Demystifying the Telemedicine Triple Threat: Reimbursement, Licensure & HIPAA

00:01 Milton Chen:
Nathaniel is one of the key legal lawyers who’s behind the scenes on a lot of the key telemedicine policies, who’s been really active, the ATA, and so you guys see him all over the place. We’re really honored to have him at our webinar today. Again, so if you read Nathaniel’s background, you’re gonna see he’s been just all over the place in terms of telemedicine coverage. He really is the expert on this one. And Nathaniel, thank you so much for joining us today.

00:34 Nathaniel Lacktman:
Thank you for having me, Milton, it’s my pleasure to be here, and I hope that we’re gonna enjoy some time talking, and a lot of Q&A. I’m gonna spend about 10 minutes, just to go over a high-level amount of three different areas that we kind of call here the “Telemedicine Triple Threat: Reimbursements, Licensure, and HIPPA.” Okay.

00:56 MC: Yeah, this’ll be great. This’ll be… How about let’s dive in? [chuckle]

01:00 NL:
Okay, great. Just for all the people attending, I’m a lawyer. I’m a partner at Foley & Lardner, and I’m chair of our Telemedicine and Virtual Care Practice, and co-chair of our Digital Health Group. So I’m involved in the ATA, and other telemedicine advisory boards. And today, we can go… The only other thing to mention is, I have a Twitter feed. I know VSee and Milton also have a Twitter feed, as well. Mine is @lacktman, and it’s all Telehealth law and business. So certainly feel free to follow it, and you’ll have a bunch of breaking news on the industry for regulations. We could go to the next slide.

[pause]

01:44 NL:
Okay, so this slide, I’m a big fan of. It’s an inside joke on an early telemedicine model for hospitals, called the hub-and-spoke model, where in the middle you would have a academic medical center or a hospital, or even a really robust multi-specialty physician group. And all the little spoke sites around the outside would be a critical access hospital, for example, or a smaller acute care hospital or maybe a community mental health center, but those are the originating sites where the patient is located. And those little blue swirly lines in between, that could represent the telemedicine technology, the communication platform through which the providers would deliver their care. So if you’re savvy to telemedicine, you might pick up that as inside joke. In this context, it’s a pinwheel of the primary legal and regulatory issues that would need to be addressed in telemedicine practice.

Defining “Telemedicine Practice” – Technological Conduit vs. Specialty Service

02:45 NL:
And I say ‘telemedicine practice’ a bit more loosely, because it is not a specialty service. It’s not like cardiology or nephrology, but rather it’s a technological conduit through which you would deliver that care. So you can deliver cardiology through it, you could deliver nephrology consults. But as such, it makes it a bit more complicated because it is an overlay over all the various legal and regulatory issues associated with delivering healthcare, particularly complicated if you harness the power of telemedicine to deliver care across boundaries without regard to geographic borders, so then you’d be subject to laws of multiple states, as well as multiple countries if you so explore international, and that’s not to make you scared or to make you hesitant. You should really embrace these opportunities because the technology is unique in that you’re not going to be able to expand your reach and fulfill your mission of delivering care to patients in Chile by posting billboards on busy intersections in your City of Cincinnati.

04:00 NL:
So we’re going to a pick up on a couple of these issues here today, primarily licensure. We’ll talk about reimbursement and privacy and security, but I don’t wanna downplay any of the others, and you can just keep it there as a bit of a reference. Let’s just go to the next slide.

Moving From Telemedicine Reimbursement To Telemedicine Payment

04:20 NL:
Okay, we’re gonna talk about reimbursement and payment here next. Now, when working with clients I try to get them to shy away from the term reimbursement because it carries baggage. Reimbursement to me connotes a fee-for service-methodology paid for by the government after the fact, and many entrepreneurial businesses out there do not so heavily rely on the government as their customer or as their payer compared to healthcare. It’s surprising. It’s one of the criticisms, I think also, of the healthcare system and how the Medicare and Medicaid budgets have gotten so significant. People need these services and they utilize them, but at the same time they’re not the ones directly paying out of pocket when they purchase them, so there’s a bit of a disconnect.

05:14 NL: And a lot of providers complain, “Oh, there’s no reimbursement. I’m just not getting reimbursed.” That is true to a certain extent, but if you change your mindset to look at revenue opportunities associated with telehealth, you’ll see significant increase in your opportunities to drive growth, fulfill your mission and deliver care. So you’ll see here in this little bubble, government fee-for-service is only one, one of many. Medicare Advantage plans and Medicaid MCOs are a great opportunity for providers to proactively contract with them, to cover services delivered via telehealth. Those types of entities are not bound by the same coverage restrictions that Medicare Fee-for-Service and Medicaid is restricted. In fact, these type of health plans are charged by the government to be innovative, find new ways to deliver care more efficiently to promote access and quality, and use private contracting ingenuity to do so. I would really encourage you to take advantage of that. And I really think that only a minority of notable providers using telehealth are targeting MA plans and Medicaid MCOs. Providers are leaving quite a bit of rocks unexplored.

