Flurry of Federal Legislation on Telehealth - Recap

If the first several months are any indication, 2017 promises to be a big year for telehealth on Capitol Hill. Below is a current rundown of pending legislation that aims to expand access to healthcare through telehealth/telemedicine.

CHRONIC Care Act of 2017

The bipartisan Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017 contains a variety of proposed Medicare changes, such as expanding in-home care and strengthening accountable care organizations (ACOs).

The legislation also seeks to improve access to telehealth services. Specifically, the CHRONIC Care Act would:

·      allow at-risk ACOs to provide telehealth services without Medicare’s geographic restrictions and with the home as an added originating site;

·      allow Medicare beneficiaries receiving dialysis treatments at home to complete monthly check-ins with their doctor via telehealth;

·      expand coverage for telehealth services in Medicare Advantage plans; and

·      remove Medicare’s geographic restrictions for telestroke services.

The Congressional Budget Office (CBO) estimates the costs of the CHRONIC Care Act to be negligible. Expanding Medicare reimbursement of telehealth services is projected to cost $150 million over a decade per the CBO, but increased coverage of telehealth via Medicare Advantage plans is projected to save Medicare $80 million. Overall, the CHRONIC Care Act received a positive score from the CBO, thanks in large part to significant cuts in the Medicare Improvement Fund.

CONNECT Act

On May 3, 2017, six senators reintroduced a bipartisan bill designed to expand Medicare coverage for telehealth services and remote patient monitoring. The legislation, Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act of 2017, was initially introduced last year by the same six senators. The CONNECT Act includes many of the same provisions as the CHRONIC Care Act, but builds on them.

The bill has five stated primary goals:

1.     Build upon provisions in the CHRONIC Care Act of 2017 to expand telehealth platforms in accountable care organizations and Medicare Advantage, as well as patients undergoing home dialysis and stroke treatment programs;

2.     Expand remote patient monitoring programs for individuals with chronic conditions;

3.     Expand telehealth and remote patient monitoring programs at community health centers and rural clinics, and integrate the technology into bundled and global payment programs;

4.     Give HHS the authority to lift restrictions on telehealth—including geographic limitations, originating site restrictions, reimbursements limitations, and restrictions on the use of store-and-forward technology—when quality and cost effectiveness criteria are met; and

5.     Expand the use of telemental health services.

The CONNECT for Health Act has garnered more than 50 endorsements, including support from the American Medical Association, American Telemedicine Association, Healthcare Information and Management Systems Society, Federation of State Medical Boards, and a wide array of vendors and health systems.

The Hallways to Health Act

The Hallways to Health Act was also recently reintroduced in Congress. The legislation would provide federal support to expand telehealth access to schools and medically underserved areas.

The bill would amend Title XXI of the Social Security Act to:

1.     Provide grants for school-based health centers that partner with community health care workers who can coordinate care and services in the community for families;

2.     Create a demonstration project to provide telehealth services at centers and expand existing telehealth services in medically underserved areas; and

3.     Ensure school-based health centers can be reimbursed for covered services under Medicaid and the Children’s Health Insurance Program at the same level as services provided in a physician’s office or outpatient clinic.

The Telehealth Innovation and Improvement Act of 2017

The Telehealth Innovation and Improvement Act is another piece of current bipartisan legislative activity that touches on telehealth. The legislation seeks to encourage health providers to launch telehealth programs through HHS’ Center for Medicare and Medicaid Innovation (CMI). In addition, the bill calls on the CMI to evaluate telehealth models “for cost, effectiveness, and improvement in quality of care without increasing the cost of delivery,” and to reimburse telehealth models under Medicare if they satisfy those criteria.

In a press release, the sponsors of the legislation, Senator Cory Gardner (R-Colorado) and Senator Gary Peters (D-Michigan), criticized Medicare for its limited coverage of telehealth, saying CMS sets “a poor industry standard, [discourages] innovation and [restricts] access to specialized services.” Senators Gardner and Peters stressed that expanded reimbursement for telehealth care will benefit citizens of urban and rural communities, and the legislation could help “reduce costly emergency room visits, hospitalizations and readmissions” and “incentivize the healthcare industry to develop new technologies that could potentially reduce costs and improve patient health.”

