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May 13, 2020
On March 11, 2020, the World Health Organization (“WHO”) characterized the Coronavirus Disease (“COVID-19”) as a global pandemic(1). The world had already started to change at that point. Even at the time this article is being written, the scientific community still has many important, unanswered questions, and the uncertainty surrounding the virus remains high. While there is no single, simple solution to control the COVID-19 pandemic or minimize the impact of it, healthcare providers and consumers in United States have to rely on existing technologies and pharmaceutical research to contribute to the greater solution.
One established technology that has been available for use for the last two decades, but is only now taking front stage, is telehealth services. The Centers for Medicare & Medicaid Services (“CMS”) defines telehealth as “services [that] include office visits, psychotherapy, consultations, and certain other medical or health services that are provided by an eligible provider who isn’t at your location using an interactive 2-way telecommunications system (like real-time audio and video)(2).” Importantly, the potential applications for telehealth services extend beyond a simple virtual check-up.
Prior to the pandemic, telehealth was primarily used to deliver non-acute consultations via virtual check-in. Early adopters of these telehealth services have been primarily large physician practices, which had not typically included hospitals and smaller private practices(3). According to one study, only one-third of inpatient hospitals have a telehealth solution installed as of April 2019(4). Prior to COVID-19, several hurdles helped slow the widespread adoption of telehealth, including, but not limited to:
Due to thesehurdles, telehealth generally has experienced slower adoption in light of the advantages it has across certain healthcare verticals, such as post-acute services. As of 2016, only 0.25% of Medicare beneficiaries used any form of telemedicine(5). Medicare beneficiaries represent America’s elderly population, a demographic proven to be less likely utilizers of advanced modern technology when compared to younger age groups. Prior to the COVID-19 pandemic, Medicare has routinely paid for many kinds of services that are furnished by way of telecommunications technology but has not considered telehealth services under Medicare’s definition. These Communication Technology-Based Services (“CTBS”) primarily comprise certain kinds of remote patient monitoring. These specific types of remote patient monitoring have historically been billed both as separate services and as part of bundled services(6). Telehealth implementation in outpatient facilities, as a percentage of total outpatient facilities in the U.S., has remained relatively flat in recent years at 44.8% in FY 2017 and 49.4%, in 2018(4).
Telehealth’s benefits to patients seem more obvious in some contexts than in others, such as rural and underserved areas that lack healthcare access. Rural community and critical access hospitals typically struggle to stay afloat financially and can lack the financial and operational resources needed to purchase expensive platforms. Telehealth capabilities such as live virtual consultations with specialist physicians and remote monitoring can help patients overcome these hurdles. These barriers to telehealth adoption force patients to travel longer distances to receive care, or delay and defer care altogether. Prior to the pandemic, providers struggled to connect with patients residing in regions lacking broadband internet. Recent estimates indicate that almost 35 million Americans do not have internet access(7). Telehealth is not an option for individuals lacking the ability to access video chat platforms needed for healthcare providers to render services. In early April 2020, a new bill was introduced to the United States Congress aimed at seeking more funding for broadband buildouts in rural communities. This bill would potentially authorize $500 million over five years and would be overseen by the Federal Communications Commission (“FCC”)(8). Despite the potential benefits, the likelihood for an extensive overhaul of telehealth services in rural areas is low without funding intervention by the federal government.
The United States Congress passed the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) on March 27, 2020, a form of economic stimulus providing funds to many Americans to help keep the economy afloat. As part of the U.S. government’s response to the COVID-19 pandemic, on March 30, 2020, CMS announced that Medicare will cover 85 additional services to be furnished via telehealth(9). Contained within the CARES Act are two sections specific to the home health and hospice industry. VMG has summarized portions of sections contained within the CARES Act below. The section summaries below describe what the regulatory framework looks like both before and after passage of these CARES Act amendments.
*Please note that for the specific amendments described above—sourced from sections included in the CARES Act—namely: Sec. 3705, Sec. 3706, & Sec. 3707, the decision to waive the previous requirements as mandated under the SSA is at the sole discretion of the Secretary of the HHS.
