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Medicare Agency Announces More Telehealth and Virtual Care Service Expansions in Second Round of Federal Waivers and Rule Changes

May 14, 2020

On April 30, 2020, the Centers for Medicare and Medicaid Services (CMS) announced a second round of regulatory waivers and rule changes in an interim final rule with comment (IFC) that added significant flexibilities for the coverage of telehealth services during the COVID-19 public health emergency. These flexibilities are a combination of:

Overall, CMS intends these changes to further ensure that Medicare patients do not have to undertake unnecessary travel to health care facilities and risk exposure to COVID-19. The loosened clinician-specific and institutional restrictions on the use of telehealth and increased reimbursement amounts may also potentially mitigate financial losses that providers have been suffering as a result of disparities between reimbursable amounts for services rendered in person or via virtual means. The changes are explicitly limited to the COVID-19 public health emergency (PHE) and could not be retained after the PHE without legislative changes. Still, the trends are highly favorable to telehealth proliferation, and we anticipate that there will be significant pressure to make changes to enable broader use of telehealth after the PHE. As CMS Administrator Seema Verma recently said, “I think it’s fair to say that the advent of telehealth has just been completely accelerated, that it’s taken this crisis to push us to a new frontier, but there’s absolutely no going back.”

The temporary waivers will apply immediately without an application process, but only for the duration of the COVID-19 PHE. CMS will apply the waivers related to a blanket waiver to retroactively to claims submitted on or after March 1, 2020. Where CMS seeks comment on any of these changes, they will be due by July 7, 2020.

Increased Expansion of Eligible Telehealth Provider and Reimbursement Opportunities During the PHE

  • Expansion of Clinical Practitioner Categories Allowed to Furnish Telehealth Services: CMS is using the expanded section 1135 waiver authority granted in the CARES Act to waive the limitations on the types of practitioners who may bill for Medicare telehealth services from a distant site pursuant to Social Security Act section 1834(m)(4)(E) and 42 C.F.R. § 410.78(b)(2). Now, subject to state law restrictions, physical therapists, occupational therapists, speech language pathologists, and “all [practitioners] who are eligible to bill Medicare for their professional services” may furnish and bill for telehealth services from the “distant site.” The prior list of eligible telehealth practitioners was limited to doctors, nurse practitioners, and physician assistants, certified registered nurse anesthetists, certified nurse midwives, clinical social workers, clinical psychologists, and registered dietitians or nutrition professionals. Further, CMS had previously announced, as part of its blanket waivers, that during the PHE it was allowing physicians and other practitioners to render telehealth services from their home without reporting their home address on their Medicare enrollment while continuing to bill from their currently enrolled location that would normally be listed as the “distant site.”
  • Expansion of Audio-Only Telehealth Services: Leveraging the expanded section 1135 waiver authority from the CARES Act, CMS is also waiving the requirement that telehealth services be furnished using video technology. This change resulted from feedback that many beneficiaries were not utilizing video-enabled communication technology from their homes to access office/outpatient services. In CMS’s IFC, the list of reimbursable audio-only services now includes many behavioral health and patient education services in addition to evaluation and management services. CMS has also increased payments for these audio-only visits to match payments for similar office and outpatient visits, from a range of about $14-$41 to $46-$110 (applicable to CPT codes 99441 through 99443). This is significant because it allows providers providing audio-only services to receive payments under Medicare that are more equivalent to the amounts they would have received for in-person services.
  • Reliance on CPT Code Descriptors for Appropriate Evaluation & Management (E/M) Level selection: In the IFC, CMS stated “that E/M level selection for office/outpatient E/M services when furnished via telehealth can be based on ‘medical decision-making time’ or time, with time defined as all of the time associated with the E/M on the day of the encounter” and referred practitioners to the Medicare public use files for typical times associated with each code. There was confusion, however, because the times listed in the public use files did not always align with the CPT code descriptors. Therefore, CMS is now clarifying on an interim basis, for the duration of the PHE, that the typical times for purposes of level selection for an office/outpatient E/M are the times listed in the CPT code descriptor, rather than those listed in the Medicare public use files.
  • Sub-regulatory Process to Add and Delete Medicare Telehealth Services: CMS announced in the IFC that it was modifying 42 C.F.R. § 410.78 to permit CMS to revise the list of telehealth services reimbursable under Medicare using a sub-regulatory process, instead of the existing rulemaking process. This change is intended to allow CMS to avoid notice and comment rulemaking and speed up the addition of services for eligible practitioners. This sub-regulatory process would only be used during the PHE. Health care providers should look to this sub-regulatory guidance for updates and additional flexibility.
  • Fewer Reporting Days Required for Payment of Remote Physiologic Monitoring (RPM) Services: CMS previously expanded the potential use of RPM to include new as well as established patients, under less stringent conditions for prior consent and supervision by physicians. In the IFC, CMS responded to additional feedback from stakeholders that many patients with COVID-19 do not need to be monitored for the 16 out of 30 days that is usually required, by allowing RPM services to be payable by Medicare for as few as 2 days out of a 30 day period, as long as the other requirements for billing the codes are met. However, payment for the RPM CPT codes 99454, 99453, 99091, 99457, and 99458 when monitoring lasts for between 2-16 days is limited to patients who have a suspected or confirmed COVID-19 diagnosis.
  • Use of Telehealth and Other Virtual Codes for Beneficiary Assignment to Accountable Care Organizations (ACOs): CMS is implementing a number of changes and applying its policies for extreme and uncontrollable circumstances to account for the impact of COVID-19 on Medicare providers and suppliers that are current ACO participants in the Medicare Shared Savings Program (MSSP). In order to ensure that the ACO Medicare assignment methodology “appropriately reflects the expanded use of technology that is helping people who need routine care during the PHE,” CMS is expanding the definition of “primary care services” for purposes of determining beneficiary assignment to include numerous telehealth codes for virtual check-ins, e-visits, and telephonic communications. These codes are applicable beginning with beneficiary assignment for the 2020 performance year starting on January 1, 2020, and for any subsequent performance year that starts during the PHE related to the COVID-19 pandemic, as defined in 42 C.F.R. § 400.200. This change helps ensure that ACOs can maintain the requisite number of assigned beneficiaries during the 2020 performance year to stay in the MSSP in future years. CMS specifically seeks comments on the modified primary care services definition. 

