On October 26, 2017, President Trump directed the Secretary of the Department of Health and Human Services (“Secretary”) to declare a National Public Health Emergency on the opioid epidemic. While the President offered few details regarding how his administration will address the challenge of treating patients struggling with opioid addiction, a previous statement from the White House indicated that the Administration plans to expand access to treatment via telemedicine and more specifically, remote prescribing of the necessary controlled substances used to treat these patients. While this is a logical step, and one that has been advocated at length by states and health care experts, alike, expanding health care providers’ capabilities to utilize remote prescribing to treat opioid addiction will likely run afoul of existing federal law.

The Ryan Haight Online Pharmacy Consumer Protection Act (“Act”) was passed by Congress in 2008 following the death of Ryan Haight, an 18-year-old honor student who overdosed on prescription narcotics delivered to his door by an internet pharmacy based on a prescription written by a physician he had never seen. The Act amended the federal Controlled Substances Act and requires a prescribing practitioner to be physically present when prescribing, or allowing to be prescribed by a remote practitioner, a controlled substance, if the prescribing practitioner has not previously conducted an in-person physical examination of the patient. However, some have viewed the Act as establishing a significant barrier to the progress of telemedicine. In the words of former Rep. Mary Bono (R-Calif.), “the issue back then is very different from what the issue has become.”

Today, telemedicine has exploded. In just the last year, nearly every state has enacted new legislation that either expands access to telemedicine services, expands parity for reimbursement for telemedicine services, and/or loosens previous restrictions on telemedicine interactions (e.g., establishing practitioner-patient relationships) and remote prescribing. In stark contrast, the federal government has made little to no attempt to modify the antiquated Act to keep up with the telemedicine advancements since it was passed in 2008. Practitioners must now navigate their telemedicine practices around the Act since there are few exceptions to the Act and violations of the Act are considered violations of the Controlled Substances Act, which include fines, penalties, disbarment, and incarceration. With such stiff consequences and the lack of guidance or regulatory measures promulgated by the Drug Enforcement Agency, practitioners are unlikely to prescribe drugs to treat opioid-addicted patients that are most vital to their treatment.

Ironically, the World Health Organization deemed methadone and buprenorphine, two controlled substances, to be “essential medicines” in the treatment of opioid addiction. Studies have shown strong inverse linear association between heroine overdose deaths and patients being treated with opioid agonist treatments, including methadone and buprenorphine. As such, the ability to treat patients effectively through telemedicine and remote prescribing will often require prescribing drugs currently prohibited for such prescription. This realization has come to many policy makers and telemedicine organizations. Most of these individuals and organizations have called for amendment or repeal of the Act; however, one possible interpretation of the Act could allow for remote prescribing of controlled substances to treat opioid addiction under the telemedicine public health emergency declaration exemption of the Act.

Within the Act, Section 802(54)(D) (21 U.S.C. 802(54)(D)) permits the remote prescribing of controlled substances “during a public health emergency declared by the Secretary” and to the extent that the prescribing “involves patients located in such areas, and such controlled substances, as the Secretary, with the concurrence of the Attorney General, designates . . . .” On October 26, 2017, the Secretary, as directed by the President, issued the following statement regarding the public health emergency:

As a result of the consequences of the opioid crisis affecting our Nation, on this date and after consultation with public health officials as necessary, I, Eric D. Hargan, Acting Secretary of Health and Human Services, pursuant to the authority vested in me under section 319 of the Public Health Service Act, do hereby determine that a public health emergency exists nationwide.

Although a declaration of a public health emergency normally includes specific geographic parameters rather than blanket “nationwide” issuance, based upon the Secretary’s declaration, one could argue that health care practitioners seeking to treat patients dealing with opioid addiction now must only await the list of controlled substances (to be issued by the Secretary and the U.S. Attorney General) before they are able to remotely prescribing controlled substances to treat opioid addiction. However, even if the Attorney General were to agree with this interpretation of Section 802(54)(D)’s application and to provide a list of controlled substances that can be prescribed thereunder, 42 U.S.C. 247d only permits a declaration of a “public health emergency” to be in place for a maximum of 90 days. Therefore, utilizing Section 802(54)(D) to allow remote prescribing to treat opioid addiction through telemedicine will only serve as a temporary patch, while the bigger issue of amending the Ryan Haight Act needs to be addressed by Congress. In the words of Ms. Bono, “if the Ryan Haight Act needs to be updated, then let’s update it.”

