August 7, 2020 - Scott R. Landau

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.