The document discusses telehealth, telemedicine, and reimbursement in the US pre- and post-pandemic. It notes that historically Medicare limited telemedicine but expanded coverage significantly during the pandemic. It explores ongoing debates around permanent expansions, differences between telehealth and telemedicine, employer adoption challenges, and compliance issues. Deployment structures like contracting through wellness programs are examined. Reimbursement changes during the pandemic and proposals for the future are summarized, including defining "reasonable and necessary" coverage and considering commercial insurance coverage.

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Telehealth, Telemedicine and Reimbursement: the
U.S. Landscape Pre- and Post-Pandemic
mHealth Meetup
September 14, 2020
Adam Solander, Partner
King & Spalding
asolander@kslaw.com
David Farber, Partner
King & Spalding
dfarber@kslaw.com

2. Telemedicine – What Do We Mean?
“The use of electronic information and
telecommunications technologies to support and
promote long-distance clinical health care, patient
and professional health-related education, public
health and health administration. Technologies
include videoconferencing, the internet, store-and-
forward imaging, streaming media, and terrestrial
and wireless communications.”
https://www.healthit.gov/topic/health-it-initiatives/telemedicine-and-telehealth
Historically, the US Government limited the use of
telemedicine in the Medicare program
• Tightly defined “remote” and “distant” sites
• Limited to when the person receiving the
service is in a designated rural area and when
they leave their home and go to a clinic,
hospital, or certain other types of medical
facilities for the service
Until the pandemic arrived….
2PRESENTATION TITLE

3. Telehealth vs. Telemedicine
What is telemedicine?
Telemedicine is the practice of medicine
using technology to deliver care at a
distance. A physician in one location uses
a telecommunications infrastructure to
deliver care to a patient at a distant site.
What is telehealth?
Telehealth refers broadly to electronic and
telecommunications technologies and
services used to provide care and services
at-a-distance.
What’s the difference?
Telehealth is different from telemedicine in
that it refers to a broader scope of remote
health care services than telemedicine.
Telemedicine refers specifically to remote
clinical services, while telehealth can refer
to remote non-clinical services.
https://www.aafp.org/news/media-center/kits/telemedicine-and-telehealth.html
What’s the Difference?
3PRESENTATION TITLE

4. The Pandemic and Telemedicine
Although federal policies and waivers have supported the massive growth of telemedicine,
that has not translated to telehealth generally, and to remote patient monitoring and
treatment services specifically?
• Will the widening gap between increased use of telemedicine create an opportunity for
telehealth as well?
• How long is the gap sustainable, and will telemedicine continue or contract?
Radical Growth – Between March 1 and April 17, 13,000/week to 1.7
telehealth services per week
Will Congress, Medicare and Commercial Payers continue to
support telemedicine expansion? What will it mean for telehealth
services?
4PRESENTATION TITLE

5. Black Swan or Swan Song: Medicare View
5
“With these transformative changes unleashed over the last several months, it’s hard to imagine merely reverting to
the way things were before.” Seema Verma (July 15, 2020)
Temporarily expand the scope of
Medicare telehealth to allow
Medicare beneficiaries across the
country—not just in rural areas—to
receive telehealth services from any
location, including their homes
CMS also added 135 allowable
services, more than doubling the
number of services that beneficiaries
could receive via telehealth.
Increased from 13,000 visits a week
pre-Covid to 1.7 million visits a week
in last week of April. 48% of
Medicare visits
CMS is reviewing the
temporary changes made and
assessing which of these
flexibilities should be made
permanent through regulatory
action.
Quality: Assessing whether the mode
of telehealth service delivery is
clinically appropriate and safe for
patients, as compared to an in-person
visit.
Cost: Assessing the Medicare payment
rates for telehealth services. During
the public health emergency, Medicare
paid the same rate for a telehealth visit
as it would have paid for an in-person
visit, given the unique circumstances
of the pandemic.
Fraud: As more health care providers
use telehealth, CMS is examining our
data. Monitoring implications such as
practitioners who may be offering
shorter telehealth visits with patients
to maximize payment, or billing more
visits than are possible in a day.

6. Telemedicine Goes Blue Chip
6

7. Here Comes the Calvary…
7

8. Will Early Entrants Fight off Competition
Post Covid?
8

9. Lets Get Back Down to Earth
9
11 Percent of US Consumers
Using
Annual Revenues of $3 Billion
Mostly Urgent Care
Replacement. Rural Medicare,
DTC, Employer, Insured
46 Percent of US Consumers
Using
Annual Revenues Could be $
250 Billion
Broad based,
Medicare/Medicaid, DTC,
Employer, insured
“Telehealth will never replace the gold-standard, in-person care. However, telehealth serves as an
additional access point for patients, providing convenient care from their doctor and health care team
and leveraging innovative technologies that could improve health outcomes and reduce overall health
care spending.” Seema Verma

10. Some Trends
10
Fraud investigations will
become more prevalent in
2021
Market will become more
fragmented as traditional
players use TM to steer
patients to their CINs. Deep
pocket entrants emerge
Telemedicine and digital
health will be combined to
form more powerful product
offerings targeted at chronic
conditions
The bubble will deflate...
How much is any ones
guess.
Regulations in both
Medicare and employer
markets