Telemedicine Opportunities In Commercial Health Plans

06:29 NL: So really commercial health plans, we’ll talk about that in the next couple slides. They’re sometimes a tougher nut to crack if the state law doesn’t require them to cover it, but it’s an opportunity. Moving around the horn, employer self-funded plans, or ERISA plans. The next one is employer out of pay. Targeting employers with telehealth services as an employee benefit is pretty tried and true. We’ve seen a number of studies forecasting that by the end of this year, 2018, more than 75% of large employers will offer a telehealth benefit. So, I don’t wanna suggest that, that market is saturated, but it is certainly been well explored and largely embraced by employers. That being said, there’s a number of different types of care you can deliver via telehealth, and low-acuity triage consults is merely just one aspect. The large provider like the Teladoc’s of the world, they do one thing, they do it very well, but that’s only one component of care. It’s as if you were to tell someone, “You can get all of your healthcare needs by going to a walk-in clinic.” No, you can get a significant chunk of them, particularly access, but let’s not forget the other providers in the care continuum.

07:44 NL: Institutions and provider arrangements is another great one. Telestroke, that’s a hospital-hospital arrangement, and it can drive revenue. There is no third party that you’re submitting the claims to. You might do some claims of reassignment, but that’s a business-to-business contract.

08:01 NL: Self-pay and cash, there’s a huge appetite among patients who already have health insurance coverage to still come out of pocket and pay for telemedicine services because of the rapid responsiveness and the access and after-hours and ease of which they can obtain the services, and finally cost savings and cost avoidance. I’m not usually a big proponent of building a business model purely around service line around cost savings, notwithstanding that hospitals have largely embraced concepts of Six Sigma to increase their efficiency and save a lot of money. Of all the clinical studies out there that are continuing to explore telehealth-based services and tie it to cost savings, in my opinion the ones that have had the most definitive favorable results are ones that assessed the virtual ICU, or EICU program. Those definitely, although it’s a notable investment in spend, have shown significant ROI for the hospital using it, notable reductions in avoidable re-admissions, increases in quality, increases in staff satisfaction, reductions in deeper fatigue, and so that’s a good example of a revenue opportunity based on cost savings. Next slide.

The Truth About Telehealth State Parity Laws and Private Payer Reimbursement

09:27 NL: So I mentioned there’s 31 states plus the District of Columbia with telehealth commercial insurance coverage laws. Those laws mean that the health plan is required to cover telehealth-based services to the same extent the plan covers them if they were delivered in person. There’s 30… Here’s the map of the US. It looks great. It’s all green. That means everybody in that state is happy and gets full coverage of their telehealth services. No, let’s go to the next slide.

10:03 NL: This is Nate’s interpretation, after reviewing all of the statutes and working with different provider plans to actually have to negotiate, and it shows a very different picture of the landscape. Now, all of the grey states here are states without any coverage law whatsoever. The green states are states with pretty broad, consumer-friendly telehealth coverage laws. The states in yellow are limited coverage. They’ll have soft language or language that includes originating site, or offers a lot of outs, escape hatches for health plans to say, “You know what? I’m actually only gonna cover five codes of services.”

10:47 NL: The states in blue have broad coverage and also payment parity. Payment parity’s another concept in insurance, and it doesn’t relate to the coverage or whether or not a service is covered, but it relates to how much the health plan will pay for that. If a state is payment parity, it largely means that the health plan must pay the provider the same rates for telehealth service that it pays for an in-person service. That could differ from provider to provider depending upon what they actually contract for with the plan in their participation agreement. A large provider with effective negotiation might just get higher payment rates than a small provider that just takes whatever is offered to them.

11:26 NL: The biggest problem here is if you pass a coverage law that’s broad but don’t have a payment parity provision in there, some plans may say, “I’m only gonna pay you 50% of your contracted rate.” That’s exactly what happened in New York around this time last year, and it means that providers who are in network have to accept payments as full of the rate that the plan pays, and they can no longer balance bill the patients, or even give the patients an opportunity to pay cash out of pocket. So in a sense, that environment made it even worse for those providers who had the foresight and interest in offering telemedicine services, because before there was coverage they could at least give their patients the option to pay out of pocket. After the coverage rule went into effect and the reimbursement was only 50%, they were losing money every time they provided the service and they couldn’t charge the patients any more. So a number of them said, “I’m just not gonna offer telemedicine services anymore until I’m actually gonna get paid a fair rate.” It’s the dark side of these coverage laws. Let’s go to the next section.

Telehealth or In-Person: Exceptions to Physician Licensure Rules

12:38 NL: Okay, we can go to the next slide. This will be telemedicine and licensure. The basic rule is that the… Let’s pick on doctors. The doctor must be licensed to practice medicine in the state where the patient is located at the time of the consult. So let’s say Milton is in Virginia or California right now… Let’s say California, and I’m in Florida, and if he is the doctor and I’m the patient and he wants to do a consult with me, he needs to have a license to practice medicine in Florida. Now, it sounds easy, but in the actual practical real world, it’s very different, because let’s say Milton is my doctor and I’ve been seeing him for a number of years and I live in California, but now I’m on vacation in Florida or vacation in New York, and I need a follow-up with him, or maybe I’m feeling sick and he’s who I trust. Well, technically in most states he still needs to have a license where I’m located.

