Telemedicine Chapter By Tara Kepler, JD, MPA

Transcription

1 2015 Physician Law Evolving Trends and Hot Topics Telemedicine Chapter By Tara Kepler, JD, MPA I. INTRODUCTION WHAT IS TELEMEDICINE? TELEHEALTH? II. PRACTITIONER LICENSING DILEMMAS A. Multi-State Licensing and Special Telemedicine Permits B. Licensing Exceptions C. Regulation of Non-Physician Practitioners III. E-PRESCRIBING RESTRICTIONS: THE GOVERNMENT S MOST RECENT GAUNTLET FOR THE TELEMEDICINE INDUSTRY A. Do You Love or Haight the DEA s New Internet Prescribing Restrictions? B. DEA Restrictions on e-transmission of Prescriptions C. State Regulation of eprescribing IV. BEWARE OF THE LESSER-KNOWN TELEMEDICINE REGULATIONS A. States That Are Currently Leading The Pack On Heightened Requirements B. Informed Consent C. Medical Records and Privacy D. Standards of Care and Unprofessional Conduct E. Hospital Licensing F. Certificate of Need G. Teleradiology H. Physician-Patient Relationship and Physician Supervision I. , Internet Advertising, and Websites J. Contractual Arrangements K. (New?) FDA Regulation of Telemedicine Software, Devices and Mobile Apps

2 V. REIMBURSEMENT A. Medicare Reimbursement B. State Medicaid and Private Payor Reimbursement VI. MALPRACTICE, LIABILITY, AND HEIGHTENED STANDARDS OF CARE A. What Are The Applicable Standards Of Care? B. Duty of Care, Continuity of Care, and Patient Abandonment The Telemedicine Dilemma of Multiple-Physician and Multiple-Facility Involvement C. Malpractice Insurance Coverage D. Jurisdiction and Choice of Law VII. FRAUD AND ABUSE ISSUES UNIQUE TO TELEMEDICINE A. Federal Kickback Restrictions B. Federal Self-Referral Prohibition C. False Claims Act and Civil Monetary Penalties D. State Fraud and Abuse Laws E. Corporate Practice Of Medicine & Fee-Splitting The Real Barriers To Telemedicine Ventures F. International Implications Page 2 of 42

3 I. INTRODUCTION This chapter addresses the key laws and compliance dilemmas that executives and legal counsel must consider before embarking on a new telemedicine business venture or project. The goal of this chapter is to serve as a resource guide and easy desk reference to make this tangled web of telemedicine regulation more navigable. However, because this area of the law is expansive and rapidly evolving, this chapter should not be used as a comprehensive guide to all applicable telemedicine laws for each state across the U.S. for a specific telemedicine project. Readers should understand that each telemedicine business venture is unique and implicates a wide range of laws. What Is Telemedicine? And Is It Different From Telehealth? The first telemedicine issue legal counsel must initially resolve is whether the activity in question is telemedicine or not and, thus, subject to special rules. Telemedicine generally refers to the use of technology to undertake an activity constituting the practice of medicine when the healthcare practitioner and patient are not in the same physical location. However, the answer to the initial question of what is telemedicine is not always as simple as it may seem, because the definition of telemedicine varies based on the location of the act and the governmental agencies that have authority to regulate the act. For example, the Centers for Medicare and Medicaid Services (CMS) under the U.S. Department of Health and Human Services defines telemedicine to include two-way, real-time interactive communication between the patient and distant site physician but not communication via telephone, , or fax. 1 Many state laws follow CMS s lead in this definition of telemedicine for the purposes of state Medicaid participation, 2 but other state law definitions of telemedicine include telephone calls, s, or faxes. 3 The definition of telemedicine can even vary within a given state depending on the regulatory authority or purpose of the particular law 1 42 U.S.C. 1395m(m)(1); 42 C.F.R (a)(3). 2 E.g., COLO. REV. STAT (5); NEB. REV. STAT (4); N.M. STAT (C). 3 E.g., CAL. BUS. & PROF. CODE ; KY. REV. STAT (17); MONT. CODE ; NEB. REV. STAT (7); N.M. STAT (K). Page 3 of 42

4 in question, such as medical licensure, 4 pharmaceuticals, 5 private health insurance, 6 and rural utilities services. 7 To further complicate the issue, telemedicine laws and regulations do not always explicitly refer to telemedicine and may use other words, such as telehealth, 8 practicing medicine across state lines, 9 or practicing medicine by electronic means, 10 just to name a few. By way of example, suppose your client s business venture does not intend to or need to rely on Medicare reimbursement for medical treatment provided to a patient via because does not fit within the Medicare definition of telehealth. This lack of a federal telemedicine benefit obviously does not necessarily exempt the physician from all other telemedicine burdens or requirements. Many state medical licensing statutes define the practice of telemedicine to include medical acts committed through any electronic means, which would obviously include . Thus, even though a particular government agency might not consider the act to be telemedicine, counsel should look at all possible regulatory authorities to determine if and specifically how the act might be regulated and subject to additional requirements. II. PRACTITIONER LICENSING DILEMMAS State licensure requirements are the initial questions posed by telemedicine executives. Most of these questions can be answered as follows any healthcare provider interested in telemedicine practice should be aware of the explicit or implicit healthcare practitioner licensing statutes or regulations that may create heightened licensing or practice requirements for each jurisdiction which the practitioner seeks to reach through telemedicine (i.e., the state in which the patient is located). Clients should be aware of not only any additional permits or licenses that may be required by a given state but also the additional practice requirements that may be 4 E.g., COLO. REV. STAT (1)(g). 5 E.g., FLA. ADMIN. CODE 64B (5). 6 E.g., HAW. REV. STAT. 431:10A-116.3(b), 432: (b), 432D-23.5(b). 7 E.g., 7 C.F.R E.g., 42 U.S.C. 1395m(m)(1); NEB. REV. STAT (4). 9 E.g., MISS. CODE E.g., S.D. CODIFIED LAWS ; 22 TEX. ADMIN. CODE Page 4 of 42

