New Reimbursement Rules Will Likely Impact Digital Health and Telemedicine

New Reimbursement Rules Will Likely Impact Digital Health and Telemedicine

On November 1, 2022, the Centers for Medicare & Medicaid Services (CMS) issued the 2023 Physician Fee Schedule (PFS) Final Rule. CMS publishes a PFS annually so as to make changes in federal healthcare reimbursement and policy. PFS changes often spill over into the private sector, as private payors typically consult the PFS when evaluating their own payment and policy arrangements. The new Final Rule, like its yearly predecessors, address widely varied issues across the Medicare Program, including an overall provider fee cut and changed policies relating to Evaluation and Management Visits and in many other areas. The Final Rule includes several rules relating to coverage and payment for in three areas of particular interest to our clients: telehealth services, digital remote therapeutic monitoring (RTM), and behavioral health services. The Final Rule also addresses changes to expect after the COVID-19 public health emergency (PHE) expires, which was recently extended through January 11, 2023. Below we discuss a few notable developments in each of these areas.

Telehealth Services

As part of the U.S. Department of Health and Human Services' strategy for addressing the PHE ongoing since 2020, CMS expanded use—and reimbursement—of Medicare telehealth services. CMS did so chiefly by means of “flexibilities”: temporary waivers of narrow restrictions that otherwise apply to delivery of, and payment for, Medicare telehealth. Critical to the expansion of telehealth during the PHE have been flexibilities that allow telehealth services to be furnished in any geographic area and in any originating site setting (including the beneficiary’s home); allow some services to be furnished via audio-only telecommunications systems; and allow physical therapists, occupational therapists, speech-language pathologists, and audiologists to furnish telehealth services.

Nearly three years into the PHE, the Final Rule sets out a path toward rescinding many current flexibilities in a manner that will provisionally confine and limit the scope of Medicare telehealth in the future . The Final Rule requires that patients again be physically present in an originating site—an office, clinic, or medical facility within a rural area—for most telehealth services. Medicare reimbursement for telehealth visits furnished by physical therapists, occupational therapists, speech language pathologies, and audiologists will no longer be allowed. The only Medicare services that will be permitted to be furnished audio-only will be mental health telehealth services. The Final Rule establishes a time frame for withdrawal of these flexibilities after 151 days following the declared end of the PHE.

The Final Rule leaves open the possibility that some flexibilities may eventually be adopted permanently. Some important flexibilities under the PHE will be allowed to extend further past the end of the PHE in order to allow additional time for the collection of data that may support their inclusion as permanent additions to the Medicare telehealth services. For example, telehealth services requiring the “direct supervision” of a physician (i.e., physical presence in the same office suite as the auxiliary provider and the ability to immediately provide assistance and direction) are reimbursable under the PHE provided that the supervising professional has “virtual presence” via real-time interactive audio-video technology. CMS states that it will continue to permit direct supervision through virtual presence through at least the end of 2023, or any subsequent calendar year in which the PHE ends. CMS states that the information and evidence on virtual supervision, which it continues to gather, may guide future rulemaking in this area.

Remote Therapeutic Monitoring (RTM)

RTM is designed for remote patient treatment management using medical devices that collect non-physiological data. Data relating to key treatment-related criteria such as therapy/medication adherence, therapy/medication response, and pain level can be collected and billed remotely under RTM codes that CMS introduced into use at the start of 2022. (RTM must not be confused with similarly named remote patient monitoring—"RPM"—which collects physiological data.) The Final Rule establishes a new RTM device supply code for Cognitive Behavioral Therapy Monitoring, opening the door to additional RTM use cases. Most notable about the Final Rule’s treatment of RTM may be the way that it broadly relaxes supervision requirements. Physicians are currently required to directly supervise “incident to” RTM billed under the physician’s enrollment, in which clinical staff use data from medical devices to manage and monitor patient health. Starting in January 2023, physicians would not need to be in the same building as clinical staff to satisfy the “general supervision” requirement and would be able to supervise virtually. The Final Rule declined to undertake some proposed changes that were expected to facilitate further Medicare expansion in this area. CMS opted neither to introduce a generic RTM device supply code that is condition/system agnostic nor to establish four new Healthcare Common Procedure Coding Systems (HCPCS) G-codes that providers could use when billing provision of RTM services by auxiliary staff.

Behavioral Health Services

In its 2022 Behavioral Health Strategy, CMS pledged to “improve access to high quality, affordable, person-centered behavioral health care, and ensure parity in access, coverage, and quality for physical and mental health services, including care enabled through telehealth and technology.”

The Final Rule acts on the pledge by establishing multiple provisions expanding access to behavioral healthcare. Starting January 2023, marriage and family therapists, licensed professional counselors, and other types of auxiliary behavioral healthcare providers will be able to provide “incident to” services to patients under general supervision of physician or non-physician practitioner, rather than under direct supervision. As explained in the preceding section, this would allow auxiliary providers to furnish services to patients without the supervising practitioner being physically present to administer immediate assistance. However, the general supervision standard still requires that the services be performed under the supervisory practitioner's “overall direction and control” (see, for example, 42 C.F.R. § 410.32(b)(3)(i)). Supervisory practitioners are still responsible for the training of the auxiliary providers performing the procedure and ensuring the quality and reliability of services performed.

CMS also finalized reimbursement of clinical psychologists and licensed clinical social workers as part of an integrated care team under code G0323. The new code requires “at least 20 minutes of clinical psychologist or clinical social worker time, per calendar month, with the following required elements: initial assessment or follow-up monitoring, including the use of applicable validated rating scales; behavioral health care planning in relation to behavioral/psychiatric health problems….” Requirements stipulate that, to be reimbursed, services must involve treatment coordination with and/or referral to physicians and practitioners authorized by law to prescribe medications, provide emergency services, and counseling and/or psychiatric consultation.

Conclusion

The Final Rule contains significant changes for telehealth, RTM, and behavioral health providers. These include new codes that will afford additional use cases, and loosened supervision requirements that, in the case of RTM and behavioral health, should broaden opportunities for furnishing of incident to services by clinical staff and auxiliary providers. The Final Rule seems to anticipate further growth in these areas and aims to facilitate it. Concerning telehealth, the Final Rule largely provides for phased retrenchment following the end of the PHE. The Final Rule also leaves open the possibility that some aspects of the temporary expansion of telehealth under the PHE, such as virtual supervision may be permanently established by future rulemaking. Starting in January 2023, prospects for telehealth, RTM, and behavioral health companies in the context of the Medicare Program and beyond will be greatly affected by the provisions of the Final Rule.

Our comments from July on the 2023 Medicare Physician Fee Schedule Proposed Rule can be found here.

The Final Rule can be accessed via this link.

CMS prepared a helpful summary of highlights from the Final Rule, which can be accessed here.

For more information, please contact Jamie Ravitz, David Hoffmeister, Georgia Ravitz, Eva Yin, Paul Gadiock, Jeff Weinstein, or any other member of Wilson Sonsini's FDA Regulatory, Healthcare, and Consumer Products practice.

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