive, and the Cadillac Tax may exacerbate those costs beginning in 2018.  I note that while the Notice does not specifically address direct-to-consumer telemedicine services, those services would be included in the definition of applicable coverage to the extent that they are covered under an employer’s group health plan.IRS

The Treasury and IRS anticipate that the definition of applicable coverage will exclude coverage provided by on-site medical clinics that provide “de minimis” care to current employees free of charge. Under the definition considered in the Notice, de minimis care is limited to first aid provided for treatment of a health condition, illness, or injury that occurs during working hours. Therefore, under this approach, the definition of applicable coverage would include coverage of telemedicine services at on-site medical clinics, making this a potential target for employers as they scale back their health offerings to minimize Cadillac Tax liability.

The IRS seeks comments on a couple related issues:

  • Whether on-site medical clinics that provide services besides first aid should also be exempt from the definition of applicable coverage; and
  • How the IRS should treat medical care provided by on-site medical clinics (for example, whether there should be a dollar limit on the cost of services provided). There are also unresolved issues that may be addressed in future notices.

Before issuing proposed regulations, the Treasury and IRS plan to issue another notice addressing potential approaches to other issues not described in Notice 2015-16, such as procedural issues relating to calculating and assessing the Cadillac Tax.

Telemedicine providers should consider submitting comments arguing for the exclusion of telemedicine services from the definition of applicable coverage, whether provided at on-site medical clinics or otherwise. Comments on the Notice, which are due on May 15, 2015, provide a valuable opportunity for stakeholders to participate in the rulemaking process.

Telemedicine, State Boards and the Supreme Court

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I have examined on this blog the various legal and regulatory issues implicated by telemedicine.  Many of those issues involve the practice of medicine and how state medical boards interpret state laws and regulations impacting telemedicine, and how those boards enforce those laws.  Believe it or not, a recent Supreme Court case may have an impact on how state boards do their business.

On February 25, 2015, the Supreme Court of the United States held that the North Carolina Dental Board (“Board”) was not insulated from federal antitrust liability under the so-called “state action” doctrine when it engaged in anticompetitive conduct to restrain non-dentists from performing teeth whitening services.  While the North Carolina case involved a dental board’s attempt to restrict activities of non-dentists, the Court’s opinion has broader implications for how states regulate and supervise professional boards—such as state medical boards.  Ultimately, the Supreme Court decision illustrates how an individual or entity, subject to perceived over-regulation by a professional board, might mount a defense by scrutinizing whether the board meets the “state action” requirements to be insulated from liability for anticompetitive regulatory actions.  Please click here to read the full EBG Client Alert.

FTC Focus on Privacy

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At the International Association of Privacy Professionals (“IAPP”) Global Privacy Summit in Washington, D.C. on March 5th and March 6th, the Federal Trade Commission (“FTC”) was clear in its message that privacy was a top priority for the agency.  The FTC had a strong presence at the conference.  Three of the five Commissioners and the Director of the Bureau of Consumer Protection (Jessica Rich) all spoke at the conference and relayed a message of the importance of consumer privacy and security.  In that regard, the FTC speakers stressed the importance of:

  • informing consumers of the collection of consumer information;
  • informing consumers how such collected information will be used; and
  • providing strong safeguards for information collected.

The FTC speakers also announced that the FTC will be beginning a new security campaign to engage businesses of all sizes in understanding the importance of securing consumer information.  The FTC speakers also emphasized the FTC’s concern and focus on the collection of health information by organizations that are not covered under HIPAA (for example organizations developing wearable devices or other consumer driven apps).  Given the tenor of the discussions, there is no question that FTC will continue to make privacy enforcement a top priority.  As a result, device manufacturers, pharmaceutical manufacturers, and mobile health developers should remember to think beyond HIPAA when they think of U.S. privacy compliance.  For a listing of prior privacy enforcement actions by the FTC see,

Telemedicine and Employers: The New Frontier

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As we have explored a number of times on this blog, telemedicine has gone mainstream.  The more recent development is that employers seem to be paying more attention now. The numbers speak for themselves. A recent Towers Watson study focusing on employers with at least 1,000 employees concluded that U.S. employers could save up to $6 billion per year if their employees routinely engaged in remote consults for appropriate medical problems instead of visiting emergency rooms, urgent care centers, and physicians’ offices.

