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This blog post has been prepared in collaboration with Nemours. Ms. Boyer is a Manager of Nemours Children’s HospitalMaya Upplauru is an associate in Crowell & Moring’s Health Care Group in Washington, D.C.

This Bulletin is brought to you by AHLA’s Children’s Health Affinity Group, which is part of the Academic Medical Centers and Teaching Hospitals and In-House Counsel Practice Groups.

One of the most fear-inducing experiences for new and first-time parents is the middle of the night illness of a young child. Many may head directly to the emergency department (ED) because they lack any means to communicate with their health care provider after-hours. Parents of children with chronic conditions or rare diseases are often forced to travel long distances to see specialists at regional centers of excellence and may struggle to check in or get questions answered once they are back at home. Teenagers managing chronic conditions may prematurely discontinue their treatment plan when they transition to college in a different state or when they enter the working world after college.

Today’s tech savvy parents are comfortable with digital health care solutions that are available 24 hours per day on their mobile phones, as they provide experiences that are similar to virtually any other products or services outside of health care. Yet too often today, their experience with the health care industry does not meet their expectations for digital access, efficiency and convenience.

Virtual care services, such as telehealth and remote patient monitoring, are increasingly being used to create a better experience and deliver convenient, effective care for parents and caregivers of young children. More specifically, telehealth can provide an access point to health care for children and families at times when they cannot reach their primary care provider, are unable to travel, or do not need an in-person visit and can avoid exposure to additional contagions at the ED or doctor’s office.

In low acuity, high distress cases such as a high fever, ear pain, respiratory illness and vomiting, telehealth providers can provide direct care or advise the family whether an ED or primary care visit is warranted. This kind of support is not only reassuring for young families, but can help reduce pressure on EDs so they can prioritize the sickest patients, educate families about which level of care is most appropriate for future health needs, and reduce unnecessary costs to the families and to the health care system.

Telehealth can also help to ensure continuity of care for families who may move or seek specialty care across state lines and want to keep in touch with their provider, particularly for children with complex or chronic diseases or adolescents who attend college out of state.

Challenges

Telehealth technology has the potential to improve outcomes and patient experience, while improving cost through more appropriate utilization of health care services. Pediatrics is particularly ripe for disruption by digital health technologies, including telehealth, virtual care, and remote patient monitoring solutions, because of the widespread adoption of technology by children and their parents as well as the generally low acuity of most common childhood illnesses. Yet there are still significant regulatory barriers that stand in the way of ubiquitous access to telehealth and related services, especially across state lines. Below, we have outlined several of these issues, focusing on the Medicaid and Children’s Health Insurance Programs (CHIP) populations.

  • Inconsistent State Definitions: The definition of “telehealth” (or “telemedicine”) varies widely across states and remains completely undefined in certain states. Some states include additional modalities, such as “store and forward” (e.g. the patient takes a picture and sends it to the provider) as well as remote patient monitoring, as part of their telehealth definition, while others exclude them. All of these variations make it more difficult for telehealth services to be provided across state lines.
  • State Licensure: Each state has a different set of licensure requirements for health care providers which can make it difficult for providers in different states to deliver care or conduct consultations with patients who may have difficulty traveling. Providers must be licensed in each state where their patients are located, which may lead to multiple fees, rules and administrative processes for them to meet the needs of their patients. The Interstate Medical Licensure Compact (IMLC) is aimed at streamlining this process, but not every state has signed on and, even in those states that participate, obtaining a license can still be costly and burdensome. Some states have enacted telehealth-specific licensure programs – such as New Mexico – which may address some of these challenges.
  • Scope of Practice: Certain states have laws limiting the scope of practice that impact telehealth. For example, some states have prohibitions on the corporate practice of medicine, which create barriers to different types of entities providing telehealth services. Further, some states limit or restrict which types of providers are eligible to receive payment for telehealth services.
  • Coverage Parity: Many states do not require insurance coverage of telehealth services, and some payers, including Medicaid Managed Care Organizations (MCOs), limit coverage to in-network providers only. The resulting confusion about which services are covered– in-person versus via telehealth– can place administrative and financial burdens on patients and families, especially when they receive unexpected bills for services they believed to be covered. Additionally, there is often confusion among providers and payers, resulting in payer denials of coverage or reimbursement.
  • Reimbursement Parity: Some states do not require reimbursement parity between in-person and virtual services of the same kind. If a provider will be reimbursed less for providing the same service virtually, this provides a disincentive to provider adoption and therefore further limits access to virtual care. Again, in some cases, certain provider types are completely excluded from reimbursement.
  • Billing and Coding: There is a lack of uniformity for telehealth billing codes and coding guidelines across states, which leads to incorrect billing and confusion among providers and patients. In some cases, different payers require certain modifiers and place of service codes, making it hard for providers to track and navigate a wide variety of requirements and remedy claims issues. These challenges are exacerbated when a provider works across state lines, as the number of payers and their respective requirements multiply.
  • Broadband Access: Across rural and urban settings, connectivity can be challenging for underserved populations. Rural families may lack broadband access, and urban families may rely solely on mobile connectivity. The Federal Communications Commission (FCC) offers programs to subsidize the cost of broadband, but these programs generally apply to connectivity for providers, not for patients, therefore addressing only part of the problem.

