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Vetting Relationships for Telemedicine Collaborations

by Lisa Mazur | Sep 13, 2019 | Telehealth

As the telemedicine regulatory and reimbursement environment becomes more cohesive and providers and patients alike embrace technology, opportunities for telemedicine collaborations are likely to grow. Like any collaboration, finding the right partner is crucial for success, particularly at the highly-scrutinized intersection of healthcare and technology. This post explores the factors to address when evaluating service providers and vendors for your next telemedicine collaboration.

Service Provider Evaluation

Ask around “town” – What is the collaborator’s reputation? What independent feedback is provided in references?
Determine if the service provider’s stage in the organizational “life-cycle” and its affiliated relationships are the best fit for the strategic goals of your partnership (e.g. should you partner with an early-stage company or a longstanding organization?)
Assess the capabilities of potential collaboration partners for meeting your organization needs, and pressure test their ability to come up with back-up options, should the need arise throughout the course of the collaboration.
Determine whether collaborator has state specific and service specific policies and procedures governing the provision of telemedicine services, including: (more…)

Telemedicine Collaborations and Partnerships: Key Considerations for Success

by Lisa Mazur | Aug 30, 2019 | Telehealth

Telemedicine collaborations, whether between technology companies and providers, health systems and patients, or other creative partnerships we have yet to see in the industry, can present numerous benefits to our healthcare delivery system and patient outcomes. However, such collaborations present a variety of regulatory, logistical and operational concerns that should be strategically addressed from the ideation stage of the collaboration onward.

Early-Stage Considerations

The strategy behind the collaboration should be developed with an eye towards the duration of the relationship and the development of mutually beneficial goals and objectives that are clear and measurable. Each party should be transparent about their capabilities and strategic vision at the outset of the collaboration talks to avoid any surprises or disappointments deeper in the future. Questions for potential collaboration partners include:

Is this an experimental partnership or a long-term plan?
What do I bring to the table? How can this partner supplement or support my capabilities?
How will this relationship be branded and marketed? Do I need greater visibility than my partner, or will we come together under a new brand?
Do we have the IT infrastructure and vendor relationships in place to execute this collaboration? If not, how will secure what we need?
Do we have the resources to meet the regulatory requirements of the partnership?
How will we measure the success or failure of the collaboration?

Considerations in the RFP Stage

After the initial strategy discussions have taken place, the proposal period raises its own series of considerations. After ensuring that the arrangement proposed can address the goals and objectives of the collaboration, regulatory and transactional issues take center stage. Rights and responsibilities of each party, reporting and compliance mechanisms, fees, credentialing, licensing and privacy compliance and liability issues, to name a few concerns, are addressed at this point in the process. Fees structures and compliance with the evolving federal and state laws regulating telemedicine providers are particularly complex issues that should be addressed at this point.

Questions to address regarding fees include:

(more…)

DOJ Continues Telemedicine Enforcement in Q2 2019

by McDermott Will & Emery, Amandeep S. Sidhu and Marshall E. Jackson, Jr. | Aug 27, 2019 | Telehealth

During the second quarter of 2019, DOJ continued its focus on enforcement activity in telemedicine. As reported in prior editions of the Quarterly Roundup, telemedicine is an expanding field, causing DOJ to pay particular attention to the industry.

In April 2019, DOJ indicted the owner and operator of 1stCare MD and ProfitsCentric with one count of conspiracy to pay and receive kickbacks. The defendant’s arrest and federal indictment is part of a nationwide law enforcement action, as reported in the Q1 2019 Quarterly Roundup, that targeted 24 defendants involved in alleged extensive healthcare fraud schemes focused on telemedicine and durable medical equipment (DME) marketing. These schemes allegedly resulted in losses amounting to more than $1.2 billion. The indictment alleges that from 2016 to 2019 the defendant defrauded HHS in its administration and oversight of Medicare by conspiring with others by paying and receiving kickbacks and bribes in exchange for doctors’ orders for DME for Medicare beneficiaries. Prosecutors also alleged that the defendants, 1stCare MD and ProfitsCentric, through their network of doctors, generated thousands of doctors’ orders for DME absent a pre-existing doctor-patient relationship and a physical examination, and that the orders were based solely on a short telephone conversation. The indictment alleges that these activities resulted in the submission of approximately $40 million in fraudulent Medicare claims for DME.

