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Telemedicine/Telehealth: Update on Regulatory Issues

This article was originally printed in Dallas County Medical Society’s Dallas Medical Journal, November 2019.

Telemedicine/telehealth update

This article will focus on updates to regulatory issues that could impact a physician’s practice of telemedicine or any other provider’s practice of telehealth.

The terms ‘telemedicine’ and ‘telehealth’ are often used interchangeably, but there is a growing difference. Telemedicine can be defined as a healthcare service delivered by a licensed physician (or someone having delegated authority from that physician) to a patient using telecommunications or information technology. Telehealth, in contrast, is usually a health care service using telecommunications or information technology by a general health professional. For example, receiving health consultations remotely regarding dietary issues or exercise regimens would be considered telehealth.

Changes in Medicare Reimbursement

Medicare has evolved, and is still evolving, in its approach to reimbursement for telehealth and telemedicine services. Centers for Medicare & Medicaid services (CMS) has been busy in this area and the following are some highlights of recent changes.

  • CMS is making changes to add additional originating sites and geographic exemptions for the treatment of end-stage renal disease and acute stroke. As it does every year, CMS also considered new codes for inclusion in its list of services eligible to be delivered through telehealth, and have added G0513 and G0514, both codes related to prolonged preventive services. CMS also added new codes (99453, 99454, and 99457) for remote physiologic monitoring, as well as a new code (99491) for chronic care management.
  • The agency is also experimenting with a program that would reimburse providers using Mobile Integrated Heath (MIH) services to reduce unnecessary emergency room visits. 
  • CMS also released its finalized 2019 Physician Fee Schedule containing many changes for Medicare. Among the changes, the proposed rule not only expands telehealth reimbursement, but communicates a new interpretation by CMS of the applicability of its statutory requirements for reimbursement of telehealth. Telehealth-delivered services under Medicare limits the use of telehealth to certain services, providers, technology (mainly live video) and patient locations (e.g., certain types of healthcare facilities in rural areas). The new rule expresses CMS’s belief that their obligations to impose those restrictions only apply to “the kinds of professional services explicitly enumerated in the statutory provisions, like professional consultation, office visits, and office psychiatry services.” Certain other kinds of services that are furnished remotely using communications technology are not considered “Medicare telehealth services” and, thus, are not subject to the restrictions. This includes interactions between a medical professional with a patient via remote communication technology. Thus, CMS has finalized reimbursement for virtual check-ins, remote evaluation of pre-recorded patient information and inter-professional internet consultation, which CMS believes fall outside the scope of Medicare telehealth services. All of these services have restrictions and physicians are strongly encouraged to analyze these restrictions carefully. 
  • CMS has also taken action for Medicare Advantage plans:
    • In a recent announcement about changes to the telehealth rules, it said, “Historically, Medicare Advantage plans have been able to offer more telehealth services, compared to Original Medicare, as part of their supplemental benefits.” CMS added that it will be more likely that plans will offer the additional telehealth benefits outside of supplemental benefits, whether they live in rural or urban areas.
    • In January, CMS updated its Value-Based Insurance Design (VBID) model of care, introduced in 2017, to give providers treating people on Medicare Advantage plans more leeway in using telehealth in place of in-person checkups.

Federal Enforcement Actions in Telemedicine/Telehealth

As telemedicine becomes more common, it has, unfortunately, attracted some shady characters looking for physicians to participate in illegal reimbursement schemes. Several recent indictments and guilty pleas show that federal prosecutors are looking closely at fraudulent billing for telemedicine services. To quote from a case involving an order of bogus genetic tests via telemedicine, the Department of Justice said:

“Often, the test results were not provided to the beneficiaries or were worthless to their actual doctors. Some of the defendants allegedly controlled a telemarketing network that lured hundreds of thousands of elderly and/or disabled patients into a criminal scheme that affected victims nationwide. The defendants allegedly paid doctors to prescribe CGx testing, either without any patient interaction or with only a brief telephonic conversation [emphasis added] with patients they had never met or seen.”