5 imposed on any practitioner who uses telemedicine within the state or reaches into the state through telemedicine. Clients should also be educated on any additional licensing or practice requirements for those ancillary providers whom they supervise in relation to a telemedicine activity. A. Multi-State Licensing and Special Telemedicine Permits State medical licensing laws have evolved independently of each other, and the lack of state consistency in regulating the practice of medicine presents a significant barrier to any multistate telemedicine program. One of the initial questions when evaluating a multi-state telemedicine venture is whether a license to practice medicine is required in each state. Some states explicitly address telemedicine in their state medical licensing laws and define the practice of telemedicine to include telemedicine that reaches into their state. 11 Some states indirectly address telemedicine by including the act of diagnosing or recommending treatment through any electronic means as the practice of medicine in their state. 12 Other states use broader language such as by any means or instrumentality to implicitly subject out-of-state telemedicine physicians to their medical licensing laws. 13 Still other states do not address telemedicine, directly or indirectly, in their state physician licensing statutes or regulations. Even for those states that do not directly or indirectly address telemedicine in their medical licensing laws or define the location of the practice of medicine, it is generally assumed that any act of diagnosing or recommending treatment constitutes the practice of medicine in the state the patient is located for the purpose of medical licensing and, thus, falls within the state s interest in protecting public health; regardless of whether it is accomplished in the physical presence of the patient or through electronic media. As one court recently described it, state medical licensing acts were not intended to authorize a physician licensed in one state to provide medical services to anyone in the United States because doing so would be stripping every state in the union of its power to regulate the health and safety of its citizens E.g., TEX. OCC. CODE (a), (b)(4). 12 See, e.g., W. VA. CODE (a). 13 See, e.g., WIS. STAT (9)(a) 14 U.S. v. Quinones, 536 F.Supp.2d 267, 272 (E.D.N.Y. 2008). Page 5 of 42

6 Most importantly, all state medical boards explicitly require a license granted by the board to practice medicine in their state. Therefore, in the absence of licensure exceptions for telemedicine, special telemedicine licensure requirements, or simplified license application processes for out-of-state physicians, all states medical boards would likely require a physician to obtain a license to practice medicine in their state before allowing the physician to provide telemedicine services to a patient physically located in their state. It is important to note that physicians should reconsider their medical licensing laws even when they only seek to provide telemedicine services within their licensed state. This is because many states have special telemedicine licensing or permitting requirements for currently-licensed physicians seeking to commence telemedicine activities within the state. 15 B. Licensing Exceptions Obtaining valid licenses to practice medicine in each state into which a telemedicine project reaches is a cumbersome, costly, and time-consuming process. Many states allow out-ofstate licensed physicians to receive an in-state license through abbreviated licensing processes such as endorsement, registration, reciprocity, and bordering states options. This does not necessarily eliminate the burden of obtaining licenses in multiple states, but it may reduce it. However, the physician will still be subject to multiple state medical boards statutes and regulations upon abbreviated application approval or upon taking advantage of any out-of-state licensing processes or exceptions. 16 Another alternative to obtaining licenses in multiple states is the common consultation exception for out-of-state physicians. Most state medical licensing boards offer some form of a 15 E.g., ALA. CODE , (a)(1), (a); MINN. STAT , ; MONT. CODE (8), , ; NEV. REV. STAT (3), , (1), (e); N.M. STAT (K), (A), ; N.M. ADMIN. CODE (E), ; OHIO REV. CODE , (A)(3), ; OR. REV. STAT , , ; TENN. CODE , (b)(21), (b); TENN. COMP. R. & REG See, e.g., Holzhauser v. State Med. Bd. of Ohio, No. 06AP-1031, 2007 Ohio App. LEXIS 4917, at *3 (Ohio Ct. App. Sep 25, 2007); OHIO REV. CODE (D). Page 6 of 42

7 consultation exception for those physicians who are duly licensed in another state. 17 The exception usually exempts out-of-state physicians from the standard licensing requirements of the state. Other general licensing exceptions may also apply to a particular telemedicine activity. For example, some states do not require out-of-state physicians to obtain a license to practice medicine from their state if the physician does not practice medicine in their state frequently, 18 is merely providing a second opinion, 19 or does not open a physical practice in the state. 20 Thus, identifying the parameters of the applicable exceptions in each state is one way to ease the licensing burden for multi-state telemedicine projects. 21 Regardless of the nature of the exception, all states require the out-of-state physician to have a full, unencumbered license to practice medicine in the physician s state of residence to qualify for any exceptions. Though an exception may eliminate the licensing application burden for the physician, the physician will likely still be subject to all the medical licensing practice requirements of the state in which the patient is located. C. Regulation of Non-Physician Practitioners States also regulate non-physicians involved in telemedicine activities. Many states have statutes that specifically regulate telemedicine activities of nurses, 22 and states like Kentucky specifically regulate telemedicine activities of chiropractors, dentists, psychologists, optometrists, physical therapists, and occupational therapists. 23 Thus, legal counsel advising a client on a telemedicine venture should be sure to think beyond the medical license issue when the business will reach across or within state boundaries through telemedicine. III. E-PRESCRIBING RESTRICTIONS: THE GOVERNMENT S MOST RECENT GAUNTLET FOR THE TELEMEDICINE INDUSTRY 17 E.g., ALASKA STAT (a)(9), (b), (2). 18 E.g., IND. CODE (a), (a)(4), (a)(5). 19 E.g., 225 ILL. COMP. STAT. 60/49.5(b-c). 20 E.g., N.J. REV. STAT. 45:9-21(c). 21 For a complete survey and analysis of each state s applicable exceptions, see AHLA s Telemedicine: Survey and Analysis of Federal and State Laws. 22 E.g., ARIZ. REV. STAT ; VA. CODE KY. REV. STAT , , , 319A.300, , Page 7 of 42

