Telehealth for an Aging Population: How Can Law Influence Adoption Among Providers,Payors,and Patients?

A. Establishment of A Healthcare Relationship

Legal and ethical analyses have long turned on whether a doctor-patient relationship has been established, but the particular modality of communication has not been of primary concern. In-person visits can facilitate the development of trust and more granular information exchange between a doctor and patient, potentially revealing counter-indications and serving broader healthcare goals (e.g., checking for vaccination status, cancer screening, or substance use). ⁶² In contrast, telehealth could allow a healthcare provider to have a very superficial relationship with a patient. For extreme examples, a patient may merely check off symptoms on a webform or send an email. ⁶³ In some ways, this is the epitome of efficiency—if a patient needs a statin, why not make it as simple and easy as possible to get that prescription written? On the other hand, unscrupulous doctors could exploit such minimal contacts to generate easy billings or patients may exploit them trying to get narcotics. ⁶⁴ More generally, some claim this technology interferes with the development of a personal doctor-patient relationship by being “dehumanizing, dissocializing and depersonalizing.” ⁶⁵

The American Medical Association (“AMA”) has promulgated an opinion that does not fully embrace telemedicine, deeming even synchronous video as insufficient to establish a doctor-patient relationship. ⁶⁶ Instead, subject to certain exceptions, the doctor-patient relationship should be established through an in-person visit, or through consultation with a doctor who has an established relationship, or in other ways specified in specialist national practice guidelines. ⁶⁷ This opinion reflects a presumption that in-person interactions should remain the baseline.

The AMA produced a 50-state survey on this question, which clearly illustrates the discrepancies between state laws and the resulting difficulties for telehealth scalability. Some states (e.g., Alabama) broadly track the AMA's suggestion and others (e.g., Idaho), allow a relationship to be established via telehealth, as long as the doctor and patient interact via two-way audio and video. ⁶⁸ Some states (e.g. Arkansas) target and proscribe the use of web-forms as the sole basis for treating or prescribing. ⁶⁹ In contrast, a Utah law for hormonal contraceptives provides for asynchronous prescribing through an “online branching questionnaire” that has been approved by the Board of Pharmacy. ⁷⁰ Nonetheless, like many states, Utah's medical board has held that an in-person or synchronous examination must occur prior to any telemedicine services being provided. ⁷¹

Tennessee is an outlier in that it deems that a physician-patient relationship is established “when a physician serves a patient's medical needs whether or not there has been an encounter in-person between the physician and patient.” ⁷² Tennessee's broader approach reflects the ethical principles of autonomy and consent to establish a physician-patient relationship, rather than relying on a formal distinction of modality whether it is through telehealth, in-person, or a future technology.

There are population-wide ethical considerations in setting the right rule for relationship-establishment. A requirement of in-person visits could increase costs, reduce access, and potentially undermine innovation. If a law requires an in-person visit or even a particularly robust telehealth visit (e.g., synchronous video), some patients may receive no care at all. ⁷³ If such laws are motivated more by doctor protectionism, rather than by bona fide concerns for patient welfare, then they may simply increase healthcare costs by reducing competition and efficiency.

Malpractice law also interacts with this question of how a relationship is established, although there are few cases directly on telemedicine. ⁷⁴ Historically, tort law required that physicians behave according to customary practices in their field. ⁷⁵ Thus, even if a telehealth visit were reasonable under the circumstances, a physician might be found liable if his or her peers were not customarily using this modality at a particular point in time. More than three decades ago, courts recognized that a telephone call could initiate a doctor-patient relationship. ⁷⁶ Generally, some courts have begun to embrace an objective reasonable care standard, applicable to other tortfeasors. ⁷⁷ This approach may be more functional and flexible, tracking the practical costs and benefits of a particular mechanism for establishing a relationship, and differences in circumstances (e.g., statins versus narcotics). ⁷⁸

For patients who cannot leave their homes without substantial difficulty, and especially in areas where there is a shortage of licensed providers, an in-person visit with a doctor seems like a particularly onerous way to establish a healthcare relationship. In many such cases, the alternative may be no care at all. Rather than such a broad-brush policy, a more forward-looking approach would be to focus on individual situations where an in-person physical exam is essential. Following the development of tort law similarly, the appropriateness of a particular modality varies case by case. One might suppose that this issue is best resolved by a general “reasonable care” tort law standard, ensuring that doctors use whatever modality may be appropriate given the circumstances.

