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Trending in Telehealth: October 7 – 14, 2024

by Amanda Enyeart, Lauren Ellison and Jayda Greco | Oct 18, 2024 | Telehealth

Trending in Telehealth highlights state legislative and regulatory developments that impact the healthcare providers, telehealth and digital health companies, pharmacists, and technology companies that deliver and facilitate the delivery of virtual care.

Trending in the past week:

Speech language pathology
Mental health and substance use disorder treatment

A CLOSER LOOK

Proposed Legislation & Rulemaking:

Illinois introduced to amend its insurance code to require coverage for speech therapy services that a treating provider deems medically appropriate as treatment for stuttering, regardless of whether the services are provided in person or via telehealth, as of January 1, 2026. Coverage would include the use of any communication technology, applications, or platforms that comply with the applicable privacy provisions of the federal Health Insurance Portability and Accountability Act of 1996.

The District of Columbia Department of Health Care Finance proposed a rule regarding the provision of medication therapy management services by pharmacists under the district’s Medicaid program, in accordance with the requirements of 29 DCMR § 910, which establishes the department’s standards for the provision of telemedicine services. The services, which are aimed at optimizing therapeutic outcomes for Medicaid beneficiaries, are limited to one initial visit and three follow-up visits per calendar year and may be provided in person or via telehealth.

Finalized Legislation & Rulemaking:

Alaska enacted HB 126, which authorizes associate counselors to provide certain services via telehealth. The legislation also extends certain immunity protections to providers who volunteer to provide services without pay through a medical clinic, medical facility, nonprofit facility, temporary emergency site, or other governmental facility, if acting within the scope of their responsibilities in such organization.
Pennsylvania’s upper house passed HB 2268, which, if signed by the governor, will mandate insurance coverage of rehabilitative speech therapy treatments for individuals with childhood stuttering and neurological stuttering.

Why it matters:

States are increasingly relying on telehealth to expand access to speech-language pathology services. Pennsylvania and Illinois took steps this week to expand access to such services, particularly for treatments involving stuttering therapy.
States continue to use telehealth as a means to address mental health and substance use disorders. Last week, Mississippi enacted a final rule to allow community service providers to perform substance use assessments either in person or via telehealth. Continuing this trend, this week Illinois expanded insurance coverage for behavioral health benefits with the goal of enhancing equity in mental health and substance use treatment. We expect to see a continued uptick in this activity going forward.

Telehealth is an important development in care delivery, but the regulatory patchwork is complicated. The McDermott digital health team works alongside the industry’s leading providers, payors, and technology innovators to help them enter new markets, break down barriers to delivering accessible care, and mitigate enforcement risk through proactive compliance. Are you working to make healthcare more accessible through telehealth? Let us help you transform telehealth.

360 Diligence for Digital Health Investments: What to Watch in Today’s Market Trends

by Marshall E. Jackson, Jr., Lisa Mazur, Dale C. Van Demark and Edward G. Zacharias | Oct 17, 2024 | Digital Health

Contributors: Dudley Baker, Managing Director, Holihan Lokey | Luiz Greca, Managing Director, Holihan Lokey | Chris Schickling, Managing Director, Gallagher

The digital health industry is complex and highly regulated, presenting unique challenges for investment in this space – especially for investors new to the healthcare industry. Healthcare companies have business lines and regulators that do not exist in other sectors of the economy, making it crucial to work with advisors that understand the value proposition of a healthcare business, where value resides amongst potential targets, and how valuations may vary. These complexities, coupled with current market trends, amplify the need for comprehensive diligence strategies to stratify risk and maximize value from advisors that understand the nuances of the healthcare sector.

In this article, we discuss the top three trends we’re seeing in digital health investment and how Gallagher, Houlihan Lokey, and McDermott Will & Emery can position your organization for success from pre-acquisition diligence to post-close operations.