8 Telemedicine activities are often intimately intertwined with technologies facilitating pharmaceutical prescribing and dispensing. Thus, physicians should be aware of the array of state and federal regulation and enforcement efforts aimed at telepharmacies, Internet pharmacies, and electronic pre- scribing that have burgeoned over the past few years. Courts have yet to offer much guidance on the legal parameters of acceptable multistate telemedicine practice involving prescription medications. However, the Hageseth v. Superior Court of San Mateo County opinion has set the tone for what may be on the horizon. 24 In Hageseth, a Stanford student, John McKay, obtained a prescription for Prozac from Dr. Hageseth in Colorado after completing an Internet questionnaire. Unfortunately, John McKay died of a drug overdose shortly thereafter, and the lawsuits began. The California appellate court in Hageseth allowed California to criminally prosecute the Colorado-licensed physician for the unlicensed practice of medicine in California through telemedicine. Prior to Hageseth, these Internet prescribing problems were handled through administrative and criminal proceedings under the theory that the physician violated DEA rules and the standard of care by failing to establish a proper physician-patient relationship prior to prescribing the controlled substance. In contrast, the Hageseth court held that California could criminally prosecute the offending physician for the unlicensed practice of medicine in California because he had reached into California through telemedicine, thereby invoking the California medical licensing laws. Interestingly, the federal Drug Enforcement Agency (DEA) quickly utilized this new legal argument and has cited this Hageseth opinion and reasoning on at least three different occasions to support DEA sanctions in the Internet prescription context. 25 Though criminal prosecution for the unlicensed practice of medicine through multistate telemedicine activities had been academically discussed as a possibility in the telehealth industry, Hageseth and the DEA 24 Hageseth v. Superior Court, 59 Cal.Rptr.3d 385, 399 (Cal. Ct. App. 2007). 25 See, e.g., Ladapo O. Shyngle, M.D., Denial of [DEA] Application, 74 Fed. Reg. 6056, (Feb. 4, 2009); Joseph Gaudio, M.D., Suspension of [DEA] Registration, 74 Fed. Reg , (Mar. 9, 2009); Patrick W. Stodola, M.D., Revocation of [DEA] Registration, 74 Fed. Reg , (May. 5, 2009). Page 8 of 42

9 have now placed that theory into action and created a considerable risk for healthcare practitioners participating in multi-state telehealth activities. A. Do You Love or Haight the DEA s New Internet Prescribing Restrictions? A significant legal hurdle for most telemedicine businesses is the United States Drug Enforcement Agency s (DEA s) regulation of controlled substances prescribed via telemedicine. Congress has been particularly active on this issue and placed new restrictions on telemedicine physicians in 2008 when it passed the Ryan Haight Online Pharmacy Consumer Protection Act. 26 In short, the law now expressly requires an in-person physical examination before a physician may prescribe a controlled substance, unless an express exception created under the law applies. A particularly useful exception to the law for many telemedicine businesses is the exception at 21 USC 802(54)(A), which allows a telemedicine provider to prescribe controlled substances to a patient without personally performing an in-person physical exam of the patient if the following three conditions are met: The patient is being treated by, and physically located in, a DEA-registered hospital or clinic during the telemedicine encounter; The remote telemedicine provider is registered with the DEA in the state in which the patient is physically located during the telemedicine encounter; and The telemedicine physician interacts with the patient using a two-way, real-time interactive audio and video communications system during the telemedicine encounter. 27 Even without these new laws specific to remote prescribing, the federal government has used existing laws to target improper use of remote prescribing. For example, the Department of Justice announced that two physicians pled guilty to conspiracy for their involvement in an international Internet pharmacy business that generated more than $126 million in gross revenues 26 Pub. L. No , 122 Stat (Oct. 15, 2008); 21 U.S.C. 802(54)(A), 829(e)(3); 42 U.S.C. 1395m(m)(1); 42 C.F.R (a)(3). 27 Id. Page 9 of 42