Furthering Access to Stroke Telemedicine (FAST) Act

Originally introduced in 2015, the Furthering Access to Stroke Telemedicine (FAST) Act was reintroduced to Congress in February 2017. The bipartisan telehealth bill, supported by the American Heart Association (AHA) and the American Academy of Neurology, would alter the Social Security Act to allow Medicare coverage of telestroke services—no matter where the patient is located.

The AHA President Steven Houser, PhD, pointed to quantitative data to support the merits of the bill — “Evidence indicates that telestroke improves patient outcomes and reduces disability. However, nearly 94 percent of the strokes that occur in America take place in areas where telestroke is not paid for by Medicare. We urge Congress to give more Medicare patients access to this proven form of treatment and support the FAST Act.”

Georgia Legislative Wrap-Up: Rural Healthcare

The latest session of the Georgia General Assembly is in the books, and the healthcare industry has been impacted as usual. Below, we highlight just a few of the successful bills with particular relevance to rural healthcare.

Perhaps more consequential than any single bill passed this session, Georgia is reportedly reconsidering a Medicaid “expansion waiver” in the wake of the Affordable Care Act withstanding a recent Congressional challenge. The benefit of this waiver program could be huge for rural healthcare in Georgia, which suffers from low Medicaid reimbursement and limited Medicaid eligibility. 

SB 180 and SB 14 Tweak Existing Law to Aid Rural Hospitals

Senate Bill 180 passed both chambers of the Georgia legislature and is designed to encourage increased donations to rural hospitals in Georgia. SB 180  was amended to include provisions of unsuccessful House Bill 54. As previously discussed, House Bill 54 sought to raise the tax credit from 70 percent to 90 percent for individuals and corporations who donate money to rural hospitals. These provisions were added to Senate Bill 180.

If SB 180 is signed by the Governor, donors to rural hospitals will receive increased tax credits retroactive to January 1, 2017; eligibility for such tax credits will extend to hospitals in counties of up to 50,000 people (increased from 35,000); and hospital payments to third-parties soliciting, administering, or managing the tax credits will be capped at three percent (3%) of a hospital’s total donations.

Senate Bill 14 amends the Georgia’s Code to make ‘rural hospital organizations’ eligible for monetary grants from the state. Under the current Georgia Code, rural hospitals not operated by a hospital authority are only eligible for state grants in limited scenarios. The legislation defines a rural hospital organization as an acute care hospital, in a rural county that:

1.     Provides inpatient hospital services at a facility in a rural county;

2.     Participates in and accepts both Medicaid and Medicare patients;

3.     Provides services to indigent patients;

4.     At least 10% of their annual revenue is categorized as indigent care, charity care, or bad debt;

5.     Annually files an IRS Form 990;

6.     Maintains a 24-hour emergency room;

7.     Operated by a county or municipal authority, or is designated as a tax-exempt organization by the IRS.

The legislation allows qualifying rural hospital organization to apply for monetary grants for projects ranging from facility renovations, equipment purchases, personnel retention, or nontraditional healthcare delivery systems.

In addition, SB 14 expands the definition of what qualifies as a rural county for both hospital authorities and rural hospital organizations to any county having fewer than 50,000 residents (up from 35,000). Finally, SB 14 raises maximum grant allocations for eligible hospital authorities and rural hospital organizations from $200,000 to $500,000 for strategic planning grants, and from $1.5 million to $2.5 million for grants involving nontraditional healthcare delivery systems. Hospital authorities and rural hospital organizations are eligible for up to $4 million annually in grants from the state under the new statutory revisions.

House and Senate Pass Resolutions Focused on Rural Development

The Georgia House of Representatives adopted House Resolution 389. The resolution creates the House Rural Development Council, which will be composed of 15 House lawmakers appointed by the Speaker of the House, David Ralston. The Georgia Senate passed Senate Resolution 392, creating the Senate Rural Georgia Study Committee. The Senate committee will be composed of 7 Senators appointed by the President of the Senate, Lieutenant Governor Casey Cagle.

