Health CARES - Title III of the CARES Act Impact on Telehealth

As we previously reported, Congress passed and the President signed the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. 116-136) (“CARES Act”) on March 27, 2020. We recently provided guidance on how the CARES Act impacts hospitals and long-term care facilities. In addition, there are multiple sections of the CARES Act that impact availability, coverage and payment for a variety of telehealth services. These changes are consistent with other guidance recently released from both federal and state executive agencies relating to expansions of telehealth opportunities. (See here, here, and here). This Legal Update will specifically focus on Title III of the CARES Act and how it impacts providers’ use of telehealth technologies and the disclosure and use of personal health information. Other programs and stimulus funding opportunities that are more widely available to employers (not just health care providers) are addressed in our other written materials.

Payment and Coverage Provisions Related to Telehealth

Section 3701 of the CARES Act allows high deductible health plans (HDHPs) to continue to qualify as high deductible even if the plan does not require satisfaction of an insured’s deductible to access telehealth services. This provision is important because HDHPs are the only plans which are allowed to be associated with a health savings account (HSA), and are typically required to have high patient responsibility amounts (copayments, deductibles and coinsurance), which are generally satisfied out of the funds in the insured’s HSA prior to triggering any coverage by HDHP.

Because the coronavirus crisis has taken place early in the year, most individuals or families with HDHPs have not satisfied their deductibles. Thus, allowing plans to proceed without deductibles for telehealth incentivizes more patients to use a telehealth benefit, and achieve a Congressional goal of keeping patients out of clinics and waiting rooms in order to prevent the spread of COVID-19. This safe harbor lasts until the end of 2021, but since most patients have already chosen their benefits plans for 2020, it is unclear how many individuals and families will be able to take advantage of this change without some sort of special enrollment trigger.

Section 3703 modifies earlier federal legislation in response to COVID-19 which expanded coverage under Medicare for telehealth services. That legislation would have allowed Medicare to cover telehealth services only if the treating physician (or another practitioner in that physician’s practice) had had a face-to-face encounter with that patient within the preceding three years. This limitation effectively meant that telehealth could only be used with a preexisting physician-patient relationship, seriously limiting its usefulness to ensure that Medicare beneficiaries could effectively receive telehealth services and stay out of waiting rooms and clinics. Section 3703 of the CARES Act eliminates that requirement which means that, depending on state law, practitioners can provide telehealth services even with new patients.

Section 3704 allows federal qualified health centers (FQHCs) and rural health clinics (RHCs) to serve as distant sites for telehealth consultations. In telehealth jargon, “distant sites” are where the practitioner is located, while the “originating site” is where the patient is located. As part of previous changes to telehealth coverage by Medicare, patients could be treated at any location, including their home or other residence. However, distant sites were limited to individual practitioners. This change will allow FQHCs and RHCs to provide telehealth to their patient base and beyond, which is particularly important because these facilities are most often located in medically underserved areas.

Sections 3705, 3706 and 3707 address the use of telemedicine in particular care settings. First, Section 3705 allows physicians to perform all home dialysis evaluations via telemedicine. Previously, new home dialysis patients had to be evaluated at least monthly for the first three months with a face-to-face consultation with a nephrologist. Subsequent quarterly evaluations could be carried out via telemedicine. Now, all home dialysis evaluations may be performed via telemedicine.

Section 3706 allows physicians to use telemedicine in order to recertify patients for hospice care. Under Medicare’s hospice benefit, a physician must certify that a patient has a life expectancy of six months or less (and subsequently recertify the patient if they live longer). Under previous rules, for the third benefit period and beyond, recertifications required a face-to-face encounter. Under Section 3706, such recertifications can be carried out via telemedicine.

Finally, Section 3707 does not change any payment or coverage provisions itself, but demands that HHS issue clarifying guidance on the use of telehealth to provide home health services. The services provided, and the method of delivery, must still be consistent with the patient’s plan of care. The requested guidance has yet to be issued, but should similarly expand the possibilities of telehealth to deliver home health services. This can be seen not only as a response to the pandemic and for protecting the health and safety of home health aides and patients, but also a force multiplier for home health agencies, and a measure to limit the strain on these workforces.

All of these changes further Congress’ goal of limiting interactions among patients and practitioners in formal healthcare settings in order to limit the spread of COVID-19 infections.

Funding Provisions Directly Related to Telemedicine

Section 3212 of the CARES Act adds $29 million in annual funding (between 2021 and 2025) for grants related to the establishment and development of “evidence-based telehealth technologies and telehealth networks.” Because this additional funding does not kick in until the 2021 fiscal year, it would be of limited usefulness for the present pandemic, but should pandemic crises reoccur in the future, these grants could greatly expand telehealth capabilities and allow providers to more promptly adapt to the need for a transition to telehealth-exclusive practices.

Conclusion

The CARES Act represents only one part of the federal government’s (and state governments’) expansion and embrace of telehealth as a response to COVID-19. Congress, federal agencies and state governments have recognized that keeping patients (especially vulnerable older patients) out of institutional health care settings, clinics and physicians’ offices, and limiting close proximity to other patients and practitioners, is an important part of a social distancing strategy and is an effective means of limiting the spread of a pandemic.