Further, in July 2019, DOJ indicted a New York-based anesthesiologist for her alleged role in a $7 million telemedicine conspiracy to fraudulently bill Medicare, Medicare Part D plans and private insurance plans, resulting in more than $3 million in payments on those claims.[51] According to DOJ, the indictment resulted from investigative work by the Criminal Division’s Medicare Fraud Strike Force, a joint initiative of DOJ and HHS. Eastern District of New York prosecutors charged the anesthesiologist with one count of conspiring to commit healthcare fraud by misusing telemedicine channels under agreements with unidentified companies to prescribe DME and drugs to more than 3,000 Medicare beneficiaries. The indictment alleges that, from January 2015 to May 2018, the anesthesiologist and other providers allegedly received kickback payments from unidentified companies for improper telemedicine encounters. The indictment alleges that the anesthesiologist “prescribed and ordered DME and prescription drugs for beneficiaries who were not examined or evaluated by a licensed physician.” The prosecutors alleged that the prescriptions flowing from the alleged telemedicine encounters were for DME and drugs that were neither medically necessary nor the result of genuine physician-patient relationships.

PRACTICE NOTE: Given DOJ’s recent criminal enforcement related to telemedicine, telemedicine companies should closely review their compliance with the federal and state laws that may be implicated through a telemedicine practice. Further, DOJ’s focus on individual accountability is particularly important with respect to telemedicine, given its interest in pursuing criminal actions against physicians.

This blog post was originally published in McDermott’s Health Care Enforcement Quarterly Roundup | Q2 2019. Click here to view the full report.

DOJ’s Enforcement Activity Against Individuals: Acute Focus on Telemedicine

by Amandeep S. Sidhu, James A. Cannatti III and Theodore Alexander | May 6, 2019 | Telehealth

DOJ’s focus on individual accountability is particularly important with respect to telemedicine. Telemedicine is a burgeoning field, with a projected market increase of 18 percent annually over the next six years, reaching $103 billion in 2024. In light of this recent surge in profitability, DOJ has begun paying extra attention to telemedicine, with at least one recent HHS-OIG report asserting that more than one-third of all telemedicine claims are improper.

The report’s claim is further supported by a recent increase in telemedicine prosecutions. In April 2019, DOJ announced charges against 24 defendants, including owners of various telemedicine companies, for their alleged involvement in a health care fraud scheme resulting in $1.2 billion in loss. This scheme involved the payment of kickbacks and bribes by durable medical equipment (DME) companies to medical professionals working with telemedicine companies, in exchange for the referral of Medicare beneficiaries. DOJ alleges that the defendants paid doctors to prescribe medically unnecessary DME without ever seeing patients or after only a brief telephone conversation. The prosecution involves charges in at least seven districts across the United States, including New Jersey, Florida, Texas, Pennsylvania, and California. Additionally, DOJ prosecuted several other individuals in connection with unrelated telemedicine schemes in late 2018 (see the agency’s press releases here, here and here). In light of this recent trend, companies should exercise extreme caution and consult with regulatory experts prior to opening telemedicine practices. Companies can expect to see increased scrutiny and further prosecution of telemedicine companies moving forward.

Practice Note: DOJ has recently re-emphasized its willingness to exercise significant discretion and reward companies that invest in strong compliance programs. Looking forward, health care companies should maintain detailed and up-to-date documentation of all compliance programs, in case such an FCA case should arise. A lawyer should be consulted if an updated compliance program is needed.

This blog post was originally published in McDermott’s Health Care Enforcement Quarterly Roundup | Q1 2019. Click here to view the full report.

Expanded Telemedicine Services Presented as Means to Address Opioid Crisis in New Legislation

by Lisa Mazur | Nov 7, 2018 | General Interest, Telehealth

Last week, President Trump signed the SUPPORT for Patients and Communities Act (SUPPORT Act), a bipartisan piece of legislation designed to tackle the opioid crisis by, among other approaches, increasing the use of telemedicine services to treat addiction. Several key provisions are summarized below.

The package includes provisions to expand public reimbursement for telemedicine services that focus on addiction treatment. Specifically, the legislation removes Medicare’s originating site requirement for substance abuse treatment provided via telemedicine, meaning that health professionals can receive Medicare reimbursement even if the patient is not located in a rural area. In addition, the Centers for Medicare and Medicaid Services (CMS) has been directed to issue guidance to states regarding possible ways that Medicaid programs can receive federal reimbursement for treating substance abuse via telemedicine. The legislation explicitly identifies services provided via a hub and spoke model and in school-based health centers, among others, as those that should be eligible for federal reimbursement.