The appointed House and Senate members will be tasked with examining problems found in rural communities around Georgia, specifically population loss, lack of doctors or hospitals, poor infrastructure, educational achievement, job scarcity, and overall lack of economic growth. Beginning April 1, 2017, the appointed legislators will begin holding meetings throughout rural Georgia with local officials, educational and business leaders, healthcare providers, civic groups, and other interested individuals for input of how to address the identified issues.

Based upon these meetings and research, the appointed legislators will explore possible legislative solutions to the identified issues for rural Georgia and introduce corresponding legislation during the next session of the Georgia General Assembly in January 2018. In the context of healthcare, H.R. 389 and S.R. 392 represent an opportunity for lawmakers to better understand the healthcare needs of rural Georgians to ensure those needs are met in the coming years.

Multiple Successes in Fight Against Opioids

House Bill 249 is set to become the latest sweeping law aimed at combatting the opioid epidemic. The bill contains various efforts to reduce opioid overdoes, including codifying Governor Nathan Deal’s executive order allowing the sale of overdose antidote naloxone without a prescription, and strengthening the state’s Prescription Drug Monitoring Program, which requires physicians to report opioid prescriptions.

Another successful bill, Senate Bill 88, entrusts the Department of Community Health with substantial licensure and oversight controls over “narcotic treatment programs.” Lawmakers have expressed concern over clinics offering narcotic addiction treatment, which often involves opioid prescriptions to fight the patient’s addiction to other opioids, and placed a one-year freeze on such clinics last summer.

Cancelable Loan Program for Rural Practitioners Expanded

House Bill 427, the ‘Physicians, Dentists, Physician Assistants, and Advanced Practice Registered Nurses for Rural Areas Assistance Act,’ expands the types of healthcare providers eligible for cancelable loans if they agree to practice medicine in qualifying rural areas of Georgia. The legislation now makes dentists, physician assistants, and advanced practice registered nurses eligible for cancelable loans. Cancelable loans for healthcare providers in rural Georgia were previously limited to physicians. The goal of the new legislation is to address the shortage of physicians and other healthcare practitioners in rural Georgia.

Rural Health Under Republicans' Post-Obamacare American Health Care Act

Last month, we posted a blog highlighting the special implications of Obamacare replacement or reform on rural healthcare. With Republicans in the U.S. House of Representatives revealing their first concrete proposal for overhauling the landmark Affordable Care Act last night, how have these possibilities evolved? 

The American Health Care Act, comprised so far of a pair of bills, advances a wide range of post-Obamacare policies, but does not repeal the entire law. Some components that are already receiving ample attention are the shift from income-based tax credits to age-based tax credits, repeal of the individual mandate, penalties for lapses in coverage, defunding of reproductive health services, and the realities confronting President Donald Trump’s statement that the new plan will mean insurance for everybody. 

Here, we focus on a select few provisions of the AHCA keenly impacting rural health providers and their patients:

- Medicaid Reform. Perhaps most important for rural health providers, the AHCA significantly reshapes the Medicaid landscape, albeit more gradually than some had anticipated. The bill calls for substantial reductions in federal matching funds to state Medicaid programs beginning on January 1, 2020, with the caveat that states would continue to receive enhanced Medicaid payments for people enrolled in Medicaid before that date. 

For new enrollees in 2020 and beyond, the federal government would only pay its pre-Obamacare share of Medicaid costs — a move that is sure to lead to cuts in expansion states’ Medicaid programs. States would have until Dec. 31, 2019, to decide whether to expand Medicaid (or implement a waiver program) and get their members enrolled. 

Studies have shown rural hospitals are more impacted by the Medicaid expansion or lack thereof than are city-based hospitals. 

Another major change to Medicaid proposed by the AHCA is a shift to per capita aggregate spending limits beginning in 2020. Notably, the initial per capita lump sum to states would be based on their respective Medicaid spending in FY 2016. Therefore, states that were to expand Medicaid or implement a waiver program between 2017 and 2019 would not receive a corresponding benefit in their per capita allotments.

