Health Law Scan

Legal Insights and Perspectives for the Healthcare Industry

Digital health—that is, medical care enhanced or made possible by the use of technology—has changed the landscape of healthcare in America. Innovation in this sector is at an all-time high and 2024 will no doubt see greater expansion and acceptance of digital health within the care continuum.

Much of the momentum associated with digital health implementation stems from the COVID-19 pandemic and the Public Health Emergency (PHE) declared to address it. With the impending expiration of most PHE-era flexibilities, 2024 will present an opportunity for federal and state lawmakers to solidify many of the telehealth programs and reimbursement methodologies providers and patients have come to rely on during the past few years.

Below are our top five areas to watch in digital health in 2024.

1. Expansion of Medicare Telehealth Coverage

Historically, the Medicare program’s ability to cover telehealth services was severely curbed by a provision in the Social Security Act (Section 1834(m)) that limited telehealth coverage to certain rural areas and only when a patient is at a designated “originating site” (such as a hospital, skilled nursing facility, or physician’s office). The PHE’s flexibilities waived these restrictions, enabling access to telehealth services to virtually all seniors in the United States. While these flexibilities were extended to December 31, 2024, the Section 1834(m) restrictions are set to renew in 2025, resulting in pre-PHE limitations on telehealth coverage returning next year if Congress does not act.

Of course, Congress is currently deliberating long-term expansion of Medicare telehealth coverage and is likely to enact legislation prior to the December 31, 2024 sunset date. For example, the CONNECT for Health Act of 2023, which enjoys broad bipartisan support, would expand the definition of an originating site to include the home, waive limitations on the types of practitioners eligible to furnish telehealth services, and continue the use of telehealth for hospice recertification. This and other bills are being actively considered on Capitol Hill.

Although we expect some type of legislation to pass before the flexibilities expire, nothing is guaranteed when it comes to congressional action, and the timing of any legislation remains in question. Although there is widespread support for expansion, the legislative vehicle to secure expansion is not yet apparent, and there are several issues—including general funding—that will take precedence.

In addition, the contours of any telehealth coverage bill need to be further hammered out, including whether coverage will be allowed for audio-only (telephone) services, whether Medicare telehealth coverage will be permitted in both rural and urban areas, whether both new and established patients may utilize telehealth services, and if coverage will be limited to certain specialties or CPT codes. Congress’s decisions on these issues will be critical to understanding to what extent telehealth will alter the Medicare landscape in the future.

2. Role of Managed and Value-Based Care in Expanding the Use of Telehealth

Although telehealth and digital health tools are seemingly poised for expanded reimbursement opportunities within the Medicare program and other insurance programs, the adoption of these technologies is getting a boost already through their successful integration in managed care plans and value-based care platforms.

Specifically, even where reimbursement for the provision of certain telehealth services or digital health tools may not be available, these technologies still present the opportunity to enhance care quality, efficiency, and access by getting patients to the right diagnosis more quickly and ensuring more consistent patient-provider contact.

Ultimately, if implemented effectively, these tools can mitigate costs and enhance user satisfaction for capitated and risk-bearing entities. And because these entities’ financial performance is derived in part from these factors, digital health tools that support these efforts can be worth their initial investment. Further, since a separate fee-for-service revenue stream is not necessary for such value to be realized, managed care organizations have significantly more flexibility than a traditional provider in ensuring the financial viability of these tools.

In 2024 (and beyond), we believe that successful integration of telehealth services will be critical to the success of managed care plans and value-based care models seeking to increase patient engagement in preventative care and improve health outcomes for the patient populations these models serve.

3. Remote Patient Monitoring

Whether it is called remote patient monitoring, remote physiologic monitoring, or remote therapeutic monitoring, in-home health data gathering technology is here to stay. This past year, for instance, the US Department of Health and Human Services (HHS) Office of Inspector General (OIG) signaled an increased interest in the delivery of digital health services, publishing both a work plan agenda item on the use of RPM services in the Medicare program (as well as a telehealth claims toolkit).

Although these OIG activities focused on different modalities, both emphasize OIG’s concerns regarding fraud, waste, and abuse in the digital health space as well as the growing interest in ensuring that these services are available to Medicare beneficiaries and appropriately delivered.

However, challenges remain in reimbursement and compliance with RPM billing elements, which are myriad and often difficult to achieve, making providers’ willingness to engage directly with RPM more limited. For example, Part B providers are expected to incur a direct expense associated with the RPM devices and must provide sufficient clinical oversight (from both a physician supervision and clinical staff perspective). Also, many conditions for which RPM may be warranted clinically may not require monitoring for 16 days.

Accordingly, we anticipate that Congress will focus on revising and expanding RPM access, including through reductions in the 16-day data collection period to just two days (as is currently proposed by the Expanding Remote Monitoring Access Act). While the Centers for Medicare and Medicaid Services (CMS) and the American Medical Association have laid the groundwork for the provision of in-home monitoring, the current framework is not readily adaptable to general practitioner use.

Additionally, as CMS has signaled before, it intends to revise its practice expense methodology to better enable vendor involvement in care delivery and establish a process for permitting licensing and other fees that may make RPM more accessible. Whether it is Congress or CMS, it is clear that more needs to be done in 2024 to promote the use of RPM.

4. Application of Artificial Intelligence to Telehealth

For both medical devices and clinical decision support software, refinement in artificial intelligence (AI) is expected to enhance clinical productivity and decision-making in 2024. Although reimbursement methodologies for AI remain unclear (except in limited circumstances under certain Ambulatory Payment Classifications (APCs) paid for by CMS), both the federal government and state medical boards are considering the role of AI in the medical community.

For example, the Federation of State Medical Boards has empaneled a working group devoted to developing model policy statements on the use of AI technologies by physicians, which raises many significant questions: What is the work that a licensed practitioner is doing? How does the use of tools, particularly those that may have their own facet for decision-making, alter the role and liability of a physician in caring for a patient?

The American Medical Association has developed an AI taxonomy guide to attempt to categorize the role of AI in medical practices. It is possible that this taxonomy, along with guidance from CMS, could serve as a basis from which state and federal reimbursement policies are fostered. It is highly likely that CMS will provide additional insight into reimbursement for AI-enhanced technologies—not just for hospital services, but also for practitioner services—in the coming year.

5. Acute Care at Home

Finally, acute care at home is the last digital health trend we are watching in 2024. In addition to the benefits of telehealth and RPM services themselves, the continued development of digital health technologies also enables the delivery of care traditionally provided in facilities to be provided to patients in the comfort of their own homes.

In this model, patients who have a diagnosis that is typically treated in an inpatient stay would instead be transferred to their residence. They are then cared for through a combination of RPM services, telehealth-driven practitioner services, in-person nursing/paramedic support, and home delivery of medication and medical equipment.

While a number of hospitals have participated in CMS’s Acute Hospital Care at Home initiative, this waiver—which provides a hospital diagnosis-related group payment for Hospital at Home care—is set to expire on December 31, 2024. As a result, many questions regarding continued reimbursement for this type of service remain. We anticipate that CMS will provide greater clarity on payment considerations for this type of service this year. In addition, as this model becomes more mainstream, related issues of liability and appropriate licensure will percolate and likely be addressed by state licensing authorities.

Overall, 2024 will be a pivotal year for the growth of digital health as a complementary area of medical practice. The decisions that Congress, CMS, and state authorities make this year regarding telehealth, RPM, and other technologies will have a significant impact on how Americans access medical care.

For any questions about reimbursement, licensure, or compliance with digital health technologies, contact the authors or your Morgan Lewis attorney.