Telemedicine: A disruptive technology

Transcription

1 Telemedicine: A disruptive technology Lisa Atlas Genecov, Head of Healthcare Transactions, Dallas Lane Wood, Senior Associate Lidia Niecko-Najjum, Associate Norton Rose Fulbright US LLP October 13, 2015

2 Continuing education information We have applied for one hour of California, Texas, Virginia CLE and New York non-transitional CLE credit. Newly admitted New York attorneys may not receive nontransitional CLE credit. For attendees outside of these states, we will supply a certificate of attendance which may be used to apply for CLE credit in the applicable bar or other accrediting agencies. Norton Rose Fulbright will supply a certificate of attendance to all participants who: 1. Participate in the web seminar by phone and via the web 2. Complete our online evaluation that we will send to you by within a day after the event has taken place 2

3 Administrative information Today s program will be conducted in a listen-only mode. To ask an online question at any time throughout the program, click on the question mark icon located on the toolbar in the bottom right side of your screen. Time permitting, we will answer your question during the session. Everything we say today is opinion. We are not dispensing legal advice, and listening does not establish an attorneyclient relationship. This discussion is off the record. You may not quote the speakers without our express written permission. If the press is listening, you may contact us, and we may be able to speak on the record. 3

4 Agenda Introduction Jurisdictional Disparity States Various Telemedicine Laws Regulatory Issues Reimbursement Case study: Teladoc Inc. 4

5 Telemedicine A Disruptive Technology With the Affordable Care Act s emphasis on lower costs, access to care and efficiencies in the delivery of health care services, as well as its focus on technology, telemedicine has become a disruptive market force that is rapidly changing the way patients seek and obtain medical care. With this increasing interest in telemedicine and telehealth technologies, funding for digital health care technology companies exceeded $4.1 Billion in 2014 with over 293 transactions completed with an average transaction size of $14.1 Million. 1 Venture funding of digital health companies in the last half of 2015 surpassed $2 Billion. Four venture-backed digital health companies went public in the first half of 2015, and Teladoc, a telemedicine company, went public early in the second half of Rock Health, Digital Health Funding: 2014 Year in Review, available at 2. Rock Health, Digital Health Funding: 2015 Midyear Review, available at

6 Hospital Participation in Telemedicine is Growing Many hospitals and healthcare providers already offer telemedicine services. According to a 2014 report, hospitals more likely to have such capabilities are teaching hospitals, those equipped with advanced medical technology, those that are members of a large health system, and non-profit institutions. 3 Rates of hospital telehealth adoption by state vary substantially and are associated with differences in state policy (e.g., policies that promote payor reimbursement for telehealth are associated with greater likelihood of adoption) Julia Adler-Milstein, Joseph Kvedar and David Bates, Telehealth Among US Hospitals: Several Factors, Including State Reimbursement And Licensure Policies, Influence Adoption Health Affairs, 33, No. 2 (2014): Id.

7 Hospital Participation in Telemedicine is Growing 7 Julia Adler-Milstein, Joseph Kvedar and David Bates, Telehealth Among US Hospitals: Several Factors, Including State Reimbursement And Licensure Policies, Influence Adoption Health Affairs, 33, No. 2 (2014):

8 Telemedicine Applications and Initiatives The range of telemedicine applications are many, and include remote monitoring programs used by hospitals for post-discharge monitoring to reduce readmissions, to hospital emergency departments that use remote video communications to enable patients to receive telephsychiatric screening. Specific Examples of Telemedicine Initiatives Include: North Carolina in 2013 established a statewide telepsychiatry system in which all North Carolina hospitals are allowed to participate. For several years, the Veterans Health Administration has used telehealth for home health monitoring to track vital signs and conditions for patients with chronic diseases or who have been released recently from the hospital, leading to improved patient care and significant reductions in hospital readmissions. Mayo Clinic has launched a pilot program to provide workforce telehealth kiosks at two if its facilities in Minnesota for use by employees of the Mayo Clinical Health System. Patients can walk up to a kiosk without an appointment and can be treated for minor health conditions by doctors, nurse practitioners and physician assistants. 8

9 Telemedicine Potential Savings and Current Hurdles A 2014 consultant s report suggests that telemedicine could potentially deliver more than $6 Billion a year in health care savings to U.S. companies. While this highlights a maximum potential savings, a significantly lower level of use could generate hundreds of millions of dollars in savings. 5 The push for health care services delivered through telemedicine technologies will only increase. Barriers to growth include legal and regulatory barriers largely at the state and local levels (e.g., standard of care, state licensure) and on the federal level (Medicare reimbursement) 9 5 Current Telemedicine Technology Could Mean Big Savings, August 11, 2014, available at