You need not spend much time reading the news to know that recent Hurricanes Harvey and Irma have disrupted the lives of tens of thousands of individuals, many of whom may already have behavioral health needs; however, the trauma caused by these recent natural disasters, and others, has created an immense need for additional behavioral and mental health services. For example, a 2012 study entitled “The Impact of Hurricane Katrina on the Mental and Physical Health of Low-Income Parents in New Orleans” reported elevated rates of incidence of Post-Traumatic Stress Disorder (“PTSD”), depression, and a need for mental health services for as much as 50 percent of the low-income population affected by Hurricane Katrina, which hit in August 2005. A Fortune Magazine article reported elevated incidences of PTSD, depression, and anxiety experienced by victims of Hurricane Sandy, which hit in October 2012. In the wake of Hurricane Harvey, some telehealth providers have offered free telehealth services to hurricane victims and a few behavioral health providers have established specific programs focused on providing access to behavioral health services. However, additional services are still needed to treat the long-term mental health needs of these victims.

Providers of health services, especially behavioral health services, who utilize telehealth technologies to treat and diagnose victims of natural disasters, should be acutely aware of certain limitations in state laws that may create liability associated with the services they are providing. Treating victims of natural disasters through telehealth technologies can be difficult because a treating provider must determine the patient’s home state and quickly assess how this may affect the provider’s ability to treat the patient; yet, answering this seemingly simple question can be extremely difficult given the uncertainty and displacement for many in the wake of a natural disaster. Consider the following examples involving Amanda, a Houston resident driven from her home by Hurricane Harvey who has decided to seek the services of a psychologist to deal with the significant emotional and psychological upheaval caused by the recent events:

  • Scenario #1: Amanda’s Houston home has been destroyed, so she purchases a new home in another state. In this scenario, a psychologist treating Amanda must be licensed to practice in the new state where Amanda now lives.
  •  Scenario #2: Amanda’s Houston home is damaged, but is not destroyed, so she plans to move back to Houston once the home has been repaired. In the interim, Amanda moves in with family located in Indiana. Ind. Code § 25-1-9.5-7(b) is fairly clear in that a “Telemedicine Provider Certification with the Indiana Professional Licensing Agency . . . [is required] before the provider may establish a provider-patient relationship or issue a prescription for an individual located in Indiana.” Thus, a psychologist treating Amanda must be licensed to practice in Indiana.
  •  Scenario #3: Amanda’s Houston home is damaged, but is not destroyed, so she plans to move back to Houston once the home has been repaired. In the interim, Amanda moves in with family located in West Virginia. W. Va. Code § 30-21-3 allows a psychologist to practice up to ten days per year without seeking licensure or providing any notice to the State. Therefore, Amanda could seek limited treatment from an out-of-state psychologist; however, the psychologist must become licensed in West Virginia if the repairs to Amanda’s home cannot be completed (and, thus, she does not move back to Houston) before her eleventh day of treatment. Please also note that this law pertains to psychologists, only; if Amanda seeks treatment from a psychiatrist or a therapist, different West Virginia laws and regulations may apply.

The question that must be addressed at the very onset of taking on a new patient, or learning that an existing patient has moved, is whether the provider is even permitted by law to treat the patient utilizing telehealth technologies. If the telehealth program through which the provider is treating the patient is only established in one or a few states, the provider may lack the proper professional licensure to provide treatment to patients who move, or even temporarily relocate, to a different state.  Some states, like Washington, have special temporary provisions that will allow a provider to treat patients residing in the state without requiring that the provider obtain a full and unrestricted license to practice; however, many more states do require that providers obtain full and unrestricted licenses to practice in the state before the provider may treat any patients who are residing in the state, even temporarily.  Some states, like West Virginia, may establish a “middle ground” by allowing for limited treatment of patients without having a full and unrestricted license to practice in the state.

Even if a physician has the proper professional licensure to treat a patient residing in a given state, the provider also must understand what the state requires the provider to do in order to establish a physician-patient relationship, as well as any limits placed on the provider’s ability to treat the patient using telehealth technologies under the state’s relevant laws. For example, in Arkansas, a physician-patient relationship may not be established through telehealth means.  Ark. Code Ann. § 17-80-118(e)(1) requires the treating telehealth physician to either already have a relationship with the patient or to act in concert with another provider who has established such a relationship with the patient.  Yet, the opposite is true in other states, including California, where a physician-patient relationship may be established through telehealth means to the extent that the physician can conduct an examination of the patient (utilizing telehealth technology) that is sufficiently comprehensive for the treatment being provided to the patient. Additionally, the treating physician must ensure that any medication she/he prescribes through telehealth encounters can be prescribed under the state’s remote prescribing laws. Most states require that an in-person visit has occurred between the physician and the patient before certain classes or schedules of drugs may be prescribed. This is further complicated by the fact that states often differ with regard to how they schedule these drugs. As a result, a physician may not be able to newly prescribe or help a patient maintain an existing prescription using certain prescription-only drugs, if the patient moves to a state with these types of restrictions in place.

