Month: August 2020

Yesterday, much to the dismay of lawmakers, providers, and my fellow “Stark nerds,” CMS gave itself yet-another year to finalize long-anticipated and much needed changes to regulations promulgated under the Physician Self-Referral Law (a/k/a the “Stark” law).  With this additional delay, it is now beyond question that the U.S. Department of Health and Human Services’ (HHS) so-called “Regulatory Sprint to Coordinated Care” is really more of a “mosey.” 

As currently structured, the Stark regulations and those promulgated under its cousin the Antikickback Statute (AKS) aim to prevent fraud and abuse concerns inherent in a fee-for-service based payment system (such as overutilization and overbilling). These rules were not only built for what is fast becoming an outdated system as we shift from fee-for-service to value-based payment, they actually discourage providers from pursuing innovative quality and value-based delivery and compensation models (I’ve previously described them as “analog regulations for a digital world”). And it is not tenable to mandate, by law (the Accountable Care Act, among others), that healthcare providers transition to a value-based system when the regulations still on the books inhibit them from doing so.

Recognizing this dilemma, in 2018 HHS launched its “Regulatory Sprint to Coordinated Care” with the laudable goal of reducing the regulatory hurdles prohibiting innovate value and quality-based delivery arrangements and care-coordination activities. Soon thereafter, HHS requested public comments on ways that the Stark and AKS regulations could be improved and modified to encourage care coordination and value-based care, and it seemed like things were quickly moving in the right direction. 

But then, nothing.   

It took almost a whole year from the request for comments for CMS and HHS to issue proposed rules to “modernize and clarify” the Stark and AKS regulations, which they did in October 2019.  And though the proposed rules included new value-based exceptions and safe-harbors and modified and clarified many others that are frequently relied upon by providers, many  commentators noted that the proposed changes did not go far enough to provide the relief providers needed to encourage them to explore innovate arrangements and effect systemic meaningful change. Those who voiced concerns were proven right when the COVID-19 crisis hit, and HHS had to issue blanket waivers of certain Stark law prohibitions (and corresponding yet aggravatingly-impotent AKS “enforcement discretion”) in order to permit providers to pursue innovative arrangements designed to expand care delivery to patients.  Yet despite overwhelming support for regulatory reform from all sides – including providers, facilities, patients, and policymakers – all of whom agree that paving the way for providers to participate in payment models where physicians and facilities can share financial rewards for delivering lower cost and higher-quality care, no permanent changes have yet to be made.  And so, the old “analog” rules remain in place.

Earlier this week, more than 70 members of Congress wrote to HHS and the White House Office of Management and Budget (OMB) asking them to “finalize already” (not a direct quote) the proposed Stark and AKS rule changes in order to allow for increased coordination and improved care for patients.  In response, the next day CMS issued its notice indicating that final updates to the Stark regulations would not be issued until August 2021.  Though there is no official word yet regarding timing of finalizing changes to AKS regulations, it seems likely that those efforts will be delayed as well, as the proposed Stark and AKS rule changes were proposed in tandem and in many ways are interrelated. 

We recognize that the COVID crisis necessarily delayed these processes and understand that regulators are still “working through the complexities of the issues.”  We also appreciate that regulators can exercise enforcement discretion in certain situations.  But such discretion can only go so far, and without actual, meaningful regulatory reform, providers will remain discouraged from fully and whole-heartedly pursuing value and quality-based care delivery and payment arrangements, and the costs associated with vetting innovative arrangements for compliance with antiquated regulations will continue to be incurred.  And ultimately it is patients who will suffer without fully coordinated care, and taxpayers who will bear the costs of our increasingly inefficient systems. 

We will of course continue to monitor the landscape and provide updates as soon as they are available.  But unfortunately, our hopes for regulatory reform anytime soon are fast-fading. 

It goes without saying that the COVID-19 pandemic has changed the healthcare delivery landscape in America.  Since the March 6, 2020 public health emergency declaration (PHE), providers have, out of necessity, pivoted from primarily providing services via in-person visits to providing services via telehealth modalities — so they can continue to care for patients while at the same time reducing exposing healthcare workers to the disease, preserving personal protective equipment (PPE), and minimizing the impact of patient surges on facilities.  But even though telehealth has proven so critical and useful over the last few months, the question still remains: is telehealth here to stay, or is it just another passing fad like the KE diet, or Beanie Babies??

Telehealth – which includes a broad range of technologies for providing patient care and improving healthcare delivery via “remote” means (including “telemedicine,” which is a subset of telehealth that refers solely to the provision of clinical services via interactive two-way communication) – has actually been around, in one form or another, for decades.  Over the past 10 or so years, significant technological advances have resulted in increased telehealth acceptance and usage by providers and patients alike.  It was even becoming a “hot target” for government enforcement pre-pandemic, with two large “takedowns” (in April 2019 and September 2019) related to telehealth kickbacks and other billing fraud schemes (and when something becomes the target of government enforcement actions, you know it is has become ubiquitous, as the government is often the last to the party).