10 from the illegal sale of prescription pharmaceuticals. 28 The physicians admitted to prescribing medications without conducting physical or mental examinations, without having contact with the customers, and without having a physician-patient relationship with the customers. Despite the successful prosecution of Internet prescribing cases, courts have been reluctant to rule that prescribing medications over the Internet is per se illegal. As explained by the federal district court for the Eastern District of New York: The government is not trying to establish a per se rule that Internet prescriptions are invalid; rather, it is prosecuting the defendants under the rule... that prescribing drugs outside the usual scope of professional practice is illegal. The government is making no attempt... to unilaterally define which practices fall outside that scope; rather, it intends to leave that question where it has been for over 30 years with the jury. 29 B. DEA Restrictions on e-transmission of Prescriptions In 2010, the DEA published a Final Interim Rule governing electronic prescribing of controlled substances which created detailed procedures and system requirements for all three key players in the e-prescribing industry: (1) healthcare practitioners who create and transmit e- prescriptions for controlled substances, (2) the service providers for the e-prescribing software and systems, and (3) the pharmacies that dispense controlled substances pursuant to an e- prescription. 30 The DEA s e-prescribing rules present new civil and criminal liability risks for physicians, hospitals, and pharmacies participating in e-prescribing or dispensing activities if they fail to comply with the requirements in the new rules. The new rules require: (1) practitioners to ensure that they only use e-prescribing systems that comply with the rules; (2) practitioners to ensure the security of their electronic signature tokens; (3) practitioners to monitor and report breaches in the security of their e-prescribing systems on a monthly basis; (4) pharmacies to monitor and report breaches in the security of 28 Press Release, Department of Justice, Two Physicians Plead Guilty in International Internet Pharmacy Conspiracy (Aug. 1, 2008), available at (last accessed Dec. 26, 2008). 29 U.S. v. Quinones, 536 F.Supp.2d 267, 271 (E.D.N.Y. 2008). 30 Electronic Prescriptions for Controlled Substances, 75 Fed. Reg (Mar. 31, 2010). Page 10 of 42

11 their e-prescription dispensing systems on a daily basis; and (5) all DEA registrants to maintain records related to e-prescribing of controlled substances for five years. The requirements also vary based on the specific DEA schedule of the prescription being transmitted, with prescriptions in the lower schedules (i.e., medications that present the highest risks for abuse) obviously subject to higher standards and controls. Thus, counsel must be aware of the actual prescription transmission mode used by its telemedicine clients to ensure that correct safeguards are in place or to advise the client to use traditional prescription transmission modalities for any controlled substances. C. State Regulation of eprescribing Most telemedicine businesses are under the false impression that, so long as they do not prescribe controlled substances, they are clear of most restrictions on prescribing via telemedicine. While that may have been a safe assumption a few years back, it is no longer the case in many states. Many new state laws and rules governing telemedicine activities have latched onto the principles from the federal Ryan Haight Act and have expanded the in person physical exam requirement to any medication prescribed to a patient in that state, not just for controlled substance prescriptions. For example, a Colorado regulation states that a pharmacist shall not dispense a prescription drug if the pharmacist knows or should have known that the order for such drug was issued on the basis of an internet-based questionnaire, an internet-based consultation, or a telephonic consultation, all without a valid preexisting patient-practitioner relationship. 31 This rule relies on a policy statement from the Colorado Medical Board regarding Guidelines Regarding Prescribing for Unknown Patients. 32 The difficulty for legal counsel when advising telemedicine clients who treat patients in Colorado (and states with telemedicine prescribing restrictions) is the ambiguous language and broad statements used in these (thus far) unchallenged medical board and pharmacy board rules C.C.R 719-1: See Colorado Medical Board Policy No (2010); Brighton Pharmacy, Inc. v. Colorado State Pharmacy Board, 160 P.3d 412, 420 (Colo.Ct.App.2007). Page 11 of 42

12 Instead of restricting only the rogue Internet prescription mills, as intended by the medical and pharmacy boards, these rules arguably cast a broad net to prohibit most any telemedicine prescribing practice that is otherwise consistent with acceptable standards of care and in the patient s best interest. Thus, legal counsel for telemedicine companies must closely monitor any new statespecific telemedicine rules and stay abreast of any new interpretive guidance, whether binding or not, when advising clients in this rapidly evolving area of the law. Some states have taken the Ryan Haight Act principles and have applied it to all medical care provided to patients in that state, not just when a prescription is involved. For example, the telemedicine rules adopted by the Texas Medical Board (TMB) in 2010 mirror many of the Ryan Haight Act restrictions, but the TMB rules are more expansive because they are applicable to any telemedicine act by a Texas-licensed physician. By way of background, the TMB adopted telemedicine rules in 2004 creating a variety of patient protection safeguards, but the rules did not restrict or permit the use of telemedicine in particular patient treatment scenarios. 33 Then in 2010, the TMB significantly expanded the telemedicine rules by creating express restrictions on the circumstances in which the use of telemedicine was permissible and when it was not permissible. 34 Similar to the federal Ryan Haight Act, the TMB rules require physicians to perform an in-person physical examination of any patient prior to providing any healthcare services via telemedicine, unless an express exception under the rules applies. Also similar to the Ryan Haight Act, the TMB rules include an exception, among many others, permitting the use of telemedicine in most hospital patient care scenarios. 35 Specifically, the exception permits the use of telemedicine when a remote physician is providing care to a patient treated in a healthcare facility, so long as the following conditions are met: Tex. Reg. 26, 6088 (Jun. 25, 2004) (adopting 22 Tex. Admin. Code et seq.) Tex. Reg. 41, 9085 (Oct. 8, 2010) (amending 22 Tex. Admin. Code et seq.). 35 See 22 Tex. Admin. Code et seq. Page 12 of 42