11. Employer Deep Dive

12. The Employer Market
0
5000
10000
15000
20000
25000
Premium
PPO
Premium
HDHP
Employer Costs
Family Individual
Sixty-seven percent of U.S. CFOs believe that the U.S. will be in recession by the third quarter of
2020, and 84 percent believe that a recession will have begun by the first quarter of 2021
The sickest 6 percent of an employer's population represents 47 percent of the cost
Telehealth and Digital Health Providers Must Show ROI

13. Employer Wants vs Actions
Reduce pharmacy costs
Improve price transparency
for medical services/supplies
Stabilize individual market
Maintain Medicaid funding
Invest more in population health
and education
Employer Wish List Telemedicine (89%) (77% through health plan)
Wellness (82%)
DM (68%)
Onsite Clinics (55%)
High Performance Network (17%)
Reduce
Benefit
Richness
(Constrained
by mandatory
coverage)
Shift Costs To
Employees
(Limited by
OOP and
Affordability
Thresholds)
Wellness and
Population
Health (Has
not shown
ROI)
Telehealth
(Limited
services and
utilization)
Payment
Reform
(Limited
Employer and
TPA
sophistication,
Limited
Provider
Interest)

14. Employer Telemedicine Deep Dive
Telemedicine
$79
Office Visit
$149
ER $1,700
Mostly urgent
care
replacement
Utilization
around 7%
(once per year)
High
readmission
rates
0
10
20
30
40
50
60
70
80
2015 2016 2017 2018
Employer Adoption
Employer Adoption

15. Top Impediments
15
Payment
Models
PMPM or
Utilization
No Performance
Guarantee
Inability to
Integrate w/ TPA
Deployment
Providers Do Not
Drive Utilization
Not Targeted: Healthy
Individuals Use
Not Properly Formed
Compliance
Privacy and Security/
Data Use
ERISA Classifications
and HDHP
Contract Risk Sharing
Key Point: Employers are going to be financially constrained in the near future. The digital and telehealth
products that will survive will need to show value, be easy to implement, reduce risk, and overcome the
perceptions of employers.

16. Deployment

17. Deployment: Plan Benefit or Employment
17
If service is considered
“medical care” outside of the
group health plan it could be
considered a separate group
health plan.
If considered a separate
group health plan it must be
compliant with the ACA
Only contract for employees
in the group health plan, but
medical services reimbursed
at higher rate. Generally
through claims
Can be made
available to all
employees
Generally lower
reimbursement.
Easier to contract
If contracting
with wellness
plan limited in
scope of
service
Strategic Decisions Wellness vs GHP Contracting

18. The Structure Matters

19. Typical Telehealth/ Digital Health
Deployments: Friendly PC (Plan Benefit)
19
Friendly PC: State 1
Friendly PC: State 3
Friendly PC: State 2 Management Services Org
Licensure
S
t
a
t
e
S
t
a
t
e
S
t
a
t
e
Insurer, Employer, Payer
Patients

20. Presentation Title 20
Typical Telehealth/ Digital Health
Deployments: Digital Health (Employ)
Employer
Insurer
Employer Group Health Plan Digital Health Company
Employees and Insureds

21. Why Isn’t Telemedicine More Available
Already?

22. Presentation Title 22
Common Compliance Issues
Wellness, EAP, and DM
IRS HSA Rules: HDHP rules generally prohibit an employer from
providing coverage prior to an individual’s deductible being met under a
HDHP
ERISA Issues: In general, any employer benefit that provides medical
care will be considered a group health plan.

23. Presentation Title 23
Non-GHP Deployment: Wellness, EAP,
and DM
IRS HSA Rules
HDHP rules generally prohibit an
employer from providing coverage prior to
an individual’s deductible being met
under a HDHP. (Ex., Enrollee would have
to pay $2000 using a tax advantaged
account before any coverage is available
under the plan)
There are 2 general exceptions to this
rule:
• Coverage under an EAP, wellness
program or disease management
program.
• Preventive services (such as annual
wellness or certain screening)
If an employer violates this rule they risk
disqualification of the plan which would
make the HSA contributions taxable to
the employer and employee
IRS Notice 2004-50
Coverage under an EAP, DM, or
wellness program will not disqualify the
plan if it does not provide
“significant benefits in the nature of
medical care or treatment.”
Cares Act
Provides a temporary safe harbor (2021)
for providing coverage for telehealth and
other remote care services.
An otherwise eligible individual with
coverage under an HDHP may also
receive coverage for telehealth and
other remote care services outside the
HDHP and before satisfying the
deductible of the HDHP and still
contribute to an HSA

