Legal Insights and Perspectives for the Healthcare Industry

It’s October 1, and that means this month is the deadline for the US Drug Enforcement Agency (DEA) to issue its final rules on special registration for telemedicine. The SUPPORT Act, signed into law on October 24, 2018, gave the DEA one year to promulgate regulations specifying the circumstances under which special registration may be obtained and the procedure for doing so. When finalized, special registration should give telehealth providers significantly more flexibility to prescribe controlled substances without first performing in-person exams.

We hope you were able to join us for last month's Fast Break on the Physician Fee Schedule proposed rule. If not, you missed a great session featuring Eric Knickrehm discussing the important changes the proposed rule would have on Medicare Part B. 

Eric provided an overview of the most important aspects of the proposed rule, which was published on August 4, 2019. A number of these changes highlight CMS's increasing emphasis on preventive and low acuity care. For instance, CMS has continued to incentivize Transitional Care Management services and Chronic Care Management services to ensure that patients who were either recently hospitalized or are very likely to be hospitalized have effective care management to avoid further hospitalization.

Coming on the heels of the FCC’s recently proposed $100 million Connected Care Program to fund telehealth-based connections between healthcare providers and patients, and continuing its recognition of the critical role telehealth plays in the healthcare industry, the FCC recently voted to adopt an extensive order overhauling the Rural Health Care (RHC) Program. The RHC Program has been supportive of telehealth services for some time, providing subsidies to rural healthcare providers to lower the expense of their broadband services, including monthly telecom and broadband recurring costs, and funding for special construction and network equipment where the healthcare provider otherwise lacks access to telecom or broadband facilities. (Read our prior blog on the FCC’s proposal.

The RHC Program has significant funding—over $571 million—and this reform is designed to streamline certain procedures, provide priority to rural healthcare in areas that are medically underserved, simplify the calculation of amounts that healthcare providers pay and service providers receive, reform the competitive bidding process, and improve the application process. The FCC intends for these comprehensive program changes to support vital telemedicine and telehealth services in rural communities while promoting efficiency and transparency and avoiding waste, fraud, and abuse.

The FCC recently issued draft rules for a pilot funding program to enhance broadband service for connected care telehealth purposes, reflecting the agency’s recognition of the increasingly critical role that telehealth plays in the healthcare industry. The proposal for a $100 million fund to use advanced telehealth technologies to reach low-income Americans and veterans will be of great interest to many healthcare companies.

Summer is almost upon us. And in between the BBQs, pool parties, and baseball games, you might be trying to understand the risks involved in offering healthcare services through telehealth. Whether you're an independent physician or practitioner, part of a hospital or physician group, or working for a telehealth platform provider, there are a number of things to consider.

CMS finalized a rule last month that will significantly expand access to telehealth services for patients in Medicare Advantage plans. Implementing provisions of the Bipartisan Budget Act of 2018 (BiBA), the new rule will allow patients to (finally) receive healthcare services from the comfort of their homes. According to CMS Administrator Seema Verma, “With these new telehealth benefits, Medicare Advantage enrollees will be able to access the latest technology and have greater access to telehealth.”

We had a successful Fast Break on HealthTech Startups last month. The program, led by Morgan Lewis corporate partners Andy Ray (@AMRayEsq) and Jeff Bodle (@jeffbodle), explored a lot of the things that might affect the relationship between capital investors, including corporate venture capital and startup entrepreneurs. We discussed a bit about the background of how a startup begins and explored the process through which a successful startup begins to obtain capital, especially when integrating vertically with potential buyers of their products (not just their business). This Fast Break also touched on some of the common healthcare regulatory issues we have to contend with on both the startup and the corporate side during diligence. If you’d like to take a listen, here is a recording of the program.

A handful of bills that comprised a healthcare reform package championed by Florida House Republicans are on their way to the governor’s desk where they’ll likely be signed into law. The result of an ambitious effort by lawmakers to overhaul how Florida regulates healthcare, the bills represent a striking departure from the current regulatory environment. Passed during the last week of the legislative session with a July 1, 2019, general effective date, providers will want to begin reviewing their policies in anticipation of the coming change.

We're excited to introduce Tele-Tuesdays, a new feature on Health Law Scan where we'll bring you the latest updates in the world of telehealth legal issues. From new regulations and legislation to enforcement actions and changes in the telehealth landscape, we'll cover it all.

Federally, telehealth continues to be a central feature of the government’s efforts to expand access and control soaring healthcare costs. Just last week, CMS finalized its rules implementing the Bipartisan Budget Act of 2018, which will increase flexibility for Medicare Advantage (MA) plans offering telehealth services irrespective of whether a patient is in a rural or urban area. Right now, MA plans are working feverishly to redesign their telehealth benefits in anticipation of plan year 2020. Providers interested in offering telehealth services should assess their current MA contracts and consider engaging with plans to make sure their telehealth services are covered. According to Kaiser Family Foundation, MA plans now cover 34% of Medicare beneficiaries, so this will be a momentous occasion in the expansion of telehealth coverage. And should the results of this expansion be as favorable as anticipated, expect future legislation that will expand telehealth to all Medicare beneficiaries, whether enrolled in MA plans or in Original Medicare.