COVID-19 Impact on Telemedicine

The COVID-19 pandemic is accelerating the telemedicine trend in America. According to Mordor Intelligence [], the telemedicine market will be worth more than $66 billion globally by 2021. The market has been steadily growing in recent years, with physician use of telemedicine services increasing by 340% between 2015 and 2018, according to a recent American Well [] survey. Now, the confluence of pre-existing provider demand and COVID-19 pandemic circumstances, such as government stay-at-home orders and the recent federal waiver of certain Medicare telehealth payment requirements, has fueled the trend further.

As background, telehealth, telemedicine and related terms generally describe the exchange of medical information from one location to another through electronic communication to improve a patient’s health. Three types of virtual services are: (1) telehealth visits; (2) virtual check-ins; and (3) e-visits. The first involves a visit with a provider that uses telecommunication systems between a provider and patient. This can involve new or established patients. Virtual check-ins involve a brief (5-10 minutes) check in with a patient’s practitioner via telephone or other telecommunications device to decide whether an office visit or other service is needed. A remote evaluation of recorded video and/or images can be submitted by an established patient. An e-visit is where a patient uses an online patient portal to communicate with the patient’s provider.

Regardless of the type of virtual service, a common concern often arises—whether the third party payer will reimburse the provider. Regulations on telemedicine reimbursement vary widely by state and third party payer (Medicare, Medicaid, private insurance). There is no set standard for private health insurance providers regarding telemedicine. A number of insurance companies appreciate the value of telemedicine and pay for it, whereas others will not reimburse providers. While some states have parity laws that require insurance companies to reimburse at the same rate as in-person care for services provided through telemedicine, Pennsylvania and New Jersey are not among them. Therefore, it is incumbent upon providers to check their contracts with third party payers or obtain prior approval before transitioning to telemedicine or before greater expansion into this arena amid the COVID-19 pandemic. Otherwise, amidst the flurry of the pandemic, providers may risk foregoing reimbursement for telemedicine.

There is good news, however, for providers as it relates to Medicare patients. The Centers for Medicare & Medicaid Services (CMS) has broadened access to Medicare telehealth services so that beneficiaries can receive a wider range of services from their doctors without having to travel to a healthcare facility. These policy changes build on the regulatory flexibilities granted under the President’s emergency declaration. CMS is expanding this benefit on a temporary and emergency basis under Section 1135 of the Social Security Act and the Coronavirus Preparedness and Response Supplemental Appropriations Act. Section 1135 allows the Secretary of Health and Human Services to temporarily waive or modify certain Medicare and Medicaid requirements to ensure that sufficient health care items and services are available to meet the needs of individuals enrolled in these programs in an emergency area.

Pursuant to this new waiver, limitations on where Medicare patients are eligible for telehealth have been removed during this pandemic emergency. In particular, patients outside of rural areas and patients in their homes have become eligible for telehealth services. This is good news for providers. The substantive change is that, previously, Medicare paid only for routine visits furnished through telehealth for an “eligible originating site” such as when the patient is located in a rural area or is located in a medical facility. The patient’s home is generally not an eligible originating site. However, under the new 1135 waiver, this restriction no longer applies.

There are evolving healthcare legal and business ramifications from the COVID-19 pandemic. Ryan Corkery and the lawyers at Ansa Assuncao have experience working with medical providers to navigate legal issues on a wide variety of issues, including commercial healthcare litigation, medical staff matters, the corporate practice of medicine, professional service agreements between physician practice groups and hospital systems, non-compete agreements, investment disputes, criminal allegations, insurance issues, real estate disputes, and subpoena responses. We are prepared to partner with health care organizations, physicians, and other providers during the COVID-19 pandemic.

Ryan R. Corkery is a Partner in our Philadelphia office.