In another case, the Justice Department’s Criminal Division described a conspiracy as exploiting telemedicine technology [emphasis added] meant to help elderly and disable patients in need of health care.”

All these cases reinforce the fact that “medical necessity” is still required for any medical treatment and show that kickbacks and bribes are not lawful in telemedicine, just as they are illegal in all other facets of medical practice.

Federal Safe Harbors for Telemedicine Ventures

There are two Anti-Kickback Statute safe harbors particularly relevant to telemedicine: (1) when a provider receives free electronic prescribing technology or training; and, (2) when a provider receives free electronic health records software, information technology, or training. Thus, adherence to one of these safe harbors could, in theory, potentially reduce or eliminate associated kickback risks. In addition to regulatory considerations, the American Medical Association (AMA) emphasizes certain ethical consideration, including that:

  1. All physicians who participate in telemedicine have an ethical responsibility to disclose to the patient any financial or other interests in connection to the application or service;
  2. All physicians inform patients about the limitations of the service;
  3. Physicians advise about follow-up care if needed; and,
  4. Physicians encourage patients to inform their primary care provider about the online consultation.

Are Digital Health Devices “Telemedicine” or “Telehealth”?

There have been concerns that some interactions between digital health devices and healthcare providers could be construed as practicing “telehealth” or “telemedicine.” These concerns include the necessity of obtaining FDA approval for some devices that could be construed as a “medical device.” The FDA recently released six guidance documents as part of the agency’s continued focus on updating the regulatory stance on software and other digital health products as a medical device. The updated guidance documents reflect the need for a more flexible, risk-based approach to regulation that accommodates a rapidly evolving technological landscape

The 21st Century Cures Act, enacted in December 2016, amended the definition of “medical device” to exclude five distinct categories of software or digital health products – e.g., “off-the-shelf” devices or some “clinical decision support” devices — from the definition of “medical device.” These changes will take away some of the regulatory restrictions on bringing digital health devices to market and should make telehealth more convenient to physicians and patients.

All of these changes should provide more clarity about how to practice telemedicine and, as to the litigation, how not to practice telemedicine. 


Scott Chase headshot photo | Health Law

Scott Chase, JD, has practiced health law, corporate law, and intellectual property law for more than 40 years. Mr. Chase is Board Certified in Health Law by the Texas Board of Legal Specialization. Mr. Chase is a partner at Farrow-Gillespie Heat Witter, LLP. His primary practice focus is business transactions for physicians and healthcare facilities, as well as healthcare regulatory issues, such as the Affordable Care Act, HIPAA and peer review. Mr. Chase handles general corporate matters and trademark/copyright issues for physicians and also for a variety of non-healthcare clients.

The Expansion (Finally) of Telemedicine in Texas: A Brief History and Future Applications and Considerations for Healthcare Providers

If you are a healthcare provider in Texas looking to supplement, or even transition, your practice into telemedicine, now is your time. Texas has always been a prime candidate for the benefits of telemedicine. It is an expansive state, with a large rural population that is often distant from medical care.

Thus, Texas residents are uniquely situated to take advantage of the outcome improvements and cost savings that telemedicine can provide.

Nevertheless, Texas was the last state to welcome telemedicine into its borders, in that it was the last state to abolish the requirement that a telemedicine provider first establish a patient-physician relationship via an in-patient visit. Now, after a lengthy court battle, this requirement has been eliminated, and providers are free to initiate patient-physician relationships in the telemedicine realm. While there was an immediate reaction by key players in the healthcare landscape to expand telemedicine in Texas, there remain a lot of unknowns that Texas healthcare providers should be aware of as they enter the world of telemedicine.

The Genesis and Outcome of Teladoc, Inc. v. Texas Medical Board

Teladoc, Inc. (“Teladoc”), one of the largest telemedicine providers in the United States, is based in Dallas and had been operating in Texas since 2005. Following amendments by the Texas Medical Board (“TMB”) to the state’s telemedicine regulatory scheme, Teladoc was forced to cease its telemedicine operations.