In another development, the US Drug Enforcement Agency (DEA) is now required to implement regulations regarding a special registration process for telemedicine providers within one year of the passage of the SUPPORT Act. The aim of this process is to expand health providers’ ability to prescribe controlled substances to patients in need of substance use disorder treatment based on a telemedicine consultation, without having to conduct an in-person evaluation first. This special registration process was originally contemplated 10 years ago under the Ryan Haight Online Pharmacy Consumer Protection Act of 2008 (Ryan Haight Act) as one of the seven pathways through which a telemedicine provider could prescribe a controlled substance to his/her patient without having first conducted an in-person evaluation, but the DEA never issued any regulations to effectuate it. At present, the special registration process and requirements (e.g., registration costs, application processing timeline, provider qualifications) are still largely unknown. The answers to these open issues will determine how accessible this new registration pathway will be to substance use disorder providers and, therefore, how impactful it will be in connecting patients in need of substance use disorder treatment with qualified providers.

In addition to these policy reforms, the SUPPORT Act also directs government agencies to conduct additional research into the possible benefits of telemedicine technology for treating substance abuse. Both CMS and the Government Accountability Office (GAO) are tasked with publishing reports concerning the use of telemedicine technology for treating children: CMS is directed to analyze how to reduce barriers to adopting such technology, and GAO is directed to evaluate how states can increase the number of Medicaid providers that treat substance use disorders via telemedicine in school-based clinics. Furthermore, the Department of Health and Human Services must issue a report regarding the impact of using telemedicine services to treat opioid addiction within five years.

The RUSH Act – Another Advancement in Telehealth Acceptance?

by Dale C. Van Demark | Oct 31, 2018 | Telehealth

As previously noted in our Digital Health Mid-Year Review, 2018 has seen greater acceptance of telemedicine within the Medicare program. Both regulatory and statutory changes have expanded reimbursement opportunities and, consequentially, opportunities for the deployment of telemedicine technologies. As we noted then, however, improvement in the Medicare reimbursement environment for telemedicine services has been tied to a policy goal of not increasing utilization unnecessarily. We noted in our Mid-Year Review that Congress appears to be following MedPac’s recent guidance that Congress “should take a measured approach to further incorporating telehealth into Medicare by evaluating individual telehealth services to assess their capacity to address. . . cost reduction, access expansion, and quality improvement.”

The recently introduced Reducing Unnecessary Senior Hospitalizations Act of 2018 (the RUSH Act), seems to deviate from MedPac’s suggested approach. The RUSH Act seeks to avoid hospitalizations through a program that creates financial incentives for providing certain nonsurgical services furnished by hospital emergency departments at skilled nursing facilities that are qualified to provide such services by the Secretary of Health and Human Services The RUSH Act specifically refers to the possibility that some of these services could be provided by licensed practitioners “through the use of telehealth.” Interestingly, the RUSH Act does not specify what telehealth services should be allowable or how they should be reimbursed; rather, the RUSH Act leaves these matters for agency determination.

According to Representative Diane Black (TN), one of the bill’s sponsors, “[t]here are companies who are ready and able to provide this innovative care. . . . These positive disruptors just need Medicare’s payment policies to catch up with the technology. . . giving [nursing homes] the technology-enabled tools needed to lower health care costs and, most importantly, save lives.”

As an observer of this industry, I tend to agree with this claim, but under the approach taken by this bill, that determination will need to be made by the Department of Health and Human Services. Digital health companies looking for a better reimbursement environment are well-advised to focus on the bottom line of federal health policy–lower cost, improved care and increased access.

Telemedicine – The New Standard of Care

by Dale C. Van Demark, McDermott Will & Emery and Lisa Mazur | Jun 27, 2018 | Telehealth

Across the health care sector, telemedicine is naturally and strategically being integrated into health care delivery and treatment plans as targeted and efficient solutions to specific health issues by hospitals, medical groups and drug-to-consumer telemedicine companies.

Telemedicine is no longer viewed as a secondary option for care—it is a new standard of care that is both expected by patients and popular with providers. Consumers expect to see health care adapt—like many other industries already have—to fit within their daily lives and schedules. Whether it’s electronic check-in procedures or better automated systems, health care providers are beginning to treat their patients a little bit more like customers, and see telemedicine and patient engagement tools as a means of improving customer loyalty and engagement while reducing costs.

However, complex billing structure and payor and reimbursement issues can create significant hurdles for health care providers looking to advance telemedicine programs. Telemedicine billing requires special attention, and if not enough consideration is given on the front end of programs, organizations may be surprised to find that that something they thought was a billable service is, in fact, not.

The Bipartisan Budget Act, which provided for the reimbursement of the distance provider, significantly increased the telemedicine use cases that are approved under the Medicare reimbursement structure. However, because Congress will now pay for it, there is a new expectation that hospitals that do not have particular areas of expertise available on-site will investigate opportunities to incorporate a telehealth programs that ensure adequate patient care.

