February 5, 2023

Volume XIII, Number 36

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February 03, 2023

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Permanent Expansion of Medicare Telehealth Services

On December 1, 2020, the Centers for Medicare and Medicaid Services (“CMS”) released the annual Physician Fee Schedule final rule (“Final Rule”) which, among other things, aimed to further President Trump’s October 3, 2019 Executive Order #13890 on “Protecting and Improving Medicare for Our Nation’s Seniors” (the “EO”) by expanding the use of proven alternatives like telehealth services to Medicare beneficiaries even after the conclusion of the COVID-19 Public Health Emergency (the “Pandemic”).

Prior to the Pandemic, it is estimated that only 15,000 Medicare beneficiaries received telehealth services on a weekly basis. Since the start of the Pandemic, however, the Centers for Medicare and Medicaid Services (“CMS”)  added 144 telehealth services covered by Medicare, and by the end of April 2020, nearly 1.3 million Medicare beneficiaries receive telehealth services on a weekly basis. Certain of these added covered telehealth services, which include, for example, emergency department visits, initial inpatient and nursing facility visits and discharge day management services, were slated to expire upon the conclusion of the Pandemic (click here for a complete list of telehealth services offered during the Pandemic).

The Final Rule advances the EO, by permanently adding nine (9) telehealth services to be permanently covered by Medicare within the confines of rural regions, and by extending Medicare reimbursement eligibility for sixty (60) telehealth services after the conclusion of the Pandemic – not limited to any specific region. As examples, these services include: emergency department visits, therapy services and critical care services.

The Final Rule comes just after the release of the U.S. Department of Health and Human Services (“HHS”) final rule, which among other things, allows healthcare providers to participate in value-based arrangements with more flexibility and will ease compliance burdens, as analyzed in our December 2, 2020 Blog Post. The CMS and HHS final rules are intended to clear the path towards the full and complete adaptation of telehealth services for the long term.

The Final Rule is in line with current trends extending access to telehealth and virtual care. In its recently released white paper, the National Governors Association, noted that although policies vary from state to state, there have been more telehealth policy changes this year than in the past two decades, with a dramatic uptick in virtual care services to match. As of the end November, telehealth legislation extending beyond the pandemic has been passed in 23 states.

While trends continue towards the expansion of telehealth services, CMS notes that without Congressional action, its lack of statutory authority will make it difficult to finalize many contingent features, such as rolling back geographic limitations for reimbursement of certain services to Medicare beneficiaries, permanently allowing audio-only telehealth services and permanently allowing ancillary providers to provide and bill for telehealth services.

CMS will continue to gather more data on the use of telehealth services and evaluate whether additional services can be added over time. Specifically, CMS has announced a commissioned study on telehealth flexibilities offered and provided during the Pandemic. The study will be aimed at exploring new opportunities for services under telehealth and virtual care supervision, including how remote monitoring can be used to efficiently bring care to patients and enhance the integrity of the program, whether beneficiaries are being treated in a hospital or in their homes.

We will continue to monitor the expansion of telehealth services and the rollout and implementation of the Final Rule in 2021.

Copyright © 2023, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume X, Number 342

About this Author

Matthew Shatzkes Attorney New York Sheppard Mullin

Matthew Shatzkes is a partner in the Corporate Practice Group in the New York office of Sheppard Mullin and is a member of the firm’s healthcare practice team.

Areas of Practice

Matthew provides strategic, regulatory, compliance, and transactional advice to all manner of health care clients, including health systems, hospitals, academic medical centers, long-term care providers, ambulatory surgery centers, diagnostic and treatment centers, physician practices, digital health companies and investors....

Ehiguina L. Borha Corporate Attorney Sheppard Mullin New York, NY

Ehi Borha is an associate in the Corporate Practice Group in the firm's New York office. 

Areas of Practice

Ehi's practice focuses on healthcare M&A and regulatory matters. He is a former member of the New York Due Diligence Group where he worked on the diligence aspect of a number of M&A transactions. Ehi is a 2019 graduate of New York Law School, where he served as a member of the mediation and negotiation clinic and completed a concentration in business and corporate law. He received his Bachelor of Arts in English Literature & Sociology from...