10 Jurisdictional Disparities 1. FSMB Direct-to-Patient Telemedicine Model Policy 2. Physician-Patient Relationship 10

11 Federation of State Medical Board (FSMB) Model Policy Framework Uniform definition of Telemedicine: The practice of medicine using electronic communication, information technology or other means between licensee in one location, and a patient in another location with or without an intervening healthcare provider Physician-patient relationship Established when physician agrees to undertake diagnosis and treatment of a patient and the patient agrees to be so treated 11 Federation of State Medical Board, Model Policy for the Appropriate Use of Telemedicine Technologies in the Practice of Medicine, (April 2014).

12 Current Status Variability per Jurisdiction Definition of telemedicine Licensing requirements Standard of care Physician-patient relationship E-prescribing 12

13 States Definitions of Telemedicine Vary Ohio Telemedicine certificate [T]he practice of telemedicine means the practice of medicine in this state through the use of any communications, including oral, written, or electronic communication, by a physician located outside this state. Rev. Code Ann. Sec North Carolina "[T]elemedicine" is the use of two-way real-time interactive audio and video between places of lesser and greater medical capability or expertise to provide an support health care when distance separates participants who are in different geographical locations. N.C. Gen. Stat. Ann. Sec. 122C Texas Telemedicine medical service means a health care service that is initiated by a physician or provided by a health professional acting under physician delegation and supervision, that is provided for purposes of patient assessment by a health professional, diagnosis or consultation by a physician, or treatment, or for the transfer of medical data, and that requires the use of advanced telecommunications technology, other than telephone or facsimile technology including: (A) compressed digital interactive video, audio, or data transmission; (B) clinical data transmission using computer imaging by way of still-image capture and store and forward; and (C) other technology that facilitates access to health care services or medical specialty expertise. 13

14 States Definitions of Telemedicine Vary (cont d) New York California Telemedicine means the delivery of clinical health care services by means of real time twoway electronic audiovisual communications which facilitate the assessment, diagnosis, consultation, treatment, educations, care management and self management of a patient s health care while such patient is at the originating site and the health care provider is at a distant site. Telehealth means the mode of delivering health care services and public health via information and communication technologies to facilitate the diagnosis, consultation, treatment, education, care management, and self-management of a patient s health care while the patient is at the originating site and the health care provider is at a distant site. Telehealth facilitates patient self-management and caregiver support for patients and includes synchronous interactions and asynchronous store and forward transfers. (Cal. Bus. & Prof. Code (6)) 14

15 Some States Require Telemedicine Licenses Texas The Out-of-State Telemedicine License is a limited license that allows a physician to practice medicine across state lines. An Out-of-State Telemedicine License holder is not authorized to physically practice medicine in the state of Texas. The license holder s practice of medicine under this license is limited exclusively: to the interpretation of diagnostic testing and reporting of results to a Texas fully licensed physician practicing in Texas or; for the followup of patients where the majority of patient care was rendered in another state. The holder of an Out-of-State Telemedicine License is subject to the Medical Practice Act and the same Rules of the board as a person holding a full Texas medical license, which includes paying the same fees and meeting all other requirements (such as CME) for issuance and renewal of the license as a person holding a full Texas medical license. Ohio Nevada The holder of a telemedicine certificate may engage in the practice of telemedicine in this state. A person holding a telemedicine certificate shall not practice medicine in person in this state without obtaining a special activity certificate. Ohio Rev. Code Ann. Sec (4) The Board may issue A special purpose license to a physician who is licensed in another state to permit the use of equipment that transfers information concerning the medical condition of a patient in this State across state lines electronically, telephonically or by fiber optics. [ ] Nev. Rev. Stat. ann. Sec (1)(e) 15

16 Elements of Physician-Patient Relationship Evaluation that meets applicable Standard of Care Identify patient Gather information Informed Consent Patients should receive information necessary to make a meaningful decision about their medical care and treatment Diagnosis Physician s discretion to collect necessary information Treatment Prescription of medicine Follow-up care Ensure availability of f/u care by a physician located in patient s state Establish an emergency situation referral plan Documentation Confidentiality/EHR Requirements Maintain patients medical records and make available to both patients and patient s health care providers Continuous care Mostly prohibited through telemedicine (generally, for out of state physicians) 16