The CARES Act amendments mentioned above are legally in effect if the following two criteria are met:
With regard to other verticals within the post-acute care sector, such as physical therapy (“PT”), occupational therapy (“OT”), and speech language pathology (“SLP”) telehealth has remained astray. Numerous studies have been performed on telehealth applicability in a physical therapy setting. Some studies have indicated significant benefits in certain cases when using telehealth for a specific purpose. One study published in March 2007 concluded that use of a virtual environment-based (“VE”) telerehabilitation system—a mode of telehealth—can improve upper extremity motor function in patients who have previously suffered a chronic stroke(10). Another preliminary study published in August 2018 indicated that telerehabilitation can reduce costs in a physical therapy setting when treating individuals with musculoskeletal disorders(11).
Included in the additional CPT codes covered by Medicare as of March 1, 2020 are telehealth procedures related to physical therapy. Despite CMS’ decision to include certain PT telehealth services, the Social Security Act still disallows physical therapy agencies (“PTAs”) from furnishing those services(6), unless waivers—similar to those granted to HHAs—are extended to PT, OT, and SLP services. However, it should be noted that if CMS extends waivers to PT, OP, and SLP regulations, the transition to implementing those telehealth services, in practice, would be much easier from a coding perspective(6). Perhaps, this is an indication that CMS recognizes the benefits included with telehealth and is strongly considering an extension of waivers to these three verticals within the Post-Acute sector.
Given the swift pace that the virus has been spreading, it is not yet clear what the regulatory framework will look like when the United States emerges from the COVID-19 pandemic due to lack of definitive guidance by any governmental body. Regardless, all parties involved in contributing to the greater solution are forced to spend enormous amounts of resources to address current demand in inpatient settings where they face large influxes of ill patients who are potentially carriers of COVID-19.
Telehealth demand has surged dramatically since the start of the COVID-19 pandemic in mid-February. In 2019, a study conducted by J.D. Power found that only 1 in 10 Americans had utilized a telemedicine service for their healthcare needs(11). More recently, in Q1 2020, Ascension, a health system with facilities in 20 states saw an online care increase of nearly 2,000%, to about 10,000 visits in March 2020 from 500 in earlier months. CommonSpirit Health, a health system with operations in 21 states, says its virtual care encounter volume doubled about every seven days, up to 33,000 telehealth visits for the week ending April 3, 2020. Two other privately-held telemedicine companies—Doctor on Demand and 98point6—have both seen their volume triple in recent months(5). Humana CEO, Bruce Broussard, commented on May 5th, “You’re going to see a different health-care system as a result of the virus that is going to be much more distributed in the ability to deliver care.” Broussard also stated that he believes the U.S. could see more healthcare services shifting to home-based settings, going forward(12).
In addition to rapid expansion in the private markets, the only publicly-traded pure-play telehealth company—Teladoc, Inc. (NYSE: TDOC)—has fared well from a growth perspective in recent months. During Q1 2020, Teladoc’s visit volume from paid members in the United States grew to 1.4 million visits, representing an increase of approximately 93% over the same quarter last year. Furthermore, Teladoc has onboarded over six million new paid members in the United States during Q1 2020 and expects to onboard an estimated, additional six to seven million new paid members during Q2 2020. U.S. paid membership increased to 43 million members, up approximately 61% versus Q1 2019. Globally, Teladoc estimates that over 60% of visits are coming from first-time users(13).
The societal and healthcare impacts on a post-quarantined society in the United States remains unclear, especially from a legislative standpoint. One thing that is for certain is that telehealth has received a significant amount of attention and adoption in recent months. The COVID-19 pandemic has shown our nation’s leaders the capabilities and potential future benefits of telehealth moving forward.
While there are many benefits to telehealth, VMG Health not does expect total national telehealth visits during the COVID-19 pandemic to increase significantly in the near-term due to the complex healthcare environment in which telehealth exists remains. Once COVID-19 becomes controlled, and our nation’s communities begin to reopen, it will become clear whether the regulatory environment continues to evolve to remove hurdles to telehealth adoption.
In the end, telehealth’s future success depends on consumers’ and providers’ willingness to adopt this technology, the governments’ ability to extend and solidify temporary waivers as a more permanent form of regulation, and private insurers’ willingness to follow Medicare’s coverage of services and allow for telehealth encounters to supplement in-person, face-to-face encounters for many medical necessities. Upon a return to normalcy, telehealth should continue to play a prominent role in the post-acute care subindustry. Volume for telehealth may not be at the same levels experienced during the COVID-19 outbreak, but consumer expectations may result in volumes remaining above pre-pandemic levels. Telehealth platforms should continue to play a more crucial role in the delivery of services in the aftermath of the COVID-19 pandemic.
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