In spite of these potential regulatory obstacles, behavioral health providers have tough choices to make between managing the potential risks of non-compliance with treating victims of natural disasters who can benefit greatly from having access to behavioral health services. Providers can consider options such as establishing questionnaires that request even temporary or part-time address information from patients, so that the providers have this information at the outset of their interactions with the patient rather than learning this information during the initial (or later) therapy sessions. Providers would then have the option to consult counsel or directly discuss the issue with state regulators, if the application of state laws of one possible “home state” could potentially limit or change how the provider would treat the patient, or to give providers the option of seeking a professional license from any additional states in order to provide services to such patients in a compliant manner.

Epstein Becker Green released an Appendix to its “50-State Survey of Telemental/Telebehavioral Health (2016)” with new and updated analysis on the laws, regulations and regulatory policies affecting the practice of telemental/telebehavioral health in all 50 states and the District of Columbia. Since the Survey was released in 2016, states have been incredibly active in their legislative efforts with respect to the provision of telehealth services. As a result, EBG again conducted extensive research to share relevant changes with providers and consumers who are navigating this complex legal and regulatory landscape.

To access the 2017 Appendix, click here. To access the 2016 50-State Survey of Telemental/Telebehavioral Health, click here.

Pursuant to the 21st Century Cures Act of 2016, Congress mandated the Medicare Payment Advisory Commission (“MedPAC”) to provide a report to Congress by March 15, 2018, in which MedPAC has been asked to answer the following questions:

  1. Under the Medicare Fee-for-Service program (Parts A and B), what is the current coverage of telehealth services?
  2. Currently, what coverage do commercial health plans offer for telehealth services?
  3. In what ways can the Medicare Fee-for-Service program adopt some or all the telehealth service coverage presently found in commercial health plans?

Earlier this month, at the MedPAC public meeting, the Commission presented a general summary regarding the first of these three questions, specifically the Medicare Fee-for-Service program’s current coverage of telehealth services. MedPAC examined four different aspects of the Medicare Fee-for-Service program that currently address coverage of telehealth services: (1) the Medicare Physician Fee Schedule; (2) other Fee-for-Service payment models within the Medicare program (e.g., inpatient / outpatient hospital services); (3) the Medicare Advantage program; and (4) the Centers for Medicare & Medicaid Innovation initiatives.

Medicare Physician Fee Schedule (“PFS”). Presently, Medicare PFS coverage of telehealth services is the most constrained because of the concern of overutilization from volume incentive. Unlike other fee-for-service models utilized by the Medicare program (e.g., MA program, CMMI initiatives) there is no associated cost risk to providers who utilize telehealth services under the Medicare PFS (i.e., no fixed payment, no cap constraints); therefore, the Medicare PFS contains comparatively strict parameters that must be met in order for Medicare to provide reimbursement for telehealth services. For example, the Medicare PFS only covers telehealth services that originate in rural areas and that are performed at one of several specific types of facilities. Furthermore, the Medicare PFS only will cover two types of telehealth modalities, two-way video (synchronous), and store-and-forward (asynchronous) technology, and the latter of these only if services are provided to Medicare beneficiaries residing in Alaska or Hawaii. The Medicare PFS has designated telehealth FFS codes for limited physician services, including office visits, mental health services, substance abuse treatment, and pharmacy management services. Under the Medicare PFS telehealth services also may be included in larger fixed payments that resemble remote patient monitoring activities (e.g., transitional care management services, chronic care management services) as well as through bundled payments for such things as the 90-day global surgery bundle and payments for cardiac monitoring devices. Interestingly, because some of these services (despite being provided via telehealth modalities) are not part of the official Medicare PFS list of telehealth FFS codes, they are not constrained by the current Medicare PFS rules and requirements for provision of telehealth services (e.g., originating site rules).

Other Medicare Fee-For-Service (“FFS”) Payment Models. Within the Medicare program, various other FFS payment models exist for provision of services to beneficiaries, with respect to services including inpatient/outpatient hospital services, skilled nursing facilities (“SNFs”), inpatient rehabilitation facilities (“IRFs”), dialsysis facilities, and long-term acute care hospitals (“LTACHs”). In contrast to the Medicare PFS rules and requirements for provision of telehealth services, Medicare coverage of telehealth services under these other Medicare FFS payment models has been more flexible because both providers and health plans bear risk if the cost of a beneficiary encounter exceeds the fixed payment for that encounter. Under these Medicare FFS payment models, providers are incentivized to use telehealth services only if doing so would reduce the cost of providing the services. Although under most of these other Medicare FFS payment models, providers may include the costs associated with telehealth services costs on their annual cost reports as allowable costs, there are some exceptions to this general rule (specifically, home health agencies and hospice agencies) that may not include these costs on their annual cost reports.