13:31 NL: Do boards of medicine… Are they interested in cracking down on those activities where a doctor and a patient have pre-existing relationships for years, and they’re just having temporary consults while the patient’s travelling? No, that’s not in their interest to do so, but if instead Milton was to advertise and hold himself out as a doctor across the country, charge patients for consults, particularly for first brand-new patients, that’s a very different approach. It’s the same clinical occurrence, doctor-patient consult via telemedicine, but you see how the risk assessment and the way it would be interpreted is very different depending upon the business model and the approach that the provider takes.

14:14 NL: Now in this slide we’ve laid out five of the primary exceptions to medical licensure that are often used in the telemedicine context. There’s more exceptions to licensure for emergency care and whatnot, but this is what we see most frequently for telemedicine. I’ll start from the bottom up. It’s a FSMB Compact states. It’s not nearly… The promise of the compact is, in my opinion, it’s not as fulfilled as much as it could have been or many providers wanted it to be. It’s not as broad or truly reciprocal as the nurse licensure compact that is in existence in about 31 states.

14:52 NL: Another exception is for follow-up care. So this is, let’s say I fly out somewhere, have surgery at a world-renowned surgical center. I fly home and they need to do post-op followup. They could do that via telemedicine. About six states offer an explicit exception to licensure, the rest of the states do not. But then you’re challenged here with the balance of continuity of care and fulfilling your professional obligations for standard of care, versus maybe a technical licensure violation if something needs to be assessed.

15:23 NL: Another is a special license or registration for telemedicine. I think these are going away. There might have been about 10 or 11 at one point, now we see maybe six or seven. And as a practical matter, it’s not any quicker to get those licenses processed. Bordering state. A few states offer reciprocity if you practice and live in a bordering state. And finally the consultation exception for physician peer-to-peer consults. This exists in 49 of the 50 states and can be used in telemedicine context. Technically Washington State doesn’t really have it for telemedicine consults after they put out a board guidance a couple years ago that probably inadvertently closed that loop. It is my understanding they’re gonna maybe re-write their rules to account for it, and this is what we often see for consultative models. Next slide.

16:18 NL: This slide shows the life cycle of a destination medicine arrangement predicated maybe on an online second opinion or specialty consult. At the top the patient initiates the contact, finds out about the provider. Selects them typically online. They get their second opinion assessment, typically through a peer-to-peer consultative arrangement. They arrange for the follow-up care, travel to the hospital for their treatment. Go home and get post-treatment follow-up care. This is a great model for centers of excellence, for any hospital, particularly, children’s hospitals or speciality groups that have something they’re very proud of that’s been ranked by US News & World Report, that they buy ad space in airports, cancer centers. All of them should be doing this. It is shocking how few of them are. You can easily find that just by Googling ‘online second opinion’ and fill out whatever specialty, and you’ll see a dearth of it, and there’s only a few. And those that are doing it will consume the market in the next 10 years, because patients will continue to be attracted to them. The same concept can apply in international arrangements to great success.

Telemedicine Privacy & Security

17:24 NL: The last topic I’m gonna cover is telemedicine privacy and security. We can go to the next… Advance two slides. Largely, when you’re talking about privacy and security in the telemedicine context, I think some lawyers or whatnot over-emphasize the complexity. Look, you have been… Most everybody on this call, I presume has been storing or transmitting patient health information electronically for a while now, they have EMRs, they have device policies. Simply because now you’re practicing telemedicine, using the technology does not change the analysis for how you store and protect medical records electronically. But this slide here has some tips for when you use PHI health information in connection with mobile devices, ’cause I think I see that a lot more. You take a company like VSee, maybe they have an app available and you deploy that to all your physicians on staff and then your patients as well, and that can take it one level further from keeping records on your EMR and your server. It’s really server as a server, but I would just recommend you take a look at some of these tips when you assess your own policy. We can go to the next slide.

18:55 MC: Oh, and that’s my contact information, so that’s about 15, 20 minutes on the button, and now can… I’m just gonna pass it back to Milton.

[pause]

How To Find Out Telemedicine State Parity Coverage For Your State

19:25 MC: Okay, great. I apologize for the technical glitch. I will say that, thank you so much for that. That was one of the best presentation I have heard about this is a legal issue. Again, thank you, thank you so much. Anne can you bring up the audience question panel? I guess while we’re bringing up the audience question panel in there, so the second slide… Well not the second, one of the slides you showed where there is parity law or whatever, and talk about [19:56] ____, what’s actually in real life, and I thought that was extremely useful in there. Now supposedly, I’m a physician in a certain state, I have a certain specialty, and I wanna figure out exactly what that insurance, how much the coverage would be. Other than hiring, let’s say hiring you or hiring lawyer to… Is there some information place that someone can go there to research for their particular condition?

