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APTA Pushes Digital Health Companies to Use “Physical Therapy” in Marketing Materials Only When the Care is Directed by Licensed Physical Therapists

On December 2, 2022, the American Physical Therapy Association (APTA) published a statement concerning a recent decision from UnitedHealthcare and its contractor, Kaia Health, to stop marketing Kaia Health’s services as “physical therapy” given that Kaia Health’s program does not consistently involve licensed physical therapists. As a result, digital health companies that market themselves as providing physical therapy should evaluate their marketing and customer communications to determine whether any revisions are required pursuant to the APTA’s guidance.

BACKGROUND
The APTA and APTA North Carolina sent a letter to UnitedHealthcare, along with a complaint filed with the North Carolina Board of Physical Therapy Examiners, identifying that the services provided through Kaia Health’s application were not overseen by a licensed physical therapist. UnitedHealthcare subsequently acknowledged that Kaia Health and United Healthcare’s benefits manager, Optum, utilized the phrase “physical therapy” in its marketing materials and that all materials would be revised to remove reference to physical therapy.

WHY IT MATTERS
The APTA has consistently held that physical therapy, either in person or digitally, must be “performed or directed only by licensed physical therapists.” The APTA has requested that physical therapy providers sign a pledge, which in part acknowledges that the “physical therapist examination, evaluation, diagnosis, development of a management plan, and intervention shall be represented and reimbursed as ‘physical therapy’ only when performed by a physical therapist or when selected interventions are performed by a physical therapist assistant under the direction and supervision of a physical therapist.” Several digital healthcare companies have signed onto the APTA’s pledge.

The complaint filed with the North Carolina Board of Physical Therapy Examiners, along with the APTA’s letter to UnitedHealthcare, are strong indicators that state boards of physical therapy and industry groups are reviewing the marketing and the scope of services offered by virtual physical therapy companies, as well as companies who partner with virtual physical therapy companies.

Businesses offering digital or virtual physical therapy or musculoskeletal services should review their service descriptions and marketing materials and assess whether any updating is required—a task our healthcare team can help with. For assistance or questions, please reach out to your regular McDermott lawyer or contact any of the authors of this article.




Final Episode | Markets Under Pressure Strategies for Restructuring and Risk Management

In this new video series, McDermott’s digital health team shares timely insights and strategies to help your organization stay ahead of the curve, addressing critical areas of workforce management, financing and the potential for restructuring.

Today’s market pressures increase the potential for broken financial covenants. In this episode, McDermott partners Dale Van Demark and Felicia Perlman discuss steps that digital health companies can take now to prepare for the possibility of restructuring and mitigate associated risks.


Explore the full series and their takeaways here.





Episode Two | Managing Capitalization Structures and Investor Relationships in Today’s Digital Health Market

In this new video series, McDermott’s digital health team shares timely insights and strategies to help your organization stay ahead of the curve, addressing critical areas of workforce management, financing and the potential for restructuring.

In episode two, McDermott partner and digital practice co-head Lisa Mazur joins fellow partner Brian Gordon to review important considerations for navigating today’s market realities.


Explore the full series and their takeaways here.





Episode One | Workforce Management Solutions in an Uncertain Economic Environment

In this new video series, McDermott’s digital health team shares timely insights and strategies to help your organization stay ahead of the curve, addressing critical areas of workforce management, financing and the potential for restructuring.

In episode one, Stephen Bernstein talks with McDermott partner Ellen Bronchetti about timely employment considerations for digital health companies.


Explore the full series and their takeaways here.





Navigating Volatile Markets in the Digital Health Ecosystem | Introduction – What to Consider

In this new video series, McDermott’s digital health team shares timely insights and strategies to help your organization stay ahead of the curve, addressing critical areas of workforce management, financing and the potential for restructuring.

Watch the introduction where Stephen Bernstein, Co-Head of the Digital Health Practice, kicks off the series discussing what companies should be considering as they navigate today’s complex digital health ecosystem.

Explore the full series and their takeaways here.





2021 Digital Health Year in Review


The continuation of the COVID-19 public health emergency (PHE) and consumer demand for digitally delivered healthcare not only necessitated the shift from in-person to virtual care, but also continued to drive interest, adoption, investment and transactions in digital health in 2021. Digital health funding in 2021 far surpassed 2020’s totals, with no signs of slowing down in 2022, and the potential permanence of some regulatory flexibilities beyond the PHE are charting a course for continued digital health growth in 2022 and beyond.

Access the report.




McDermott Partners Recognized As Digital Health Power Players

Washington (August 11, 2021) – McDermott Will & Emery partners Jennifer Geetter and Vernessa Pollard have been recognized within an Insider profile on the “9 behind-the-scenes players who can make or break your digital-health startup.” The pair discussed advising young companies on the regulatory hurdles they have to clear before tackling the healthcare market.

As part of the Firm’s industry-leading health practice, Jennifer advises digital health companies on the development, delivery and implementation of innovative healthcare solutions. Vernessa leads medical device and technology companies through US Food and Drug Administration (FDA) regulations to bring products to market.

Vernessa explored with Insider how more tech companies are spreading into healthcare. These companies need assistance discussing the FDA’s newest regulations, including machine learning oversights or health-data privacy rules. If businesses are not knowledgeable about their regulatory requirements, it can make or break their investments.

