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Telehealth is expanding during the pandemic, but are the changes here to stay?

The telehealth services field is surging, and expected to become a conventional feature of health care. After years of slow, incremental growth, the pressures of the COVID-19 pandemic have forced regulatory overhaul, dramatically increased consumer demand and implementation by physicians, spurred technological innovation and investment, and prompted standardization of reimbursement protocols. The powerful drivers of telehealth expansion include regulatory, legislative, and commercial developments.

Expanded Medicare coverage – site and scope.  Before the pandemic, regulations allowed Medicare reimbursement for telehealth services only when the services were provided to patients in rural areas and at a medical facility. Now, pursuant to CMS temporary waivers, patients can receive virtual services virtually − including at their homes in major metropolitan areas. The temporary Medicare waivers also expands the range of reimbursable telehealth services, including, significantly, preventative health screenings and mental health counseling.

Relaxed licensure requirements and service across state lines. CMS and many state health agencies – Texas among them – have suspended requirements that out-of-state providers of telehealth services be licensed in the state where the patient is located. In addition to the now ubiquitous in-home consultations in the pandemic context, out-of-state physicians can care for patients at rural hospitals remotely, via phone, computer connection, or even radio. For rural hospitals and their patients, this could be the difference between access and no access.

Money matters. Regulatory changes in private insurance and Medicare. 

  • Provider incentives: pay parity. In Texas, private insurance plans regulated by the Texas Department of Insurance must pay for telehealth services at the same rate they would pay for in-person visits. On the federal level, Medicare will likewise pay providers the same amount for telehealth services as it does for in-person services.
  • Consumer incentives: waived cost-sharing and co-payments. Private insurers across the country have eliminated copayments, deductibles, and other financial barriers to accessing telehealth services. On the provider side, CMS has temporarily authorized providers to reduce or waive otherwise required patient cost-sharing amounts for telehealth visits under Medicare and other federal healthcare programs.

A little less red tape: waived HIPAA regulations.  Under emergency waivers, a covered health care provider can communicate with patients for telehealth visits using any available non-public-facing remote communication product.

New patient relationships – via phone. Federal and some state emergency waivers allow providers to establish new physician-patient relationships via virtual visits; in-person examinations are not required. In Texas, pandemic-specific rules provide that even audio-only telephone calls are sufficient to establish a physician-patient relationship for all purposes, and that phone calls may be used for diagnosis, treatment, and ordering of tests for any conditions (not just for issues or conditions related to COVID-19).

Prescription of controlled substances.  Under emergency waivers and in limited circumstances, certain controlled substances can be prescribed via telehealth without an in-person exam.

Are These Changes Here to Stay?  While not all the regulatory and private sector changes that respond to pandemic conditions are likely to serve well in the long term, the experience so far suggests that many will. It has certainly wrought permanent changes in how people think about telehealth. In the Dallas area, the majority of primary care physicians now utilize some form of telehealth services, as do a substantial proportion of specialists. Private employers and insurance companies are working with physician groups and hospitals to incorporate routine use of telehealth.

At the government level, the promise of telehealth to expand access and reduce costs, combined with the need for online education, has prompted the creation of federal and state grant and incentive programs for the development of critical IT infrastructure. CMS intends to make permanent the temporary changes for home health providers, and is consulting with Congress about which other temporary changes should be made permanent. The same discussions are occurring in Texas, at the agency, executive, and legislative levels (although pandemic-related budget realities may limit what can be accomplished in the 2021 legislative session).

We expect that growth and innovation in the telehealth field will continue, and that development of complementary technologies and services will multiply the commercial impact of the expanding telehealth market.

Senator Nathan M. Johnson is a commercial litigator at Thompson Knight who is also a State Senator for District 16 in Dallas County, Emily W. Miller is a partner at Thompson Knight who focuses on complex business disputes, and Mackenzie S. Wallace is a partner at ThompsonKnight and a trial attorney focused on litigation. 


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