Medicare Advantage (“MA”) Program. Under the MA program, payments to health plans are capitated and health plans must provide coverage for any telehealth services that are covered under the existing Medicare PFS, so as a result coverage for these services under the MA program also is constrained by the same PFS rules and regulations described above. However, by contrast, the MA program extends to these health plans the flexibility to finance coverage of additional telehealth services through a supplemental premium or their rebate dollars. Although the telehealth services offered by these health plans (as supplemental benefits) may not be built into the bids these health plans submit to the MA program, any savings from the health plans’ use of such services can be captured by the health plans in their required reporting to CMS. Similar to FFS, there is an incentive to use telehealth service if it reduces costs.

Center for Medicare and Medicaid Innovation (“CMMI”) Initiatives. Through the CMMI, selected pilot programs have been given waivers by CMS to incorporate the use of telehealth services beyond what is currently permitted through the Medicare PFS rules and regulations. For example, some accountable care organizations (“ACOs”), known as the “Next Generation ACOs”, have received CMMI waivers to use telehealth services in urban settings and/or beneficiaries’ homes (contrary to current Medicare PFS coverage rules and requirements). Other ACOs have received CMMI waivers allowing physicians to receive Medicare FFS payment rates for telehealth visits while the ACO remains at risk for beneficiaries’ total spending. Many of the telehealth initiatives made possible by these CMMI waivers have arguably created greater incentive for Medicare providers to utilize telehealth service if they can have the effect of curbing associated costs.

At the recent meeting MedPAC also reported, based on the limited data currently available, on beneficiary utilization of telehealth services under the Medicare PFS. According to MedPAC, in 2016 approximately 0.3 percent of all Medicare beneficiaries (for Part B) utilized telehealth services, amounting to approximately $27 million for just over 300,000 encounters in total. MedPAC noted that the most common telehealth services utilized by Part B beneficiaries in 2016 were basic office visits, mental health services, and follow-up care. Additionally, approximately 2,000 ESRD-related visits and 2,000 telestroke visits occurred in 2016. Although this utilization was comparatively low, MedPAC reported an increased use of telehealth services, mostly in subsequent nursing care, psychotherapy, and pharmacological management. According to MedPAC, between 2014 and 2016 the number of telehealth visits per 1,000 beneficiaries increased by approximately 79 percent, compared to an average 3 or 4 percent increase for all Medicare physician services within that same two-year period. Also, MedPAC noted that telehealth users were disproportionately dually eligible (for Medicare and Medicaid), located in rural areas, and dealing with chronic care conditions (e.g., mental health conditions, diabetes, chronic obstructive pulmonary disease).

MedPAC will continue its examination of telehealth services by addressing the latter two questions in the following two months, with the intention to review the entirety of its findings in January 2018 (prior to publishing the March 2018 report). Although MedPAC’s upcoming meetings most likely will focus (with respect to telehealth services) on its June 2016 report findings, the Commission hopefully will start to combine its current examination of telehealth services with its June 2016 recommendations to policymakers regarding telehealth (e.g., expanding Medicare PFS coverage of telehealth services).

Throughout the campaign season and the first months of Donald Trump’s presidency, the current Administration has voiced a commitment to furthering telehealth advancement. For example, during the campaign, then-candidate Trump emphasized the importance of telehealth tools in reforming the U.S. Department of Veterans Affairs (“VA”). More recently, both U.S. Department of Health and Human Services Secretary Tom Price and Centers for Medicare and Medicaid Services Administrator Seema Verma stated in their confirmation hearings that they were interested in promoting the use of telehealth technology. On Thursday, August 3, 2017, VA Secretary Dr. David Shulkin, joined by President Trump, took steps towards fulfilling this commitment, announcing three telehealth initiatives aimed at improving access to and quality of care for veterans.

First is a forthcoming regulation that Secretary Shulkin referred to as “Anywhere to Anywhere VA Healthcare.” Under current law, VA practitioners may provide in-person health care services in any state, as long as they are licensed in one state, without needing additional professional licensure. This proposed regulation would expand the ability to engage in multistate practice to VA practitioners who are providing telehealth services. Anywhere to Anywhere VA Healthcare, if enacted, would authorize VA practitioners to serve veterans using telehealth technologies, regardless of the locations of the provider or the patient, as long as the VA practitioner maintains a valid professional license in good standing in at least one state.

