Telehealth laws and regulations in 2019 have set the stage for increased access and use

By | December 12, 2019

In some ways, 2019 has been a banner year for telehealth. The remote care delivery model has been gaining traction among patients, particularly those who have grown up with technology. As the model becomes more legitimate in the eyes of providers and consumers, it becomes more widespread, and could help to mitigate the effects of physician shortages that have had an especially hard impact on rural areas.

As telehealth takes center stage, though, there emerges the need for laws, regulations and industry practices that ensure its feasibility from a reimbursement, procedure and clinical care perspective. And that’s what has made 2019 such an interesting year for telehealth: A framework is starting to emerge, and while it’s not fully mature, it’s no longer the nascent healthcare delivery approach it once was.

Below, we take a look back at the year that was, and how the changes that have happened in telehealth could affect the years ahead.


While states are largely responsible for crafting laws regulating the use and access of telehealth, the legislative picture is gradually becoming more favorable for the remote healthcare model. Adoption, especially in rural markets, is becoming more widespread.

This is particularly true when it comes to the use of telehealth to administer mental health services. An October survey from national law firm Epstein Becker Green found that both state and federal lawmakers increasingly support coverage for mental health services provided via remote technology, with all 50 states and the District of Columbia now providing some level of coverage for telehealth services for their Medicaid members.

Earlier this year, for example, Massachusetts approved coverage of telehealth services for its 1.9 million Medicaid members seeking access to psychologists, psychiatrists, psychoanalysts, clinical social workers, behavioral health nurses, nurse practitioners, and professional counselors.

Kentucky adopted legislation that went into effect July 1, which allows telehealth visits to take place in a patient’s home, while Arizona expanded its telehealth law to include coverage of treatment services for substance-abuse disorders.

At a federal level, home-based telemental health has bipartisan support in Congress in the Mental Health Telemedicine Expansion Act, which was reintroduced earlier this year.

Where things can get tricky is in the patchwork nature of the regulatory picture. State regulations, by nature, are confined to state boundaries; any legislation on the books in North Dakota, for instance, applies only to North Dakota.

But telehealth doesn’t know any boundaries, at least hypothetically. So without a more robust federal framework, providers looking to offer any kind of telehealth services have to be aware of various state laws and administer care accordingly. Telehealth Company X may be located in New Mexico, but if a physician on its network is tending to a North Dakotan, they need to adhere to North Dakota law.

That represents a potential barrier to more widespread adoption. Another is that state parity laws are largely loose and ineffective. Such laws are intended to ensure the same coverage of services provided in person, but the laws themselves are often not very robust — simply stating that telehealth services must be medically necessary in order to be covered, or that payers should not exclude services solely because they were provided through telehealth.

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Telehealth parity laws are currently in effect in 39 states and the District of Columbia. Momentum came to a halt last year as payers, providers, and legislators in several states couldn’t reach agreements on reimbursement levels.

Telehealth isn’t completely off the federal radar. HIPAA addresses it to a certain extent, and with respect to the prescribing of controlled substances, there’s the federal Controlled Substances

Act. So far there’s not a whole lot more than that, but Amy Lerman, a member of Epstein Becker Green in the Health Care and Life Sciences practice, anticipates that future DEA regulations could allow for the long-awaited “special telemedicine registration,” which would enable physicians to prescribe controlled substances without conducting a prior in-person examination first.

Also representing movement at the federal level is the CONNECT for Health Act of 2019, introduced in the Senate in October, which would grant authority for the Secretary of the Department of Health and Human Services to waive current telehealth restrictions in fee-for-service Medicare, including remote services in the home. It has the support of numerous healthcare organizations, including the American Hospital Association, the American Medical Association, and the Health Information and Management Systems Society (HIMSS), the parent organization of Healthcare Finance News.

Medicare Advantage plans have long had more flexibility to use telehealth services.


In late September, the California state senate approved a bill, AB-744, that if passed would result in telehealth being reimbursed at the same rate as an in-person doctor’s visit. The bill is expected to be signed by Governor Gavin Newsom, and could eventually have ripple effects that touch telehealth reimbursement across the country.

As physicians are currently reimbursed at a lower rate for telehealth versus an in-person visit, the California bill would drastically change how much providers get paid for offering virtual services. Currently, telehealth reimbursement varies significantly across the U.S. The Centers for Medicare and Medicaid Services is the biggest payer for telehealth, while third-party payers all have different rules and guidelines for how to reimburse remote care services.

A patchwork approach to reimbursement laws means states have taken the lead in crafting their own rules. About 40 states have some kind of telehealth reimbursement rules that bring the playing field closer to true parity, but the path has been uneven, and as yet no national guidelines exist.