13 A licensed or certified health care provider is available on facility premises during the telemedicine encounter to assist the telemedicine physician as requested; and The facility has sufficient technology and medical equipment to facilitate physical evaluation of the patient that may become necessary during the telemedicine encounter. 36 However, much like the Colorado issues, the language in the TMB rules is ambiguous in places and arguably casts a broad net to prohibit many telemedicine acts that are consistent with acceptable standards of care. To that end, the TMB is currently in a dispute with a popular telemedicine company, Teladoc, over its application of the new TMB rules. 37 According to the court documents, the TMB issued some type of warning letter to Teladoc asserting that Teladoc s physicians were violating the TMB rules. Teladoc subsequently filed a suit against the TMB asking for injunctive relief related to the warning letter, but Teladoc was unsuccessful at the district court level. Teladoc has since appealed the lower court s decision, and the lawsuit is pending in the Court of Appeals for the Third Judicial District of Texas. In its pleadings to date, the TMB has provided the following arguments disputing the legality of Teladoc s business model: The [TMB s] telemedicine regulatory scheme would be pointless if a physician could evade its restrictions simply by picking up the phone and calling the patient The Board does not contend that Teladoc must comply with Chapter 174; rather, the Board s argument is that Teladoc s reading of Rule 190.8(1)(L)(i)(II) is nonsensical in light of Chapter 174. In sum, Teladoc cannot evade the plain language of Rule 190.8(1)(L)(i)(II), which requires a face-to-face meeting. Teladoc s physicians do not perform anything resembling a physical examination, and they interact with patients exclusively by asking questions by telephone. For this reason alone, the trial court s judgment should be affirmed Id. 37 Appellees Brief, Teladoc, Inc. v. Texas Medical Board, No CV, Tex. 3rd Ct. of Appeals (Aug. 23, 2013). 38 Id. Page 13 of 42

14 Despite this strong stance, the TMB also acknowledges in its pleading that there are interpretation dilemmas for telemedicine companies with the following statement: In fairness, it may be true that the Rule would be even clearer if the term including substituted for the term such as, but the availability of a better alternative does not mean that the current term does not suffice. 39 It will be interesting to follow the developments in this case, and legal counsel for telemedicine companies should keep a close eye on this lawsuit and similar ones that are sure to surface in other states in the near future. IV. BEWARE OF THE LESSER-KNOWN TELEMEDICINE REGULATIONS A. States That Are Currently Leading The Pack On Heightened Requirements Counsel should not stop at state practitioner licensing and e-prescribing laws when assessing the risks applicable to a client s telemedicine venture. A number of states have passed statutes and finalized rules that affect multiple dimensions of telemedicine practice, and the regulations are rapidly evolving. While not comprehensive, the following list identifies states that regulate a wide range of telemedicine activities: Arizona regulating telemedicine informed consent, medical records, privacy, hospital licensing, and teleradiology; 40 Colorado regulating telemedicine medical records, standards of care, hospital licensing, contractual arrangements, and unprofessional conduct; 41 Connecticut regulating telemedicine contractual arrangements and teleradiology; 42 Florida regulating telemedicine informed consent, medical records, standards of care, the physician-patient relationship, and teleradiology; Id. 40 ARIZ. REV. STAT ; 9 ARIZ. ADMIN. CODE R , R (C)(2)(i). 41 COLO. REV. STAT , , (1)(jj). 42 CONN. GEN. STAT (d). Page 14 of 42

15 Kentucky regulating telemedicine informed consent, medical records, privacy, and workers compensation; 44 Maine regulating telemedicine hospital licensing, credentialing, and certificates of need; 45 Montana regulating telemedicine medical records and contractual arrangements; 46 Nebraska regulating telemedicine informed consent, medical records, privacy, standards of care, and quality of care; 47 New Hampshire regulating teleradiology; 48 New Mexico regulating telemedicine privacy; 49 Oklahoma regulating telemedicine informed consent, medical records, privacy, and the physician-patient relationship; 50 Tennessee regulating telemedicine contractual arrangements; 51 and Texas regulating telemedicine informed consent, medical records, privacy, standards of care, quality of care, the physician-patient relationship, advertising, , conflicts of interest, and physician supervision. 52 Each state may independently craft the additional areas of telemedicine regulation that are necessary to protect public health. Thus, below is a discussion of the types of heightened requirements that states have enacted. B. Informed Consent Arizona, Kentucky, and Texas generally require telemedicine-specific informed consent documentation in the patient s medical record prior to any telemedicine act. 53 Arizona has 43 FLA. STAT ; FLA. ADMIN. CODE 64B KY. REV. STAT , (7); 907 KY. ADMIN. REGS. 3:170(6 8) CODE ME. R. IX.E(4)(c); CODE ME. R. 10.E(2). 46 MONT. CODE (2)(b). 47 NEB. REV. STAT , N.H. R. S. 329:1-b. 49 N.M. STAT OKLA. STAT TENN. COMP. R. & REG (7). 52 TEX. OCC. CODE , , ; 22 TEX. ADMIN. CODE 164.6, et seq. Page 15 of 42