The second telehealth initiative discussed during last week’s announcement is an app titled “VA Video Connect” that allows veterans to connect with health care providers via secure and web-enabled video on their smartphones or computers. Currently, VA Video Connect is being used by 300 VA providers in 67 hospitals, and the VA intends to roll-out the app nationwide over the course of the next year. The third telehealth initiative discussed is another app, titled “Veteran Appointment Request App” or “VAR App.” The VAR App enables veterans to use their smartphones, tablets, or computers to schedule or modify appointments at VA facilities. The VAR App is currently available at some VA locations, but now the VA has planned a nationwide roll-out.

Last week’s announcement of these telehealth-focused initiatives was met with praise from many, including leading telehealth advocacy organizations such as the American Telemedicine Association and Health IT Now. The VA has long been at the forefront of telehealth progress, including being an early adopter of telehealth technology, piloting telehealth programs as early as the 1990s, and pioneering much of the progress being made in telehealth care coordination. As the largest telehealth program in the country, the VA continues to be a leader in the telehealth space. Last year alone, 700,000 veterans received telehealth services through the VA. For more information about the VA Telehealth Program, visit VA Telehealth Services.

Updates to OIG FY 2017 Work Plan

The United States Department of Health and Human Services (“HHS”) Office of the Inspector General (“OIG”) recently updated its FY 2017 Work Plan. Traditionally, OIG’s annual Work Plan has given health care providers a preview of OIG’s enforcement priorities. With the OIG now making updates to its Work Plan on a monthly basis, providers stand to gain even more insight into how the focus of OIG is constantly shifting in order to assist in the identification of significant compliance risk areas.

In this most recent set of updates to the FY 2017 Work Plan, OIG announced that it will conduct a review of Medicare claims paid for telehealth services in FY 2017. Specifically, OIG is interested in reviewing claims for telehealth services provided at “distant sites” (i.e., the location of the provider of the telehealth service) that do not correspond with claims from an “originating site” (i.e., the location of the patient). By undertaking this review, presumably OIG seeks to verify that providers of telehealth services are: (1) appropriately rendering these services to Medicare beneficiaries based on current reimbursement rules under Medicare for provision of telehealth services (i.e., the beneficiary is at a valid originating site when receiving the telehealth service, which under current Medicare rules does not include a beneficiary’s home), and (2) not submitting fraudulent claims for telehealth services (i.e., services delivered outside of Medicare’s coverage and reimbursement scope). OIG’s review of these claims may demonstrate the need to update Medicare’s outdated coverage and reimbursement provisions for telehealth services.

Medicare’s Current Coverage of and Reimbursement for Telehealth Services

Compared to ever-expanding coverage of and reimbursement for telehealth services in individual states, as well as the private insurance market, Medicare Part B beneficiaries currently have limited access to telehealth services due to the following restrictions:

  1. Medicare beneficiaries only have access to telehealth services transmitted using an “interactive 2-way telecommunications system (with real-time audio and video).” This definition excludes three frequently used modalities used by providers to deliver telehealth services: (a) store-and-forward technology (with the limited exceptions of CMS demonstration projects ongoing in Alaska and Hawaii), (b) remote patient monitoring (“RPM”) services, and (c) mobile health / wearable technology.
  2. Medicare confines telehealth coverage to “rural health professional shortage area[s].” This geographic restriction is federally defined.
  3. Medicare beneficiaries only may receive telehealth services while physically situated at one of eight “originating site[s],” none of which include the patient’s home—those living in geographically-restricted areas are still obligated to access a medical originating site in order to activate Medicare coverage.
  4. Only eight types of practitioners may deliver the telehealth services to Medicare beneficiaries, and must do so from a qualified “distant site.”
  5. The Centers for Medicare & Medicaid Services (“CMS”) publishes a limited number of HCPCS and CPT codes for telehealth services, and while this universe of codes has gradually increased over time, most of these codes are geared towards reimbursement for behavioral health services delivered through telehealth.

Current Legislative Efforts in Congress

In recent years, federal lawmakers have been working to lessen the constraints on Medicare Part B coverage of and reimbursement for telehealth services.