To be sure, there are legitimate quality concerns. For example, studies have found that, when doctors do not have in-person contact with a patient, they tend to be more likely to overprescribe medicines, including antibiotics. ⁷⁹ Conversely, a study that scanned over 3,000 articles published from 2004-2018 found that generally telehealth services were equivalent to in-person care. ⁸⁰

The rub is that, if an in-person visit is considered essential to guarantee quality care, then that negates the potential of telehealth to be a genuine substitute, and accordingly increase access and decrease costs. Quality and safety checks are equally necessary for telehealth as for in-person care.

B. Licensure of Providers

Generally, medical professionals must be licensed by state authorities in every jurisdiction in which they wish to practice—they must have the requisite test score, pay the required fees, and wait for approval. ⁸¹ This system of state licensure of healthcare providers is another barrier to interstate growth of telehealth. ⁸²

Each state has its own medical licensing authority, which sets its own rules and requires passing an examination. ⁸³ There are several widely accepted licensing examinations that need only be taken once to fulfill licensing requirements in most states. The United States Medical Licensing Examination, for example, is accepted in all U.S. states, though the passing score required varies. ⁸⁴ The application for licensure goes to the state medical boards and, pending no abnormal background or concerns, is typically granted in approximately 60 days. ⁸⁵

The traditional rule has been that the law of the patient's location applies. ⁸⁶ Therefore, if a doctor is licensed in California but is providing telemedicine services to a patient in ten other states, then the doctor is subject to all of those states' licensing laws and standards of care. ⁸⁷ The simplest and most impactful change would be to flip this rule, so that the physician's location is essential for licensure. This model has been used in other domains, but raises concerns about a “race to the bottom,” where physicians would seek out the jurisdictions with the least oversight. ⁸⁸ A reciprocity regime for states with substantially equivalent levels of oversight would solve this problem.

States have taken modest efforts to minimize the burden of securing multiple state licenses. A majority of states offer a consultation exception that allows out-of-state licensed doctors to practice in very limited situations without the specific state's license. ⁸⁹ This exception allows out-of-state licensed doctors to consult on patients provided that they work with or offer services at the request of an in-state doctor. ⁹⁰ This exception typically requires consultations to be infrequent or that the in-state doctors make the final medical decisions. ⁹¹ These rules essentially require doctor redundancy. Another approach followed by nine states is to have special licenses related to telehealth. ⁹² These allow doctors to provide services remotely across state lines, as long as they do not set up a physical office in the state. ⁹³

The Interstate Medical Licensure Compact (“IMLC” or “Compact”), which began issuing licenses in April 2017, is an agreement between 29 states and the 43 Medical and Osteopathic Boards in those states. ⁹⁴ The IMLC creates an expedited process for eligible doctors to apply for licensure in compact states, and it is intended to reduce time and difficulty for doctors seeking licenses in multiple states. ⁹⁵ According to the IMLC, “approximately 80 percent of doctors meet the criteria for licensure through the IMLC.” ⁹⁶ Once qualified, the doctor may select any number of Compact states in which they desire to practice. ⁹⁷

A compact permits states to maintain agency over their licensing procedures while providing medical professionals an expedited process to gain medical licenses. ⁹⁸ These are not, however, cross-border licenses. ⁹⁹ The Compact still requires that a medical professional apply for license in each state in which they wish to practice, which is less efficient than automatic reciprocity of a potential uniform law, or a federal solution. ¹⁰⁰ Contrast the doctor IMLC with the Nurse Licensure Compact, which is more like a “multi-state license similar to a driver's license, where the license is recognized in the home state and other compact member states,” without making further applications. ¹⁰¹

Notwithstanding these avenues of reform, many states continue to restrict healthcare providers from practicing telemedicine by requiring a full license in the state of service. ¹⁰² These states often define “the practice of medicine broadly to include phone calls, e-mails, and on-line discussions, circumscribe[ing] the use of the new technology.” ¹⁰³ To the extent that these state licensing laws are designed to favor local providers, they may arguably be subject to challenge under the dormant commerce clause of the U.S. Constitution, ¹⁰⁴ or under federal antitrust laws. ¹⁰⁵ Regardless, Congress should consider affirmatively preempting them as hindrances to interstate commerce and federal spending, such as Medicare. Likewise, Congress preempted state doctrines around corporate practice of medicine, to the extent that they interfere with the work of Health Maintenance Organizations (“HMOs”). ¹⁰⁶

Similar to when and how a healthcare relationship should be established, states may claim that strict licensure laws improve standardization and quality of care, ¹⁰⁷ but if the benefit is slim, then it may not offset the chilling effect of the on cross-border practice, and hence, provider participation and patient access. In fact, state licensure laws do not vary substantially, and a more ambitious alignment seems to be a promising path forward. ¹⁰⁸

C. Reimbursement of Costs

In this section, we describe current approaches by insurers, including Medicare, Medicaid, and private carriers, to reimburse for telehealth services. We discuss related state laws, and suggest how to optimize reimbursement for greater telehealth adoption.