- Safety Net Funding to Non-Expansion States. In states to have not and will not expand Medicaid, the AHCA would extend $10 billion in safety net funding for Medicaid providers over five years ($2 billion/year). As a rough comparison of budgetary scope, the Congressional Budget Office estimated that the next 10 years of Obamacare’s Medicaid expansion nationwide would have involved $993 billion in federal funding.

- DSH Cuts. Medicaid Disproportionate Share Hospital payments, protecting safety net hospitals that treat a high number of indigent patients, were scheduled to be cut beginning in FY 2018 under Obamacare. The AHCA would repeal Medicaid DSH cuts for non-expansion states in 2018 before they even take effect, and would repeal such cuts in expansion states beginning in 2020. 

- Community Health Center Funding. In recent years the federal government has increasingly supported Community Health Centers, also known as Federally Qualified Health Centers, which are not exclusive to rural areas but do exclusively serve medically underserved areas. The AHCA would offer a one-time increase in funding to Community Health Centers of $422 million. 

- 340b Program. One of the effects of a less-than-wholesale repeal of Obamacare is that some provisions may be simply left alone without much public attention. At least in the first iteration of the AHCA, this appears to be the case for the 340b Drug Pricing Program, which was expanded to include 1,100 rural hospitals under Obamacare. The rural hospital community would surely welcome a continuation of this change. 

- Individual Marketplace. As mentioned above, the AHCA proposes substantial changes to the individual insurance marketplace, including the shift from income-based tax credits to age-based tax credits with older consumers receiving more assistance. These changes would have many direct and indirect impacts on rural healthcare, largely by increasing patient co-insurance and reducing the number of privately insured patients. For example, because the AHCA premium tax credits are not tied to local premiums as under Obamacare, people in areas where premiums are higher (often rural areas) would receive a flat tax credit based on age but would be stuck with the remainder of the higher local premium.

Generally, rural areas have lower-income populations than do urban areas, so premium tax credits that are not adjusted for income level may lead to more uninsured patients in rural areas. This handy interactive map from the Kaiser Family Foundation (adjustable by age and income!) shows that 40-year-olds with an income of $30,000 will often face reduced tax credits under the AHCA in rural America, but will not be as affected in urban pockets. 

The AHCA aims to address some of these private marketplace deficits through lower premiums via health plan competition and increased use of health savings accounts. 

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Overall, the AHCA proposes a handful of measures acknowledging the difficulties of rural health providers, offering safety net funding to non-expansion states, halting impending DSH cuts, increasing funding to FQHCs and leaving the 340b program untouched.

However, the likely reduction in insured patients -- whether by decreased Medicaid funding or changes to the individual marketplace -- threatens to outweigh these potential benefits. The National Rural Health Association has already released a statement expressing concern about the bill. 

Disclaimer: The foregoing materials are provided for informational purposes only, and are not to be construed as legal advice. Please consult an attorney before applying this guidance to any particular facts or circumstances. 

Obamacare Update – Repeal, Repair, Is There a Difference?; Special Implications for Rural Health

Several key Republican lawmakers have reportedly shifted their rhetoric in recent weeks from repealing and replacing the Patient Protection and Affordable Care Act (“ACA”) to repairing it. But with many of the leading ‘repeal’ plans promising to reinstate certain elements of ACA immediately, the differences between these two paths may be academic. 

Throughout the last election cycle, Republicans promised newly insured individuals they would not lose insurance coverage if the ACA were repealed. Facing pushback from the public on certain popular provisions of the law, Senator Lamar Alexander (R – TN), chairman of the Senate health committee, announced the alternative plan could be more accurately described as a “repair” than a replacement. Adding to the mixed message, Speaker of the House, Rep. Paul Ryan, (R – WI) said ‘repairing’ the ACA actually meant repealing and replacing it. 

Semantics aside, it is becoming increasingly clear that the GOP replacement plan will share some characteristics with the ACA. Fundamentally, most prominent GOP alternatives mirror the ACA’s multi-payer system in which consumers are offered tax credits for purchasing private insurance on an individual marketplace, while public programs like Medicaid are bolstered through federal funds. Within this context, differences exist as to how the tax credits will be distributed, how the Medicaid funds will be applied, and how insurers will be restricted in shaping their plans. Also like the ACA, Speaker Ryan’s “Better Way” plan seeks to prohibit insurers from excluding members based on preexisting conditions, and to allow adults up to age 26 to remain on their parents’ plans.  Health and Human Services Secretary nominee Tom Price, who has proposed his own replacement plan, supports a limited form of preexisting condition exclusions and stated in his confirmation hearing that he would considering preserving the CMS Innovation Center that has housed many of the ACA’s value-based payment reforms. 

