November 28, 2021

Volume XI, Number 332

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Top 5 Telehealth Law Predictions for 2021

With 2020 officially behind us, what does 2021 have in store for telemedicine and digital health policy? A year ago, our team predicted 2020 would bring “notable expansions in Medicare and Medicaid coverage” and “the reimbursement landscape looks promising for virtual care services.” Looking back, that was an understatement (if an easy one). Below are five new predictions for what legal changes telemedicine and digital health companies might expect to see this year.

1.  Licensing: More Efforts to Increase Reciprocity and Reduce Barriers

In an effort to balance workload nationally and expand access to health care practitioners during the Public Health Emergency (PHE), many states temporarily suspended medical licensing requirements. As these temporary waivers begin to sunset, some state legislatures will seek to make the waivers permanent, allowing practitioners licensed in other states to deliver telehealth services across state lines, provided the out-of-state practitioner follows local state practice standards. While this may be a topic of discussion among policy shops, we expect few states will actually enact such changes in 2021.

Federally, the PREP Act allows practitioners to deliver telehealth services across state lines under a licensure exemption for COVID testing and certain limited “covered countermeasures” (e.g., treatment of COVID-19 infections). The PREP Act also grants certain immunities and protections, preempting state laws during the PHE. Given its Constitutional complexity and political nature, interstate licensing does not have a widely-accepted “solution,” nor does it have the bipartisan support seen in other areas of telehealth. Licensure will be a friction point between virtual care stakeholders and traditional practitioners invested in brick and mortar locations industry. The status quo (i.e., profession-specific interstate compacts and state-by-state patchwork legislative efforts) has left many digital health stakeholders unimpressed, frustrated, and increasingly searching for an alternate solution. Yet, a federal “top-down” preemption approach will be perceived as an unconstitutional encroachment on states’ rights under the 10th Amendment. Keep an eye out for a third channel to thread the needle, perhaps tying federal funds (e.g., Medicaid or COVID relief dollars) to state adoption of certain licensure waivers, enticing states to opt-in to interstate licensure reciprocity rather than federally compel it.

2.  Modalities: Technology-Neutral State Laws that Prioritize Quality of Care.

In 2020, many states enacted new telehealth laws and rules to change prior practice standards, allowable modalities, or prescribing requirements. Changes included eliminating face-to-face exams, practicing via telephone only, or waiving modality prescribing restrictions on telemedicine. Some of these changes were made by legislation while others by executive order or regulation. Many of the changes were on a temporary basis during the pandemic (with expiration dates that, confoundingly, often did not match the federally declared Public Health Emergency date). These waivers created a telehealth regulatory environment that focused less on technical modalities of care delivery (e.g., audio-video vs. asynchronous) and more on meeting the standard of medical care for a given patient. Aiding in this effort, the American Telemedicine Association (ATA) published model policy language for state telehealth rules, to serve as a reference tool for best practices. This trend towards technology-neutral telemedicine laws will continue in 2021, with stakeholders emphasizing the importance of medical standard of care and clinical quality of services, rather than proscriptive modality requirements.

3.  Privacy: Greater Sensitivity to Patient-as-Consumer in Digital Health

Telemedicine and digital health companies handling patient information on substance use disorder treatment can expect to see favorable changes to HIPAA laws, designed to encourage easier sharing of patient data, particularly for treatment purposes. Similar changes are anticipated to regulations under 42 C.F.R. Part 2 to ease payment and health care operations. Telehealth companies should also keep an eye on state data privacy laws. More states are expected to enact their own consumer laws to protect data privacy, as California did with its California Consumer Privacy Act. And the Federal Trade Commission (FTC)—the nation’s top federal privacy regulator—will continue enforcement investigations against organizations that violate consumer privacy rights. Given the proliferation of new telehealth services and startup companies launched in 2020, increased privacy regulation is likely to occur in 2021.

4.  Enforcement: OIG/DOJ Will Build on Prior Investigations

Building on its 2019 and 2020 criminal and civil investigations, HHS OIG and DOJ will continue its takedown of companies engaged in "telefraud": scams that couple aggressive online marketing tactics with telemedicine services to serve as a conduit for illegal kickback arrangements with pharmacies, DME suppliers, and laboratories. Most telemedicine enforcement actions to date have involved kickback schemes and billing for medically unnecessary equipment and diagnostic tests, and few have centered on billing and coding of telehealth professional services. The ATA has commented how these companies do not represent the industry at large, and issued a letter articulating hallmarks of legitimate telemedicine providers.

