September 21, 2021

Volume XI, Number 264

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September 20, 2021

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Waiver of State Licensure Requirements for The Delivery of COVID-19 Countermeasures via Telehealth

In a fourth amendment to the March 17, 2020, Public Readiness and Emergency Preparedness Act (PREP Act), the US Department of Health and Human Services (HHS) has expanded access to COVID-19 Covered Countermeasures through telehealth and clarified the scope of liability protections provided by the PREP Act. In particular, the declaration is important to telehealth providers because it appears to preempt, under certain circumstances, state laws that have limited cross-border practice of medicine using telehealth. Healthcare providers should take note that the licensure exception and any immunity protections are limited to healthcare providers who are ordering or administering a Covered Countermeasure and there is no indication of intent to expand beyond these focused measures.

In Depth


Late last week, the US Department of Health and Human Services (HHS) announced a fourth amendment to the Public Readiness and Emergency Preparedness Act (PREP Act) declaration dated March 17, 2020, which is intended to expand access to COVID-19 Covered Countermeasures through telehealth and clarify the scope of liability protections provided by the PREP Act. According to HHS, the amendment authorizes telehealth providers to order or administer Covered Countermeasures (defined below) for patients who are located in other states and it extends liability protections under the PREP Act to covered persons for recommended activities related to any Covered Countermeasures authorized or approved by the Food and Drug Administration (FDA) for COVID-19 and to any respiratory protective device approved by the National Institute for Occupational Safety and Health for use during the public health emergency (PHE).

What is the PREP Act?

The PREP Act, which was enacted in 2005, provides the HHS Secretary with the authority to make declarations that provide immunity from liability under certain circumstances, including “claims of loss caused, arising out of, relating to, or resulting from administration or use of countermeasures to diseases, threats and conditions; determined by the secretary to constitute a present, or credible risk of a future public health emergency; and to entities and individuals involved in the development, manufacture, testing, distribution, administration, and use of such countermeasures.” The initial PREP Act declaration related to the current PHE was issued in mid-March 2020 and there have been three other amendments to the declaration before this latest one.

Note that a PREP Act declaration and a PHE declaration are different—they are made based on different public health determinations and have different legal effects. For example, the PREP Act declaration may be made before a PHE declaration and its liability protections can apply to activities that precede and follow the PHE declaration.

Why is this latest amendment to the declaration particularly relevant to telehealth providers?

This latest declaration has captured the attention of telehealth providers because it appears to preempt, under certain circumstances, state laws that have limited cross-border practice of medicine using telehealth. Specifically, Section V.e of the amended declaration now provides that “[w]hen ordering and administering Covered Countermeasures by means of telehealth to patients in a state where the healthcare personnel are not already permitted to practice, the healthcare personnel must comply with all requirements for ordering and administering Covered Countermeasures to patients by means of telehealth in the state where the healthcare personnel are permitted to practice. Any state law that prohibits or effectively prohibits such a qualified person from ordering and administering Covered Countermeasures by means of telehealth is preempted. Nothing in this Declaration shall preempt state laws that permit additional persons to deliver telehealth services.

In its description of the amendment, the Secretary notes that “[t]elehealth is widely recognized as a valuable tool to promote public health during this pandemic,” and references assessments of the utility of telehealth services by the Centers for Disease Control and Prevention and support for the utilization of telehealth services by HSS and its component agencies and offices, including the Centers for Medicare and Medicaid Services and the Office for Civil Rights.

What is a “Covered Countermeasure”?

Under the March 10, 2020, HHS PREP Act declaration, a Covered Countermeasure is a product such as a drug, diagnostic, device or vaccine that is used to diagnose, mitigate, prevent, treat, or cure COVID-19 or the transmission of SARS-CoV-2 (or a virus mutated from SARS-CoV-2) or any serious or life-threatening disease or condition caused by the use of a Covered Countermeasure. A Covered Countermeasure could also be a product or technology intended to enhance another Covered Countermeasure or a device used in the administration of another Covered Countermeasure. In order to qualify as a Covered Countermeasure, the product or technology must be appropriately cleared or approved by the FDA or authorized for emergency use in accordance with the Federal Food, Drug and Cosmetic Act.