Heightened Scrutiny on Healthcare Transactions and Physician Practice Management Structures

Healthcare transactions and physician practice management structures (sometimes referred to as the “friendly PC model”) are facing heightened scrutiny at both the state and federal levels. Regulators are imposing new requirements on parties and applying stricter transaction review standards, creating hurdles for healthcare investors and companies that may impact their ability to execute transactions and management relationships, and upend standard transaction timelines. For example, state laws like the recently passed and subsequently vetoed California’s AB 3129 seek to implement transaction notification and approval requirements that could present new obstacles to closing transactions and may extend pre-closing timelines. This bill would have also changed in the ways in which management companies and physician groups arrange for support services. Although Governor Newsom vetoed AB 3129, there is a newfound wave of support at both the state and federal levels to further regulate private investment in, and control of, healthcare organizations that continues to gain momentum. Oregon and Massachusetts are examples of other states that have considered similar legislation.

McDermott’s specialized focus on healthcare dealmaking and our scrutiny of the federal and state regulatory landscape helps investors and health companies stay ahead of legal developments, understand implications of proposed regulations, ensure compliance with federal and state agencies, and chart a course to move transactions through the review process efficiently.

Strengthening Cybersecurity

The healthcare sector is particularly vulnerable to cybersecurity issues and continues to be highly targeted for cybercrime. The health sector has historically under-invested in cybersecurity personnel and technology and is increasingly being targeted by sophisticated ransomware and other malicious threat actors.

In recent years, attacks on healthcare providers, insurers, and health technology vendors have resulted in catastrophic cyberattacks that have compromised patient data, resulted in a wave of class action litigation, and resulted in regulatory scrutiny and new regulations of the healthcare industry. These incidents are also incredibly expensive to contain, investigate, and remediate. In fact, according to the 2024 IBM-Ponemon Cost [...]

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Trending in Telehealth: September 30 – October 7, 2024

by Lisa Mazur, Lauren Ellison and Jayda Greco | Oct 17, 2024 | Telehealth

Trending in the past week:

Professional standards
Teledentistry
Occupational therapy

A CLOSER LOOK

Proposed Rulemaking:

The Florida Nursing Board proposed a set of guidelines that the board must follow when imposing disciplinary penalties upon telehealth registrants. The penalties include reprimand, suspension with a corrective action plan, and revocation of the individual’s license.
New York proposed a rule to update its regulations for personal recovery-oriented services to align with telehealth guidance. The rule would mandate that individuals receiving intensive rehabilitation services be seen at least once in-person or through audio-visual telehealth during the calendar month.

Finalized Rulemaking:

Mississippi enacted a final rule that defines the Department of Mental Health’s certification requirements for community service providers. For all individuals reviewing mental health services and/or substance use services, the initial assessment and subsequent assessments may be provided either in-person or via telehealth.

Ohio adopted a final rule permitting occupational therapists to provide telehealth services. A provider may use synchronous or asynchronous technology during the initial patient visit. A provider also may deny a patient telehealth services and require the patient to undergo an in-person visit if care is continued with that provider.
Maine enacted a final rule permitting dentists to deliver diagnostic services via telehealth in accordance with the MaineCare Benefits Manual and current rules and guidance. The rule states that when delivering services via telehealth, dentists should bill for the underlying service and include the appropriate teledentistry CDT code that indicates a synchronous real-time encounter or an asynchronous encounter in which information is stored and forwarded to the dentist for subsequent review.

Why it matters:

States continue to expand access to telehealth services. Maine expanded access to teledentistry services, while Ohio expanded access to occupational therapy services and clarified the corresponding reimbursement methodology.
Legislation continues to slow as we approach the election, and many states have concluded the year’s legislative sessions. As mentioned in last week’s update, legislative activity has slowed, including legislation related to telehealth. Many legislators prefer to maintain the status quo until after elections, and legislative sessions in several states, such as California, have already concluded.

Trending in Telehealth: September 17 – 30, 2024

by Patrick Zanayed, Lauren Ellison and Grayson Dimick | Oct 1, 2024 | Telehealth

Trending in the past week:

Insurance and Medicaid reimbursement
Professional standards

A CLOSER LOOK

Proposed Legislation & Rulemaking:

The California governor vetoed AB 2339, which would have expanded the definition of “asynchronous store and forward” for Medicaid purposes to include asynchronous electronic transmission initiated directly by patients, including through mobile apps. The bill would have allowed Medicaid providers to establish a provider-patient relationship using asynchronous store and forward when the visit related to sensitive services.