More Telehealth Service Delivery Flexibilities for Clinic-Based and Institutional Providers During the PHE

  • Rural Health Clinics & Federally Qualified Health Centers May Provide Medicare Telehealth Services: As authorized by section 3704 of the CARES Act, CMS will now reimburse telehealth services furnished by rural health clinics (RHCs) and Federally Qualified Health Centers (FQHCs) as a distant site to Medicare patients for the duration of the PHE. Combined with the other available telehealth services waivers under section 1135, health care practitioners employed by or contracted with RHCs and FQHCs can furnish and receive payment for telehealth services to Medicare patients from any distant site location, including their home as authorized under the temporary change to the “distant site” requirement. Prior to the PHE and the CARES Act, RHCs and FQHCs were not eligible for Medicare reimbursement for telehealth and virtual communication services, and could only be an “originating site” for such services. 
  • Hospital-Based Providers May Bill for Services Provided to Beneficiaries in Their Home as Hospital Outpatient Services: Under ordinary circumstances, Medicare would not pay for a hospital outpatient department’s therapeutic services if provided to a beneficiary in his or her home. Regulations explicitly require that therapeutic hospital services be furnished in the hospital or department of a hospital. During the PHE, however, the IFC provides that Medicare beneficiaries’ homes can qualify as provider-based departments of hospitals, and that therapeutic outpatient hospital services can be considered as hospital outpatient services, so long as all other requirements applicable to hospital outpatient departments are met.
  • Hospitals May Bill as the Originating Site for Telehealth Services: When telehealth services are provided by a health care provider who ordinarily practices in a hospital outpatient department to a patient at home who is registered as a hospital outpatient, CMS has stated that it will permit the hospital to bill and be paid the facility fee it is entitled to as the originating site for telehealth services, for the duration of the PHE.
  • Expanded Ability for Use of Telehealth to Supervise Medical Residents: CMS further increased flexibility in its regulations applicable to teaching physicians during the PHE. Specifically, CMS will allow Medicare payment under the physician fee schedule for teaching physician services when a resident furnishes a service included in the previously expanded list of services in primary care centers, including via telehealth. The teaching physician must still meet the requirements to provide the necessary direction, management, and review for the resident’s services using audio/video real-time communications technology.

Is COVID-19 Creating Lasting Changes in Favor of Telehealth? 

The regulatory landscape for telehealth continues to change rapidly at the federal level in order to address the perils of COVID-19 exposure to vulnerable Medicare beneficiaries during the PHE. Despite the federal government’s actions indicating its support of steps to lift stay-at-home orders and “reopen” their economies, the Department of Health and Human Services will likely continue to implement regulatory changes to promote telehealth and reduce barriers to its uptake by providers who are seeking to provide continuity in health care while minimizing COVID-19 infection risks to themselves and the population at large. We also anticipate that given the widespread availability and use of telehealth during the PHE, the data generated on telehealth usage will help to make the case for maintaining expansions through permanent legislative and regulatory changes after the PHE officially ends. Indeed, where there are fewer legislatives barriers, such as in the commercial insurance market, we would anticipate a higher level of telehealth and virtual care service coverage and utilization after the PHE. 

Individual and institutional health care providers and technology companies aiding health care providers in rolling out telehealth and RPM services should review the most recent changes and consult our prior alert describing the first round of changes to telehealth reimbursement. Please reach out to one of the listed authors, or your regular Crowell & Moring contact, for further guidance on implementing CMS’s recent telehealth policy changes.


For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Jodi G. Daniel
Partner & CHS Managing Director – Washington, D.C.
Phone: +1.202.624.2908