Opportunities

The federal government has made a few encouraging strides that could help to address some of these challenges. These initiatives include:

  • FCC Connected Care Pilot: The FCC has issued a Notice of Inquiry regarding telehealth for low-income consumers. While the comment period is closed, the pilot is a signal that the FCC is interested in creative solutions to solve the connectivity problems described above, within the agency’s statutory limitations.
  • CMS Integrated Care for Kids Model: Building from a Request for Information on pediatric health earlier this year, CMS has announced eight cooperative agreements for up to $16 million each in funding for innovative state Medicaid models addressing behavioral and physical health needs arising from the nation’s opioid crisis. Telehealth and digital health services bring significant value in addressing the health concerns of children; however, more must be done to address challenges relating to providing care across state lines.
  • Modernization of Reimbursement Policy for Digital Health: Changes to Medicare payment policy for telehealth could have a positive downstream impact on Medicaid and other pediatric payers. In the proposed 2019 Physician Fee Schedule Rule, CMS proposed several new remote patient monitoring and virtual check-in codes. Further, the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act, passed this year as part of a larger budget deal, aimed at expanding telehealth services for certain chronic condition populations.

In addition to these initiatives, the federal government could make continued progress in the following ways:

Building on Existing Efforts to Increase Evidence

  • Funding Additional Research: More data is needed on the impact of virtual care and other consumer digital health technologies on access, satisfaction, quality, cost and outcomes for children and families. Areas ripe for research and potential future cost-savings include: avoidable ED visits and readmissions, behavioral health services, chronic disease management, and children with medical complexity. Particular attention should be paid to the unique needs of children and pediatric use cases, and how those needs differ from the adult population.
  • Resources for Best Practices: Further investment is needed to identify and disseminate best practices for telehealth and other virtual care services to state Medicaid and CHIP programs. This includes identification of any unique barriers for the pediatric population and ways to address them, and compiling emerging practices, their impact and lessons learned from existing initiatives implementing telehealth services across all federal agencies including the Health Resources and Services Administration (HRSA), the U.S. Department of Defense (DoD), and the U.S. Department of Veterans Administration (VA), to share and encourage alignment across federal programs. This data could also be shared with state Medicaid and CHIP programs.

Leverage Current Policies and Federal Initiatives

  • New Demonstration Project Focusing on the Multi-State Challenge: CMS could launch a regional, multi-state demonstration pilot to test a set of aligned Medicaid policies impacting digital health access and payment focused on Medicaid and CHIP, especially when care is provided across state lines.
  • Integrate Telehealth as a Priority Focus in Existing Models: Exploring and/or promoting the use of telehealth and other virtual health services in existing Center for Medicare and Medicaid Innovation initiatives, like Accountable Communities for Health, where digital health technologies may be foundational to linking clinical care with essential community social services for children and supporting care for children in a range of settings, including school based clinics.

Finally, CMS could provide technical assistance and resources, such as model telehealth service agreements, to support states and providers in managed care contract negotiation as well as service contracts that abide by fraud and abuse regulations to expand coverage and access to consumer digital health technologies for children and families. Two precedent examples of these model contract provisions are (1) the model Business Associate Agreement published by the HHS Office for Civil Rights to aid covered entities entering into agreements with business associates under HIPAA, and (2) the EHR Contracts Untangled resource published by the Office of the National Coordinator for Health IT (ONC) to assist providers in contract negotiation with electronic health record vendors.

Conclusion

Technology offers the opportunity to improve the way health care is delivered and received, and is likely to continue shaping the health care market well into the future. Patients and families are increasingly demanding more convenient health care services, including virtual access to care, despite the many regulatory barriers impeding the seamless flow of care within and across state lines. Opportunities to improve the regulatory landscape abound, and realizing these opportunities could result in increased access, reduced cost for certain populations, and overall improved outcomes. However, such a future requires close partnership between providers, state governments and the federal government to jointly chart a path toward seamlessly connected care.