17 Standard of Care: In-Person Evaluation? General Definition: The reasonable and customary conduct demonstrating minimal competence under the circumstances Telemedicine laws: At physicians discretion An intermediary assistant at a distant site required In-person evaluation required: Texas Ins. Code Ann. Sec : A health benefit plan may not exclude a telemedicine medical service or a telehealth service from coverage under the plan solely because the service is not provided through a face-to-face consultation. T.A.C. section (L)(i)(c): A defined physician-patient relationship must include, at a minimum: physical examination that must be performed by either face-to-face visit or in-person evaluation 17

18 E-Prescribing Authority Prescribing authority depends on being able to establish a patient-physician relationship Most states have adopted blanket restrictions to prescribing based on an internet questionnaire alone Controlled substances Many states ban the prescription of DEA controlled substances based on a telemedicine encounter only Federal Ryan Haight Act that does not permit remote prescribing of controlled substances and does not include exceptions for the direct-topatient virtual care model, preempting state laws 18

19 General Healthcare Regulations Also Applicable Although many states have at least some telemedicine-specific law, it is important to keep in mind that telemedicine providers must still follow established regulations, including: Fraud and Abuse Privacy and Security Regulations, and Corporate Practice of Medicine 19

20 Fraud & Abuse Considerations Anti-kickback: equipment exchange between providers OIG evaluated telemedicine-specific models in 1998, 1999, 2004 and 2011, which focused on the value of the most often free consultative telemedicine services to both the referring and consulting practitioners, and evaluated any equipment exchange arrangements to determine inducement of referrals June 2015 OIG Fraud Alert on Physician Compensation Arrangements 7 Referrals: direct-to-consumer telemedicine programs necessitate referrals for follow-up care or emergent care 20 7 OIG Adv. Op. No (Issued Aug. 29, 2011), OIG Advisory Op. No (issued June 17, 2004), OIG Advisory Opinion OIG Advisory Op. No (issued Dec. 28, 1999 and OIG Advisory Opinion OIG Advisory Op. No (issued Nov. 25, OIG, Fraud Alert: Physician Compensation Arrangements May Result in Significant Liability (June 9, 2015).

21 Privacy & Security Regulations HIPAA privacy and security protection requirements Applies to health care providers, health plans and other entities that process health information (i.e. Covered Entities and Business Associates) State-specific privacy and security laws requiring greater security measures than under HIPAA Ex.: Texas Medical Records Privacy Act Applies not only to health care providers, health plans and other entities that process health insurance claims but also to any individual, business, or organization that obtains, stores, or possesses protected health information (defined as any information that reflects that an individual received health care from the covered entity; and is not public information), as well as their agents, employees and contractors if they create, receive, obtain, use or transmit protected health information. In most instances, the Act prohibits covered entities from using or disclosing protected health information without first obtaining an individual's authorization through the standard Authorization to Disclose Protected Health Information form that Texas Attorney General had adopted

22 Corporate Practice of Medicine A non-physician person, partnership, association or corporation is prohibited from directly or indirectly aiding or abetting the practice of medicine. o Ex. Texas: Provides for exceptions that allow employment of physicians by nonprofit health corporations, FQHCs, migrant health centers, non-profit medical schools, school districts and certain state institutions and hospital districts 9 Typical contractual structure used to comply with the corporate practice of medicine doctrine is through management or administrative services arrangement or telemedicine/vendor platform only Tex. Occupations Code Sec

23 State Regulatory Wrap-Up Current physician / mid-level provider regulations New regulations related to telemedicine State-specific law and guidance Political process and industry influence 23

24 Reimbursement 1. Medicare 2. Medicaid 3. Private payors 24

25 Reason for Failure to Bill for Services Delivered via Telemedicine 25 Mary Ann Liebert, Inc. Vol. 20 No. 6 (June 2014) Telemedicine and e-health

26 Medicare Defines telemedicine as a distinct service apart from inperson health care services and thus restricts reimbursement coverage based upon the following factors: Location of the patient Type of technology Type of provider Eligibility of the service 26

27 Medicare Location and Originating Site Facilities qualifying as originating sites are: Physician offices Hospitals Critical access hospitals Rural health clinics Federally qualified health centers Hospital-based or critical access hospital-based renal dialysis centers Skilled nursing facilities Community mental health centers Sites participating in federal telemedicine demonstration projects approved by the DHHS. 27

28 Medicare Technology Provider must use an interactive audio and video telecommunications system Differentiates between real-time video (synchronous) versus store-and-forward (asynchronous) models 28