20:26 NL: Sure, how to find out coverage. There’s two ways to… Well, there’s a number of ways, but to your question, outside of working with an expert or a consultant, two ways: One is if you’re a patient, one is if you’re a provider. If you’re a patient, you can reach out to your health plan, and they’ll have your benefits package, and they’ll be able to explain to you to what extent telehealth services are covered generally under your policy. And you can even go a step further and say, “Hey, I want to get this particular treatment.” You don’t need to know the codes, they’ll give that to you. Other side, if you’re a provider, many of these policies, they’re only two to three pages long, but they are often only available if you’re an in-network provider and you log into their password-secured portal.

21:10 NL: That’s why a lot of folks like you and I can’t actually access it. It creates confusion. That’s the first step. Check with the payer, login, and find it. You may find that it’s broad. You may also find that it’s quite narrow, sometimes narrower than the law requires. In which case, you should take every effort to reach out proactively to those various payers, and you could make the case to say, “Look, I’m not asking you to change your policy plan-wide, but our participation agreement, let’s talk about having an addendum, a one-page amendment for telehealth-based services,” and our clients have been pretty successful on that.

What Are The Top Telemedicine Revenue Opportunities in 2017?

21:46 MC: Got it. Okay, that’s helpful there. Another comment you made there, I really liked about how your opening comment about, so many people focus on about reimbursement, which implied the fee-for-service model, versus there’s all of these other news where revenue opportunity that telemedicine enables. So what are some that maybe is you consider maybe top-revenue opportunity, other than this reimbursement, or maybe relatively unexplored, you think it’s such a really lucrative, people should be exploring?

22:19 NL: Yeah, that’s a good question. I think what you need to do… It depends upon what your company is. If you’re a telemedicine provider, that’s all you do is… Like a Teladoc type of a company, you’re offering one nature of something, and you really want to target the payers, because it’s a cost-savings opportunity that you’re presenting. If instead let’s say you’re a hospital, your business largely is delivering medical care, so you look to ways that other people could receive and purchase that care from you, not just a third-party payer. So I would absolutely explore international arrangements. I would explore in-state arrangements with rural areas. ‘Cause not only would that turn into revenue under the actual contract itself, it can have a halo effect of additional relationships and permitted referrals of new patients and new business to your hospital, because it’s giving you an opportunity to interact with them and show how responsive and how excellent you can be.

What Are The Rules for Doing Telemedicine If An Established Patient Traveling in Another State?

23:17 MC: Okay, got it. Okay, sounds good. Another note you made that I thought it was really interesting, you talked about… So for example, if you have a patient that your patient just happen to be traveling to different states and that you are actually able to provide telemedicine even though you don’t have the licence in those states, does that mean, pretty much, long as you have this patient relationship [23:43] ____ in more than one state, then is that just a blanket in there where… Is there any subtleties that physicians should be careful about?

23:53 NL: Sure, there are a lot of subtleties. And the example I gave was not to say that you absolutely can do that without a license to practice medicine, because you do need to have it, unless it’s you need an exception. But it’s to show the alignment of what the intent of the medical boards are to protect health and safety, the continuity of the doctor-patient relationship, and attention between these different care obligations, and licensure when patients travel across states. I think we may see a change in some of that tenure, but we might not, and that’s okay. We can have these laws in place, and then if medical boards use their appropriate discretion to determine whether and when it’s appropriate to sanction certain activity, and other times they say, “You know what? We find this to be exceptional,” I think that we’ll see that.

24:50 NL: Moreover, if you need an exception to licensure, like consultation or whatnot, or follow-up, don’t be misled to the idea that you’re not practicing medicine. I believe you need to own it. If you’re a doctor, you are practicing medicine, you’re just doing so under a recognized rule that says, “You don’t need to have a license in this particular state.” So yeah, you still need to be aware of medical malpractice, and insurance coverage and providing care. It’s not like anything goes, but I think that there is some real opportunity there for doctors who wanna take the time to explore it.

Are Employer Self-Funded Plans (ERISA) Exempt From State Telemedicine Parity Laws?

25:22 MC: Yeah, the reason I ask that is, so when we see a lot of activity in telemedicine is in the concierge. Those patient demographics seems to be more like, they travel more [25:34] ____ in the various states, so we get questioned on that all the time in there. So, we have an audience question from Jeffrey. So he’s asking, “Are E-R-I-S-A self-funded plans exempt from states’ mandates?”

25:54 NL: Yeah, I probably got this question maybe 20 times in the last year or something. Yeah, so ERISA plans, those are federal laws with that for employer self-funded plans, and by and large these state commercial coverage laws do not apply to ERISA plans. The ERISA laws preempt them.

Do Payers Have To Comply With Parity Laws Regardless of the Payer-Provider Contracts?

26:15 MC: Okay. So I have another question from Lauren. So regarding the parity laws, do the payers have to comply regardless of the contract between the payer and the provider says? And what if, for example, if the provider did not include telehealth as a covered benefit in the contract with the payer, does it have to say, I guess, “Telehealth is covered in the contract with the payer?”