Possible Implications of a Complete Repeal for Rural Hospitals

An overhaul of the ACA comes at a critical time for healthcare in rural America. A December 2016 report from the CDC found a decline in life expectancy for Americans—particularly among Americans living in rural areas—for the first time in 20 years. The CDC attributed this finding to rural Americans having higher rates of chronic illness, obesity, alcoholism, mental illness, and suicide relative to their urban counterparts. The financial health of hospitals serving rural populations remains dire; an estimated 700 rural hospitals across the country are vulnerable to closure. 

Here are some elements of the ACA that have especially affected rural healthcare and whose repeal would have significant impacts on rural providers. 

Medicaid Expansion

Repealing the ACA’s Medicaid expansion would be a massive blow to rural health providers, but its impact would be greater, naturally, in states that opted to expand Medicaid in the first place. After the U.S. Supreme Court made expansion optional in 2012, thirty-two states including the District of Columbia expanded Medicaid coverage under the ACA. For providers in states that declined to expand Medicaid, a repeal of the expansion will be business as usual. 

In so-called “expansion states,” many hospitals will see an increase in uncompensated care if the ACA’s replacement withdraws federal support for expanded Medicaid programs. The American Hospital Association has estimated repealing the expansion of Medicaid would cost hospitals across the United States more than $160 billion due to reductions in Medicaid revenue received and an increase in unpaid medical bills. These financial losses would impact all hospitals, especially rural hospitals due to a greater percentage of their patient populations gaining coverage under the Medicaid expansion relative to urban and suburban hospitals. 

Medicare and Other Reimbursement Cuts

The ACA contained a variety of Medicare payment cuts that have adversely affected health providers. Repealing some of these cuts, such as the reduction in reimbursement from Medicare Advantage plans, would benefit health providers including those in rural areas. The same goes for repeals of payments that compensate hospitals treating a disproportionate share of uninsured patients (“DSH” payments); however, while cuts to Medicare DSH payments have hurt some rural hospitals, such hospitals would be much more heavily impacted by the ACA’s planned reductions in Medicaid DSH payments, which have been delayed and therefore not yet felt by rural hospitals. 

Of note, the across-the-board 2-percent sequestration cut to Medicare payments, first passed into law in 2011, was not a part of the ACA and would not be undone merely by way of an ACA repeal. 

Value-Based Care

The ACA contained several initiatives aimed at tying providers’ payments to the quality of their care (Accountable Care Organizations; Hospital Value-Based Purchasing Program; Hospital-Acquired Condition Reduction Program, and more) and further directed CMS to test and implement new approaches to compensating providers in hopes of containing costs. Currently, the CMS Innovation Center administers dozens of programs in this “value-based” mold, and private payers have followed suit.

Repealing the ACA without immediately reinstating the statutory basis for these value-based programs would cause significant confusion and disarray in the provider community. While many providers would likely breathe a sigh of relief without the threat of penalties for readmissions and other quality measures, these programs have been widely adopted and their repeal would disrupt delivery and workflow changes and technological investments that providers have made since the ACA’s passage. 

340b Program

The 340b Drug-Pricing Program was enacted by Congress in 1992 to provide low-cost drugs to designated “social safety net” medical facilities in economically distressed areas of the country. A provision of the ACA expanded the 340b Program, causing 1,100 rural hospitals to become eligible to purchase low-cost drugs from drug companies. The expanded 340b Program was a windfall for many rural hospitals, especially when the typical rural hospital operates on small margins. An outright ACA repeal would eliminate these valuable cost-savings.  

Individual Mandate

An increase in insured patients is a benefit to all providers, including rural hospitals. Therefore, the repeal of the ACA’s “individual mandate,” requiring all taxpayers to purchase health insurance or else pay a penalty, will not help rural healthcare to the extent that it raises the uninsured rate. 

