March 18, 2020
Health Care Alert
With the impending surge of COVID-19 patients on the horizon, federal government and state leaders are enacting historic expansions of telehealth. The policy change on the use of telecommunications in patient care could be transformative for the American health care system.
Copyright © 2020, American Health Lawyers Association, Washington, DC. Reprint permission granted.
As the health care system braces for a surge of COVID-19 patients, state and federal governments are increasingly looking to telehealth for help. During the last few weeks, medical providers across the United States started, revamped, or expanded their virtual care capabilities. Public health experts, including the Centers for Disease Control (CDC), agree that a wider adoption of telecommunications in patient care will improve hospital capacity by preventing the additional spread of the virus. In the face of a global pandemic, federal legislators, state governors, and regulators around the country are acting in concert to leverage telehealth.
The policy changes include:
These policy changes reflect the recognition at national and local levels that telehealth will be critical in helping to limit further exposure and stop the spread of COVID-19 in health care settings. In addition, the significant opportunities arising for virtual care, which is at the forefront of the fight against coronavirus, may transform telehealth forever.
Existing Medicare Fee-For-Service Reimbursement
The lack of Medicare reimbursement for telehealth is a key roadblock to the wider adoption of telehealth. For decades, Medicare reimbursement for telehealth services was limited to certain circumstances. A patient receiving telehealth services was required to be at an “eligible originating site,” meaning the patient had to be located in a rural area and in a medical facility.  The patient’s home was not considered an eligible originating site. In other words, telehealth services provided to a patient located at home were not reimbursable by Medicare under this framework.
Medicare expanded reimbursement for telehealth services incrementally over the past few years. For example, it allowed reimbursement for (1) brief, patient-initiated communications with a health care practitioner, known as “virtual check-ins” with existing patients and (2) non-face-to-face, patient-initiated communications through an online patient portal, known as “E-Visits.” The most recent appropriations bill removed key restrictions imposed upon virtual care to address the COVID-19 national emergency.
Congressional Expansion of Telehealth to Curb Coronavirus
As part of the federal government’s initial response to the growing pandemic, the bi-partisan Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 appropriated $500M to telehealth reimbursement, opening the door for the Centers for Medicare & Medicaid Services (CMS) to expand telehealth coverage. The new law amended Section 1135 of the Social Security Act by authorizing the Department of Health and Human Services (HHS) to issue waivers that remove traditional limitations for telehealth in an emergency area during an emergency period. Under the statute, the telehealth waiver authority was automatically triggered by the COVID-19 pandemic.
CMS Guidance on “Blanket” Telehealth Waiver Under Section 1135
On March 16, 2020, CMS exercised its newly granted authority under Section 1135 of the Social Security Act (Section 1135 waiver) to expand telehealth services during the COVID-19 emergency. Clinicians can bill immediately for dates of service starting March 6, 2020. The Section 1135 waiver allows for the following:
The following table provided by CMS summarizes Medicare FFS reimbursement for telehealth services:
Many states continue to restrict Medicaid reimbursement to limited circumstances, but this may also change as telehealth becomes the most viable option for access to care. In efforts to combat the virus, state governors and public health leaders have announced expansions in Medicaid reimbursement in many states. For example, New York has expanded telehealth coverage and reimbursement for disability services under Medicaid. It is also important to remember that many state Medicaid-managed care plans already authorize telehealth, and some states have already required parity in payment for telehealth. Irrespective of the availability of reimbursement, it is also worth noting that licensure, supervision, and professional judgment are still required, and professional standards of care have not changed.
Recognizing that the virus does not discriminate by state line, both state and federal regulators are removing licensing barriers for health care providers to care for COVID-19 patients. HHS issued a separate 1135 waiver of the requirement that “physicians or other health care professionals hold licenses in the state in which they provide services if they have an equivalent license from another state.”
State leaders and medical boards are similarly beginning to loosen their restrictions regarding cross-state licensure. For example, New York is permitting unlicensed individuals, upon completion of training deemed adequate by New York’s Commissioner of Health, to collect throat or nasopharyngeal swab specimens from individuals suspected of being infected for purposes of testing. Certain state governors and medical boards are removing home state licensing restrictions altogether. In California, licensure requirements are waived for any out-of-state medical personnel that come to California to provide health care services in an effort to assist in preparation for, respond to, mitigate the effects of, and recover from COVID-19. These efforts are all aimed to increase staffing and the capacity to care for COVID-19 patients. 
Given the importance of social distancing and other strategies recommended to reduce the risk of COVID-19 transmission, federal enforcement agencies are giving providers more flexibility, including by allowing providers to offer telehealth services for free and/or making it easy-to-use.
It appears that federal and state governments and enforcement agencies will continue to find ways to expand much-needed access to care during the COVID-19 pandemic. Providers should begin planning their telehealth strategies now to prepare for hospital surges, reduction of physician office visits, or find alternatives to in-office care, such as remote visits. In the fight against the novel coronavirus, providers have more flexibilities and freedom on coverage, modality of technology used, and location of the patient.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.
Health Care Alert | 08.05.20
Health Care Alert | 03.31.20
Environmental Law Alert | 03.27.20
Corporate/M&A alert | 03.25.20
Interstate Commerce Alert | 03.20.20
04.02.20 | Webinar
03.31.20 | Webinar