State and Federal Regulatory Issues

The SUPPORT for Patients and Communities Act (“the Act” or “the SUPPORT Act”), signed into law by President Trump on October 24, 2018, is intended to combat the growing opioid crisis in the United States. The Act aims at preventing opioid addiction and misuse and enhancing access to care for those who have substance use disorders.

A key aspect of the Act is the expanded Medicare coverage of telehealth services to beneficiaries in their home (see Section 2001 of the Act). Currently, and historically, Medicare has restricted coverage of telehealth services to beneficiaries who reside within certain geographic rural areas and who seek such services at specific “originating sites” (patient beneficiary’s home is not included in the current Medicare definition for “originating site”). The Act amends 42 U.S.C. § 1395m(m) to eliminate these coverage restrictions for “an eligible telehealth individual with a substance use disorder diagnosis for purposes of treatment of such disorder or co-occurring mental health disorder, as determined by the Secretary [of Health and Human Services].” With this amendment in place, health care providers may now be reimbursed for providing eligible substance use disorder services to Medicare beneficiaries in their homes via telehealth. Although the Act does not provide for any “facility fee” reimbursement for telehealth services provided to beneficiaries in their homes, the Act requires reimbursement be provided to physicians and other health care practitioners furnishing these services at the same rate as they would otherwise receive if providing the same services in-person.

It is important to note that while Section 2001 of the Act takes effect on July 1, 2019, it authorizes the Secretary of the U.S. Department of Health & Human Services (“Secretary”) to implement these amendments immediately by creating a final interim rule.  The Act also mandates that the Secretary report on the impact of this legislation on: (1) the health care utilization (and in particular, emergency department visits) related to substance use, and (2) “health outcomes related to substance use disorders,” including opioid overdose deaths. The Act provides $3 million to the Centers for Medicare & Medicaid Program Management Account in order to carry out these reporting requirements, which must be completed within five years.

Another key aspect of the Act mandates that the U.S. Attorney General (“Attorney General”) promulgate final regulations that specify (1) “the limited circumstances in which a special registration under this subsection may be issued” and (2) “the procedure for obtaining a special registration.” Under 21 U.S.C. 831(h), as amended by The Ryan Haight Online Pharmacy Consumer Protection Act of 2008 (“Ryan Haight Act”), this special registration would allow health care providers to prescribe controlled substances via telemedicine when legitimately necessary, including when an in-person evaluation is not possible. As discussed in one of our recent TechHealth Perspectives blog posts, despite the statutory mandate in the Ryan Haight Act passed more than eight years ago, the Attorney General has not yet issued any regulations or guidance on how to obtain this special registration. The Drug Enforcement Administration (“DEA”), the federal agency delegated authority to promulgate these regulations by the Attorney General, has also not promulgated any regulation or other guidance addressing special registration. The SUPPORT Act gives the Attorney General until October 24, 2019, to promulgate its final regulations on this matter.

Epstein Becker & Green plans to discuss the Act’s numerous provisions in greater detail in future Client Alerts.

The Ryan Haight Act Online Pharmacy Consumer Protection Act of 2008 (21 U.S.C. § 802(54)) (the “Ryan Haight Act” or “Act”) expanded the federal Controlled Substances Act to define appropriate internet usage in the dispensing and prescribing of schedule drugs, and in doing so effectively banned the issuance of prescriptions via telemedicine services for any controlled substances unless the ordering physician has conducted at least one in-person evaluation of the patient. The Act includes multiple exceptions that permit prescribing of controlled substances without conducting an in-person evaluation, the most relevant to the practice of telemedicine being the mandate that the Drug Enforcement Administration (“DEA”) or other federal agency establish rules for a “Special Registration” to be utilized by health care providers. However, despite the statutory mandate, since the 2008 passing of the Act neither the DEA nor any other federal agency has promulgated any regulation or other guidance regarding the development and implementation of such a Special Registration process.

Several previous TechHealth Perspectives blog posts have highlighted the pressures imposed from Congress on the DEA to promulgate the Special Registration process in the wake of the opioid crisis and the recent passage of House Bill 5483, entitled the “Special Registration for Telemedicine Clarification Act of 2018” (the “Bill”), which seeks to address the lack of regulatory guidance regarding the Special Registration exception to the Ryan Haight Act.  Ironically, the Bill would require the DEA to promulgate rules that are already required under the Ryan Haight Act to allow health care providers to apply for a Special Registration.

