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Telehealth and the Changing Regulatory Landscape: Opportunities and Challenges in the Digital Health Ecosystem

What if you didn’t have to take time out of your day to see a physician in person when you needed a prescription? What if a diagnosis could be delivered over video chat? What if your psychiatrist was available at the press of a button or swipe on your screen?

These options are fast becoming a reality, as telehealth (or telemedicine) continues to take hold in a health care system that is desperate for increased efficiency and higher quality outcomes. And while telehealth offers exciting new possibilities in terms of convenience and access for patients, it also poses new regulatory challenges for industry stakeholders still learning the new rules of the game in today’s digital health ecosystem.

digital health, ecosystem,

The Chronic Care Act

One of the biggest drivers of change in the industry right now is the Chronic Care Act. Last month, as part of the House and Senate budget deal to fund the government through March 23, legislators included the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017, which will increase reimbursement for a lot of different telemedicine programs.

For example, if you went to a rural hospital and they didn’t have a stroke neurologist and you were having a stroke, you would have an ED doctor with no stroke specialty diagnosing you—not an ideal situation. With telemedicine, it’s now possible for rural doctors to consult with specialty doctors at renowned sites, which the government will fund thanks to the Chronic Care Act.

A big component of the Chronic Care Act is increased Medicare funding for telemedicine. This is on top of CMS’s 2017 telehealth codes, which increased coverage for more telehealth services and made it easier for providers to bill for those services, as noted in our 2017 Digital Health Year in Review. And in 2016, the 21st Century Cures Act expanded telehealth services, easing limitations on Medicare coverage that severely limited health care practitioners’ potential reimbursement for the delivery of telehealth services to Medicare beneficiaries. To illustrate, in 2015, Medicare paid a total of $17,601,996 for telehealth services—an infinitesimal portion of the Medicare program’s $630+ billion budget.

With new reimbursement rules now in the legislative mix, industry stakeholders are asking questions about what patients should be charged, when payers have to pay, who handles billing, etc. As financial frameworks and reimbursement policies change, confusion abounds among health care companies.

Technology is moving at a million miles per hour and the regulators, with their limited resources and their limited understanding of technology and their limited understanding of health care (depending on which agency you’re talking about), combined creates a perfect storm of trouble.

Mobile Health

One of the quickly developing spheres of telehealth is the use of apps, which is something the Chronic Care Act touches on as well.  On an app, a patient can put how they’re feeling that day and if they have movement or mobility in their body, and all that data can be sent to their medical records. It’s helping with the direct provider-patient interaction, in addition to what happens afterwards. Telemedicine and related apps also have the potential to improve efficiencies and control costs, such as decreasing overutilization of emergency rooms by allowing patients to virtually check-in with a physician.

It’s worth noting that app-driven health tracking is not limited to emergency or post-op situations. Just last month, Apple announced the upcoming inclusion of medical records in their Health app. People are already managing their health through things like Fitbits and cardiac monitoring devices. Telemedicine allows medical providers to access the data from these existing and new sources of technology to improve patients’ experience.

Digital Health Investment

It’s not just the Chronic Care Act that’s driving increased interest and investment in telehealth/telemedicine. Over the past year, we’ve seen legislation related to the growing field, such as:

  • The Medicare Telehealth Parity Act of 2017
  • The Helping Expand Access to Rural Telemedicine (HEART) Act
  • The Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act of 2017
  • The Telehealth Enhancement Act of 2017
  • The Evidence-Based Telehealth Expansion Act of 2017
  • The Medicare Pilot Program
  • And finally, the Telehealth Innovation and Improvement Act of 2017

These bills have signaled an increased focus on the possibilities and potential of telehealth. We’re also seeing large provider groups like Accountable Care Organizations (ACOs) and larger physician groups using telemedicine on a frequent basis. Even unlikely sources are looking at telemedicine as a potential resource, like the use of telepsychiatry in prisons.

As telemedicine expands into new realms and more organizations begin to invest in it, the regulatory questions will continue to emerge. In addition to questions surrounding reimbursement, there are also questions about translating non-virtual transactions in to virtual ones.

How do you regulate technology to do the jobs that were previously done by a person? We regulate people who provide health care services extensively, so how do we regulate robots that do the same things? There is also a question of liability. When cancer is misdiagnosed, who is at fault for not properly identifying the disease – the robot or the individual using the technology?

Technology is going to keep changing and regulatory agencies only have so much capacity, and so people are going to start taking risks. As my client put it, they’re going to take an aggressive stance on things, which means putting their company in a state of vulnerability.

What 2018 holds in store for risk and regulation is yet to be seen, but what we can say with certainty is that telehealth is expanding, and we shouldn’t expect it to go away any time soon.

© 2018 McDermott Will & Emery

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About this Author

Lisa Schmitz Mazur, Health Law Attorney, McDermott Will Law Firm
Partner

Lisa Schmitz Mazur is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  Lisa maintains a general health industry practice, focusing on the representation of hospitals and health systems and other health industry providers.

Lisa’s representation of hospitals and health systems includes providing guidance on not-for-profit corporate governance matters, tax-exemption issues, conflict of interest compliance and overall corporate compliance effectiveness.  In addition, Lisa regularly assists hospital and health system clients to...

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