The standard of care continues to improve as patients have greater access to nationwide physicians and as new technology like telestroke and clinical decision support tools become more widely available. For example, a stroke neurologist in one New York can now diagnose a stroke patient in Florida, and then facilitate an emergency room physician to treat that stroke. Telestroke programs check off all of the right boxes: better quality care, better access to care, and overall lower cost of care.

As use cases like this continue to be integrated into health care delivery and familiarity builds around how telemedicine can be used effectively, expectations shift around the standard of care and new questions arise around the risks of integrating—or failing to integrate—telehealth programs. If the tools are available and easily accessible, and if there is a supportive reimbursement model, how much a part of the standard of care does telemedicine become and what is the risk of failing to embrace these tools? If hospitals choose not to implement telehealth programs, and then patients suffer harm as a result, for example a delayed diagnosis and treatment of a stroke, could that lead to increased medical malpractice suits or other types of liability?

In the newest episode of the Of Digital Interest podcast, McDermott Digital Health partners, Lisa Schmitz Mazur and Dale Van Demark, share their perspectives on these questions and the various barriers, risks and opportunities associated with the rise of telemedicine and other technological advancements in health care delivery. Access this [...]

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Order now: The Law of Digital Health Book

by McDermott Will & Emery, Amanda Enyeart, Anisa Mohanty, Amy C. Pimentel, Bernadette M. Broccolo, Dale C. Van Demark, Jiayan Chen, Lisa Mazur, Marshall E. Jackson, Jr., Michael W. Ryan, Ryan S. Higgins, Scott Weinstein and Vanessa K. Burrows | Mar 20, 2018 | Big Data, Cloud, Consumer Protection, Data Privacy, General Interest, Telehealth

Designed to provide business leaders and their key advisors with the knowledge and insight they need to grow and sustain successful digital health initiatives, we are pleased to present The Law of Digital Health, a new book edited and authored by McDermott’s team of distinguished digital health lawyers, and published by AHLA.

Visit www.mwe.com/lawofdigitalhealth to order this comprehensive legal and regulatory analysis, coupled with practical planning and implementation strategies. You can also download the Executive Summary and hear more about how Digital Health is quickly and dynamically changing the health care landscape.

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Texas Continues to Embrace Telemedicine

by Lisa Mazur, Marshall E. Jackson, Jr. and Olivia J. Jahn | Oct 10, 2017 | Telehealth

On September 15, 2017, the Texas Medical Board (Board) released proposed rules regarding telemedicine and mental health services (Proposed Rules) to implement Senate Bill 1107, which was passed on May 11, 2017. Most notably, the Proposed Rules provide that a physician-patient relationship can be established solely by the delivery of care via telemedicine services and eliminates the prior requirement that services for new patients be provided at an established medical site and with a telemedicine presenter. These changes to the Board’s approach create the same standard of care for in-person and telemedicine services.

McDermott previously r eported on Senate Bill 1107 and provided relevant background on telemedicine in Texas. The Board is accepting public comments on the Proposed Rules. A public hearing regarding the Proposed Rules will be held at a later date to be determined.

In addition, the Texas Health and Human Services Commission (HHSC) recently adopted final rules regarding the reimbursement of telemedicine in Texas Medicaid (Final Rules) on October 6, 2017. The Final Rules are effective as of December 1, 2017. (more…)

The Way Forward for Telemedicine

by Dale C. Van Demark | Sep 25, 2017 | Telehealth

A lot of us have argued that one of the floodgates for telemedicine has been reimbursement. If states and the Federal government more liberally reimbursed or required reimbursement for telemedicine service, we argue then a significant barrier to broader telemedicine will be removed. This is a valid argument, and the potential flurry of activity on Capitol Hill as of this writing (September 20, 2017) gives many hope that Medicare reimbursement for telemedicine may be greatly expanded soon.

Alas, another problem persists. A spate of recent surveys and reports on utilization demonstrate that awareness should be viewed as a similar sort of barrier. It is, of course, a generalization to say this, but consumers are largely unaware of the benefit being made available to them, or are unaware of the appropriate uses of a telemedicine service. It would be foolish to speculate as to the reasons why, but a recent trend may help to erode this barrier.

When it comes to customer service and user engagement, none are better than our technology industry. The West Coast tech giants clearly understand how to engage and attract users. The remarkable success of smart phones provides ample evidence—can you think of any other consumer product of comparably high-cost being as ubiquitous? It is also clear that the health care industry has failed to engage consumers as effectively. There are likely multiple reasons for this. Health care is: (1) highly regulated, resulting in limited ability to be quickly responsive to consumer demands; (2) run by professionals trained in many things, but not sales or consumer satisfaction and engagement; and (3) burdened both by a lack of competition at the point of sale, and by a third-party payment system that has so far proven to be impervious to the forces of disintermediation. (more…)

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