CMS has finalized the adoption of multiple CPT codes in the CY 2019 PFS that create more opportunities for providers and digital health companies to collaborate on chronic care management business models in the fee-for-service market.

Virtual Check-Ins

CMS finalized the creation of a new code to reimburse providers for brief “check-in” services conducted using communications technology by creating HCPCS code G2012, defined as “[b]rief communication technology-based service, e.g. virtual check-in.” Continue Reading Digital Health Updates in the 2019 Physician Fee Schedule (PFS) Rule

On October 15, 2018, the Centers for Medicare & Medicare Services (“CMS”) in the Department for Health and Human Services proposed a rule to require prescription drug manufacturers to post the Wholesale Acquisition Cost (“WAC”) for drugs and biological products covered by Medicare or Medicaid in direct-to-consumer television advertisements. The WAC reflects the manufacturer’s list price for a drug to direct purchasers, not inclusive of any discounts or rebates. CMS is proposing this rule in the context of broadcast advertisements, an area in which the Supreme Court has recognized that the government may take special steps to help ensure that viewers receive appropriate information.[1]

CMS stated that 47 percent of Americans have high-deductible health plans and that many patients may pay the list price of the drug until they meet their deductible. The proposed rule aims to provide greater transparency into the prices charged by prescription drug manufacturers. The theory is that markets operate more efficiently with greater transparency, and that increased exposure of the list price will also provide a moderating force to discourage price increases. While wholesale prices do not equate to the patient’s out-of-pocket obligation, CMS asserts that benefit designs are impacted by WACs, and patients in high-deductible plans may pay the full list price until meeting their deductible – thus, the WAC may still be relevant to many patient and impact their decisions and market dynamics. The price required to be posted would be for a typical course of treatment for an acute medication like an antibiotic, or a thirty day supply of medication for a chronic condition that is taken every month. The posting would take the form of a legible textual statement at the end of the ad and would not apply where the list price for a thirty day supply or typical course of treatment of a prescription drug was less than $35.

Overall, the agency has taken action designed to promote transparency in healthcare this year. In the drug pricing arena, CMS released a redesigned version of the Drug Spending Dashboards which identifies manufacturers that have increased their prices, along with year-over-year information on drug prices. Outside of the drug pricing space, CMS recently launched the eMedicare initiative to allow customers to find and compare Medicare coverage options and quickly see estimates on what the coverage would cost, among other features. CMS has also included requests for information on cost transparency and expanded patient access to data in recent payment rules, and is expected to propose more new policies in an upcoming regulation currently under OMB review.

CMS’s proposal is part of an ongoing effort by the Trump administration to bring down prescription drug prices and out-of-pocket costs, as signaled by the release in May of American Patients First, the administration’s drug pricing blueprint. This is also the latest in a series of steps focused on increasing data access and price transparency in healthcare. Although Congress was not successful in its attempt to address direct-to-consumer advertising this summer through a provision that would have allocated $1 million to the Food and Drug Administration to implement regulations requiring drug companies to list their prices in TV ads, Congress passed and the President signed into law legislation to improve transparency and lower health care costs for patients across the country. This law effectively paves the way for pharmacists to advise their patients on the cost of various medications and different payment methods, free from restrictions imposed by take-it-or-leave-it contracts with insurers.

In the present proposal CMS seeks public feedback on a variety of questions, including:

  • How providing consumers with the list price of a medication may influence interactions with prescribers, the selection of drug products, and the perceived efficacy of the prescribed drug.
  • How benefit design influences these choices.
  • Whether compliance with rule should be a condition of payment by a federal health care program.
  • Whether WAC is the amount that best reflects the “list price” for the stated purposes of price transparency and comparison shopping
  • Whether 30-day supply and typical course of treatment are appropriate metrics for a consumer to gauge the cost of the drug.
  • How to treat an advertised drug that must be used in combination with another non-advertised drug or device.
  • Whether the cost threshold of $35 to be exempt from compliance with this rule is the appropriate level and metric for such an exemption.
  • Whether rule should be extended to advertisements in other media forms, including radio, magazines, websites, etc.

This rulemaking presents a major opportunity for pharmaceutical companies, insurers, and patients alike to make their voices heard in an area that is critically important. Electronic comments can be submitted until December 17, 2018. For further assistance, please contact Jodi Daniel (jdaniel@crowell.com), Barbara Ryland (bryland@crowell.com), and Maya Uppaluru (muppaluru@crowell.com).

[1] See Red Lion Broad. Co. v. FCC, 395 U.S. 367, 390, 394 (1969) (“It is the right of the viewers and listeners, not the right of the broadcasters, which is paramount.”)

