Last week, President Trump signed the SUPPORT for Patients and Communities Act (SUPPORT Act), a bipartisan piece of legislation designed to tackle the opioid crisis by, among other approaches, increasing the use of telemedicine services to treat addiction. Several key provisions are summarized below.

The package includes provisions to expand public reimbursement for telemedicine services that focus on addiction treatment. Specifically, the legislation removes Medicare’s originating site requirement for substance abuse treatment provided via telemedicine, meaning that health professionals can receive Medicare reimbursement even if the patient is not located in a rural area. In addition, the Centers for Medicare and Medicaid Services (CMS) has been directed to issue guidance to states regarding possible ways that Medicaid programs can receive federal reimbursement for treating substance abuse via telemedicine. The legislation explicitly identifies services provided via a hub and spoke model and in school-based health centers, among others, as those that should be eligible for federal reimbursement.

In another development, the US Drug Enforcement Agency (DEA) is now required to implement regulations regarding a special registration process for telemedicine providers within one year of the passage of the SUPPORT Act. The aim of this process is to expand health providers’ ability to prescribe controlled substances to patients in need of substance use disorder treatment based on a telemedicine consultation, without having to conduct an in-person evaluation first. This special registration process was originally contemplated 10 years ago under the Ryan Haight Online Pharmacy Consumer Protection Act of 2008 (Ryan Haight Act) as one of the seven pathways through which a telemedicine provider could prescribe a controlled substance to his/her patient without having first conducted an in-person evaluation, but the DEA never issued any regulations to effectuate it. At present, the special registration process and requirements (e.g., registration costs, application processing timeline, provider qualifications) are still largely unknown. The answers to these open issues will determine how accessible this new registration pathway will be to substance use disorder providers and, therefore, how impactful it will be in connecting patients in need of substance use disorder treatment with qualified providers.

In addition to these policy reforms, the SUPPORT Act also directs government agencies to conduct additional research into the possible benefits of telemedicine technology for treating substance abuse. Both CMS and the Government Accountability Office (GAO) are tasked with publishing reports concerning the use of telemedicine technology for treating children: CMS is directed to analyze how to reduce barriers to adopting such technology, and GAO is directed to evaluate how states can increase the number of Medicaid providers that treat substance use disorders via telemedicine in school-based clinics. Furthermore, the Department of Health and Human Services must issue a report regarding the impact of using telemedicine services to treat opioid addiction within five years.

On November 1, 2018, the Centers for Medicare and Medicaid (CMS) issued final rules for updating the 2019 Medicare Physician Fee Schedule to implement recent telehealth-related legislative reforms. As reported in our Digital Health Mid-Year Report: Focus on Medicare, these changes are expected to have a material impact on the ability of providers to receive payment for delivering telehealth services. Certain key changes are highlighted below:

  • Qualified providers may be reimbursed when providing telehealth services for stroke and kidney disease—even when patients are located in their own homes.
  • Qualified providers may receive a small amount of reimbursement for holding “virtual check-in[s]” with patients and when they evaluate recorded video and images from an established patient. CMS noted that these changes are aimed at allowing providers to help determine whether an in-person visit or additional follow-up is needed. Doing so “increase[s] efficiency for practitioners and convenience for beneficiaries.”
  • CMS also issued an interim final rule related to the recently-signed SUPPORT for Patients and Communities Act, a bipartisan piece of legislation that was passed to combat the opioid crisis. Similar to the Bipartisan Budget Act, the SUPPORT Act removed the originating site requirement for substance abuse and related mental health treatments. There is a 60-day comment period before this rule will be finalized.

Together, these rules represent a substantial expansion of Medicare reimbursement for services provided via telehealth.  For additional guidance on how to interpret and implement these new changes, please contact your regular McDermott attorney.

On October 26, 2018, CMS released a Notice of Proposed Rulemaking addressing expanded telehealth coverage in Medicare Advantage, extrapolation of RADV audit results, and updates to the Medicare Advantage and Part D Quality Star Ratings program, among other topics. If finalized, the regulations set forth in the Proposed Rule would impact not only Medicare Advantage and Part D plan sponsors but also a broad range of providers and health care companies, particularly those involved in the provision or delivery of telehealth services.

CMS is accepting comments on the Proposed Rule through December 31, 2018.

Access the full article.

As previously noted in our Digital Health Mid-Year Review, 2018 has seen greater acceptance of telemedicine within the Medicare program. Both regulatory and statutory changes have expanded reimbursement opportunities and, consequentially, opportunities for the deployment of telemedicine technologies. As we noted then, however, improvement in the Medicare reimbursement environment for telemedicine services has been tied to a policy goal of not increasing utilization unnecessarily. We noted in our Mid-Year Review that Congress appears to be following MedPac’s recent guidance that Congress “should take a measured approach to further incorporating telehealth into Medicare by evaluating individual telehealth services to assess their capacity to address. . . cost reduction, access expansion, and quality improvement.”

