Telemedicine Dynamics: Regulatory Perspective

Prior to the pandemic, Medicare and Medicaid had tight restrictions on coverage of telehealth service. But given its usefulness during the long lockdown in the United States, Congress and the administration waived many restrictions, allowing for payment for telehealth services that became increasingly essential as patients couldn’t get out to see their doctors. Now, as COVID-19 outbreaks lessen in some parts of the country, the question is whether policymakers should make the reimbursement changes permanent after seeing the benefits it holds for those with less access to specialized health care.

To find out more, GLG spoke with Sarah-Lloyd Stevenson, former Policy Advisor to the White House Domestic Policy Council and former Policy Advisor at the US Department of Health and Human Services. Below are a few select excerpts from our broader discussion.

Can you give us an overview of changes we’ve seen to telemedicine as a direct result of the COVID-19 public health crisis?

Back in March, Congress signed into law the first of what ended up being three large and then two smaller subsequent COVID relief packages. The first, called the Coronavirus Supplemental Act, gave the Health and Human Services (HSS) Secretary unprecedented new authority to waive statutory restrictions around the provision of telehealth in the Medicare program. While that law provided the first waiver, each subsequent bill provided additional flexibilities and expanded that waiver authority.

The Social Security Act, section 1834(m) is very restrictive as to how telehealth services can be reimbursed in the Medicare program. With these laws, HHS has been able to waive many Medicare restrictions and statutes across the country. This spurred the tidal wave of telehealth use that we’ve seen in the last few months.

The US Senate Committee on Health, Education, Labor & Pensions recently held a hearing on telehealth where Committee Chairman Lamar Alexander suggested that the originating site rule and the expansion of covered telehealth services by Medicare and Medicaid should be made permanent. What would you say is the likely scenario coming out of this?

Let me take it two steps back. Most of this waiver authority falls into one or two buckets — one, a statutory restriction that the secretary could waive during the pandemic or rather during the specific public health emergency, or two, it was a regulatory change that HHS already had technically the authority to do but just wasn’t doing it before. But nearly every change we’ve seen so far has been temporary during the public health emergency.

The statutory changes for telehealth are contingent on the current public health emergency. Right now, we’re all waiting kind of on the edge of our seats to see if HHS is going to continue the public health emergency at the end of July. I think that they will. [Ed. note: the HHS has since extended the public health emergency until October 22, 2020.]

Once the public health emergency does end, these authorities will go away. Some of them fall into the regulatory bucket where they could continue those on their own. I can talk you through which ones are regulatory and which ones are statutory.

Let’s focus first on the statutory pieces. Right now, there’s a lot of conversation on Capitol Hill about how patients are using telehealth in the Medicare program for the first time ever. It’s something that many of us have been advocating for years, and it’s working. Patients are using it. Providers are using it. It’s well received. Congress seems to realize that, while they’ve given the authority to grant access to telehealth, it could go away if they don’t act.

So, what’s going to happen? What we heard from Chairman Alexander is there’s a bit of a tug and pull right now in Congress. Some are arguing that they need to change the underlying statutory problems — what I would call arbitrary restrictions in 1834(m) of the Social Security Act — or do we just go into an extended waiver authority period?

There have been some pieces of legislation introduced. I’ll put it in kind of three buckets right now.

Number one, there are many offices and members of Congress interested in some sort of data collection. Essentially, their argument is we can’t make a final permanent policy change until we know how telehealth has really been used, how costs have gone up or gone down, how patient safety has or has not been compromised, how privacy’s been compromised, etc. We can’t make that decision until we have data, according to some.

I believe that there’s a problem with that strategy because the data could take years to come, as well as it’s kind of unfair to judge a modality of care like telehealth from a pandemic. It’s not really apples to apples. Utilization in telehealth went up in the last few months, but it will eventually start to slide off, and we’re actually starting to see that.

Number two, perhaps we extend this waiver authority indefinitely, but with the idea that the extension is advisable. That would provide a sort of sliding transition back to normal, or a transition into something that’s more permanent.

Number three is more ambitious. We change the underlying statute. Let’s get into 1834(m), change the specific issues around geographic restriction, originating site restriction, and a few others to just fix the problem where it starts. This is something that most of the industry wants right now. Just today we saw approximately 340 organizations in this space — telehealth providers, patient organizations, patient advocacy groups — write to Congress to say the issue needs fixing. Change the underlying statute so we can move forward.

That’s what Chairman Alexander was talking about at the hearing. It was huge news in this little world of telehealth that the chairman of the health committee may be interested in championing this issue. It would be very welcome considering his years of leadership. [Ed. note: on July 30, Chairman Alexander introduced the Telehealth Modernization Act to make many of these temporary telehealth policies permanent.]

How much might health plans stand to benefit from the regulatory changes we’ve seen to date and the potential that some of these changes might remain permanent?

It’s a little tough to say, because for the most part they have had the authority to do this all along. If they wanted to provide telehealth to their beneficiaries, they could’ve been doing it. It’s just whether or not the state was requiring it to be covered or reimbursed at parity.

Employers have been providing telehealth or covering telehealth services for years because they see that added benefit. Employers definitely see a benefit, for example, if their employees don’t have to leave the workplace for medical appointments. If it keeps employees healthier longer, or keeps them out of the ER, an employer or a health plan can see implicit benefits.

The data pretty much supports that. But the tricky thing is that generally we have anecdotal cases and specialty-specific arguments around how avoiding the ER reduces costs, but there’s little data for broader care. But COVID might change that.

I’d like to make a final Medicare Advantage (MA) point because, obviously, MA plans are private plans funded through Medicare. MA, starting in plan year 2020, has been allowed to have telehealth as a base benefit.

This was enacted in 2017 and came into effect January 1, 2020. So, you would think, “Great, they’re going to see this benefit for patients that they have to pay a capitated rate for.” But it hasn’t really been the uptick that we all expected. That’s largely because the Medicare program was not allowing telehealth visits to count toward Medicare Advantage risk-adjustment rates.

But now, during the pandemic, the Centers for Medicare & Medicaid Services (CMS) is allowing that to count. And I know there are a lot of people out there who are hopeful that will count moving forward. This is something that will likely not require a statutory change. CMS can move forward without an actual act of Congress.

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About Sarah-Lloyd Stevenson

Sarah-Lloyd Stevenson is currently a Director at Faegre Drinker Consulting, working with health and life sciences stakeholders. Prior to this, she served as Policy Advisor to the White House’s Domestic Policy Council and its Office of Science and Technology Policy until July 2019, providing policy reports, recommendations, and updates to the West Wing on a daily basis. Before that, she worked as Policy Advisor at HHS and gained insight into the agency processes and collaborations that drive health policy. She reviewed, edited, and approved agencies’ regulations, funding opportunity announcements, reports, budget documents, press pieces, and other correspondence, working with various agencies including the Centers for Disease Control and Prevention, Food and Drug Administration, and National Institutes of Health. Sarah-Lloyd’s policy career began in the office of Sen. Roger Wicker (R-Mississippi), where she served as a key advisor on domestic and global health policy.

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This article is adapted from the June 29, 2020, webcast “Telemedicine Regulatory Dynamics: Impact of COVID-19.” If you would like access to this teleconference or would like to speak with Sarah-Lloyd Stevenson, or any of our more than 700,000 experts, contact us.