In August 2016, HHS published a Report to Congress on “E-Health and Telemedicine.” In this report, HHS expressed its support for telehealth expansion and its importance in the health care industry: “[T]elehealth holds promise as a means of increasing access to care and improving health outcomes.” Congress has seemed to take note. In the 2017–2018 legislative session, four key bills have been introduced that, if passed, would improve coverage of and reimbursement for telehealth services under Medicare:

  • The CHRONIC Care Act of 2017 (S. 870) would make four key changes to Medicare: (1) provide coverage and reimbursement for RPM delivery of home kidney dialysis assessments; (2) provide nationwide coverage and reimbursement for “telestroke” consultations (not just those that occur in rural hospitals or other originating sites); (3) eliminate the geographic restriction of an originating site for Accountable Care Organization (“ACO”) beneficiaries, thus allowing patients to receive home telehealth services; and (4) allow Medicare Advantage plans to offer telehealth benefits in annual bid amounts, instead of using rebate dollars to pay for telehealth as a “supplemental service.” The CHRONIC Care Act recently received a favorable, budget neutral Congressional Budget Office (“CBO”) score—alleviating a traditionally difficult roadblock for telehealth legislation.
  • The Medicare Telehealth Parity Act of 2017 (H.R. 2550) would provide an incremental expansion of coverage for telehealth services under Medicare by expanding the number of acceptable geographic locations for telehealth coverage under three “phases.”
  • The CONNECT for Health Act of 2017 (H.R. 2556) includes provisions that would expand coverage and reimbursement of telehealth services for (1) ACO enrollees, (2) individuals receiving kidney dialysis therapy, (3) stroke patients, and (4) RPM services for beneficiaries needing chronic care and would lift restrictions on telehealth for mental health services.
  • The HEART Act (H.R. 2291) aims to increase Medicare coverage of telehealth services, including coverage and payment for store-and-forward services delivered to “any telehealth services that are furnished from a distant site, or to an originating site, that is a critical access hospital . . ., a rural health clinic . . ., or a sole community hospital” and for home-based monitoring of congestive heart failure and chronic obstructive pulmonary disease. These three bills have not yet been scored by the CBO.

While it remains to be seen whether any of these bills (or any others) will become law, the level of legislative activity still is promising—and particularly so in conjunction with HHS’s support for telehealth—that expansion of telehealth coverage and reimbursement under Medicare can make greater strides toward improving access to these services for Medicare beneficiaries.

Added to this, OIG’s recent updates to the FY 2017 Work Plan to include a review of telehealth reimbursement claims under Medicare may further accelerate this process if OIG identifies any pertinent potential risk areas related to provision of telehealth services.

This post was written with assistance from Matthew Sprankle, a 2017 Summer Associate at Epstein Becker Green.

Private payer parity laws generally require private insurers and health maintenance organizations to cover, and in some cases also reimburse, for the provision of telehealth services in the same manner and at the same level as comparable in-person services. These laws are enacted at the state level, creating a complicated framework within which insurers must operate. At this point, most states have implemented some form of private payer parity law, although the specifics of each state’s laws vary. One of the most common is a rule such as Montana’s, which requires insurers to offer coverage for health care services provided by a health care provider by means of telemedicine if the services are otherwise covered by the plan. Some states, like Iowa, only mandate parity within their Medicaid programs without extending the mandate to private payers. Other states only require parity for certain types of services, like mental health services in Alaska. Lastly, Illinois and Massachusetts, require parity only when insurers opt to provide telehealth services.

In the 2017 legislative session thus far, two more states have enacted private payer parity laws. In April, North Dakota enacted its law, SB 2052, which prohibits policies that provide health benefits coverage to be delivered, issued, executed, or renewed that do not provide coverage for health services delivered by means of telehealth. Although SB 2052 does not require reimbursement for telehealth to match in-person services, it does permit establishing reimbursement for telehealth services through negotiations conducted by the insurer with the health services providers in the same manner as used for in-person services. At the end of June, New Jersey passed its law, requiring health benefits plans to “provide coverage and payment for health care services delivered to a covered person through telemedicine or telehealth, on the same basis as, and at a provider reimbursement rate that does not exceed the provider reimbursement rate that is applicable, when the services are delivered through in-person contact and consultation in New Jersey.” Pennsylvania’s bill, prohibiting a health insurance policy or ancillary service plan from excluding a health care service for coverage solely because the service is provided through telemedicine, is still pending.

Recent efforts in other states to enact telehealth private payer parity laws have not been as successful. A number of parity bills died in the last legislative session, including in Iowa, Kansas, Idaho, and Massachusetts. A bill in Florida that would have created tax credit for health insurers and health maintenance organizations that cover telehealth services also failed. At present, 15 states do not yet mandate private payers to cover and reimburse telehealth services at the same level as in-person health care services. In addition to the aforementioned, Alabama, Illinois, North Carolina, Ohio, South Carolina, South Dakota, Utah, Wisconsin, West Virginia, and Wyoming all lack such laws or regulations.

We continue to track the progress of bills in state and federal legislatures. If you have questions on coverage and reimbursement for telehealth services, please reach out to Epstein Becker Green’s Telehealth & Telemedicine team to learn more about our capabilities. Additionally, we are in the process of updating our state survey on telemental health laws. Check back soon for additional details.