On the private payor front, 40 states and the District of Columbia have laws governing reimbursement for telehealth. ¹⁰⁹ These laws either require coverage parity, which ensures that a service is reimbursed if provided through telehealth, or payment parity, which ensures that reimbursement is at the same rate as when care is delivered in-person. ¹¹⁰ If the policy goal is to increase use of telehealth, then payment parity can reassure doctors that telehealth will not undercut their revenues. However, payment parity laws can defeat the policy advantage of telehealth to reduce costs. ¹¹¹

Because the majority of states have private-payer reimbursement laws of some sort, the current practice is to amend a law to expand its applicability to additional specialties. Minnesota, for example, did this when it expanded its private-payer law to cover dental coverage, while Utah's expansion singles out telepsychiatry services, ¹¹² and Washington allows telemedicine to be offered from “any location determined by the individual receiving the service.” ¹¹³ It is important to question whether these private-payer laws are necessary to expand reimbursement efforts given increasing market demand. A Milbank report documented interviews in six states that did not have parity in payment laws, yet found that almost all private health insurers covered telehealth services and paid the same rate as in-person services. ¹¹⁴

The aforementioned expansion of MA plans to cover telehealth could be an excellent natural experiment to compare before and after 2020. The clear implementation date could determine whether and how much reimbursement changes are improving overall utilization, access to care, better health outcomes, and lower costs when compared to the traditional Medicare population, in essence the control group. Comparisons between states may also be striking as most MA enrollees, forty percent, reside in six states (Florida, Hawaii, Minnesota, Oregon, Pennsylvania, and Wisconsin) and Puerto Rico, and, by contrast, rural states have lower rates of MA enrollees. ¹¹⁵

MA's expansion into the telehealth may create additional market pressure for private insurers (who often also administer MA plans) to voluntarily reimburse for telehealth services. Traditional Medicare may follow the pathway that MA is starting with a bipartisan bill that was reintroduced on October 30, 2019 entitled Creating Opportunities Now for Necessary and Effective Care Technologies “CONNECT” for Health Act, which is currently pending in the Senate Finance Committee. ¹¹⁶ This bill would reduce geographic and site-specific requirements for traditional Medicare so that these beneficiaries would also receive telehealth delivered care directly in their homes. ¹¹⁷ This pending legislation could make an enormous impact on telehealth utilization nationwide where the pool of patients would surge to nearly 60 million people.

The MA move may also influence Medicaid, especially as the largest payor for long-term care in America. There are over six million older adults on Medicaid who have both Medicare and Medicaid coverage (aka “dual-eligibility”), and this is largely attributable to them going through their savings paying for some form of long-term care. ¹¹⁸ In an effort to extend personal finances, a phenomenon of “aging in place” is gaining primacy as the preferred long-term care model, rather than a nursing home or institutional setting. ¹¹⁹

Telehealth coverage and reimbursement in state Medicaid programs vary considerably. Almost all states (49) and the District of Columbia have some coverage for telehealth, and nearly all reimburse for live video telehealth. ¹²⁰ Some state Medicaid programs impose restrictions such as limits on the sort of facilities where telehealth care can be received, by what type of healthcare provider, and geographic restrictions. ¹²¹ As of 2016, eight state Medicaid programs reimbursed for telehealth under their home health services, but this number more than doubled to 19 states by 2019. ¹²² Patients are eligible for these Medicaid services if they have two or more chronic conditions, one chronic condition and are at risk for a second, or have one serious and persistent mental health condition. ¹²³ Given the prevalence for chronic conditions and mental health among older adults, as previously discussed, many will be able to meet the eligibility requirement. ¹²⁴

States are removing some of these restrictions, for instance, the majority of state Medicaid programs no longer have rural requirements that must be met for telehealth reimbursement. ¹²⁵ Additionally, a number of states are demonstrating innovative efforts with funding support from the federal government, namely through grants and waivers for home health programs. ¹²⁶ With the consent of the U.S. Department of Health and Human Services, Alabama, Iowa, Maine, New York, Ohio, and West Virginia have all used state plan amendments that include telehealth coverage in their home health proposals. ¹²⁷ Similarly, Kansas, Pennsylvania, and South Carolina have used waivers to cover remote patient monitoring for long-term care services. ¹²⁸

Across all these domains of insurance, the quick expansion of telehealth coverage may be worrisome if it forces patients who would otherwise prefer an in-person visit to only have access to care via telehealth. One option to help curtail this issue is for insurance regulators to require that insurers maintain an in-person option for members. Nonetheless, such insurance mandates may wreak inefficiency, if they do not reflect consumer preferences.