Is This the Worst Medicare Telehealth Law of 2020?

15 February 2021 Health Care Law Today Blog
Author(s): Nathaniel M. Lacktman

The Public Health Emergency introduced a myriad of changes to federal and state telemedicine and digital health laws and rules. There were expansions to telehealth coverage and reimbursement, suspension of enforcement on HIPAA security for digital health, expedited FDA review processes, DEA exemptions of controlled substance prescribing rules, and state waivers of medical licensure requirements. Nearly all these changes, whether permanent or temporary, were telemedicine-friendly and promoted the use of digital health technology to deliver medical care.

But one change, signed into law in the last days of December 2020, has raised confusion (and eyebrows) in the telemental health provider community. It is a single sentence, contained in Section 123 of the Consolidated Appropriations Act of 2021. It reads:

“Payment may not be made under this paragraph for telehealth services furnished by a physician or practitioner to an eligible telehealth individual for purposes of diagnosis, evaluation, or treatment of a mental health disorder unless such physician or practitioner furnishes an item or service in person, without the use of telehealth …” (emphasis added).

In short, the Act changes the Medicare telehealth coverage statute, expanding Medicare payment beyond substance use disorder treatment (already required under the SUPPORT Act) to more broadly cover treatment of mental health disorders. Most telemedicine industry stakeholders would support expanded Medicare coverage of telehealth-based mental health services. The need for access to mental health care is high, considering the well-documented shortage of mental health practitioners nationwide, particularly in rural areas. However, under this new law, Medicare will cover the telehealth mental health service only if the practitioner has conducted an in-person consult with the patient in the prior six months and subsequently continues to conduct in-person exams (at such a frequency to be determined by HHS). Otherwise, Medicare will not pay for the telehealth service.

Here is the language of Section 123 in its entirety.


(a) TREATMENT OF MENTAL HEALTH SERVICES FURNISHED THROUGH TELEHEALTH.—Paragraph (7) of section 1834(m) of the Social Security Act (42 U.S.C. 1395m(m)) is amended—


‘‘(A) IN GENERAL.—The geographic’’;

(2) in subparagraph (A), as added by paragraph (1), by inserting ‘‘or, on or after the first day after the end of the emergency period described in section 1135(g)(1)(B), subject to subparagraph (B), to an eligible telehealth individual for purposes of diagnosis, evaluation, or treatment of a mental health disorder, as determined by the Secretary,’’ after ‘‘as determined by the Secretary,’’; and

(3) by adding at the end the following new subparagraph: ‘


“(i) IN GENERAL.—Payment may not be made under this paragraph for telehealth services furnished by a physician or practitioner to an eligible telehealth individual for purposes of diagnosis, evaluation, or treatment of a mental health disorder unless such physician or practitioner furnishes an item or service in person, without the use of telehealth, for which payment is made under this title (or would have been made under this title if such individual were entitled to, or enrolled for, benefits under this title at the time such item or service is furnished)—

“(I) within the 6-month period prior to the first time such physician or practitioner furnishes such a telehealth service to the eligible telehealth individual; and

“(II) during subsequent periods in which such physician or practitioner furnishes such telehealth services to the eligible telehealth individual, at such times as the Secretary determines appropriate.

‘‘(ii) CLARIFICATION.—This subparagraph shall not apply if payment would otherwise be allowed—

‘‘(I) under this paragraph (with respect to telehealth services furnished to an eligible telehealth individual with a substance use disorder diagnosis for purposes of treatment of such disorder or cooccurring mental health disorder); or

‘‘(II) under this subsection without application of this paragraph.’’.

(b) IMPLEMENTATION.—Notwithstanding any other provision of law, the Secretary may implement the provisions of, or amendments made by, this section by interim final rule, program instruction, or otherwise.

This is not the first time restrictions have been imposed on Medicare reimbursement for telehealth or virtual care services. For example, certain CPT service codes are limited to established patients, select items of durable medical equipment have had a “face-to-face encounter” requirement, and the geographic and originating site restrictions on telehealth have been in place for nearly 20 years. Yet, this law may very well be the first and only instance of a federal statute expressly mandating an in-person exam as a prerequisite for Medicare coverage of a telehealth-based service.

Little legislative history is readily available that reflects Congressional lawmakers discussing the merits of Section 123’s requirement for an in-person exam. To be fair, at 5,593 pages and $2.3 Trillion, this legislation is the longest bill ever passed by Congress and one of the largest spending measures ever enacted. But the in-person exam requirement is at odds with the direction that telehealth policy has moved over the last decade. It disrupts Medicare’s historical approach, which is to defer to state laws on professional practice requirements and clinical standards of care.

State laws vary on their specific requirements and practice standards, but at this point generally allow the creation of valid doctor-patient relationships via telemedicine without an in-person exam, assuming the standard of care is met. Additionally, 43 States now have telehealth coverage laws requiring commercial health plans to cover services delivered via telehealth. Some states, like Massachusetts’ recent telemedicine law, even take extra steps to ensure reimbursement of telehealth-based mental health care, and CMS itself includes new patient evaluation/management (E/M) service codes (e.g., CPT Codes 99201-99205) among the Medicare-covered telehealth services. 

Moreover, Section 123’s new prerequisite for an in-person visit applies only to mental health treatment. Medicare beneficiaries seeking medical services via telehealth are not subject to this requirement. It is only those patients seeking treatment of mental health disorders who are required to “mask up” and head to their practitioner for an in-person exam. It prompts consideration as to why mental health care is being held to different payment restrictions than medical care, despite years of efforts on mental health parity and the passage of the Mental Health Parity and Addiction Equity Act.

While expansion of Medicare coverage for telehealth services can increase access to care, particularly as the Public Health Emergency continues, the policy implications of Section 123’s in-person exam requirement may leave patients and practitioners wondering if the Act actually gives as much as it takes.

Want to Learn More?

For more information on telemedicine, telehealth, virtual care, remote patient monitoring, digital health, and other health innovations, including the team, publications, and representative experience, visit Foley’s Telemedicine & Digital Health Industry Team Page.

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