16 specific exceptions to this requirement for (1) emergency situations and (2) situations in which a consulting physician interprets films or diagnostic tests via telemedicine. 54 Oklahoma has a telemedicine informed consent law and exception similar to Arizona, but has more detailed requirements for the documented consent, including written confirmation that the physician disclosed any risks specifically associated with the use of telemedicine. 55 C. Medical Records and Privacy Numerous states have taken care to ensure that any electronic records or other documents created during or as a result of a telemedicine act become part of the patient s permanent medical record and are subject to all other general requirements of patient medical records. 56 Similarly, numerous states have taken care to ensure that any electronic records or other documents created during or as a result of a telemedicine act are subject to all other general medical record privacy and confidentiality requirements. 57 D. Standards of Care and Unprofessional Conduct Many states require telemedicine activities to be performed in accordance with the appropriate standard of care, but Florida, Texas, and Alaska have codified the specific presumption that a physician breaches the standard of care or participates in unprofessional conduct by prescribing medications via telemedicine based solely on a medical questionnaire filled out by the patient ARIZ. REV. STAT (A); KY. REV. STAT (1)(a); TEX. OCC. CODE ARIZ. REV. STAT (E). 55 OKLA. STAT E.g., ARIZ. REV. STAT (C); CAL. HEALTH & SAFETY CODE (a); COLO. REV. STAT , ; MONT. CODE (2)(b); OKLA. STAT ; 22 TEX. ADMIN. CODE et seq. 57 E.g., ARIZ. REV. STAT (B), (D); KY. REV. STAT (1)(b); OKLA. STAT (A)(3), (5); TEX. OCC. CODE FLA. ADMIN. CODE 64B ; 22 TEX. ADMIN. CODE et seq.; 12 ALASKA ADMIN. CODE (27 28). Page 16 of 42

17 E. Hospital Licensing Arizona and Utah require hospital administrators to develop and implement written policies and procedures governing telemedicine acts as a condition for hospital licensure if the hospital conducts telemedicine activities. 59 Colorado requires healthcare facilities to make telemedicinerelated medical records available to the patient upon request, as a condition of facility licensing. 60 Maine and Utah have specific hospital credentialing and medical staff requirements for physicians who participate in telemedicine activities in affiliation with a hospital licensed by the state. 61 F. Certificate of Need Maine specifically states that the cost effective use of telemedicine to serve rural communities is one of the factors used to determine whether a healthcare facility should be granted a certificate of need and permitted to operate in Maine under the State Health Plan. 62 G. Teleradiology Connecticut requires a Connecticut license to practice medicine for any physician who, through an ongoing, regular or contractual arrangement interprets radiographic images for physicians or patients physically located in the state of Connecticut. 63 Florida s requirements are not as rigid as Connecticut s and only require the physician requesting the interpretation of radiographic images through telemedicine to be licensed by the state of Florida. 64 New 59 9 ARIZ. ADMIN. CODE R (C)(2)(i); UTAH ADMIN. CODE R COLO. REV. STAT , CODE ME. R. IX.E(4)(c); UTAH ADMIN. CODE R CODE ME. R. 10.E(2). 63 CONN. GEN. STAT (d). 64 FLA. STAT Page 17 of 42

18 Hampshire requires the out-of-state radiologist to be licensed by the state of New Hampshire unless the radiologist is consulting with a New Hampshire-licensed physician. 65 H. Physician-Patient Relationship and Physician Supervision Texas regulates the minimum requirements for establishing a proper physician-patient relationship for any physician who utilizes the Internet in the practice of medicine. These minimum requirements include verifying the patient s identity, obtaining an appropriate patient history and physical, and assuring the availability of the physician for any possible follow-up care for the patient. 66 Texas also regulates physician supervision of non-physician practitioners during a telemedicine encounter and the maximum number of practitioners a physician is permitted to supervise during the encounter. 67 I. , Internet Advertising, and Websites Texas has established minimum requirements for physicians who use physician practice websites, Internet advertising, or for patient communications. 68 For example, physicians who use for patient communications must have periodically evaluated policies for management, processing, responses, privacy, archiving, and hours of operation. 69 Physicianpractice websites must include numerous disclosures, such as website ownership, in-office contact information, licensure and qualifications of affiliated physicians and healthcare professionals, complaint and feedback processes, and disclosure of any financial interest the physicians may have in any products or services discussed or advertised on the website. 70 J. Contractual Arrangements 65 N.H. REV. STAT. 329:1-b TEX. ADMIN. CODE et seq. 67 TEX. OCC. CODE (3), (4) TEX. ADMIN. CODE 164.6, et seq. 69 Id. 70 Id. Page 18 of 42

19 Many states, such as Colorado, Connecticut, Montana, South Dakota, and Tennessee, have heightened licensing restrictions for out-of-state physicians who provide telemedicine services pursuant to a contract with an in-state facility or physician. 71 These states essentially nullify other applicable licensing exceptions in the event that a telemedicine service is provided to an instate patient by an out-of-state physician pursuant to an existing contract. 72 For example, a telemedicine consultation service that is otherwise exempt from the state licensing requirements under one of these states consultation exceptions would not qualify for the consultation exception if the service was provided pursuant to a contract with an in-state facility or physician. K. (New?) FDA Regulation of Telemedicine Software, Devices and Mobile Apps Over the past two years, a new dilemma for telemedicine legal counsel has reared its ugly head. Until September 2013, telemedicine companies were essentially operating without any specific guidance from the United States Food and Drug Administration (FDA) addressing the parameters of the FDA s regulation over telemedicine-specific software, devices and mobile apps. From one perspective, guidance was much needed because of the unique questions presented with technology in healthcare as it relates to where the line is drawn on what is a regulated medical device in the virtual world of telemedicine. Another perspective was that any guidance would only create more confusion in the industry. Over the past year, the FDA has not disappointed either perspective. On September 25, 2013, 73 the FDA published a sweeping guidance document that essentially subjected every telemedicine company to the possible wrath and regulation of the FDA. However, after much clamoring from the industry, on June 19, 2014 the FDA provided another guidance document on the topic which reigned in much from the initial guidance document. 74 As stated in the 2014 guidance document: 71 COLO. REV. STAT (3)(b); CONN. GEN. STAT (d); MONT. CODE (1)(c)(ii); S.D. CODIFIED LAWS ; TENN. COMP. R. & REG (7). 72 Id. 73 FDA, Mobile Medical Applications: Guidance for Industry and Food and Drug Administration Staff (Sept. 25, 2013). 74 FDA, Medical Device Data Systems, Medical Image Storage Devices, and Medical Image Communications Devices (June 19, 2014). Page 19 of 42