The District of Columbia gave notice of a proposed Medicaid state plan amendment. The amendment would allow DC Medicaid to cover and reimburse for new remote patient monitoring (RPM) preventive services for eligible pregnant and postpartum individuals who are at risk of experiencing pregnancy-related morbidity or mortality issues. This amendment would include coverage for medically necessary monitoring devices, initial set-up and patient education on such devices, and collection and interpretation of the results by a healthcare professional.

The Texas Medical Board proposed repealing and replacing its telemedicine regulations. The proposed regulations are pared down from the current regulations, addressing only licensure and requirements for prescribing, and affirming that telemedicine medical services, including supervision, delegation, and posting of notices regarding filing a complaint, must be in compliance with Tex. Occ. Code C 111 and the Medical Practice Act.
At the federal level, the US House of Representatives approved the bipartisan HR 6033, which would create a task force focused on access to healthcare information technologies for non-English speakers. The bill would create best practices for:
- Facilitating and using interpreters during telemedicine visits.
- Providing accessible instructions for how to use telecommunication systems.
- Improving digital patient portals for non-English speakers.
- Integrating the use of video platforms that enable multi-person video calls via telecommunications.
- Providing patient materials, communications, and instructions in multiple languages. This would include text message appointment reminders and prescription information.

The bill defines “health information technology service providers” to include electronic medical record companies, RPM companies, and telehealth and mobile health vendors.

Finalized Legislation & Rulemaking:

Delaware enacted SB 301, which requires public universities to provide access to medication for the termination of pregnancy and emergency contraception. Although the medication and contraception must be provided onsite, the consultation to provide them may be performed through telehealth services.
Illinois enacted HB 4475, which amends the Insurance Code to address mental health and substance use parity requirements. The act provides that insured individuals have the right to select the provider or facility of their choice and modality, whether the care is provided via in-person visit or telehealth, for medically necessary mental health and substance use care.
The US Senate issued a joint resolution,
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Trending in Telehealth: August 26 – September 17, 2024

by Amanda Enyeart, Jessica Vishny and Grayson Dimick | Sep 20, 2024 | Telehealth

Trending in the past week:

Out-of-state telehealth providers
Interstate compacts
Reimbursement requirements

A CLOSER LOOK

Proposed Legislation & Rulemaking:

California’s AB 2339 was approved by both chambers and sent to the governor for signature. The bill would expand the definition of “asynchronous store and forward” for the state’s Medicaid program, Medi-Cal, to include asynchronous electronic transmission initiated directly by patients, including through mobile apps. Existing law prohibits a healthcare provider from establishing a new patient relationship with a Medi-Cal beneficiary via asynchronous store and forward, audio-only, remote patient monitoring, or other virtual communication modalities, except as specified. Among those exceptions, existing law authorizes a healthcare provider to establish a new patient relationship using an audio-only synchronous interaction when the visit is related to sensitive services (e.g., mental or behavioral health, sexual and reproductive health, substance use disorder treatment, gender affirming care) and when established in accordance with Medicaid-specific requirements. AB 2339 would expand this exception to the use of asynchronous store and forward when the visit is related to sensitive services. Existing law also authorizes a healthcare provider to establish a new patient relationship using an audio-only synchronous interaction when the patient requests an audio-only modality or attests that they do not have access to video. AB 2339 would remove from that exception the option of the patient attesting that they do not have access to video, and would add a parallel exception to permit the use of an asynchronous store and forward modality when the client requests.
The North Dakota Board of Medicine proposed regulations that would provide exceptions to physician licensure for telehealth providers licensed in another state, including for continuation of care received outside of the state, temporary care while the patient is located within the state temporarily, preparation for a scheduled in-person visit, practitioner-to-practitioner consultations, and emergency circumstances.