In the interim, state legislatures have started passing their own laws to address the issue of remote prescribing of controlled substances by telemedicine providers. State remote prescribing legislation varies widely among the states that have enacted such provisions, but generally fits into one of three categories:

Category I—Remote Prescribing is Allowed. Many states have not regulated the remote prescribing of controlled substances any differently than how the state has regulated in-person prescribing practices, or states have placed very minimal, added responsibilities on telemedicine providers seeking to do remote prescribing of controlled substances, which primarily are intended to ensure that the standard of care provided in the telemedicine delivery setting sufficiently mirrors the standard of care provided in the traditional in-person delivery setting. Examples of states that have taken this route include Arizona, Kentucky, Maine, Minnesota, Missouri, Tennessee, and Vermont.

Category II—Remote Prescribing is Prohibited. A handful of states have completely prohibited the remote prescribing of controlled substances or only permit it to occur in rare instances. Connecticut and Georgia (citation available just past verification page) are examples of two states that have adopted this approach.

Category III—Remote Prescribing is Allowed, But Additional Burdens and Barriers Are Placed on Prescribing Providers. Several states, including New Jersey, North Dakota, Oklahoma, and South Carolina, require at least one in-person appointment before a health care provider can remotely prescribe controlled substances or scheduled narcotics / medications to their patients. While these states may allow for the remote prescribing of controlled substances, there may be limits on prescribing activities, including limits on the types of controlled substances that can be remotely prescribed (and expressly prohibiting the prescribing of certain controlled substances entirely, such as opioids and certain schedule narcotics).

Regardless of which category a state may fall into, many of these states’ laws would be in direct conflict with the Special Registration exception under the Act, if it is ever formulated. That is, many states either prohibit the remote prescribing of controlled substances without an initial in-person consult, or impose more stringent conditions on remote prescribing than what is mandated under current federal law. The question is whether federal law would preempt any state law that is inconsistent with the Special Registration exception and would prohibit remote prescribing without an in-person examination even if the health care provider holds a Special Registration from the federal government.

Congress expressly retained supremacy and preemption through provisions of the Controlled Substances Act (21 U.S.C. § 903): “[n]o provision of this subchapter shall be construed as indicating an intent on the part of the Congress to occupy the field in which that provision operates, including criminal penalties, to the exclusion of any State law on the same subject matter which would otherwise be within the authority of the State, unless there is a positive conflict between that provision of this subchapter and that State law so that the two cannot consistently stand together.” The legislative intent is clear that upon the passing of the Controlled Substances Act, Congress anticipated federal and state conflicts of law and expressly directed that federal law would control. However, the drafting yields some authority to the states and is somewhat ambiguous on relevant points.

Thus, states may also regulate remote prescribing and many have taken the opportunity to do so. If the DEA or any other federal agency promulgate rules that potentially could affect any of the existing state laws pertaining to remote prescribing, the supremacy provision  in the Controlled Substances Act is sufficiently vague such that states could craft creative legal arguments providing that the federal and the state laws can consistently stand together. Currently, no entity (federal or state) has challenged any of the existing state laws as conflicting with the Ryan Haight Act or the exceptions for remote prescribing without an initial in-person examination. However, should such an action be filed, federal preemption could overrule any inconsistent state laws, rules, or regulations.

Recently, we have seen some indicia of federal preemption in the telehealth arena with the Department of Veterans Affairs asserting dominance over any state regulation and oversight of telemedicine services with the promulgation of recent regulation (38 C.F.R. § 17.417) which states in no uncertain terms that the federal rule overrides any conflicting state laws. Moreover, the notice and comments from the Department of Veterans Affairs strongly invoke federalism in this area.

Ultimately, federal law could preempt the various state laws that completely prohibit telehealth prescribing, as well as those state laws that have put in place barriers to remote prescribing that are inconsistent with the Ryan Haight Act. Upon the promulgation of the Special Registration process, if and when it may occur, each state will have to assess and address any inconsistencies with federal law in the area of remote prescribing. Of course, while the provisions in the Ryan Haight Act addressing Special Registration do not have limitations on what kind of controlled substances could be remotely prescribed without an in-person examination under the exception, the Special Registration could incorporate limitations on the type of controlled substances that can be remotely prescribed without an in-person examination (similar to current requirements in a number of states).