20 Therefore, the FDA does not intend to enforce compliance with the regulatory controls that apply to MDDS devices, medical image storage devices, and medical image communications devices Medical Device Data Systems (MDDS) are hardware or software products that transfer, store, convert formats, and display medical device data. A MDDS does not modify the data, and it does not control the functions or parameters of any connected medical device. MDDS are not intended to be used in connection with active patient monitoring. This was great news for many telemedicine companies because it minimizes the regulatory hurdles for these companies with respect to FDA regulation. However, even under the new guidance document, telemedicine companies will still likely be subject to FDA regulation as purveyors of low-risk FDA classified device. Thus, this appears to be an evolving issue and more will likely come from the FDA on the parameters of its regulation over the telemedicine industry. V. REIMBURSEMENT Reimbursement rules create an additional hurdle for interstate and intrastate telemedicine projects. The most common telemedicine restriction in federal, state, and private-payor reimbursement is that medical encounters are not considered medically necessary and appropriate if the physician was not in face-to-face contact with the patient. This payment restriction is gradually eroding as government and private payors have begun adapting to the growing use of telemedicine as a more efficient means of providing healthcare services. A. Medicare Reimbursement Page 20 of 42

21 Medicare has carved out a few exceptions to the face-to-face contact requirement, with numerous strings attached to the payment. 75 Under Medicare, telemedicine services are only reimbursable to the distant site practitioner if the services were provided to a Medicare beneficiary at an acceptable originating site. In addition to the reimbursement of the physician at the distant site, qualifying originating sites may also bill Medicare for a facility fee related to the provision of the telemedicine service. Under most circumstances, an originating site must be located in a rural health professions shortage area (HPSA) or outside a Metropolitan Statistical Area (MSA). The originating site must also be one of the following to qualify: Physician or practitioner office; Inpatient or outpatient hospital; Critical access hospital (CAH); Rural health clinic (RHC); Federally qualified health center (FQHC); Renal dialysis center; Skilled nursing facility; or Community mental health center. Medicare reimburses telemedicine services provided in live, real-time situations in which the physician is interacting with the Medicare beneficiary via interactive telecommunications systems. Medicare does not reimburse for telemedicine services provided via telephone, , or fax. The following are the current Medicare-reimbursable telemedicine services, but the list is reevaluated annually: Telehealth consultations, emergency department or initial inpatient Follow-up inpatient telehealth consultations furnished to beneficiaries in hospitals or SNFs Office or other outpatient visits 75 See 42 U.S.C. 1395m(m); 42 C.F.R , ; Medicare Claims Processing Manual (ch. 12, 190). Page 21 of 42

22 Subsequent hospital care services, with the limitation of 1 telehealth visit every 3 days Subsequent nursing facility care services, with the limitation of 1 telehealth visit every 30 days Individual and group kidney disease education services Individual and group diabetes self-management training services, with a minimum of 1 hour of in-person instruction to be furnished in the initial year training period to ensure effective injection training Individual and group health and behavior assessment and intervention Individual psychotherapy Telehealth Pharmacologic Management Psychiatric diagnostic interview examination End-Stage Renal Disease (ESRD)-related services included in the monthly capitation payment Individual and group medical nutrition therapy Neurobehavioral status examination Smoking cessation services Alcohol and/or substance (other than tobacco) abuse structured assessment and intervention services Annual alcohol misuse screening, 15 minutes Brief face-to-face behavioral counseling for alcohol misuse, 15 minutes Annual depression screening, 15 minutes High-intensity behavioral counseling to prevent sexually transmitted infection; face-to-face, individual, includes: education, skills training and guidance on how to change sexual behavior; performed semi-annually, 30 minutes Annual, face-to-face intensive behavioral therapy for cardiovascular disease, individual, 15 minutes Face-to-face behavioral counseling for obesity, 15 minutes Transitional care management services with moderate medical decision complexity (face-to-face visit within 14 days of discharge) (effective for services furnished on and after January 1, 2014) Page 22 of 42

23 Transitional care management services with high medical decision complexity (face-to-face visit within 7 days of discharge) (effective for services furnished on and after January 1, 2014) Medicare payment for a telemedicine service is the same amount that Medicare would have paid if the service had not been provided via telecommunications. In order to bill for Medicare reimbursement of telemedicine services, the physician or practitioner must be licensed under state law to provide the telemedicine service and must be one of the following types of healthcare practitioners: Physician; Nurse practitioner; Physician assistant; Nurse-midwife; Clinical nurse specialist; Clinical psychologist; Clinical social worker; or Registered dietitian or nutrition professional. Medicare also requires another physician, or telepresenter, to be physically present with the Medicare beneficiary if it is medically necessary for the telemedicine service, as determined by the distant physician. In addition to these Medicare Part B reimbursement rules, the Medicare Hospital Conditions of Participation (COP) rules for telemedicine must also be considered. These must be considered regardless of whether the hospital or telemedicine provider will request direct Medicare Part B payment for the telemedicine encounter because all Medicare-participating hospitals must comply with these COPs. 76 These COPs require hospitals to have written medical staff bylaws and contract provisions describing how the hospital plans to credential and privilege C.F.R et seq. Page 23 of 42