Finalized Legislation & Rulemaking:

Delaware enacted SB 331 into law. Under the act, out-of-state practitioners who wish to prescribe controlled substances in Delaware, including those who have privilege based on a telehealth registration or compact license, must obtain a Delaware controlled substance registration.
Alaska enacted SB 75 into law, entering the state into the Audiology and Speech-Language Pathology Interstate Compact.
Alaska enacted SB 91 into law. The act updates the telehealth licensure exceptions (which currently allow physicians licensed in another state to provide telehealth services in Alaska without Alaska licensure under certain circumstances) to include exceptions for members of a physician’s multidisciplinary care team. “Multi-disciplinary care team” is defined to include nurses, advanced practice registered nurses, physician assistants, social workers, psychologists, licensed professional counselors, marriage and family therapists, physical therapists, occupational therapists, and other provider types. The exception applies when such services provided are not reasonably available [...]

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Updated Mandatory Disclosure Requirements for Colorado Mental Health Providers Go into Effect

by Lisa Mazur, Stacey Callaghan, Sam Siegfried and Angela Irene Theodoropoulos | Sep 11, 2024 | General Interest

On August 1, 2024, Colorado legislation took effect amending the mandatory disclosures that mental health providers must make to their clients under state law. Providers of mental health services in Colorado should take note of the new legislation and review their existing patient disclosure notices to ensure compliance.

Colorado law requires mental health providers to disclose certain information in writing during initial client contact. The statute covers a broad range of mental health providers, including psychologists, social workers, marriage and family therapists, licensed professional counselors, addiction counselors, and licensee candidates. Key elements of the mandatory disclosures include the following:

The provider’s name, business address, and business phone number.
The provider’s degrees; credentials; certifications; registrations; licenses; and related education, experience, and training.
Contact information related to the applicable board that regulates the provider’s profession.
Certain statements regarding fees, patient freedom of choice and rights to information, inappropriateness of sexual relationships between providers and clients, confidentiality of information discussed during sessions, and record retention requirements.

Colo. Rev. Stat. Ann. § 12-245-216(1).

The newly enacted legislation reduced the extent of the required mandatory disclosures. Previously, the Colorado statute required that providers include information explaining the levels of regulation applicable to different mental health professionals, but Senate Bill 24-115 removed this requirement. 2024 Colo. Legis. Serv. Ch. 217 (S.B. 24-115). This is a positive change for providers because it reduces some of the mandatory disclosures.

If you need assistance creating a patient notice to comply with the Colorado statute overall or assistance updating your existing disclosures, please reach out to us. We will work to address any questions you may have regarding the impact of this legislation and the compliance of your current forms.

Trending in Telehealth: August 13 – 26, 2024

by Amanda Enyeart and Angela Irene Theodoropoulos | Sep 4, 2024 | Telehealth

Trending in Telehealth highlights state legislative and regulatory developments that impact the healthcare providers, telehealth and digital health companies, pharmacists and technology companies that deliver and facilitate the delivery of virtual care.

Trending in the past two weeks:

Licensing requirements
Substance use disorder
Teleoptometry

A CLOSER LOOK

Finalized Legislation & Rulemaking:

In Maine¸ the comment period deadline passed for a Department of Professional and Financial Regulation proposed rule, which, in part, implements the legislation to establish telehealth standards, uses, and limitations for the practice of optometry. The proposed rule would establish a comprehensive framework of virtual care delivery, imposing guidelines around scope of practice, underscoring the importance of identity verification, and providing a necessary reminder about the importance of informed consent for telehealth providers. If adopted, the rule would prohibit prescribing to a patient based solely on a static questionnaire and defines telehealth to exclude the provision of optometric services exclusively through an audio-only telephone, email, text messaging, instant messaging or US mail or other parcel service. While the proposed rule states that eye examinations should generally be performed in-person, it allows for a remote interview and examination “if the technology utilized in a telehealth encounter is sufficient to establish an informed diagnosis” as though care had been delivered in person.
In Nevada, the Board of Psychological Examiners adopted a final rule relating to the supervision of psychological assistants, psychological interns, and psychological trainees. The regulation imposes additional duties on the supervisor to ensure that “a psychological trainee receives at least 1 hour of individual supervision for each 10 hours of service delivery per week.” Notably, the regulation specifies that “service delivery” means “activities that involve direct contact with a client in-person or through telehealth.” Nevada currently defines “telehealth” as “the delivery of services from a provider of health care to a patient at a different location through the use of information and audio-visual communication technology, not including standard telephone, facsimile or electronic mail.”
The Oregon Criminal Justice Commission adopted a final rule to administer the state’s Jail-based Medications for Opioid Use Disorder Grant Program. The program will provide $10 million in funding to develop substance-abuse recovery programs to adults in custody. Under the rule, applicants for the grant must describe how the funds will be used to meet one of four requisite aims, including the provision of “medication, telemedicine, or any other reasonable treatment to persons in custody with an opioid disorder.”