In the end, the DEA (or whatever other federal agency decides to address the issue of remote prescribing) will need to find a balance when developing the Special Registration process, as there are legitimate concerns surrounding how to address the opioid crisis which is at the forefront of ongoing public health discussions. The current federal stance related to the opioid abuse in this country may prompt federal regulators to turn a blind eye to any conflicting state law or, in the alternative, it may prompt the federal regulators to exercise the power to promote access to needed treatment. The federal government may have the right to preempt and enforce against state laws inconsistent with the Ryan Haight Act; however, most state laws are generally aligned with the public policy intent behind the Ryan Haight Act. Below are additional resources which will be helpful in attaining a broader understanding of the current public information on both the state and federal level concerning the Opioid Crisis:

Rebecca Francis, a Summer Associate (not admitted to the practice of law) in the firm’s Houston Office, contributed significantly to the preparation of this post.

Effective June 11, 2018, all Department of Veterans Affairs (“VA”) health care providers will be able to offer the same level of care to all beneficiaries regardless of the beneficiary’s or the health care provider’s location. In its recently released final rule, the VA stated that in December 2016 Congress mandated that the agency provide veterans with a self-scheduling, online appointment system, and that the agency meet the demands for the provision of health care services to veterans, regardless of whether such care was provided in-person or using telehealth technologies. As a general rule, most telehealth practitioners are required to comply with various and state-specific licensing, registration, and certification requirements in order to render health care services via telehealth. Failure to do so can potentially jeopardize a practitioner’s professional credentials and could expose them to penalties including fines and imprisonment for the unauthorized practice of medicine or other health care services. These state-specific requirements create certain challenges for telehealth practitioners seeking to practice across state lines.

Therefore, in order to address the mandate issued by Congress, the VA developed and published the final rule to supersede these state-to-state regulations by clarifying that VA health care providers may exercise their authority to provide health care services via telehealth, notwithstanding any state laws regarding licensure, registration, or certification requirements that might be conflicting with taking these actions. Essentially, the VA is exercising its authority as a federal agency to preempt conflicting state laws relating to the practice of medicine or other health care services via telehealth. These efforts by the VA are designed to better protect its health care providers from potential enforcement actions by individual states and/or their respective professional boards, provided that these practitioners are providing telehealth services within the scope of their VA employment.

It must be noted that the final rule’s scope is narrow and only applies to health care providers who are employed by the VA. The final rule does not cover contractors, including health care providers who are participating in the Choice Program. The final rule also does not expand the scope of practice for VA health care providers beyond what is required or authorized by federal laws and regulations or the laws and regulations relating to the practice of medicine or other health care services that are dictated by the state(s) in which the health care provider is licensed to practice. Additionally, the final rule does not affect the VA’s existing requirement that all VA health care providers must adhere to all applicable laws and regulations regarding prescribing and administering of controlled substances, which not only obligates a provider to comply with such laws in the state(s) where he/she is licensed to practice, but also with the federal Controlled Substances Act.

Among the public comments submitted in response to the VA’s proposed rule, published October 2, 2017, the Federal Trade Commission, an agency that has been a big proponent of efforts to expand access to telehealth services, applauded the amendments to the VA’s regulations, stating that it will “provide an important example to non-VA health care providers, state legislatures, employers, patients, and others of telehealth’s potential benefits and may spur innovation among other health care providers and, thereby, promote competition and improve access to care.”

Telehealth providers and stakeholders should closely follow the VA’s progress as the agency works to implement the final rule. Any resulting successes, as well as any failures, may meaningfully impact the continued expansion and adoption of telehealth technologies and services among the private and commercial sectors, as well as potentially influence continued state legislative efforts in this developing area.

In 2008, Congress passed the Ryan Haight Act (21 U.S.C. § 802(54)) (“Ryan Haight”) following the death of Ryan Haight, a young man who overdosed on prescription painkillers he purchased from an online pharmacy without a valid prescription. Ryan Haight amended the federal Controlled Substances Act (21 U.S.C. 802 et seq.) and specifically prohibits dispensing controlled substances via the internet without a “valid prescription” which, according to the law, must be issued for a legitimate medical purpose and may only be issued once a physician has conducted at least one in-person evaluation of the patient (i.e., before issuing the remote prescription for the controlled substance). Certain exceptions may apply, but arguably none contemplate the direct-to-patient virtual care models that many of today’s telehealth / telemedicine companies are utilizing.