In the telehealth context, Covered Countermeasures such as diagnostic tests or vaccines may be ordered by telehealth providers after a virtual encounter with a patient and filled or administered by the patient’s pharmacy or laboratory.

What is the implication on state licensing laws and why does this matter? What about other telehealth rules?

Any state laws that prohibit a qualified person from ordering or administering a Covered Countermeasure through telehealth is preempted, including licensing laws.

State licensure has been extremely burdensome for telehealth providers. Generally, a provider must be licensed in the state in which a patient is located at the time of the telehealth visit, unless a licensure exception applies. While many states waived licensure requirements or implemented streamlined registration processes in response to COVID-19, the waivers in many states are expiring or have expired, or were narrowly drafted resulting in limited utility. In sum, each state has different professional licensure rules, which can make multistate telehealth programs challenging to implement. While this amendment is a very narrow exception to licensure requirements because it is limited to Covered Countermeasures, it will likely assist in the implementation of multistate testing and vaccination programs. Telehealth providers will still need to comply with applicable state rules (provided that these rules do not prohibit or effectively prohibit the ordering or administering Covered Measures). In addition, acts that constitute “willful misconduct” are not protected from the PREP Act. Healthcare providers still must provide care that meets the applicable standard of care.

Is the statement of preemption found in this latest declaration effective?

The Office of the General Counsel (OGC) of HHS would likely advise that it is effective for preempting state licensure rules for telehealth providers engaged in Covered Countermeasures. HHS Advisory Opinion 20-02 sets forth the argument for preemption under the PREP Act with respect to pharmacists being able to administer COVID-19 tests independent of state licensing laws. The reasoning set forth in this opinion applies to the cross-border practice by physicians as well. As noted in the opinion, pharmacists, pharmacies and one trade association asked the OGC whether the PREP Act preempts state licensing laws that restrict the ability of pharmacists to order and administer COVID-19 diagnostic tests where HHS has expressly authorized pharmacists, under the PREP Act, to order and administer those tests. The opinion concludes that the PREP Act, in conjunction with the Secretary’s March 10, 2020, PREP Act declaration, preempts any state or local requirement that prohibits or effectively prohibits a pharmacist from ordering and administering a COVID-19 diagnostic test that the FDA has authorized, which could include state licensure rules.

What are the key takeaways?

The licensure exception and any immunity protections are limited to healthcare providers who are ordering or administering a “Covered Countermeasure,” and there is no indication that it is intended to expand beyond these focused measures. Even if a provider can leverage this licensure exception to support the delivery of Covered Countermeasures, telehealth providers must still comply with applicable state telehealth laws that are not covered under this amendment (i.e., those that do not prohibit or effectively prohibit the ordering or administering of Covered Countermeasures).

© 2021 McDermott Will & EmeryNational Law Review, Volume X, Number 343
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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...

312-984-3275
Amanda Enyeart Healthcare and Life Sciences Attorney Mcdermott WIll Emery Law Firm
Partner

Amanda Enyeart is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  Amanda focuses her practice on general regulatory health law matters. 

Previously, Amanda was an associate at a national law firm in its Chicago office where she provided guidance on regulatory issues, such as practitioner licensure; telehealth; Medicare and Medicaid reimbursement; and compliance with Stark Law and the Anti-Kickback Statute and state fraud and abuse laws.

Additionally, Amanda has...

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 Dale C. Van Denmark MWE Partner DC, Regulatory, Government & Lobbying Strategies  Health Care  Life Sciences
Partner

Dale C. Van Demark advises clients in the health industry on strategic transactions and the evolution of health care delivery models. He has extensive experience in health system affiliations and joint venture transactions. Dale also provides counseling on the development of technology in health care delivery, with a particular emphasis on telemedicine. Dale has been at the forefront of advising clients with respect to the globalization of the US health care industry. He advises US and non-US enterprises with respect to the formation of cross-border affiliations and international patient...

202-756-8177
Associate

Marshall E. Jackson, Jr. is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Washington, D.C. office.  Marshall focuses his practice on transactional and corporate matters affecting health care organizations,  including business organization, corporate governance, mergers and acquisitions, strategic affiliations and joint ventures.  Marshall also provides advice and counsel on a full range of federal and state fraud and abuse laws to hospital systems, medical practice groups and pharmacies.

Prior to...

202-756-8019
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