26:42 NL: Well, most participation agreements follow largely the same format, and because plans have such high volume, their in-house lawyers don’t like to customize agreements too much. Often times what they’ll do is a one or two-pager addenda that says, “Okay, Section 2.5, 2.4, is deleted,” but they don’t actually delete it in the body of the contract. So there is definitely opportunity for negotiation customization, but not like you would normally see. So as a result, it’s the policy itself that hangs out there, and you need to be aware of it.

What Are the Legal Issues for Telemedicine in Skilled Nursing Facilities?

27:15 MC: Got it, okay. I guess in terms of the… Well, I have a question from Lori. It says, “What are your thoughts, in terms like the legal issues regarding, again, skilled nursing facilities? Is there anything extra about that segment?”

27:34 NL: Sure. I think SNFs, skilled nursing facilities and other long-term care facilities are really great venues for telehealth-based services. [27:45] ____ I think, [27:46] ____ originating site under Medicare, if it’s in a rural area and meets the other trappings, so there’s opportunity there. Even for private pay, like a high-end continuum care retirement facility or assisted living facility, where the patients are just paying cash out-of-pocket, it could be a great way to say, “You know what? Mom and dad want the high-level access to these experts via telehealth for their checkups.” I would like that for my parents, and I think that many other people would. It’s an industry that has not been nearly as tapped into or explored as tele-psychiatry or neuro. We’re seeing more of them in some startups. An example in that… We represent a number of clients in the space, and one example is UPMC has rolled out… It’s called Curavi, and it’s basically telehealth targeted to post-acute SNFs.

28:40 MC: Got it. What about in terms of something adjacent to that? Yes, you have a lot of these home care, when the staff people come to elderly’s home. They help around those. These again, non-medical staff. So is there any issues for these folks to be able to almost like, let’s say bring let’s say iPad or some medical equipment, it will connect to let’s say a physician involved in there? Is there any issues in terms of using some of those business model?

29:09 NL: The coordination of care post-discharge from hospital is a huge area of waste and loss, not just financially but really opportunity, because these patients are quasi-abandoned. They really need more hand-holding and shepherding around to the variety to physical therapy, for non-emergency ambulatory care, home health, infusion. And there are startup companies that are trying to crack that nut, nobody yet. You definitely can do great things in this space. There are complexities of it, because oftentimes the coordinator of the care is someone different from all the different home health agencies and the providers, and so there are patients [29:55] ____ steering an anti-kickback consideration that come into play largely because the care coordinator wants to monetize their different arrangements, and as part of the arrangement they basically have this shepherd and steer referrals. So, there’s a tension there, building a arrangement that complies to fund-abuse rules for something that is really effective, and has a high user experience. You can do it, but there’s no one that I know yet that has achieved a lot of scale and notoriety in doing it big and great. I would definitely look to see for more of those in the next two years.

Is a Physical Exam Required To Get Paid For Telemedicine?

30:34 MC: Got it, okay. Appreciate that. Now, another question is from Elizabeth. So she’s asking, she wanna have clarification about exactly this payment parity. Essentially, it’s this, if you see… If someone says the payment must be the same for telemedicine and versus in-person care, but if the telemedicine counter cannot include a physical exam in there, like for in-person care will do, how does that get treated?

31:07 NL: Well, in the most states you can do a patient examination via telemedicine without an in-person exam, and that’s efficient…

31:17 MC: When you can have the equipment… What I mean is that if I go to my doctor’s office, typically they’ll take my blood pressure, maybe listen to my heart, it’s all these things, but that’s typically if you use let’s say Teladoc or American Well or MDLIVE. It’s not like the patient will have these devices [31:34] ____ it’s like, “Okay”. So looking at it, it sounds like you don’t have that sort of exam. So in that case is this your…

31:43 NL: Right, but that doesn’t mean that the service isn’t gonna be covered or the service is medically insufficient. Judd Hollander from Jefferson and with JeffConnect, I think he’s associated with Rothman Institute in Pennsylvania, within the last couple of weeks put out a really good article… He’s a doctor. Put out a good article on the physical aspect of physical exams via telemedicine, and from a doctor’s perspective addressed how much you actually can do in how many scenarios you don’t really need to lay hand.

32:15 NL: Dermatology, for example, I had my skin checked a week or so ago. My physician did not check my heart rate or my blood pressure. Yet, that was a legitimate medical exam purposes, and I’m sure he dropped the claim to my insurance company to get paid for it. So, there is opportunity. Now, that does not mean to the viewer’s question, if you have a service and you’re in a state with very broad coverage and payment parity, but if it’s medically deficient or inappropriate, because patient’s condition was so complex or necessitated labs or some in-person exam, then you shouldn’t get paid for it, because utilization review will still apply and examination below the acceptable standard of care for the patient’s clinical scenario, that would be a reason to deny it, whether it’s in-person or via telemedicine.