The intent behind the enactment of Ryan Haight in 2008 was to shut down online pharmacies and to restrict access to painkillers and other controlled substances provided to patients in ways that could circumvent a physician’s examination (and the issuance of a valid prescription, if the physician determined it was an appropriate course of treatment for the patient). Unfortunately, the effect of enacting Ryan Haight was, in reality, much more significant – not only restricting access via online pharmacies to the deadliest or most addictive painkillers, but also banning the issuance of remote prescriptions for any controlled substances unless an in-person visit occurred first between the physician and the patient. What the requirements imposed by Ryan Haight ignore is that there are many more drugs in Schedules II – V that are designed to treat patients for a panoply of non-pain related illnesses, many of which can be prescribed safely and effectively by means of an appropriate telehealth encounter. While Congress largely has ignored calls to revise Ryan Haight to address this issue, some states have started to rethink how, at least at the state level, they will handle the issue of health care providers prescribing controlled substances through non-traditional treatment arrangements, such as the use of telehealth / telemedicine.

An example is Indiana, where the legislature recently amended Indiana Code 25-1-9.5-8 (in 2017) to expand the list of drugs that may be prescribed by authorized prescribers through telehealth / telemedicine. Originally enacted in 2016, the law banned the remote prescribing of all controlled substances if such prescribing was done via a telehealth / telemedicine encounter. The revised law dramatically expands the ability to prescribe, via telehealth / telemedicine, certain controlled substances, and only limits such prescribing practices with respect to opioids, abortion inducing drugs, and/or ophthalmic devices (i.e., contact lenses and glasses). The Indiana law is particularly thoughtful and timely because it excludes from the ban any opioids that act as partial-agonists are used to treat or manage opioid dependence. Therefore, the Indiana law not only expands treatment options by allowing the remote prescribing of many controlled substances, including some that can be used to treat opioid dependence disorders, but does so in a manner that attempts, discretely, to address the opioid dependence epidemic by limiting access to most opioids.

Following a similar path is Hawaii, which like Indiana has excluded the remote prescription of opioids via telehealth as well as medical cannabis. While Hawaii’s laws do not explicitly permit the remote prescription of controlled substances, the fact that Hawaii Statutes Revised § 329-1 does not distinguish between the prescribing of controlled and non-controlled substances (within the context of discussing the rules related to remote prescribing) and that Hawaii Statutes Revised § 453-1.3 only requires an in-person examination prior to prescription of opioids and medicinal cannabis, would logically support the assumption that prescribing other, less controversial controlled substances would be permissible. Like Hawaii, Florida is another state that has taken a more nuanced approach to remote prescribing of controlled substances via telehealth / telemedicine. Florida Administrative Code rule 64B8-9.0141, for example, permits the prescription of controlled substances to treat psychiatric disorders.

Simultaneously, some states also have continued to build, refine, and expand statewide databases that store information regarding the prescriptions for controlled substances written by practitioners licensed by the state. This information can help physicians and other prescribing health care providers to determine, if and when contemplating the issuance of a remote prescription to a certain patient, whether that patient may be “doctor shopping” and/or whether concomitant medications may pose a risk to a patient if he/she is prescribed a particular drug. These databases, and the laws creating and amending them, may be one reason why states are more willing to expand remote prescribing practices given these new additional safeguards.

By contrast, to date the Drug Enforcement Agency (DEA) has taken no additional steps to clarify or refine the requirements under Ryan Haight since it was enacted. When Ryan Haight was first passed, it included an exception on its applicability for prescribers who obtain a “special registration” from the Attorney General or the Administrator of DEA per 28 CFR 0.100. When Ryan Haight was passed, Congress contemplated that DEA would “promulgate regulations governing the issuance to practitioners of a special registration relating to the practice of telemedicine;” however, neither DEA nor any other agency has provided any additional information regarding this special registration since Ryan Haight was first signed into law in 2008. In 2015, DEA proposed making a rule that would provide clarity to the “special registration” exception; however, in 2016 DEA amended the proposed rule-making to a “Long-Term Action” with no set deadline, further delaying even the idea of providing additional clarity. Perhaps the DEA’s response is a reaction to states that strongly oppose providing prescribing information to other states or even to the federal government for various reasons, including privacy concerns. That is to say, perhaps states are more willing to loosen remote prescribing laws for controlled substances because the databases they control and the data provided thereunder have eased concerns with allowing prescribers to prescribe as they see fit based on the information available regardless of whether the prescriber is physically present in the same room as the patient.