Attitudes towards telemedicine more generally in the United States also have undergone a significant shift:

  • 74 percent of consumers would use telehealth services given the opportunity;
  • 76 percent of patients prioritize access to care over the need for human interactions with health care providers; and
  • 70 percent of patients are comfortable communicating with their health care providers via text, e-mail, or video, in lieu of seeing them in person.

Just as significantly, telemedicine is increasingly viewed as an efficient and cost-effective care delivery vehicle, due to several factors: i) a health care system transitioning from fee-for-service to one where reimbursement is closely tied to quality and patient outcomes; ii) an increase in the use of integrated delivery models such as accountable care organizations and medical homes; and iii) the relative ubiquity of sophisticated health care technologies.

Employers, in particular, are paying close attention to developments in telemedicine for another reason: the looming “Cadillac Tax.”  Starting in 2018, a 40 percent excise tax will be imposed annually on health plans with premiums exceeding $10,200 annually for individuals and $27,500 annually for families. Given this impending tax, employers are looking for efficient ways to cut their employee health care costs. Telemedicine has become an extremely viable option for several reasons:

  • Many employees hesitate to take time off work and to pay the copayments associated with physicians’ visits, particularly for ailments perceived as minor.
  • Many employees forego physician visits entirely, causing relatively minor health issues to sometimes escalate into costly conditions.
  • Although some employers have established onsite clinics where employees can receive sick care and preventive care services, there are high costs associated with creating these clinics.

iStock_000016401740SmallAccording to the Towers Watson study, only about 20 percent of U.S. employers offer telemedicine services to employees today, but nearly 40 percent of employers surveyed said that they plan to offer access to such services in 2015, while 33 percent are considering offering access to telemedicine services within the next three years. It is clear to see why. Effective use of telemedicine services could eliminate 15 percent of physician office visits, 15 percent of emergency room visits, and 37 percent of urgent care visits. This all results in significant savings to employers that cover any part of the costs of their employees’ health care.   Employers considering the inclusion of telemedicine services in their employee benefit offerings should pay attention to some significant, but not insurmountable, legal and regulatory issues implicated by the use of telemedicine. In brief, those issues include:

  • Licensure: State licensure laws are a major stumbling block to the interstate practice of telemedicine. With limited exceptions, providers must be licensed in every state in which they intend to practice medicine (location of patient and the provider), and each state has its own licensure requirements. This tension creates a patchwork of inconsistent laws. The Federation of State Medical Boards has developed an Interstate Medical Licensure Compact that would facilitate license portability and the practice of interstate telemedicine. Mid-level practitioner organizations are working on their own compact proposals.
  • Physician-Patient Relationships: Among the factors required by states to establish a physician-patient relationship is an evaluation or examination of the patient by the treating physician. This is especially important when the treating physician is prescribing medications for the patient. States have different requirements that must be met in order for a proper examination to have occurred.
  • Privacy & Security: Numerous privacy and security issues are implicated by the use of telemedicine technologies, including compliance with federal and state privacy and security standards, data management, data sharing (and management responsibility for such sharing) with other providers, and data storage.
  • Medical Liability: Adapting existing principles of medical malpractice liability to telemedicine is a challenging task, especially regarding what constitutes the applicable “standard of care.”
  • Fraud & Abuse: Telemedicine arrangements must comply with federal and state health care fraud and abuse laws, including anti-kickback statutes and/or physician self-referral prohibitions.

Employers seeking to access the telemedicine market must carefully assess the legal and regulatory requirements, and limitations, of any potential arrangements.