The recently introduced Reducing Unnecessary Senior Hospitalizations Act of 2018 (the RUSH Act), seems to deviate from MedPac’s suggested approach. The RUSH Act seeks to avoid hospitalizations through a program that creates financial incentives for providing certain nonsurgical services furnished by hospital emergency departments at skilled nursing facilities that are qualified to provide such services by the Secretary of Health and Human Services The RUSH Act specifically refers to the possibility that some of these services could be provided by licensed practitioners “through the use of telehealth.” Interestingly, the RUSH Act does not specify what telehealth services should be allowable or how they should be reimbursed; rather, the RUSH Act leaves these matters for agency determination.

According to Representative Diane Black (TN), one of the bill’s sponsors, “[t]here are companies who are ready and able to provide this innovative care. . . . These positive disruptors just need Medicare’s payment policies to catch up with the technology. . . giving [nursing homes] the technology-enabled tools needed to lower health care costs and, most importantly, save lives.”

As an observer of this industry, I tend to agree with this claim, but under the approach taken by this bill, that determination will need to be made by the Department of Health and Human Services. Digital health companies looking for a better reimbursement environment are well-advised to focus on the bottom line of federal health policy–lower cost, improved care and increased access.

Join us on November 8, 2018, for the third installment of McDermott’s live webinar series on digital health. In this installment, partners Bernadette M. Broccolo, Jiayan Chen and Vernessa T. Pollard will explore opportunities for accelerating biomedical research, development and commercialization through digital health tools and solutions, such as end-user license agreements (EULAs), wearables and mobile apps, telemedicine, and big data exchange and analytics. They will discuss tactics for overcoming challenges related to these new approaches, as well as evolving compliance issues, including:

  • Privacy and security
  • Human subject protection
  • The US Food and Drug Administration pre-market approval regime

They will also review alternative compliance and contracting strategies for managing risk while capturing opportunity from the perspective of key stakeholders, such as sponsors, investigators, research sites and digital health developers.

Click here to register for this event.

In an effort to address the need for increased access to behavioral health services, Illinois has passed a series of bills that meaningfully expand the reimbursement of telehealth services delivered to its Medicaid patients. Illinois’ legislators, telemedicine advocates, healthcare providers and patient advocacy groups collaborated in an impressive effort to develop focused and targeted legislative solutions that effectively balance the need to get critical behavioral health services to patients in need with long-standing concerns that increasing access via telehealth will result in greater health care costs to a state already experiencing severe financial challenges.

Governor Bruce Rauner advised that these “initiatives work together to improve the quality of care and hopefully the quality of life for so many Illinoisans suffering from mental health and substance use disorders.” Supporters of the legislation are optimistic that these changes will further expand telehealth programs in Illinois, continuing the growth experienced in the past several years.

As a result of changes to the Illinois Public Aid Code (305 ILCS 5/5-5.25), the following will receive reimbursement from the Department of Healthcare and Family Services (“Department”) for delivering telehealth services that meet applicable requirements:

  • Clinical psychologists
  • Clinical social workers
  • Advanced practice registered nurses certified in psychiatric and mental health nursing
  • Mental health professionals and clinicians who are authorized by Illinois law to provide mental health services to recipients via telehealth (in addition to psychiatrists and federally qualified health centers)

The Department is also required to reimburse any Medicaid certified eligible facility or provider organization that acts as the originating site (i.e., the location of the patient at the time a telehealth service is rendered), including substance abuse centers licensed by the Department of Human Services’ Division of Alcoholism and Substance Abuse.

In addition to these changes, the Illinois Telehealth Act’s definition of a “Health care professional” (225 ILCS 150/5) has been revised to include dentists, occupational therapists, pharmacists, physical therapists, clinical social workers, speech-language pathologists, audiologists, and hearing instrument dispensers. As a result of this change, these professionals are now explicitly subject to the Illinois Telehealth Act’s requirements.

Finally, the Illinois Insurance Code (215 ILCS 5/356z.22) has been amended to require that any individual or group policy of accident or health insurance that provides coverage for telehealth services also provide coverage for telehealth services provided by licensed dietitian nutritionists and certified diabetes educators to senior diabetes patients. The amended section clearly states that this change is intended to “remove the hurdle of transportation for senior diabetes patients to receive treatment.” While this change is a step in the right direction, Illinois remains in the minority as one of the states without a telehealth coverage and/or payment parity law. The vast majority of states have parity laws that, at a minimum, include a coverage requirement, mandating certain types of payors to approve and reimburse certain telehealth encounters the same as they would in-person medical encounters.

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The Illinois legislators who sponsored the passed legislation will be recognized for their efforts at the 2018 Telehealth Awards Luncheon organized by the Partnership for a Connected Illinois scheduled at the Chicago office of McDermott Will & Emery on November 13, 2018. Please contact Laura Lewandowski for additional details on registration.

The author thanks McDermott Summer Associate Emily Edwards for her research contributions to this article.

It has been only a little over six months, and already 2018 has been a busy year for digital health, particularly in the area of Medicare reimbursement. The Centers for Medicare and Medicaid Services (CMS), Congress, the Medicare Payment Advisory Commission, and the US Department of Health and Human Services (HHS) Office of Inspector General (OIG) have all contributed to make 2018 extraordinary.