With many traditional in-person providers having newly (and quickly) moved into telehealth in 2020, along with new temporary waivers of billing and coding rules and a relaxed regulatory environment, the future will likely see more Medicare audits and overpayment claims of telehealth professional services. Some niche areas of enforcement may be marketing/referral arrangements with pharmacies and laboratories, waivers of patient financial responsibility, ordering high-cost genetic tests, billing for practitioners located outside the United States, and arrangements seeking to take advantage of the global pandemic.

5.  Payment: Continued Expansion of Telehealth Reimbursement

The pandemic compelled health plans, both government and commercial, to remove prior restrictions on telehealth and expand coverage for virtual care at a rate previously unseen. The new policy changes on Medicare reimbursement followed the previously established pathway of coverage, but the pace at which they were made was stunning. CMS also introduced nearly 100 telehealth service codes covered on a temporary basis until the Public Health Emergency expires. Much of 2020’s reimbursement expansion will continue through 2021, as commercial payers follow CMS’ lead. Remote patient monitoring still has plenty of room to grow. Despite the recent payment expansions RPM has seen, it has yet to have its “breakout year” in widespread use and payment.

Employers will explore more telehealth services for employees to deal with the stress of the pandemic, focusing on tele-primary care, behavioral health, and specialty care like fertility. As more traditional providers offer telehealth services in addition to in-person care, we may see telehealth increasingly paid on a fee for service basis (rather than a PEPM enterprise model). At the same time, value based models focusing on or centered around virtual care, including bundled payments and shared savings, will grow beyond the pilot phase, as providers begin to “own” certain care pathways.

Time will tell how these five predictions will hold up over the next 12 months. What is certain, however, is that telemedicine and virtual care continues to be one of the fastest-growing areas in healthcare.

© 2021 Foley & Lardner LLPNational Law Review, Volume XI, Number 12
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About this Author

Nathaniel Lacktman, Health Care Attorney, Foley and Lardner Law Firm
Partner

Nathaniel (Nate) Lacktman is a partner and health care lawyer with Foley & Lardner LLP, and a Certified Compliance & Ethics Professional (CCEP). His practice focuses on health care compliance, counseling, enforcement and litigation, as well as telemedicine and telehealth. Mr. Lacktman is a member of the firm’s Health Care Industry Team which was named “Law Firm of the Year — Health Care Law” for three of the past four years on the U.S. News – Best Lawyers® “Best Law Firms” list. 

813-225-4127
Alexis Bortniker, Health Care Attorney, Foley Lardner Law Firm
Partner

Alexis Bortniker is a Partner and health care lawyer with Foley & Lardner LLP. Her practice focuses on transactional and regulatory matters with an emphasis on counseling health systems, hospitals, and other providers in managed care and physician contracting. Ms. Bortniker is a member of the firm’s Health Care Industry Team.

Previously, Ms. Bortniker was an associate with Choate Hall & Stewart LLP where she gained experience working directly with health care organizations on regulatory and corporate compliance issues, including the...

617.226.3177
Thomas B. Ferrante, Foley, Healthcare Regulatory Lawyer, Transactional Matters Attorney
Partner

Thomas (T.J.) Ferrante is a Partner and health care lawyer with Foley & Lardner LLP, where he focuses his practice on a wide range of transactional and related regulatory issues for health industry clients, including for-profit and not-for-profit hospitals and health systems, multi-specialty physician practice groups, and long-term care providers. Mr. Ferrante has experience with a variety of transactions, including mergers and acquisitions, joint ventures, strategic affiliations, obtaining and maintaining tax-exemption, employment contracts and leases, and other...

813-225-4148
Aaron T. Maguregui Health Care Attorney Foley & Lardner Tampa, FL
Special Counsel

Aaron Maguregui is a health care lawyer and member of the firm’s Privacy, Security & Information Management Practice, and national Telemedicine & Digital Health Industry Team. He advises innovative health care and technology companies to solve complex compliance, cybersecurity, data governance, data privacy, and risk management matters. Working with leading health care insurers, government-sponsored managed care organizations, health care providers, and technology companies, he delivers pragmatic legal advice and action-oriented solutions guidance to help clients reach their goals...

813-225-4129
Jennifer Hennessy, Foley Lardner Law Firm, Privacy Security and Healthcare Attorney
Associate

Jennifer J. Hennessy is a privacy and security and health care regulatory attorney with Foley & Lardner LLP. Her practice includes advising businesses on compliance with state and federal data privacy and security laws. She assists covered entities and business associates in complying with the HIPAA Privacy and Security Rules, and also advises businesses and individuals on compliance with state data privacy laws and federal law 42 C.F.R. Part 2, Confidentiality of Alcohol and Drug Abuse Treatment Records. She frequently guides clients through data incident management...

617-502-3211
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