How To Get Insurance Providers To Cover Your Telemedicine Services

33:08 MC: Okay, got it. Appreciate it. So I have question from Gail. So, I guess recently there was some study that showed that like when you offer telemedicine, it actually does not decrease cost, it actually increase cost of the insurance. [chuckle] So the question is for example, there is… So he has found out there are many of the insurance provider actually do not want to provide coverage for telehealth visits. So what’s the best way to approach these insurance provider to give them a coverage?

33:42 NL: Sure. Now, I’ll take take parts of that question. The first is the study. I think that the viewer is probably referring to the Rand Institute study that came out a week or so ago, and after that study came out there was just a lot of blow-back from the telehealth community including clinicians on criticizing the study. Everybody’s gonna criticize the study one way or another, there are a lot of studies out there. But that study in particular focused only on the short-term medical spend for I think acute respiratory illness. It did not, as I understand, address if the patient’s care would have gone untreated, or if the patients would have otherwise got their care in urgent care walk-in clinic, something that could be just as expensive if not more so. And finally it didn’t address the long-term cost savings. It was only a very narrow thing of let’s say bronchitis or chest cold. So to an extent it was one dimensional and certainly could be criticized. I think all studies have a lot of their benefits and drawbacks. With regards to how do you actually approach a payer when your state has a really crummy telehealth law or no telehealth law, I think that you need to put yourself in the plan’s shoes.

34:57 NL: To a certain extent it’s true that health plans don’t owe anything to providers. Plans owe an obligation to their members, their enrollees. The members are the ones who have a contract with the plan and say, “I will pay you $1,000 a month premium, and in return you will arrange for the services.” So plans have to provide quality and access. Providers are merely a tool through which the plan fulfills its obligations to its members, just like you could say telemedicine is a tool through which you provide your care. But so many providers tend to take a myopic view and say, “These are my patients in my care and I demand and deserve to get paid by some unknown amorphous entity for that.” Without regard to how much the patient may pay in premiums or what benefit policy they selected for the plan’s own obligation. And so the providers that we work with, that put themselves in their shoes of the plan — use parlance of, instead of “reimbursements”, they use parlance of “medical spend”, which is plan language; instead of “patients”, they use words like “members”— are much more successful.

36:02 NL: And then you set up a phone call or a meeting, and you talk about what you wanna do and achieve, why you wanna achieve it, and then ultimately you lawyer it and paper it in an amendment to your participation agreement. And let’s say, you have it in effect for a year. You add GT modifier, a 95 modifier. You track the utilization in the medical spend, and if a plan likes it, after a year they can continue, and if they don’t, well then they have ability to terminate. Most participation agreements, a health plan can terminate it without cause in a 60-day notice, anyhow. So, again, it just shows you how singularly dependent many providers are on these third-party payers, and they don’t realize how much they’re at the mercy of the payers sometimes, on how these contracts are structured. So it would behoove you, any of our providers, and the payers, to try to work arm-in-arm and collaborate, and know that at the American Telemedicine Association’s annual meeting coming up next month, there’s actually an entire panel devoted to this topic, and collaboration and alignment between plans and providers is a big undercurrent theme of this year.

What Are the Telemedicine Legal Issues For International Medical Groups?

37:09 MC: Okay, I really appreciate that. So I have a question from Ashish. So they have been creating platforms for telemedicine to connect in between different countries, like taking experts from one country to provide a second opinion to different countries. So what are any particular laws that can restrict this, either both now or in the future, where things, they should be careful about?

37:37 NL: Sure. International arrangements, we’ve built that a lot. I would say it probably worked on 14, 20 different countries in the last 12 months or so, primarily, US medical institutions or medical groups wanting to have arrangements overseas. The laws, by and large in international jurisdictions are not going to be as complicated as what we see within the 50 US states, nor as developed, but a number of them have laws on practice via telemedicine. Many don’t have an express consultation exception to licensure, rather they would define… They would exclude from the definition of practicing medicine a consultative relationship. But you need to be careful, and just like you wouldn’t, or shouldn’t, run and deliver services into a new state without understanding the laws or the rules or the approaches, you shouldn’t do it in a foreign country. There’s a lot of opportunity in foreign countries though to bring… For destination medicine, to bring patients who have a significant amount of resources and don’t have any third-party insurance to pay rack rate for the surgeries and the treatments they have in the US.

38:47 NL: So I understand it’s very lucrative, but you need to do the same diligent execution of your legal and business analysis in building it out, otherwise you’re exposing yourself, not just a legal risk but also you could have just a failed model because you haven’t thought it out. And that’s just a shame, because then your reports up in the C suite will think, “Oh telehealth, it just doesn’t work, or it doesn’t work for us.” And that’s not a failure in the technology, it’s a failure in your execution of it.

When Will Medicare Start Paying for Telemedicine Visits Originating in the Home?

39:16 MC: Okay, appreciate that. I have a question from Lauren. So he’s asking us, “So do you think Medicare is gonna pass some sort of Medicare telehealth parity law, where when they take care of a patient, even when they are at home, they can get reimbursed?”

39:35 NL: I hope so.

39:37 MC: Okay.