This Special Report includes:

  • An up-to-date review of 2018 Medicare reimbursement highlights
  • A discussion of Congressional and CMS expansion of telehealth reimbursement
  • Notes of caution about the future of Medicare reimbursement

Read the Mid-Year Digital Health Report: Focus on Medicare.

Across the health care sector, telemedicine is naturally and strategically being integrated into health care delivery and treatment plans as targeted and efficient solutions to specific health issues by hospitals, medical groups and drug-to-consumer telemedicine companies.

Telemedicine is no longer viewed as a secondary option for care—it is a new standard of care that is both expected by patients and popular with providers. Consumers expect to see health care adapt—like many other industries already have—to fit within their daily lives and schedules. Whether it’s electronic check-in procedures or better automated systems, health care providers are beginning to treat their patients a little bit more like customers, and see telemedicine and patient engagement tools as a means of improving customer loyalty and engagement while reducing costs.

However, complex billing structure and payor and reimbursement issues can create significant hurdles for health care providers looking to advance telemedicine programs. Telemedicine billing requires special attention, and if not enough consideration is given on the front end of programs, organizations may be surprised to find that that something they thought was a billable service is, in fact, not.

The Bipartisan Budget Act, which provided for the reimbursement of the distance provider, significantly increased the telemedicine use cases that are approved under the Medicare reimbursement structure. However, because Congress will now pay for it, there is a new expectation that hospitals that do not have particular areas of expertise available on-site will investigate opportunities to incorporate a telehealth programs that ensure adequate patient care.

The standard of care continues to improve as patients have greater access to  nationwide physicians and  as new technology like telestroke and clinical decision support tools become more widely available. For example, a stroke neurologist in one New York can now diagnose a stroke patient in Florida, and then facilitate an emergency room physician to treat that stroke. Telestroke programs check off all of the right boxes: better quality care, better access to care, and overall lower cost of care.

As use cases like this continue to be integrated into health care delivery and familiarity builds around how telemedicine can be used effectively, expectations shift around the standard of care and new questions arise around the risks of integrating—or failing to integrate—telehealth programs. If the tools are available and easily accessible, and if there is a supportive reimbursement model, how much a part of the standard of care does telemedicine become and what is the risk of failing to embrace these tools? If hospitals choose not to implement telehealth programs, and then patients suffer harm as a result, for example a delayed diagnosis and treatment of a stroke, could that lead to increased medical malpractice suits or other types of liability?

In the newest episode of the Of Digital Interest podcast, McDermott Digital Health partners, Lisa Schmitz Mazur and Dale Van Demark, share their perspectives on these questions and the various barriers, risks and opportunities associated with the rise of telemedicine and other technological advancements in health care delivery. Access this episode at www.mwe.com/mcdermottdigitalhealth or subscribe to the podcast on iTunes, Pocket Casts or Soundcloud.

As the health industry evolves to meet consumer expectations for better quality, lower-cost and more convenient health care options, the demand for technology-driven innovation is accelerating as is the level of interest and investment among stakeholders or all sorts.

Health systems and other institutional providers are playing a more active investment role in the commercialization of biomedical, digital health, and other important health care discoveries in order to remain competitive, secure their positions as industry leaders and generate growth opportunities. This more active role also affords their internal innovators (e.g., physicians and scientists) to play a meaningful role in accelerating the commercialization of home-grown discoveries that may otherwise be left in “the valley of death” between government-funded basic research and later stage, industry-funded commercialization. Drug and medical device manufacturers, venture capital, private equity firms, large donors and other investors are injecting significant capital into fueling research, development and commercialization of health care technology innovation. On the one hand, health care systems and providers welcome such external co-investors who bring sophisticated expertise in product and market research, technology innovation, valuation and strategy capabilities, as well as access to networks of potential co-investors. For such external co-investors, on the other hand, joining forces with health care institutions affords much needed access to the expertise and thought leadership of clinicians, scientists and health technology innovation; a ready‑made proving ground and “anchor customer” for the product; and the halo effect of the health care provider around the co-investor’s clinical care and research reputation. The theory and the hope is that the combined capital and the different, but complementary, expertise, experience and perspectives of such co‑investors provides a formula for financially successful innovation that is transformative and not merely disruptive. Continue Reading Blazing New Trails in Health Care and Technology Innovation Ventures

Join McDermott next Wednesday for a live webinar on the unique considerations in developing and procuring AI solutions for digital health applications from the perspective of various stakeholders. We will discuss the legal issues and strategies surrounding:

  • Research and data mapping essential to the development and validation of AI technologies
  • Protecting and maintaining intellectual property rights in AI solutions
  • Technology development
  • Risk management and mitigation for various contractual arrangements, including contracts with customers, vendors and users

We will also focus on the trends in US law for AI solutions in the digital health space, and present actionable advice that will help you develop an effective strategy for developing and procuring AI solutions for digital health applications.

Developing and Procuring Digital Health AI Solutions: Advice for Developers, Purchasers and Vendors
Wednesday, June 13, 2018 | 11:00 am CT | 12:00 pm ET
Register Here