Why it matters:

Regulators are adapting to the evolving healthcare delivery landscape. States continue to authorize telehealth care delivery for a wider range of practitioners. As evident from the proposed rule in Maine, however, such new authorizations can come with a myriad of compliance considerations, including obtaining informed consent, restrictions around prescribing, as well as heightened privacy and security concerns.
Regulators disavow a one-size-fits-all approach for virtual care delivery. As legislators and regulators become increasingly sophisticated as to the various telehealth modalities, they [...]

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Trending in Telehealth: July 30 – August 12, 2024

by Stacey Callaghan, Patrick Zanayed and Angela Irene Theodoropoulos | Aug 16, 2024 | Telehealth

Trending in Telehealth highlights state legislative and regulatory developments that impact the healthcare providers, telehealth and digital health companies, pharmacists and technology companies that deliver and facilitate the delivery of virtual care.

Trending in the past two weeks:

Community health
Interstate compacts
Teledentistry

A CLOSER LOOK

Finalized Legislation & Rulemaking:

The Illinois governor signed into law SB 2586. While the bill imposes certain restrictions on the practice of teledentistry, it expands patient access to care in other ways, including allowing a dentist to treat a “patient of record” to provide emergent care, or conduct an initial consultation using teledentistry for the purpose of treating or assessing acute pain, infection, injury, or certain other conditions. A “patient of record” is defined as a patient for whom the patient’s most recent Illinois-licensed dentist has obtained a relevant medical and dental history and on whom the dentist has performed a physical examination within the last year; obtained relevant records that are appropriate for the type of teledentistry service being provided from an in-person examination within the previous 12 months, including a review of the patient’s most recent x-rays; or established a relationship with the patient through an exchange of protected health information for the purpose of providing emergency care, treatment, or services. The bill expands the definition of “teledentistry” to encompass diagnosis and treatment planning. The act also prohibits a teledentistry provider from requiring a patient to sign an agreement that limits in any way the patient’s ability to write a review of services received or file a complaint with a regulatory agency.
In New Hampshire, the governor signed into law SB 403. This bill specifies that certified community health workers are permitted to provide services through telemedicine. The state defines “telemedicine” as “the use of audio, video, or other electronic media for the purpose of optimizing individual and family health outcomes.”
In Ohio, SB 90 went into effect. Passed in April of this year, this bill enacts the Social Work Licensure Compact with the purpose of facilitating interstate practice of regulated social work by improving public access to competent social work services.

Why it matters:

States are continuing to recognize the value of teledentistry. As more states develop the role of teledentistry, many are taking measures to ensure this mode of care increases access as intended while not displacing critical in-person services. For example, the latest Illinois legislation limits the practice of teledentistry to “patients of record” but allows for the use of teledentistry to provide emergent care.
State legislatures are recognizing the utility of virtual care delivery. In the past two weeks, we saw this through New Hampshire’s allowing community health workers to practice via telehealth, broadening the types of providers permitted to do so.
Interstate compacts are becoming increasingly popular alongside the adoption of telehealth. The pandemic witnessed a rise of multijurisdictional behavioral health practices which have proved to be enduring. Such multistate compacts have great [...]

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Trending in Telehealth: July 23 – 29, 2024

by Marshall E. Jackson, Jr. and Jae Hyun Lee | Aug 1, 2024 | Telehealth

Trending in Telehealth highlights state legislative and regulatory developments that impact the healthcare providers, telehealth and digital health companies, pharmacists and technology companies that deliver and facilitate the delivery of virtual care.