But, as we previously reported back when we were much better about writing regular blog posts, pre-pandemic services delivered by telehealth modalities were only reimbursed by Medicare under limited circumstances (mostly involving rural providers and patients), and thus, were relatively underutilized.  Following the March 6, 2020 PHE declaration and CMS’ March 16, 2020 “1135 waivers” (which relaxed many of the prior restrictions on Medicare reimbursement for telehealth services), however, telehealth usage by Medicare beneficiaries and patients covered by Medicaid, as well as patients with coverage through commercial payors (who largely followed Medicare’s lead and adopted coverage and reimbursement for telehealth in alignment with federal and state mandates) boomed.  According to new data from Fair Health’s tracking tool, from May 2019 to May 2020, telehealth claim lines increased by 5,680% nationally, from 0.15% of medical claim lines in May 2019 to 8.69% in May 2020.  And though telehealth usage appears to have plateaued since May, it remains a critical tool in the providers’ toolbox as the COVID-19 crisis continues to cause havoc across the land.

Ultimately what will become of the myriad waivers and regulatory flexibilities implemented by the government post-PHE remains to be seen and is the subject of speculation and debate in the healthcare world.  Recent government actions, however, seem to suggest that many longstanding restrictions on telehealth usage and reimbursement will continue to be “relaxed” post-pandemic and may even be discontinued altogether – allowing Telehealth to become a more permanent feature of healthcare delivery in America. Specifically, in just the last few weeks, the government has taken the following important actions impacting Telehealth usage and reimbursement:

• Effective July 25, HHS renewed the COVID-19 PHE.  Had the PHE not been renewed, the pandemic-related Telehealth would have expired and things (Telehealth related things, anyway) would have gone back to “normal.” With this most recent renewal, the PHE is extended for another 90 days and will now expire on October 23, 2020 unless renewed again (which seems likely) or if the HHS Secretary terminates it earlier.

• On August 3, President Trump signed an executive order to expand access to Telehealth services in rural communities and make certain Telehealth services permanent once the COVID-19 public health emergency (PHE) ends. The order seeks to build upon CMS’s previous Telehealth expansions permitting providers to provide telehealth services across state lines and boosting reimbursement rates.  Additionally, the order: (1) requires HHS to implement a new payment model designed to meet the needs of rural communities; and (2) calls for the government to deploy a “joint initiative focused on improving healthcare infrastructure in rural areas.

• On the heels of the August 3 executive order, CMS issued a proposed rule announcing policy changed for Medicare payments under the Physician Fee Schedule (PFS) for calendar year (CY) 2021, and other Medicare Part B issues.  With respect to telehealth, the proposed rule, which is 1353 pages long (no, we did not read the whole thing), proposes, among other things: (1) Expanding Medicare beneficiary access through Telehealth to carry out, among other things, home visits for evaluation and management (E&M) services and some visits for individuals with cognitive impairments; and (2) Temporarily continuing payment for telehealth services for emergency department visits and other services to give the healthcare community “time to consider whether these services should be delivered permanently through telehealth outside of the” PHE. It also calls for suggestions for other telehealth services that should be reimbursed by Medicare, to be submitted via comments by October 5,

• The HEROES Act, which was passed by the House of Representatives in May, includes direct funding and other provisions aimed at increasing telehealth access and infrastructure, and the plan proposed by Senate leadership seeks to extent telehealth waivers and increase access and benefits to employees who do not work full time or may not otherwise qualify for employer coverage. 

Clearly these are all steps towards making telehealth a larger and more permanent feature of the U.S. healthcare system.  That said, expansion of telehealth by both government and commercial payors, however, is not without its hurdles – including technology costs, operational challenges, provider comfort with virtual modalities, and training needs.  There is also the issue/question of fee rates, with many payors viewing telehealth as a way to save money relative to in-person visits (in states where there are no telehealth “parity” laws), while providers — many of whom are already facing rate reductions and increasing expenses – fear (rightfully) that fee disparities will only further disrupt the already delicate economics of running hospitals, healthcare institutions, and professional practices.

Additionally, in order for telehealth to become a permanent feature of healthcare in America, significant legal changes (on both the federal and state levels) will be needed.  While some of this can be done “administratively” via executive action and agency rulemaking and guidance, at the end of the day, real change will ultimately require congressional action via legislation, as CMS’ regulatory authority outside of the PHE is largely limited to what types of services can be provided via telehealth, and CMS cannot make telehealth reimbursement available permanently or permanently expand the list of providers authorized to provide services via telehealth.  As CMS Administrator Seema Verma has stated, “telemedicine can never fully replace in person care, but it can complement and enhance in-person care by furnishing one more powerful clinical tool to increase access and choices” for patients.  To what extent telehealth will become a permanent “complement” to in-person services, however, remains an open question, and one to which there is likely not a “one size fits all” answer.  We will of course continue to monitor the landscape and provide updates as they become available.  And if you have any questions about telehealth/telemedicine, please reach out to us and we will be happy to assist.