Telehealth continues to be a hot topic of state and federal legislatures. Texas, for example, recently joined the rest of the states in no longer requiring initial in-person visits before being able to provide telehealth services.

The Texas legislature enacted the major telehealth bill SB 1107 on May 19, 2017, and the governor signed the bill into law shortly thereafter on May 27, 2017. As reported in our prior post, Texas had considered that, if passed, this telehealth bill would allow patient-physician relationships to be established via telemedicine without requiring an initial in-person visit. Prior guidance from Texas Medical Board required an in-person physician-patient interaction before a visit via telehealth, specifically in prescribing medication. The Texas Medical Board’s telemedicine FAQs are being revised as a result of this enacted law.

This law’s enactment would also effectively bring to an end the years long battle between a telehealth provider and Texas Medical Board. In 2015, a telehealth provider brought legal action against the Texas Medical Board and its telehealth restrictions. This litigation was twice stayed to allow for such a resolution to occur.

Additionally, the Federal Trade Commission was investigating the Texas Medical Board for possible antitrust violations due to its guidance that restricted the practice of telemedicine and telehealth in Texas. However, on June 21, 2017, the Federal Trade Commission announced that it will close its investigation into the Texas Medical Board as a result of the Texas legislatures enacting the law that overrode the board’s telehealth restrictions.

This Texas telehealth law is important because of the large telehealth market that Texas represents. The passage of this law removes the hurdle to allow telehealth providers to start operating or expand operations in the state with the second largest population in the nation.

We continue to track the progress of bills in state and federal legislatures. If you have questions on the provision of telehealth services- in Texas or any other state- please reach out to Epstein Becker Green’s Telehealth & Telemedicine team to learn more about our capabilities. Additionally, we are in the process of updating our state survey on telemental health laws. Check back soon for additional details.

At the American Telemedicine Association’s (“ATA”) recent conference in Orlando, a panel of strategic investors discussed the growth of the telehealth industry. The panel delved into topics such as the driving forces for telehealth and which telehealth programs they believe have the ability to gain traction across a broad universe of stakeholders. Based on firsthand experience with deals that have worked, and those that have not, the panel shared their insights and discussed lessons learned, which in turn provided listeners with interesting insight regarding the future of the telehealth industry.

During the conference and prior to the panel session, the panelists took time to wander through the vast ATA exhibit hall, where numerous telehealth providers and platforms showcased their offerings. The investors assessed (and discussed during the panel) three distinct models: (1) “doctors on carts” (2) software delivering a “virtual care” experience, and (3) gadgets. The panelists identified a need for differentiation in the market and recommended greater development of telehealth platforms that are additive to solutions that already exist, as well as encouraging the industry to start moving away from standalone technology. Other highlights from this interesting panel discussion follow below.

Challenges facing the telehealth industry:

According to the panel, telehealth remains a huge business and investment opportunity, but one that is still largely aspirational. One panelist described telehealth as a three-legged stool – technology, operations, and provider networks – and said challenges must be carefully evaluated at each point. In particular, from the technology side, investors must consider how potential telehealth technologies fit into existing operational structures. For example, telehealth platforms and technology targeting the post-acute space face particular hurdles because of basic infrastructure upgrades needed in many post-acute settings.

Not surprisingly, the panel identified reimbursement as one of the greatest challenges facing the telehealth industry. General sentiment among the panel members was that until utilization of telehealth increases, the reimbursement landscape for telehealth services will not meaningfully change. Other challenges to greater utilization of telehealth services include a lack of awareness of telehealth’s capabilities “in the moment” when care is being provided, unfamiliarity with telehealth capabilities by comparatively sicker and older populations (for whom utilization of telehealth might be extremely beneficial), and a perpetual perception that the telehealth industry is “stuck in pilot mode.” Health care providers have the ability to change the way care is delivered by utilizing telehealth technology; however, according to the panelists, stakeholders must continue working to raise awareness of telehealth’s benefits for both patients and providers.

What story should telehealth stakeholders tell to empower providers and payers to adopt telehealth services?

The panelists discussed the importance of “knowing the audience” to whom stakeholders are attempting to sell telehealth business ideas, particularly with regard to potential providers of and payers for these services. Demonstrating the strategic value-add that use of telehealth technology provides is key to the equation.

With respect to providers, access to care is core to their mission, and as such, stakeholders should focus on examples of telehealth services or platforms that increase patient access to care. One successful strategy may be using telehealth technology to meet patients where they want to be met – i.e., in the home – and demonstrating that the technology can deliver the needed care in a lower cost setting. With respect to payers, some believe that any increased volume of telehealth services will drive prices up, and as such, stakeholders need to have their ROI case down in order to demonstrate to payers that telehealth will not just drive volume, but rather will reduce costs and/or improve health outcomes. Notably, several of the panelists recommended that those looking to sell telehealth services and/or platforms focus most heavily on potential opportunities for partnership and collaboration.