Eventually, Teladoc filed suit in federal court, alleging the TMB’s actions violated federal antitrust laws and the Commerce Clause of the Constitution. The parties then agreed to stay the proceedings to pursue settlement negotiations. These negotiations culminated in Texas Senate Bill 1107 (“SB 1107”), which was signed into law on May 27, 2017. Senate Bill 1107 abolished the requirement of an in-patient visit prior to utilizing telemedicine services. The new legislation applies across all telemedicine platforms.

Expansion Plans for Texas Telemedicine and Beyond

On September 22, 2017, the DWC announced “New 28 Texas Administrative Code § 133.30, Telemedicine Services” (the “Proposed Rule”). The Proposed Rule’s stated purpose is to “expand the accessibility of telemedicine services in the Texas workers’ compensation system by allowing health care providers to bill and be reimbursed for telemedicine services regardless of where the injured employee is located at the time the services are delivered.”

To reach this goal, the Proposed Rule included the removal of a Medicare-based reimbursement restriction that services be provided to injured employees at an originating site located in an area where there is a shortage of healthcare professionals. In other words, the Proposed Rule now allows a provider to bill and be reimbursed for telemedicine services no matter where the injured employee is located at the time the services are delivered.

Similarly, federal lawmakers are taking heed of the benefits of telemedicine. On November 7, 2017, the U.S. House of Representatives passed The Veterans E-Health and Telemedicine Support Act of 2017 (“VETS Act”). Much like the Proposed Rule issued by the DWC, the VETS Act eases geographic restrictions on telemedicine provided to veterans and aims to ensure that veterans, rural and disabled veterans in particular, can receive care across state lines.

The U.S. Senate passed its version of the VETS Act on January 4, 2018, which is slightly different than the House’s version, in that it bars individual states from taking disciplinary action against physicians who practice telemedicine across state lines.

Private employers are also noticing the benefits of telemedicine, and there has been a sharp increase in the number of large employers who see telemedicine services as a way to optimize how health care is accessed and delivered, while offsetting overall healthcare costs. More specifically, the Large Employers’ 2018 Health Care Strategy and Plan Design Survey found that 96 percent of large employers intend to make telemedicine services available to their employees at some point in calendar year 2018.

Considerations for the Telemedicine Provider

Whether a provider has been offering telemedicine services for some time or is just now getting in the game, there are some important issues to consider in updating or implementing telemedicine policies and procedures:

  • Telemedicine is a moving target – As of now, there is no uniformity across state lines in the regulation of telemedicine. From state-to-state, many crucial statutory definitions vary significantly. It is unclear how federal legislation like the VETS Act will resolve these discrepancies, if at all. Therefore, providers licensed in different states or providing services across state lines should comply with the rules and regulations of every state they encounter, including formal, regulatory schemes and the practice requirements set forth by the state’s medical board.
  • Data breach and cybersecurity risks – The provision of telemedicine exposes patients to increased cyber, privacy, and data security risks. Before launching a telemedicine practice, providers should conduct a thorough risk analysis aiming to implement policies and procedures that, at a minimum, comply with the HIPAA Security Rule and set forth an incident response plan that incorporates all applicable regulatory requirements.
  • The battle for universal reimbursement – One of the major barriers to a provider’s implementation of a robust telemedicine practice is the lack of universal reimbursement, both from Medicare and private payers. Providers should consider this issue in building their telemedicine business models, as ultimately, the telemedicine industry needs universal reimbursement to become widespread and economically sustainable.

Katie M. Ackels is a ligation attorney with broad experience for a diverse client base. Ms. Ackels primary practice areas are business litigation, employment litigation defense, personal injury litigation defense, and healthcare litigation. She graduated magna cum laude from Texas Tech University School of Law.