Trending in the past week:

Teleoptometry
Supervision
Naturopathic doctors

A CLOSER LOOK

Finalized Legislation & Rulemaking:

In Michigan, the governor signed SB 747 with line-item vetoes. This appropriations bill allocates money from the behavioral health initiative to nonprofit organizations to, among other things, increase the use of telehealth for behavioral health services. This bill further requires at least the same rate of reimbursement for telehealth services as services involving face-to-face contact for behavioral and physical health services provided through managed care or the fee-for-service program.

Legislation & Rulemaking Activity in Proposal Phase:

Highlights:

Oklahoma proposed a rule that requires optometrists practicing telemedicine to provide services to patients located in Oklahoma consistent with their obligations under statutes and Board rules for in-person consultations, including meeting patient confidentiality requirements under HIPAA. However, the proposed rule makes clear that telemedicine encounters shall not be used to establish a valid provider-patient relationship for prescribing contact lenses and or spectacles.
Oregon adopted a rule that amends the definitions regarding supervision for occupational therapists to allow for supervision via telehealth.
Wisconsin adopted a final rule that allows for the licensure, discipline and practice of naturopathic doctors which also allows for telehealth practice.

Why it matters:

States are expanding telehealth to more healthcare professionals. Oklahoma, Oregon, and Wisconsin adopted rules expanding telehealth permissibility to various healthcare professionals including optometrists, occupational therapists and naturopathic doctors.
Legislation remains slow for the summer. As typical during the mid-to-late summer, legislative activity has slowed down, including as related to telehealth.

Telehealth is an important development in care delivery, but the regulatory patchwork is complicated. The McDermott Digital Health team works alongside the industry’s leading providers, payors and technology innovators to help them enter new markets, break down barriers to delivering accessible care and mitigate enforcement risk through proactive compliance.

Trending in Telehealth: July 16 – 22, 2024

by Dale C. Van Demark and Jae Hyun Lee | Jul 26, 2024 | Telehealth

Trending in the past week:

Professional standards
Hospice services
Teledentistry

A CLOSER LOOK

Finalized Legislation & Rulemaking:

In Alaska, the governor signed SB 91 that impacts out-of-state members of a multi-disciplinary team providing services to a patient located within the state. SB 91 clarifies that the out-of-state members of a multi-disciplinary team are treated the same as out-of-state physicians and it addresses the disciplinary actions that may be imposed.

Legislation & Rulemaking Activity in Proposal Phase:

Highlights:

In New Hampshire, the House passed HB 1095, which standardizes the definition of telemedicine across multiple professions.
Ohio proposed two separate substantive rules eliminating the availability of services provided via telehealth. The summaries of the rule changes reference changes in federal policy since the end of the COVID public health emergency as justification for the roll-back, but do not specify the specific policy changes:
- The first rule relates to Medicaid covered services that hospice providers may or must furnish to the extent specified by the individual’s plan of care. Among the changes to the rule is the removal of language that allows core and non-core services to be provided through a combination of contracting services and telehealth services as necessary.
- The second rule addresses hospice services and includes among the changes the removal of language that allowed for the reimbursement of telehealth services where in-person visits were otherwise mandated.
Washington issued a proposal statement of inquiry regarding a possible rule implementing recent legislation which updated supervision requirements and the scope of practice for medical assistants. The bill lowered the supervision level required for the medical assistant-certified (MA-C) credential and the medical assistant-registered (MA-R) credential to provide treatment for known or suspected syphilis infections from “immediate or direct visual” supervision to “telemedicine” supervision.
Nevada proposed a rule establishing permissible services to be provided via teledentistry.

Why it matters:

States are focusing on ensuring professional standards for telehealth services. Ohio and Washington are considering proposed rules to adopt additional professional standards and scope of practice regulations concerning various healthcare professionals. Alaska also passed a bill that imposes certain disciplinary guidelines for the improper provision of telehealth services.
Teledentistry continues to be adopted by more states. Nevada is considering a proposed rule establishing provisions on teledentistry.

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