However, as discussed above, rural hospitals treat a higher percentage of Medicaid patients relative to urban hospitals, and a lower relative percentage of commercial-pay patients. This will limit the impact of changes to the individual marketplace on rural providers. 

The frustratingly limited benefit of the individual mandate on rural health is especially pronounced in states that have declined to expand Medicaid.  That is because the ACA was never redesigned to account for the optional Medicaid expansion; therefore subsidies for buying private insurance were never extended to patients who would otherwise have been covered under expanded Medicaid programs (a problem known as the “coverage gap”). 

Individuals falling in this coverage gap have incomes that exceed eligibility for Medicaid, but fall below the lowest income eligible for premium tax credits under the ACA. An estimated 2.5 million adults fall into this category. If the coverage gap had been closed through amendments to the ACA, rural providers in non-expansion states would be more affected by possible changes to the private insurance marketplace.  

Telehealth Capsules - Federal Legislation

Telehealth to Expand in TRICARE; Shown as Viable Treatment Option for PTSD

The recently enacted National Defense Authorization Act for Fiscal Year 2017 will expand the use of telehealth in TRICARE, the federal healthcare program for military personnel and military retirees. Specifically, the law mandates coverage parity for telehealth services with conditions and reimbursement specifications to be defined in upcoming Department of Defense rules. An earlier version of the law contained broad interstate licensure exemptions, which have since been deleted following complaints by the American Academy of Family Physicians, among others.

TRICARE represents an exciting new adopter of telehealth parity, particularly in light of a recent study, to be published in the upcoming February 2017 issue of Behaviour Research and Therapy, showing therapy delivered via telehealth represents a viable treatment option for veterans with post-traumatic stress disorder (PTSD). The study compared the efficacy of home-delivered therapy by videoconference for veterans with PTSD to treatment received at a U.S. Veterans Affairs clinic, finding the home-delivered therapy to be just as effective to treatment at a U.S. VA clinic.  

The study placed veterans with PTSD into two randomly assigned groups. Each group received 10 to 12 therapy sessions to treat the symptoms of PTSD. One group attended therapy sessions at a Veterans Affairs clinic, while the other group consisted of veterans receiving home-delivered therapy via videoconference with a psychiatrist. Researchers found veterans who received home-delivered therapy made similar progress in treating PTSD symptoms as  veterans who received inpatient therapy at a Veterans Affairs clinic.

ECHO Act Signals Continued Commitment to Expansion of Telemedicine

On December 14, President Obama signed the Expanding Capacity for Health Outcomes Act (ECHO Act) into law. The legislation is modeled after University of New Mexico Health Sciences Center’s telehealth initiative “Project ECHO.” Project ECHO uses a “hub-and-spoke” model to connect healthcare specialists with rural healthcare providers and their patient populations using a telehealth platform. Healthcare specialists located at “hub” hospitals conduct virtual clinics and train primary care providers at “spoke” sites, typically located in rural areas. Through the virtual clinics and training, patients can receive care locally at a spoke site, avoiding costly referrals and the need for a patient to travel to the office of a healthcare specialist. 

The ECHO Act requires HHS to study technology-enabled collaborative learning and capacity building models, and the impact of such models on (1) mental and substance use disorders, chronic diseases, prenatal health, pediatric care, pain management, and palliative care; (2) healthcare workforce issues (e.g., shortage of healthcare specialists); (3) public health programs; and (4) delivery of healthcare to rural, medically underserved areas. Donald Berwick, the former administrator of CMS, has stated the model of Project Echo represents a fundamental design shift “from moving the patient to moving the knowledge,” a necessary shift to meet modern healthcare demands. 

The ECHO Act is the latest legislative effort to ensure quality healthcare services to rural communities through the utilization of telehealth. Telehealth will continue to be a point of legislation in upcoming years due to the efficacy and cost-savings associated with the technology.

Disclaimer: The foregoing materials are provided for informational purposes only, and are not to be construed as legal advice. The information relies on limited authority and has not been screened or approved by any governmental agency. Please consult an attorney before applying this guidance to any particular facts or circumstances.