The bill will likely have its biggest impact in the rural areas of the state. In California and across the country, rural areas are more likely to be hit by persistent physician shortages that are restricting access to care in remote communities. AB-744 seeks to break down some of the reimbursement barriers that can prevent telehealth services from seeping into these high-need communities. But because national reimbursement requirements are so varied and uneven, it’s a difficult path to navigate.

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AB-744 is likely getting attention from some of the larger players who have swooped in to change the landscape of U.S. healthcare. Amazon and WalMart, who are both edging their way into the healthcare business, have tinkered with the idea of expanding into specialty consultations in areas such as cardiology, neurology and psychology — a move that would be made easier if the reimbursement picture is more clear.


The emergence of telehealth has given rise to the possibility of connecting with healthcare providers remotely, but there’s one snag for those who wish to offer it as a service: the law.

At the federal level, the Anti-Kickback Statute poses a substantial risk to parties entering into telehealth arrangements, due to its wide reach, as well as its ties to the federal False Claims Act. The statute prohibits the offering, paying, soliciting or receiving anything of value for referrals of business pertaining to healthcare.

A violation of the Anti-Kickback Statute, or AKS, can result in significant civil penalties. That can include $ 11,000 to $ 22,000 in per claim penalties, not to mention treble damages and potential exclusion from participation in federal healthcare programs. The AKS is a criminal statute and, as such, convicted violators face potential jail time.

The AKS can come into play in any arrangement in which something of value — remuneration — is provided by one party to a telehealth arrangement where there might be referrals of federal healthcare program patients between the parties. When the arrangement involves a financial relationship between a physician and certain entities billing Medicare and Medicaid, the Stark Law may also be implicated.

An example of a telehealth arrangement that could implicate both laws would be an arrangement in which a hospital engages a physician to provide on-call telestroke services where the hospital provides the equipment to the physician and pays the physician an hourly rate for his or her services.

Both the AKS and the Stark Law have what are referred to, respectively, as “safe harbors” or “exceptions.” These protect certain arrangements that might otherwise violate these laws. Because of the nature of the Stark Law in particular, all of an exception’s requirements must be met, or else the law has been violated.

One example: An entity can enter into a bona fide employment arrangement with a physician in which the entity pays compensation to the physician if the amount of the compensation is consistent with fair market value — not determined in a way that takes into account the volume or value of any referrals by the physician to said entity.

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If the compensation isn’t at fair market value, the Stark Law is violated, regardless of the reason for exceeding the fair market value compensation level. The AKS is a little more forgiving. It has safe harbors that protect arrangements in which all of the safe harbor’s requirements have been met, but unlike the Stark Law, failing to meet all those requirements doesn’t necessarily mean the law has been violated.


Until recently, reimbursement for remote patient monitoring services was something of a gray area for providers. It was only a year ago, after all, that CMS issued its final 2019 Physician fee Schedule and Quality Payment Program, which opened the door to reimbursement for services that enable providers to manage and coordinate care at home.

There were a number of changes, one being the implementation of new CPT codes. CPT code 99453 sets parameters on remote monitoring in regards to measuring weight, blood pressure, pulse oximetry and respiratory flow rate, as well as guidelines on patient education surrounding such equipment. PT code 99454 is similar, but focuses on the devices themselves and sets guidelines around daily recordings and programmed alerts.

For providers, though, perhaps the most impactful new CPT code is 99457. That’s where the reimbursement picture becomes a little more clear.

CPT code 99547 went live in January. According to Health Care Law Today, it offers Medicare reimbursement for “remote physiologic monitoring treatment management services, 20 minutes or more of clinical staff/physician/other qualified healthcare professional time in a calendar month requiring interactive communication with the patient/caregiver during the month.”

When CMS’ final rule was published in November 2018, CMS said code 99457 described professional time — meaning it “cannot be furnished by auxiliary personnel incident to a practitioner’s professional services.”

But in a technical correction inspired by industry feedback, CMS removed that sentence entirely and confirmed that these services may be furnished by auxiliary personnel incident to a practitioner’s professional service.” Telehealth providers applauded the revision.

The change means that remote patient services are now more closely aligned with chronic care management services, the difference being that the default rule for incident to billing under Medicare requires direct, not general, supervision.

Direct supervision essentially means that the physician and all auxiliary personnel have to be in the same building at the same time, though not necessarily in the same room. General supervision, on the other hand, doesn’t require all parties to be in the same building simultaneously. Instead, the physician could use telemedicine to facilitate general supervision over the auxiliary personnel.

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