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Telemedicine Business Opportunities and the “Doc Fix” Bill

Nathaniel Lacktman, Esq.
Foley & Lardner LLP, Tampa, FL

Telemedicine was one of the many beneficiaries of changes introduced by the so-called “doc fix” bill, formally titled the Medicare Access and Children's Health Insurance Program (CHIP) Eligibility Reauthorization Act (H.R. 2). The legislation was passed by Congress on April 15, 2015 and signed into law by the President on April 16, 2015. It introduces sweeping changes to the reimbursement methodologies and financing of healthcare in the United States, including a notable shift away from the traditional fee-forservice model and towards accountable care organizations (ACOs), risk-based payment and a focus on quality and population health.

As organizations embracing telemedicine recognize, these new payment models are ideally suited to the improved access, quality and care management offered by telemedicine technologies. The Act is a signal to the provider community that embracing innovative care delivery, such as telemedicine and telehealth, is an important step to positioning your organization to best capture these new payment opportunities.

But the Act also includes specific provisions benefiting telehealth and remote patient monitoring (RPM), particularly for the Medicare program. It states:

  • Telehealth and remote patient monitoring are expressly recognized as, and included in the definition of, “Clinical Practice Improvement Activities” along with care coordination, population health management and monitoring of health conditions.

  • New “Alternative Payment Models” may include payment for telehealth services, even if the service is not otherwise covered by the traditional Medicare program (42 U.S.C. 1395(m)).
  • The Government Accountability Office (GAO) is required to conduct a study on telehealth and the Medicare program, publishing the report no later than April 2017. Specifically, it states:

STUDY ON TELEHEALTH SERVICES. The Comptroller General of the United States shall conduct a study on the following:

How the definition of telehealth across various Federal programs and Federal efforts can inform the use of telehealth in the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.).

Issues that can facilitate or inhibit the use of telehealth under the Medicare program under such title, including oversight and professional licensure, changing technology, privacy and security, infrastructure requirements, and varying needs across urban and rural areas.

Potential implications of greater use of telehealth with respect to payment and delivery system transformations under the Medicare program under such title XVIII and the Medicaid program under title XIX of such Act (42 U.S.C. 1396 et seq.).

How the Centers for Medicare & Medicaid Services monitors payments made under the Medicare program under such title XVIII to providers for telehealth services.

  • The GAO is required to conduct a second study on remote patient monitoring and the Medicare program, publishing the report no later than April 2017. Specifically, it states:

STUDY ON REMOTE PATIENT MONITORING SERVICES. The Comptroller General of the United States shall conduct a study:

of the dissemination of remote patient monitoring technology in the private health insurance market;

of the financial incentives in the private health insurance market relating to adoption of such technology;

of the barriers to adoption of such services under the Medicare program under title XVIII of the Social Security Act;

that evaluates the patients, conditions, and

clinical circumstances that could most benefit from remote patient monitoring services; and

that evaluates the challenges related to establishing appropriate valuation for remote patient monitoring services under the Medicare physician fee schedule under section 1848 of the Social Security Act (42 U.S.C. 1395w–4) in order to accurately reflect the resources involved in furnishing such services.

REMOTE PATIENT MONITORING SERVICES. The term ‘‘remote patient monitoring services’’ means services furnished through remote patient monitoring technology.

REMOTE PATIENT MONITORING TECHNOLOGY. The term ‘‘remote patient monitoring technology’’ means a coordinated system that uses one or more home-based or mobile monitoring devices that automatically transmit vital sign data or information on activities of daily living and may include responses to assessment questions collected on the devices wirelessly or through a telecommunications connection to a server that complies with the Federal regulations (concerning the privacy of individually identifiable health information) promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996, as part of an established plan of care for that patient that includes the review and interpretation of that data by a health care professional.

The Act contains many provisions intended to promote innovation and care delivery by catalyzing healthcare organizations to invest in and use the powerful telemedicine tools and technologies available in the marketplace. This vision is consistent with prior surveys of healthcare executive leadership. By continuing to develop their telemedicine programs and pursuing new payment options, leaders are showing they know that their smartest play is to be ready for the law to catch up with their business strategies.

Nathaniel Lacktman is a healthcare lawyer and partner with Foley & Lardner, LLP. His primary practice area is telemedicine and telehealth, advising a range of clients, including hospitals, clinics, physicians and entrepreneurs, on the opportunities, business models and regulatory issues presented by innovative healthcare delivery approaches and disruptive technologies. A true believerin healthcare innovation, he advises clients on telehealth issues nationwide and internationally with a particular focus on U.S. to China telemedicine arrangements. He earned his law degree from the University of Southern California School of Law and his undergraduate degree from the University of Florida. He may be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. or www.foley.com/telemedicine.

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