24. Presentation Title 24
Non-GHP Deployment: Wellness, EAP,
and DM
ERISA Issues
In general, any employer benefit that
provides “medical care” will be considered a
group health plan.
• “medical care” means amounts paid for—
the diagnosis, cure, mitigation, treatment,
or prevention of disease, or amounts
paid for the purpose of affecting any
structure or function of the body and
amounts paid for insurance covering
medical care.
Under the ACA, group health plans must
provide certain mandated coverages in order
to make sure medical coverage provided by
employers is comprehensive. (Ex., GHPs
must provide an EHB package that includes
items and services in 10 categories (Ex.,
hospitalization and prescription drugs)
Excepted Benefit EAP
The IRS, DOL, and HHS released
regulations on excepted benefit EAPs
EAPs are excepted from the coverage
mandates under the ACA if 4 factors are
met
• Most importantly, the program must not
provide significant benefits in the nature
of medical care
The Final Rule did not provide a bright line
rule, the amount, scope, and duration of
covered services are taken into account
Proposed Rule Edge Case: a program that
provides no more than 10 outpatient visits
for mental health or substance use disorder
counseling, an annual wellness checkup,
immunizations, and diabetes counseling,
with no inpatient care benefits, should be
considered to provide significant benefits in
the nature of medical care

25. The Reimbursement Landscape –
Change and No Change

26. Reimbursement Changes -- Telemedicine
Effective for services starting March 6, 2020 and for the duration of the COVID-19 Public
Health Emergency, Medicare will make payment for Medicare telehealth services furnished
to patients the same as in-person visits and are paid at the same rate as regular, in-
person visits for all services in all areas of the country in all settings.
Even if telemedicine before required travel to or be located in certain types of originating
sites such as a physician’s office, skilled nursing facility or hospital for the visit, for duration
of the COVID-19 Public Health Emergency, Medicare will make payment for Medicare
telehealth services furnished to beneficiaries in any healthcare facility and in their home.
Virtual checking codes allowed to be used (G2012)
Evisits also permitted
99421: Online digital evaluation and management service, for an established
patient, for up to 7 days, cumulative time during the 7 days; 5–10 minutes
99422: Online digital evaluation and management service, for an established
patient, for up to 7 days cumulative time during the 7 days; 11– 20 minutes
99423: Online digital evaluation and management service, for an established
patient, for up to 7 days, cumulative time during the 7 days; 21 or more minutes.
The Government has taken significant steps to facilitate reimbursement
for telemedicine, and the market has responded
26mHealth Meeting September 14, 2020 ©King & Spalding 2020
https://www.cms.gov/ne
wsroom/fact-
sheets/medicare-
telemedicine-health-
care-provider-fact-sheet

27. Reimbursement Changes – Telehealth
The government proposes to tighten Remote Patient Monitoring, which is now to be called
“Remote Physiological Monitoring” (85 Fed. Reg. at 50118 (Aug. 17, 2020))
• “monitoring must occur over at least 16 days of a 30-day period in order for CPT codes 99453 and
99454 to be billed” (except during pandemic) -- but CMS asks for input
• Can be any FDA-regulated device, including Category I, even if not “cleared” (likely needs to be
registered)
• “the medical device should digitally (that is, automatically) upload patient physiologic data (that is,
data are not patient self-recorded and/or self-reported).
• “use of the medical device or devices that digitally collect and transmit a patient’s physiologic data
must, as usual for most Medicare covered services, be reasonable and necessary…” – is
temperature a physiological monitor?
• “a physician or other qualified healthcare professional is an individual whose scope of practice and
Medicare benefit category includes the service and who is authorized to independently bill Medicare
for the service” and not clinical staff for 99091 but allows billing under 99457/458 using clinical staff
• During COVID, CMS proposes to allow monitoring over 2 days (rather than 16) and clinical staff
(rather than physician or other qualified professional) do the review
The Government has not taken significant steps to facilitate
reimbursement for telehealth, and the market continues to lag
Telehealth reimbursement needs to change to improve the
marketplace
27PRESENTATION TITLE

28. An Important Pending Change
On September 1, 2020, CMS for the first time proposed to define “reasonable and necessary” –
one of the key standards for coverage
“an item or service would be considered ‘‘reasonable and necessary’’ if it is—
(1) safe and effective;
(2) not experimental or investigational; and
(3) appropriate for Medicare patients, including the duration and frequency that is considered
appropriate for the item or service, in terms of whether it is—
(1) Furnished in accordance with accepted standards of medical practice for the
diagnosis or treatment of the patient’s condition or to improve the function of a
malformed body member;
(2) Furnished in a setting appropriate to the patient’s medical needs and condition;
(3) Ordered and furnished by qualified personnel;
(4) One that meets, but does not exceed, the patient’s medical need; and
(5) At least as beneficial as an existing and available medically appropriate alternative.
We also propose that an item or service would be ‘‘appropriate for Medicare patients’’ under (3) if
it is covered in the commercial insurance market, except where evidence supports that there
are clinically relevant differences between Medicare beneficiaries and commercially insured
individuals
New Definition of “Reasonable and Necessary”?
New Importance of Commercial Coverage?
85 Fed. Reg. at 54328 (Sept. 1, 2020)
28PRESENTATION TITLE

29. Thank you
QUESTIONS?