In the end, and regardless of the reasons, Ryan Haight continues to be good law, meaning that it is enforceable against prescribing health care practitioners. Despite an apparent lack of actual enforcement (the last case against a physician to enforce Ryan Haight was in July of 2011), the DEA technically can choose to enforce Ryan Haight at any time. Prescribers should therefore be cautious and understand that remote prescribing of controlled substances, even within the confines of a state law, still could be considered a violation of federal law with penalties including prison, fines, and temporary or permanent loss of the prescriber’s DEA Registration. Health care providers contemplating the prescribing of any controlled substances through telehealth / telemedicine can benefit from doing diligence with the support of legal counsel to fully understand the potential impacts of Ryan Haight, relevant state laws, and the potential risk involved in such a venture before proceeding.

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.

Capitol BuildingAs requested by Congress as part of an appropriations bill signed into law late last year, this month, the Department of Health and Human Services (HHS) released a report highlighting its e-health and telemedicine efforts.  The report makes for interesting reading, and while there are no significant surprises in the report, it offers a clear snapshot of some of the agency’s thinking regarding virtual care.

The first thing I noted in the report is the agency’s view that “telehealth holds promise as a means of increasing access to care and improving health outcomes.”  This is important because it has not always been clear whether the agency views telehealth quite in the same favorable way as other stakeholders increasingly do.  The other thing I noted was the agency’s view that the various alternative payment methods currently being tested may facilitate expansion of telehealth.

Among other things, the report details some of the policy challenges faced by telehealth stakeholders:

  • Significant variability in telehealth coverage from one payer to another.
  • State licensure requirements for clinicians and the administrative burden such requirements impose on clinicians.
  • Credentialing and privileging.
  • Gaps in access to affordable broadband.

HHS indicates that many reforms are currently being tested or implemented to address these challenges. For example, in the area of reimbursement, the agency notes that it is currently testing more expansive telehealth coverage through its Next Generation ACO Demonstration, and highlights MACRA’s incentives for physicians to use telehealth.  The report references the agency’s new rule that permits the use of telehealth modalities to provide Medicaid home health services.

The report also provides an overview of telehealth-related federal activity including:

  • The number of telehealth grants administered by HRSA and SAMHSA.
  • The establishment of the Federal Telemedicine Working Group (comprised of 26 agencies and departments such as USDA and the FCC) to facilitate telehealth education and information sharing.
  • ONC developing an inventory of federal telehealth activities.
  • AHRQ providing an evidence map of the available research regarding telehealth.
  • The continued great telehealth work being done within the VA and reasons why that model may not be scalable.

Overall, the report is an illuminating but relatively unsurprising take on agency thinking.  In particular, two nuggets stood out. First, the agency appears to view chronic disease management as a particularly good fit for telehealth.  In recounting that almost half of all adults have at least one chronic illness and that chronic disease accounts for 75 percent of all health expenditures, the report concludes that telehealth “appears to hold particular promise for chronic disease management.” It goes to reason that any expansion of telehealth under Medicare will probably first focus on chronic disease management. Second, HHS signaled the importance of Medicare Advantage in any telehealth expansion effort, by including a proposal in the President’s budget request for FY 2017 to expand the ability of MA organizations to provide telehealth by eliminating otherwise applicable Part B requirements that certain services be provided only in-person.

We are pleased to present our 50-State Survey of Telemental/Telebehavioral Health (2016), published by Telehealth practice at Epstein Becker Green.

Learn more about the survey here and download your complimentary copy here.  See our full announcement below:

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As Cyber-Counseling Booms, Complex Legal and Regulatory Issues Grow;
Survey Breaks New Ground in Tracking Related Laws

WASHINGTON, DC – May 11, 2016 –Epstein Becker Green (EBG), has released a groundbreaking, comprehensive survey on the laws, regulations, and regulatory policies impacting telemental health in all 50 states and the District of Columbia. The “50-State Survey of Telemental/Telebehavioral Health (2016)” details the rapid growth of telemental health (mental health care delivered via interactive audio or video, computer programs, or mobile applications) and the increasingly complex legal issues associated with this trend.