[laughter]

39:42 NL: I think we’ll see that in the next two years. I would like to see it during this administration. It’s not up to CMS or HHS. These restrictions are baked into the federal Social Security Act, so it would require an act of Congress, but there are four or five bills, bipartisan bills pending in Congress to eliminate these restrictions. And they are arbitrary restrictions. The spend on Medicare Telehealth services is infinitesimally small, well less than was predicted before they first made it available in 2001. And, as regards to the agencies, CMS, HHS, OIG, I feel like they’re giving every signal and indication possible to providers that they want to push telehealth, health information technology.

Any Legal Advice For Bootstrapping Telehealth Startups?

40:34 MC: That’d be very exciting. I think it’s limiting that the originating site cannot be in the home. It would launch mass use of it just like the killer contract into the whole industry. Now, another question from Cody. He’s asking, “What advice would you give telehealth start-ups, who are just trying to get things off the ground, unfortunately they can’t afford to pay lawyers in there, but how do you go about or figure out all these complicated telehealth laws?

41:04 NL: Sure. I would say… We work with a lot of start-ups, and it’s really fun. They’re challenging clients. Often times, they’re not physicians or healthcare professionals, and they say, “I never went to med school, do I have to deliver care this way?” And it makes me think twice and I say, “You know what? You don’t.” Often times they do have great ideas. One advice that I give those, I think too many just have an idea, and they’re under-capitalized. So the idea that you want to create a new business, in a cutting-edge area of technology that’s red hot, that is in healthcare, one of the most highly regulated industries in the country, short of maybe defense, and you don’t have enough money to hire a lawyer, means that you might not have the business foresight to get into it. You would not open a bakery or a stationery store without having a…

[overlapping conversation]

42:08 MC: It’s also like, the start-ups, sometimes they aren’t doing the fundraising, they aren’t getting anything going. So you eventually say, “We’ll have the resource up front.” Maybe just as they’re getting going, do they spend a couple thousand dollars to pay a lawyer or do they spend that in a higher need area? In the really early stages, any advice you can…

42:27 NL: If you’re ready in an early stage that probably means you have a kernel of an idea. Unless you’re a programmer, if he’s just “Let me just jump into it and program something,” I would not build something without thinking about how I’m gonna deploy it. “What gap am I filling? What am I proving? What is my pathway?” And because you’re gonna need to answer those questions for venture capital private equity, we do the same thing working with our clients, talking them and changing it. So by and large our pathway working with start-ups is this: We’ll do an intro call or a meeting, and hear about their ideas and do a lot of listening and then give some suggestions, and we do it on the fly to say, “You know what? We’ve seen behind the curtain in so many different telemedicine virtual care arrangements, those elements might not move the needle for your utilization or drive the revenues, have you thought about this and that?”

43:12 NL: At the same time we’ll immediately prune off approaches that would be high risk from a fraud and abuse or a legal compliance standpoint. Because if they build out something that might be successful but violates foreign abuse laws and then takes that to a venture capital firm, they’ll hire a law firm like mine to do a due diligence review, and it’ll just shred the start-up, and then they either won’t invest or they’ll discount the purchase price or they’ll put all these onerous closing conditions on. So I think a dollar spent in the front-end is well worth it…

[chuckle]

What Are the Legal Considerations on Recording Telemedicine Video Visits?

43:48 MC: Great advice there. Next question is from Carla. She’s asking, so she holds one-on-one and a group health coaching over video conference. Is it okay to record these telehealth sessions from the clients? Is there any… I guess what are the legal issues regarding recording the sessions?

44:13 NL: That’s a good question. There was an NPR article last year, a story about that, about recording telehealth sessions and the pros and cons. A lot of adult children want that for their parents so they can look back on it, remember exactly what the directions and the care was. Most providers deliver and care via telemedicine do not record. If you do, know that it’s not just a video, it’s a medical record, and you need to store it. And let’s say you’re offering it to kids, some pediatric hospitals, they’re subject to 26 years of record storage for pediatric records. That’s a big expense to store it. And you can’t just say, “I’m gonna keep it for a week or two.” No, it’s a medical record. Now, if you’re saying, “I’m doing health coaching and it’s not healthcare,” well, then that might be a little different, and whether health coach is subject to any regulation would depend upon state law. There’s pros and cons, but even in the medical context, if you’re confident in the care that you’re providing, and you give the patient notice and consent that you are gonna record, I think it can be beneficial.

45:14 MC: Got it. So, it’s almost like I hear… When you call customer service or the airlines and they’ll tell you “For quality services we might record.” So you’re saying more or less is, provided you notify the patient that it’s being recorded, then you can, as a… Probably you could decide to record?

45:30 NL: You have to get the consent. You can’t just… You won’t be able to just notify them, but they actually have to give the consent.

45:37 MC: When you say consent you mean that explicitly they need to have some sort of check box and explicitly say, “It’s okay.”

45:43 NL: Yeah, or I suppose if you’re recording it, you can ask them once before you record. Start the recording, and then ask them again so you have their consent recording.

Can Insurance Companies Require Providers To Use a Specific Telemedicine Platform To Deliver Their Telemedicine Services?