“We have a number of what we’d consider to be nontraditionally FDA regulated entities, such as the large tech companies and even hospitals and healthcare providers, that are entering this space because they’re developing new tools or technology that may trigger FDA requirements,” Vernessa noted.

Jennifer explained that it’s not always clear if decade old FDA laws apply, so she advises her clients to prioritize building trust with patients through an emphasis of privacy and cybersecurity protection.

“There’s something about the intimacy of the standard doctor-patient relationship when you’re sitting across the room from your doctor that breeds trust,” Jennifer said. “When you’re in a digital healthcare system with distance, you don’t necessarily have that.”

McDermott Will & Emery is the nation’s leading health law firm. The Health Industry Advisory group is the only health practice to receive top national rankings from U.S. News – Best Lawyers “Best Law Firms,” Chambers USA, The Legal 500 US and Law360. The practice was also recognized by Chambers as “Health Team of the Year” in 2010, 2013, 2017 and 2019. McDermott has also held the top spot in PitchBook’s League Tables as the most active firm for healthcare private equity since 2017.




Access To Digital Health Applications And Digital Care Applications In Germany

On 20 January 2021, the German Federal Cabinet approved the draft law on the digital modernization of healthcare and nursing care. The draft has been criticized for not taking into account lessons learned from the implementation of the 2019 digital health applications law.

The legally enforceable right of patients insured in the Germany statutory healthcare system (SHI) to be able to access digital health applications (DiGAs) was included in the German SHI code (SGB V) at the end of 2019.

DiGAs are low-risk medical devices (risk class I and IIa) that are primarily based on digital technologies and support the detection, monitoring, treatment, or alleviation of diseases, injuries, or disabilities. Under the SGB V, DiGAs have to be approved by the German Federal Institute for Drugs and Medical Devices (BfArM) and included in the DiGA List before doctors can prescribe them to their patients on an individual basis and at the SHI’s expense. Among the DiGAs listed by BfArM since the first listing in October 2020, are those that support patients with light depression, insomnia, obesity, or tinnitus.

Read more in our latest edition of International News.




Telehealth and Prescribing: What’s Permissible in Your State?

Telehealth’s state-by-state regulatory patchwork means that healthcare providers must navigate a variety of regulations that govern which types of care can be provided by virtual means, and even what modalities can be used in different care settings.

Our new interactive map explores the standards and requirements that physicians and nurse practitioners must follow when prescribing non-controlled substances or ordering tests via a telemedicine encounter in all 50 states and the District of Columbia. Key issues addressed in the survey include:

  • In what states are asynchronous solutions permitted?
  • What are state rules governing prescriptions when a physician-patient relationship does not exist prior to the telehealth encounter?
  • What are state rules on prescribing via audio-visual encounters or audio-only encounters?
  • Under what state regulations can a questionnaire be sufficient to create a physician-patient or advance practice registered nurse-patient relationship?

Click here to access the map and download the full report. 




Three Digital Health Trends Affecting Investors in 2021

Private equity deal volume hit a low in the first half of 2020 as the pandemic slowed the US and global economies. But toward the end of the year, deals began picking back up, particularly in the digital health space.

COVID-19 forced healthcare providers to shift from in-person to virtual care, and technology was the vehicle to make that switch possible. Investors noticed, and more deals focused on companies specializing in telehealth, remote patient monitoring and other technology platforms that facilitate communication among specialists.

Expect this trend to continue in 2021, and keep these three factors in mind when evaluating the digital health landscape.

Easing of Laws and Regulations Surrounding Telehealth and Digital Health

Both telehealth and digital health are highly regulated, as every state has laws and regulations that govern how care is provided virtually and how those services are billed. In response to the pandemic, we’ve seen flexibility with these laws and regulations, and the Biden administration has signaled that it might make some flexibilities permanent.

Investment opportunities will likely increase as a result of the Biden administration’s willingness to lower some of the longstanding barriers to coverage and payment for virtual services, including telehealth, remote patient monitoring and other related services. That’s a positive sign for firms looking at healthcare through the lens of a technology solution.

Reallocation of Resources Due to Vaccine Rollout

Since the onset of the pandemic, labs have conducted a huge volume of testing and have had to ramp up personnel and other resources. Plus, the vast majority of COVID-19 tests must be ordered by a physician or nurse, further straining available resources.

While testing will likely continue in some capacity for a long time, the number of tests will presumably decline steadily as more people are vaccinated. That means capacity will open up, both for healthcare providers who were ordering the tests and for lab companies that were performing them. As a result, firms should begin asking themselves:

  • Where are there opportunities to shift focus and resources previously devoted to testing?
  • What other conditions lend themselves to at-home testing?
  • Where can companies shift efforts that were previously focused on reviewing orders?

Addressing Mental Health and the Other Epidemic

COVID-19 obviously emerged as the foremost health emergency of the past year. But it’s important to remember that the United States is still in the midst of an opioid addiction epidemic.

On top of that, COVID-19 has been hard on many people’s mental health. In response, many employers have made mental health a higher priority, and that trend is likely to continue, even as employees return to the workplace. In 2021, investors are likely to continue to emphasize digital health tools and service offerings that are focused on mindfulness and behavior health.

To learn more from Lisa and other thought leaders about the healthcare investing landscape heading into 2021, you can view a recording of The Deal’s webinar here.




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