How should telehealth providers and companies work to raise capital?

The panelists advised that telehealth providers and companies “do their homework” regarding what their technology can do to help and to enhance an existing health system, as a means toward raising capital. Telehealth companies should be prepared to pursue strategic partnerships that would allow a potential health system partner to seamlessly integrate the telehealth services and/or platform into an existing system and/or platform. Companies should push a market-centric story. The panelists advised against companies pushing the message that their telehealth technology or platform will be a “win-win” for everyone; rather, companies should be prepared to explain the losers (i.e., the competing technologies and platforms that have not worked) and how their technology and/or platform will be able to navigate around that. Companies should acknowledge there is tremendous competition in the telehealth market and should resist saying their technology or platform will be the next WhatsApp of the health care industry.

Should telehealth providers and companies focus on the patient or consumer experience?

Some in the telehealth industry have targeted consumers (i.e., tech-savvy millennials who want the convenience of virtual care) as a potential key driver of growth. However, the panelists advised that a focus on consumers may not be beneficial to the telehealth industry. Interestingly, some panelists recommended that the telehealth industry actually pursue the sickest patients who consume the most health care services and, in turn, drive health care costs. The panelists described early but ongoing collaboration between software engineers and clinicians, in pursuit of looking for the right types of patients to target within specialties such as dermatology, wound care, and behavioral health. The panelists felt there is a compelling ROI case with regard to bringing telehealth to these populations.

How will the telehealth industry evolve and what are the most promising investment opportunities?

When asked to look ahead to what the future may hold, the panelists recommended thinking less of telehealth as a technology and more about how telehealth integrates into consumer solutions. The future of telehealth should focus on how tools enable us to change the delivery system and sites of service, so that many health care services can be shifted from being provided at “brick and mortar” sites like hospitals, to being provided at more convenient and less expensive sites of service such as patient’s homes, cars, on the phone, etc. The panelists discussed that another significant evolution in the telehealth space is providers that are building their own telehealth solutions in-house. Finally, the panelists reiterated that greater development of technology and platforms that manage particular high utilization populations, like those with chronic care conditions, also provide growth opportunities. According to the panelists, the major specialty growth areas within telehealth include tele-ICU, tele-stroke, and tele-behavioral health.

Finally, the panelists advised that investors target potential telehealth offerings that are marketed well and that provide a good patient experience, as these tend to be indicators that will convince health plans to sign on. Furthermore, technology and platforms that are easy to use will have the best chance at widespread adoption.

The Information Sharing and Analysis Organization-Standards Organization (ISAO-SO) was set up under the aegis of the Department of Homeland Security pursuant to a Presidential Executive Order intended to foster threat vector sharing among private entities and with the government. ISAOs are proliferating in many critical infrastructure fields, including health care, where cybersecurity and data privacy are particularly sensitive issues given HIPAA requirements and disproportionate industry human and systems vulnerabilities. Therefore, in advising their companies’ management, general counsel and others might benefit from reviewing the FAQ’s and answers contained in the draft document that can be accessed at the link below.

Announcing the April 20 – May 5, 2017 comment period, the Standards Organization has noted the following:

Broadening participation in voluntary information sharing is an important goal, the success of which will fuel the creation of an increasing number of Information Sharing and Analysis Organizations (ISAOs) across a wide range of corporate, institutional and governmental sectors. While information sharing had been occurring for many years, the Cybersecurity Act of 2015 (Pub. L. No. 114-113) (CISA) was intended to encourage participation by even more entities by adding certain express liability protections that apply in several certain circumstances. As such proliferation continues, it likely will be organizational general counsel who will be called upon to recommend to their superiors whether to participate in such an effort.

With the growth of the ISAO movement, it is possible that joint private-public information exchange as contemplated under CISA will result in expanded liability protection and government policy that favors cooperation over an enforcement mentality.

To aid in that decision making, we have set forth a compilation of frequently asked questions and related guidance that might shed light on evaluating the potential risks and rewards of information sharing and the development of policies and procedures to succeed in it. We do not pretend that the listing of either is exhaustive, and nothing contained therein should be considered to contain legal advice. That is the ultimate prerogative of the in-house and outside counsel of each organization. And while this memorandum is targeted at general counsels, we hope that it also might be useful to others who contribute to decisions about cyber-threat information sharing and participation in ISAOs.

The draft FAQ’s can be accessed here: https://www.isao.org/drafts/isao-sp-8000-frequently-asked-questions-for-isao-general-counsels-v0-01/