Telemental/telebehavioral Health Survey
While other telehealth studies exist, this survey focuses solely on the remote delivery of behavioral health care. The survey was spearheaded by René Y. Quashie and Amy F. Lerman, both EBG Senior Counsel in the Health Care and Life Sciences practice in the firm’s Washington, DC, office.

“As telemental health care gains in popularity, it gives rise to a number of significant legal and regulatory issues, including privacy and security, follow-up care, emergency care, treatment of minors, and reimbursement, among other things,” said Quashie. “While some federal laws and regulations (such as HIPAA) apply, most of the issues involve state law, which has resulted in an inconsistent patchwork of laws and regulations that vary widely by state. And there are a number of states that don’t address telemental health specifically in their laws.”

Bridging the Care Gap

The survey begins with a report on the state of telemental health in 2016, highlighting its growing legitimacy (and acceptance by payers) as a treatment option, the barriers to delivery that persist, the high costs of care and prescription drugs, and insurance reimbursement parity issues.

Mental health care lends itself particularly well to remote delivery, since the provider usually need not lay hands on the patient to provide care. In addition, this method helps bridge the gap between the large numbers of Americans (about 60 million) experiencing mental illness and the significant shortage of qualified mental health care providers. Only 40 percent of Americans with mental illness report receiving treatment, and there is one mental health care provider for every 790 individuals.

The EBG survey also reports that new technologies are driving the boom in telemental health, with a significant increase in mobile applications related to mental health (now almost 6 percent of all mobile health apps) and another 11 percent devoted to stress management. There is also a growing number of companies providing “text therapy” services, which allow users, for a flat-rate fee, to text chat with any number of licensed mental health providers.

“Accessing mental health care is a significant challenge for most Americans, with wait times to see a provider measured in weeks and months, rather than days. In addition to long wait times, distance, cost, and stigma present significant barriers to getting care. These are all challenges that telemedicine is uniquely equipped to solve,” said Dr. Ian Tong, Chief Medical Officer at Doctor On Demand.

Deep Dive into Legal Issues

The survey provides a detailed state-by-state analysis of legal issues related to telemental health, such as:

  • Definitions of “telehealth” or “telemedicine”
  • Licensure requirements
  • Governing bodies
  • Reimbursement and coverage issues
  • The establishment of the provider-patient relationship
  • Provider prescribing authority
  • Accepted modalities for delivery (e.g., telephone, video) to meet standards of care

There is also comprehensive data tracking telehealth legislation and rulemaking in progress for each state. Highlights include the following:

  • 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 New York, psychologists may engage in telepractice so long as, among other things, they obtain informed consent from patients describing the benefits and risks of telepractice, and they conduct an initial assessment of each client to determine whether telepractice is appropriate.
  • 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 apparent 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 to create a policy on how soon an individual can expect a response from the physician to questions or other requests included in transmission.

“As telemental health continues to grow and evolve, it will increasingly be viewed as a viable solution by clinicians, payers, and policymakers,” said Lerman. “At the same time, legal and regulatory issues will continue to proliferate. The survey breaks new ground for anyone navigating this multifaceted legal landscape.”

In addition to Mr. Quashie and Ms. Lerman, EBG attorneys Jonathan K. Hoerner, Bonnie I. Scott, James S. Tam, and Meghan F. Weinberg contributed to the survey.

Click here to download the survey.

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About Epstein Becker Green

Epstein Becker & Green, P.C., is a national law firm with a primary focus on health care and life sciences; employment, labor, and workforce management; and litigation and business disputes. Founded in 1973 as an industry-focused firm, Epstein Becker Green has decades of experience serving clients in health care, financial services, retail, hospitality, and technology, among other industries, representing entities from startups to Fortune 100 companies. Operating in offices throughout the U.S. and supporting clients in the U.S. and abroad, the firm’s attorneys are committed to uncompromising client service and legal excellence. For more information, visit www.ebglaw.com.

International TelemedicineAs 2015 winds down, I think it is safe to say that it has been a whirlwind year in telehealth.  According to the National Conference of State Legislatures (NCSL), over 200 telehealth-related bills were introduced in 42 states.  The Federation of State Medical Boards (FSMB) has launched an interstate physician licensure compact that creates a new pathway to expedite physician licensure in multiple states.  Twelve states (with Wisconsin being the latest) have so far enacted the licensure compact.  Many states such as Colorado, Iowa, and Louisiana released regulations or policies that in my view took a more progressive approach to telehealth regulation.

