Health Law Scan

Legal Insights and Perspectives for the Healthcare Industry

Is the COVID-19 pandemic making you feel a bit like Bill Murray in Groundhog Day? Although most parts of life have returned to the "new normal," the federal government remains in a seemingly endless cycle of regulatory uncertainty.

Once again, the US Department of Health and Human Services (HHS) is poised to extend the COVID-19 federal public health emergency (PHE), this time into 2023. This latest extension will have major ramifications on Medicare telehealth policies if the Centers for Medicare & Medicaid Services (CMS) doesn't take additional action. While CMS has begun to imagine a life without the PHE, as indicated by a recent blog post titled, “Creating a Roadmap for the End of the COVID-19 Public Health Emergency,” there is no sign that the PHE is in fact nearing its end.

HHS has committed to provide stakeholders and states with at least 60 days’ notice prior to terminating the PHE to prepare for the implications of the end of this period. On August 16, 2022, that deadline (albeit a self-imposed one) came and went with no indication from HHS that the PHE will end on October 15, 2022. As it has done in several prior instances, HHS will now likely issue a formal extension in early to mid-October—just a few days ahead of the current scheduled expiration. Another 90-day extension would take the PHE into mid-January 2023.

But this latest extension will have special significance. Multiple flexibilities from HHS and CMS are set to expire “in the year in which the PHE ends.” Crossing the December 31 line will effectively extend these flexibilities for an entire additional calendar year, unless CMS revises its regulations to reflect an earlier sunset period.

While this is indeed welcome news for many providers, some have begun to grow increasingly concerned about the ongoing delay in developing permanent telehealth policies and the impact of that on their long-term strategies and growth opportunities. While Congress has made some headway in passing telehealth extension legislation, we still don’t have clear direction on what virtual care services will be permitted in the future and how they will be covered. And without a greater understanding of what healthcare will look like in five to 10 years, investors have been hesitant to throw the full weight of their capital into virtual care offerings.

The healthcare community has developed significant data on the use and cost of telehealth services, even outside of the early days of the pandemic that may not adequately represent standard healthcare services. Congress, in concert with regulatory bodies, the Congressional Budget Office, and industry stakeholders, should consider a permanent strategy of adoption for virtual care so that the medical community can develop a realistic pathway forward.