45:52 MC: Got it, okay. That makes sense. So one question, in our previous talks, there are… For example, there are some big payers, insurance, they invested in some technology start-up, in the case like V-I-D-Y-O, America Well or some of those in there. So then they told their providers, unless you pay for their technology platform they will not reimburse you for the telehealth. I mean is that, I guess… What’s your thought, is that legal? Is that anti-competitive practice, or actually it’s okay?

46:32 NL: The answer might be yes to all of your questions. If it’s legal, it may be legal and it may be anti-competitive, and it may also be beneficial. [chuckle] It is not uncommon to have health plans or health plan-owned entities make investments in all of the really exciting innovation that start-ups are pouring their heart and soul into. It’s good for the start-up because then they can get some funding. It’s good for the health plan because we’re seeing a trend that payers wanna become more integrated along the delivery line, diversify their portfolio, foster ways of delivering better, cheaper care, and then actually enjoy the revenue, back-end revenues those companies really enjoy

47:12 NL: Your question about narrow networking though, yeah, well, that’s a bit more nefarious. It says, okay, well, this particular provider may have given up ownership interest in its company and then they use that as the incentives for other providers to contract with them. Some laws don’t prohibit narrow networking. Some telehealth coverage laws don’t prohibit telehealth narrow networking, some do. The issue is being addressed right now in the State of Colorado, because there was pushback and plans are saying, “You have to use our preferred technology vendor” or whatnot, and it’s the institutional providers or the physician groups who are left out in the cold. And so there is an amendment to their law right now being discussed in Colorado legislature to change that, basically put in any willing provider provision.

48:01 MC: Got it, got it. So do you know, when do you expect the Colorado ruling, law to come?

48:10 NL: Yeah, I think it might have passed the House and it’s in the Senate. After that it would go to the government signature. So, if it passes and it’s enacted, I would imagine we would hear about it by the… It would be in play by this summer.

48:24 MC: Okay, that would be really exciting. Because we hear this from quite a bit of physicians. It’s [48:29] ____ like you’re either a physician group or so on, you make some purchase on your favorite telemedicine system in there. All of a sudden now they’re saying well you gotta pay for their system. Then I feel like, to have to do the retraining, to do all these different things, it’s literally like… It’s almost like the providers of the insurance forcing the… [chuckle]

48:53 NL: The plus side, I am aware of at least a couple plans that would have contracted with telehealth software companies, where the plan says, “We’ll pay the software fee, and we’ll just make it available to our providers who want to use it.” That way the providers have an easier path. Yes, it’s maybe only one or two or three, fine, but at least then they’re giving their in-network providers a pathway to say, “Just try telemedicine.” And you don’t have to zero invest in with the provider. It’s a good way to get your feet wet.

What 3 Health Policy Changes Are Key To Telemedicine Growth?

49:26 MC: Nice, nice. I know we went over a little bit. We got still a bunch of questions, and I apologize to the audience. We didn’t get to everyone’s questions. What we’re gonna do is, we’ll pass it to Nathaniel and he will be able to… We’re gonna pause the other recordings and then answer your questions on the page after the session. Again, I just wanna apologize. But then it’s just like this, the questions are pouring in, [chuckle] unfortunately I just couldn’t get to all of them. And the final question, maybe I’ll ask you, as we wrap up. If you can whisper in President Trump’s ear three things you want him to do, regarding, specifically in the telehealth, or just things again, putting politics aside, just like what are some policy, what are things that would really help our industry? What are those things you’ll whisper in his ear?

50:19 NL: Sure. I know there’s a lot of transition and change with the new administration, but I remain bullish on health technology, and I see some really interesting opportunities with some of the new appointees and some of these new laws that are gonna go into effect. Three things: I would definitely say, let’s eliminate these artificial barriers to Medicare coverage of telehealth services. If you do so and it turns into some huge budget buster, which I think is incredibly unlikely, then they could always address it and change ’em back, put ’em back into play. That would be one, ’cause then I think a lot of payers will just follow the rules of Medicare. I don’t think we can… I’d love to see is if there’s a way to address licensure, I just don’t see it happening under the Tenth Amendment and states’ rights.

51:06 MC: Okay.

51:08 NL: Third one: Not really telehealth per se, but it’s interoperability, and I think that’s almost like a concept, like perfection. [chuckle] You know it’s there, people can see it, but no one… You can’t really reach it. That would be, I think, a game changer on connectivity and intersection, and tie with other concepts of block chain and IOT that healthcare can take advantage of.

51:31 MC: Got it. Awesome. Thank you so much, Nathaniel. This is an amazing session, really appreciate it. And for the audience, next week, we’ll be back again on Thursday. We have a really exciting speaker. So you probably, audience know, we do this annual physical conference called ‘Telehealth Failures & Secrets To Success’. Last year, our conference we had the highest-rated speaker, and was coming back to a webinar, again, I think you’re gonna really enjoy her insight in there. Again, Nathaniel, thank you so much for participating, I really appreciate it.

You can find more telemedicine and telehealth resources at vsee.com/telemedicine