Activity has not just been limited to the states.  Congress has introduced a number of telehealth-related bills such as the TELE-MED Act of 2015 which permits certain Medicare providers licensed in a state to provide telemedicine services to certain Medicare beneficiaries in a different state without having to be licensed in that state.  In addition, a number of reports, surveys, and white papers have been published on all aspects of telehealth.  After many false dawns, telehealth has truly arrived.  But many issues remain to be addressed.

Now we look forward to a new year.  What can we expect?  In addition to a continuation of what has occurred in 2015, there are a few other issues and/or trends that bear watching.  Here are a few:

The Rise of Compacts to Address Licensure Issues

The use of compacts to address licensure issues will continue to gain steam in 2016.  I have already mentioned FSMB’s interstate physician licensure compact.  As many of you know, nurses (RNs and LPNs/VNs) have long had a licensure compact in which a nurse who declares a compact state as his or her primary state of residence can practice (physically and remotely) in other compact states without having to obtain another license.  There are 25 states that are members of the nurse compact.

Other providers are getting in on the act.  Recently, the National Council of State Boards of Nursing, a non-profit association comprising 59 boards of nursing, released a draft compact for advanced practice registered nurses (e.g., nurse practitioners).  The draft APRN compact essentially follows the framework of the nurse licensure compact allowing APRNs to practice in any participating state with just once license. One interesting change in the draft APRN compact not included in the nurse compact is the requirement that states “implement procedures for considering the criminal history records of applicants for initial APRN licensure.”  I expect a number of states to enact the APRN compact in the coming years.

Note that psychologists, physical therapists, counselors, and EMS personnel are just a few of the provider groups that have considered or are considering compact models in some fashion.

Telehealth Accreditation

While there have been some accreditation programs that have touched on telehealth, I believe that 2016 will be the year in which telehealth accreditation takes on new significance.  Two recent examples highlight my point.  About a year ago, the American Telemedicine Association launched an accreditation program for online consultations in which ATA accredits organizations that provide online, real-time health services complying with certain standards.  Among the examples the ATA offers of what kind of the kind of organizations the program would accredit is an employer providing its employees with online, real-time telehealth services.

More recently, URAC, a longstanding accrediting organization, has launched its own telehealth accreditation program for providers involved in consultations with facilities, consumers, and other health care providers through televideo and other electronic methods.  URAC’s accreditation standards were developed by an expert panel that included health systems, hospitals, health plans, telemedicine companies, and academic medical centers.

The Voice of Large Employers

I believe 2016 will be the year large employers will be heard loud and clear in the telehealth regulatory debates that are sure to take place.  The fact is many Americans receive their health insurance through their employers.  And, according to the National Business Group on Health, 74 percent of large employers are expected to offer telehealth in 2016 compared to 48 percent in 2015.  Given the important role employers play in health care, and how telehealth is increasingly being used by employers, it is only logical that employers would ultimately play a significant role in our ongoing telehealth regulatory debate.

One group is leading the charge.  The ERISA Industry Committee (ERIC), the only nonprofit national association advocating solely for the employee benefit and compensation interests of the country’s largest employers, earlier this year launched a telehealth initiative to promote policies that facilitate access to telehealth for employees to have expanded access to health care services.  ERIC will be actively involved in the major telehealth discussions that occur next year both at the state and federal levels giving large employers a significant voice not usually heard from in telehealth regulatory circles.iStock_000062830618_Small

Wearable Market Poised for Breakout

As I have written before in previous blog posts, the healthcare wearables market 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. Market research is bullish.  For example, Soreon Research, a leading independent research firm, projects that the wearable healthcare market will reach $41 billion by 2020—with diabetes, obesity, sleep disorders, and cardiovascular disease as the largest growth segments in the market.  From my perspective, a combination of the ability to collect data along with big data analytics capabilities will drive this market.  And as the market booms and the technology becomes more sophisticated, legal and regulatory issues loom.  Here are a few issues of which to be mindful:

  • 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.)
  • FDA.

I have only touched on a few issues.  Other issues such as reimbursement (particularly Medicare), use of telehealth in ACOs and similar models, antitrust, use of diagnostics and peripherals, scope of practice, and privacy and security will be some of the frontline telehealth issues in 2016.  We look forward to addressing all of those issues throughout next year.

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.

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.