24 telemedicine physicians who are allowed to provide care to hospital patients. 77 Medicare allows a hospital to keep all telemedicine physician credentialing in-house or to rely on the credentialing and privileging processes of a third party. Whichever process the hospital chooses, the hospital s decision must be memorialized in writing in the medical staff bylaws and in the hospital s contract with the telemedicine provider. Further, these documents must include the precise terms that Medicare has outlined in its COP rules. 78 In recent years, Medicare and the Joint Commission have complicated reimbursement matters for hospital telemedicine providers due to their inconsistent telemedicine credentialing standards. However, rules finalized by CMS in May 2011 bring the Medicare Hospital COPs for credentialing of telemedicine providers in line with the less stringent Joint Commission standards. 79 Now, as long as certain conditions are met, both CMS and the Joint Commission allow a hospital to rely on the distant site s credentialing of a telemedicine provider, rather than requiring full credentialing of the telemedicine provider by both the remote-site and originating hospitals. 80 B. State Medicaid and Private Payor Reimbursement State Medicaid programs and private payors have developed a wide variety of reimbursement policies that range from complete denial of telemedicine service reimbursement to full reimbursement of any covered medical service provided through telemedicine. Many state Medicaid programs simply incorporate the Medicare requirements for telemedicine reimbursement. States also tie Medicaid reimbursement of telemedicine services to additional telemedicine-specific requirements. For example, Colorado, and Kentucky require heightened informed consent, quality of care proto- cols, and privacy requirements for state Medicaid reimbursement of telemedicine services. 81 Thus, telemedicine program designers should identify C.F.R (a)(9), (a)(4). 78 Id Fed. Reg , (May 5, 2011). 80 See also Joint Commission, Comprehensive Accreditation Manual for Hospitals: The Official Handbook, MS COLO. REV. STAT (4); KY. REV. STAT (3). Page 24 of 42

25 the state Medicaid reimbursement policies for telemedicine for each state into which the program will reach. 82 Private payor reimbursement for telemedicine can only be directly determined on a patient-by-patient, plan-by-plan basis. However, some states have created statutory requirements, to varying degrees, that private payors cannot discriminate between medical services provided via telemedicine and those provided via traditional, in-person encounters. 83 Thus, counsel should identify whether the individual states into which the telemedicine program will reach have mandated private health insurance coverage of telemedicine and should identify the specific telemedicine reimbursement policies for potential private payors. Practically speaking, counsel can often negotiate coverage for telemedicine services if the particular service is not explicitly addressed in the payor contract or state Medicaid rules. VI. MALPRACTICE, LIABILITY, AND HEIGHTENED STANDARDS OF CARE Few primary authorities directly address telemedicine malpractice issues. However, existing state malpractice case law, tort law and civil procedure will govern telemedicine malpractice issues not directly addressed by a specific telemedicine statute or case. As discussed in more detail in the following sections, telemedicine activities present novel malpractice and liability risks, so counsel and risk managers should begin with the following key questions: In what state is the patient located? In what state is the physician located? 82 For a more thorough collection of state Medicaid and private payer laws on telemedicine reimbursement, see AHLA s Telemedicine: Survey and Analysis of Federal and State Laws. 83 E.g., CAL. INS. CODE ; CAL. HEALTH & SAFETY CODE ; COLO. REV. STAT ; GA. CODE (d); HAW. REV. STAT. 431:10A-116.3(c), 432: (c), 432D-23.5(c); KY. REV. STAT A-138; 806 KY. ADMIN. REGS. 17:270, 17:500(3)(13); LA. REV. STAT. 22:657; N.M. STAT (B); OKLA. STAT ; TEX. INS. CODE Page 25 of 42

26 To which state medical board(s) has the physician subjected herself in performing the telemedicine act in question? Is the physician properly trained to use the telemedicine equipment, and did the physician use the equipment properly? Did the physician fail to utilize available telemedicine technology which could have pre- vented injury to the patient? What traditional medical encounters are most similar to the telemedicine encounter in question? What processes are in place to ensure proper creation and termination of the physician patient relationship? What processes are in place to ensure continuity of care, coordination of care, and ultimate responsibility over the patient among multiple healthcare practitioners and facilities? Which state s laws are more favorable for your client (e.g., statutes of limitations, medical malpractice damages caps, medical licensure laws, standards of care, elements of malpractice, burden of proof)? Does either state have telemedicine laws that heighten physician requirements and standards when performing telemedicine acts (e.g., informed consent, medical records, internet advertising, quality of care, prescribing medication)? Does the physician s malpractice insurance cover the telemedicine act in question? A. What Are The Applicable Standards Of Care? The standard of care to which a telemedicine practitioner s actions are compared to determine negligence is not always clear, even in traditional medical encounters. Some courts prefer using a local or community standard of care, while others use a national standard of care. If a community standard is used, multi- state telemedicine encounters complicate the analysis. Which community should the court use as the reference point the patient s or the physician s? It would be onerous to assume that the physician should be knowledgeable of multiple community standards of care. Arguably, however, the standard of care in the patient s Page 26 of 42