CMS has issued its 2019 Physician Fee Schedule Proposed Rule, containing highly anticipated new reimbursement policies for telehealth, remote monitoring, and other uses of digital tools, as well as updates to health IT requirements in the Quality Payment Program, with a stronger focus on patient access to health information. Comments are due September 10 at 5pm.

Continue Reading New CMS Incentives for Remote Patient Monitoring and Patient Access

On April 17, 2018, the Food and Drug Administration (FDA) released its Medical Device Safety Action Plan which outlines FDA’s intended steps to address medical device safety while preserving enough space for innovation in the market.

The FDA’s plan is the latest effort by the FDA on medical device safety, including a recent budget request seeking $70 million to create a Center of Excellence on Digital Health that would, among other things, craft new regulations for third-party certification for developing medical devices. This comes as FDA is pushing guidance and innovative approaches for oversight of digital health (see our blog).

According to FDA Commissioner Scott Gottlieb’s announcement, the FDA’s plan organized into five points that seek to balance patients’ timely access to devices and safety and effectiveness. Continue Reading FDA’s Medical Device Safety Action Plan

The Food and Drug Administration (FDA) has announced several new initiatives that reflect its ongoing commitment to maintain patient safety, while also championing the need and opportunity for health care innovation.

During opening day of Health Datapalooza, FDA Commissioner Scott Gottlieb highlighted the critical import of novel digital health tools in achieving patient-centered care, and outlined how the agency is committed to moving the ball forward in health care innovation through the following initiatives:

  1. Multi-Function Device Draft Guidance. FDA’s new draft guidance, “Multiple Function Device Products: Policy and Considerations,” explains the FDA’s regulatory approach to multi-function digital health devices—where some functionalities fall under the FDA’s definition of a medical device, and other functionalities do not. The guidance, mandated by the 21st Century Cures Act, provides examples in which the FDA will review certain functional software capabilities in a medical device. Consistent with previous guidance and risk-based frameworks from the FDA, the agency’s enforcement focus will be on medical device functions that diagnose and treat patients. For example, data analysis will be considered a device function for which the FDA would enforce compliance, but data tracking and trending will not.
  2. Software Precertification Pilot Program Expansion and “Pre-Cert 1.0” Roll-Out. Gottlieb outlined three updates to the Software Pre-Cert Pilot Program, originally announced last Fall. The FDA will hold a “user session” on May 10, 2018 to discuss the agency’s general progress on the pilot program, and to conduct an in-depth discussion of the three updates:
    • Draft Working Model – An initial framework and vision which outlines the program’s key components: Excellence Appraisal and Determining Precertification Level, Review Pathway Determination, Streamlined Premarket Review Process, and Monitoring Real-world Performance.
    • Challenge Questions – Key questions about various components of the Pre-Cert program for stakeholders to consider with regard to the areas outlined in the Draft Working Model.
    • Roadmap – An overview of the program’s milestones and timeline toward launching the first version of the program (“PreCert 1.0”).
  3. Expansion of Digital Health Tools for Drug Development. The FDA announced its intention to establish clear policies for integrating the review and validation of digital health tools into drug development programs. The FDA will publish a policy framework, through new guidance, and seek public input on the best practices to incorporate software intended for use with prescription drugs.
  4. Precertification Approach to Artificial Intelligence (AI). Gottlieb recognized the novel role that AI and machine learning can have on the medical device submission process (obviating the need to make multiple submissions) and new software validation tools. Gottlieb also discussed “employing the Pre-Cert approach to AI.” This suggests the FDA’s interest in a more effective approach to regulation of medical devices that use AI. This announcement expands upon the FDA’s brief mention of regulatory oversight of devices using “proprietary algorithms,” included in December’s Draft Clinical Decision Support and Patient Decision Support Guidance. (See our prior blog post analyzing the guidance.)
  5. Premarket Digital Safety Program Launch. Gottlieb announced the creation of a Premarket Digital Safety Program, which would allow for electronic submissions of premarket safety reports for an Investigational New Drug Application.
  6. Information Exchange and Data Transformation Incubator. Gottlieb announced the agency’s new digital health/technology incubator, to be known as the Information Exchange and Data Transformation (INFORMED). The incubator will initially be launched in the cancer context, with fellowship collaborations between the FDA and the National Cancer Institute, as well as with Harvard on AI and machine learning. Crowell & Moring’s Digital Health team is ready to assist with the submission of industry input, as well as strategic counseling on these issues.