29 Medicare Provider Types Physicians PAs NPs Nurse-midwives Clinical nurse specialists Clinical psychologists Clinical social workers Registered dietitians or nutrition professionals 29

30 Medicare Service Type Examples of eligible types of services covered under Medicare: Office or other outpatient visits Professional consults Individual psychotherapy Individual pharmacology Transitional care management Alcohol and other substance abuse counseling and treatment 30

31 Medicare Remote Chronic Care Coordination Programs Medicare will pay providers a monthly fee to manage and coordinate the care of patients with two or more chronic conditions (heart disease, diabetes and depression). Non-face-to-face communication styles include telephone, secure messaging and . Eligible chronic care management services must be furnished using an e-health record or other health IT or health information exchange platform 31

32 Medicaid Reimbursement for Telemedicine Federal Medicaid statute does not recognize telemedicine as a distinct service States may determine: whether or not telehealth services are covered, what services are covered in what geographic areas, which practitioners are reimbursed, and how much services are reimbursed Differs from state to state, though the states must still satisfy the federal requirements of efficiency, economy and quality of care 32

33 Medicaid Reimbursement State Survey (July 2015) 47 state Medicaid programs and DC are now reimbursing for live video telehealth 9 state Medicaid programs offer some reimbursement for store-and-forward, not counting states that only reimbursed for teleradiology 16 state Medicaid programs reimburse for remote patient monitoring 29 state Medicaid programs provide for a transmission or facility fee for telemedicine services 27 states require a telemedicine-specific informed consent be obtained from the patient 33 Center for Connected Health Policy (CCHP s) July 2015 State Telehealth Laws and Medicaid Program Policies, A Comprehensive Scan of the 50 States and District of Columbia:

34 Private Payors Some health insurance companies partner with telemedicine service companies State Parity Legislation payors may not distinguish between coverage for in-person services and telemedicine services Denial of payment is higher for telemedicine services than inperson services 12 According to the American Telemedicine Association, twenty-nine states and D.C. require parity and eight states have proposed parity legislation Chris Anderson, Private Payers Are Advancing the Use of Telemedicine Technology, Healthcare IT News (May 5, 2013). 13 American Telemedicine Association 2015 State Telemedicine Legislation Tracking

35 Administrative Barriers to Billing Private Payors Preauthorization Using code modifiers Required case review prior to service delivery Required preferred provider status Other barriers not associated with the same care delivered in person 35 Nina M. Antoniotti, RN, MBA, PhD,1 Kenneth P. Drude, PhD,2 and Nancy Rowe, BS. Private Payer Telehealth Reimbursement in the United States Vol. 20 No. 6 (June 2014) Telemedicine and e-health.

36 Credentialing and Privileging States typically require licensed health care facilities to credential all individuals providing professional medical services at the facility Government and commercial payors also typically require health care facilities or provider organizations to credential all practitioners as a condition of participation A provider needs to be credentialed at both the originating site and the distant site 36

37 Credentialing by Proxy CMS adopted a process to allow for credentialing by proxy Originating site may rely on distant site s prior credentialing of the provider Requires an agreement between both the distant site and originating site facilities that contains ongoing reporting requirements by the originating site facility on outcomes data 37

38 Credentialing by Proxy Practical Implications Benefits: Streamlines administrative process Saves time Saves money Originating site hospitals should review their medical staff bylaws, policies and procedures related to credentialing and privileging to comply with conditions of participation 38

39 Promising Legislation for Expansion of Telemedicine Medicare Access and CHIP Reauthorization Act (passed into law April 16, 2015) Recognizes telehealth and remote patient monitoring as part of the definition of Clinical Practice Improvement Activities Alternative Payment Models may include payment for telehealth services, even if the service is not otherwise covered by the traditional Medicare Program. 21 St Century Cures Act EHR interoperability & intensive study of Medicare population and services that may be improved most by the expansion of telehealth services Medicare Telehealth Parity Act of 2015 Expansion of originating sites, provider types and services 39

40 Promising Programs Chronic Care Management (covered by Medicare, effective January 1, 2015) Federation of State Medical Boards Interstate Medical Licensure Compact Participating state medical boards would retain their licensing and disciplinary authority but would share information and processes essential to the licensing and regulations of physicians who practice across state borders Next Generation ACOs Administration announcement that Medicare reimbursement will be expanded with regard to telemedicine (not yet lifted for the Pioneer and MSSP ACOs) 40

41 Case Study: Teladoc, Inc. Teledoc Inc. Company that allows users to create an online profile, to upload medical records, and request a telemedicine consultation with a physician, including treatment by prescribing medicine Texas Medical Board (TMB) April 10, 2015 adopted revised T.A.C (1)(L) that now requires a face-to-face examination for a physician to prescribe medicine to a patient 41

42 Teladoc, Inc., et al v. Texas Medical Board et. al Teladoc sued TMB to enjoin it from implementing the newly revised section 190.8(1)(L), arguing: TMB is concerned for public safety TMB is not immune from antitrust suits because state licensing boards made up of active members of the licensed profession are not immune from the antitrust laws when they take anticompetitive actions without the active supervision of the State. N. Carolina Board of Dental Examiners v. FTC, 574 U.S. (2015) TMB has not objected to on-call physicians treating patients they have never physically examined by phone and that there is no evidence that the telehealth services Teladoc has provided are not up to standard. TMB did not object to Teladoc s telehealth services until its business started to grow exponentially in 2009 and significantly competing with the traditional physician offices; the new rule would put Teladoc out of business in Texas, and have a detrimental effect on Teladoc nationwide. The revision to section 190.8(1)(L) is based on TMB s concerns for public safety, to maintain the quality standard of health care services in Texas. TMB is entitled to take (and has taken) disciplinary action against physicians who fail to practice medicine in an acceptable professional manner consistent with public health and welfare. 42

43 Continuing education information If you are requesting CLE credit for this presentation, please complete the evaluation that you will receive from Norton Rose Fulbright. If you are listening to a recording of this web seminar, most state bar organizations will only allow you to claim selfstudy CLE. Please refer to your state s CLE rules. If you have any questions regarding CLE approval of this course, please contact your bar administrator. Please direct any questions regarding the administration of this presentation to Cristina De Los Santos at [email protected]. 43

44 Speaker Lisa Atlas Genecov Head of Healthcare Transactions, Dallas Norton Rose Fulbright US LLP With 30 years of experience, Lisa Genecov has built a practice focused on providing legal services to the health care industry. She devotes her practice to the regulatory, business, corporate, governance, compliance, M&A and transactional aspects of health care law. She advises clients on transaction structures, implementation matters, compliance obligations and strategic opportunities under the Affordable Care Act and related healthcare laws and regulations. She also regularly advises the boards of health care entities on governance issues. Lisa counsels various hospitals and health systems, medical groups and other health care providers in both regulatory matters as well as business transactions, including: acquisitions and divestitures of hospitals, ancillary service lines and medical practices; co-management and service line management arrangements; the development and formation of accountable care organizations, clinically integrated networks and physician/hospital/payor alignment strategies; physician and hospital contracting, physician employment and recruitment issues; physician practice management and management services agreements; corporate practice of medicine and fee splitting issues; as well as advising on fraud and abuse and Stark Law compliance, tax-exempt and antitrust issues, and licensure and CHOW matters. Lisa has been recognized and included for many years in the prestigious Chambers USA: America's Leading Lawyers for Business rankings for health lawyers, as well as the Best Lawyers in America for Health Care, Texas Super Lawyers, Best Lawyers in Dallas, and was the only private law firm lawyer selected by the Dallas Business Journal for inclusion in its 2013 "Who's Who in Health Care" edition. 44

45 Speaker Lane Wood Senior Associate, Norton Rose Fulbright US LLP Lane Wood concentrates her practice on corporate health care transactions including the sale and purchase of health care entities and professional practices, joint ventures, acquisition and disposition transactions, professional services agreements, and employment and management services agreements. She also represents health care providers and health care industry companies in connection with regulatory issues and fraud and abuse issues related to the Anti-Kickback Act, the Stark Act, HIPAA and data protection, and other federal and state law issues. 45

46 Speaker Lidia Niecko-Najjum Associate, Norton Rose Fulbright US LLP Lidia Niecko-Najjum is a health care transactional associate in the Washington, D.C. office. She focuses her practice on health care regulatory, coverage and payment, transaction, compliance, and policy matters, including FDA issues. Representative clients include academic medical centers, health systems, physician groups, physician/hospital joint ventures, long-term care facilities and multinational companies. Prior to joining Norton Rose Fulbright, she worked for the Association of American Medical Colleges (AAMC) in Government Relations where she conducted policy and health care regulatory research in support of AAMC's advocacy agenda. As part of her responsibilities, she co-authored peer reviewed articles on health care policies related to academic medicine and physician workforce planning. Lidia began her professional career as a clinical nurse at Georgetown University Hospital. 46

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