The various initiatives, guidance, and calls for industry input reflect the FDA’s quest to be flexible in the face of digital health opportunity and innovation. Not only will the FDA’s newest initiatives support its quest to advance safe, patient-centered care, but these initiatives will provide the regulatory predictability critical to encouraging business investment in innovative technologies and products.

Crowell & Moring’s Digital Health team is ready to assist with the submission of industry input, as well as strategic counseling on these issues.

Building on momentum from Administrator Seema Verma’s announcement of the MyHealtheData initiative at HIMSS 2018, CMS has published more clues as to future action to liberate health information for patients.

In the CY 2019 call letter to Medicare Advantage organizations and Part D programs, CMS describes the Blue Button 2.0 project and its use of the interoperable application programming interface (API) standard Fast Healthcare Interoperability Resources (FHIR). CMS encourages Medicare Advantage plans to adopt “data release platforms” that either meet or exceed the capabilities of Blue Button 2.0, and makes it clear that the agency intends to pursue rulemaking requiring such adoption for 2020.

The FHIR standard is also discussed, although not required, in the 2015 Edition Health IT Certification Criteria for API access, regulations promulgated by the Office of the National Coordinator for Health IT (ONC) that set the rules for functionality and interoperability of electronic health record systems. It seems likely that ONC further promote FHIR for API-based patient access in their upcoming rulemaking updating the certification program, expected this summer.

This move from CMS arrives alongside increased Congressional interest in patient access to information about the cost of healthcare services. This includes a recent Senate price transparency initiative led by Senator Bill Cassidy. Almost 1000 pages of feedback have already been received by Senate staffers, describing why and how payers and providers can make healthcare price and cost information more accessible for individual patients.

Health plans that wish to get ahead of the future regulatory action can check out the developer resources for Blue Button 2.0 to see how CMS envisions API access working for payer data. Plans can also participate in an ongoing ONC Tech Lab project to learn more about on how these standard resources can be used for health plan-specific information and influence standards development.

This morning, the Food and Drug Administration released highly anticipated guidance on clinical and patient decision support that has been in the works at the agency for several years, advising the digital health community about how it plans to regulate software that offers recommendations or feedback to its users—both healthcare professionals, and patients and caregivers. It also provides guidance on FDA’s interpretation of new software provisions in Section 3060 of the 21st Century Cures Act.

Given the explosion of these innovative digital health tools and their strong potential to transform healthcare, this guidance is a significant development for tech companies and investors focusing on this space. Comments will be accepted for 60 days. Continue Reading FDA Issues New Guidance for Clinical and Patient Decision Support Software

CMS announced important changes to Medicare reimbursement for remote patient monitoring and telemedicine that can help accelerate adoption and use of these digital health tools. These changes are implemented through two rules released this week that will take effect January 1, 2018. Understanding these rules can help you incorporate these tools into clinical practice and can positively affect the business model for technology developers and innovators.

What are these new rules and do they affect me?

The 2018 Quality Payment Program Final Rule provides policy updates to the Quality Payment Program (QPP), which was established by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and will be entering its second year. MACRA offers two “tracks” for eligible clinicians to take as they move toward value-based care:

  • Participation in QPP and its scoring, or
  • Participation in an Advanced Alternative Payment Model (APM).

The majority of Medicare payments are still tied to fee-for-service, but HHS has set a goal of moving to 50 percent of Medicare payments for alternative payment models by 2018. For previous coverage of QPP proposals, visit our summary here.

The 2018 Physician Fee Schedule Final Rule addresses revised payment policies for the Medicare physician fee schedule. Any provisions in the PFS rule typically apply to fee-for-service type providers. Continue Reading New Reimbursement for Remote Patient Monitoring and Telemedicine

The FDA is focusing on safety and effectiveness of interconnected medical devices with the issuance of final guidance on medical device interoperability, released last week. As the FDA notes, medical devices are becoming increasingly connected to one another and to other technologies, and it is critical to address their ability to exchange and use information safely and effectively.

For device manufacturers, this guidance provides clarity on how the FDA is thinking about interoperability and patient safety in the premarket submission process and provides considerations for manufacturers in the development and design of interoperability medical devices. It demonstrates the FDA’s focus on the safety and effectiveness of devices as implemented in an interconnected environment and the expectations of FDA on manufactures to anticipate and design for anticipated uses and reasonably foreseeable misuses. Manufactures should consider this guidance in the design, development, and on-going monitoring of connected medical devices.

This guidance may be helpful for other audiences as well:

  • Care providers that frequently interact with medical devices in the course of patient care
  • Hospital IT teams who make device purchasing decisions
  • Vendors of health technologies that frequently exchange data with medical devices

Continue Reading Interoperability by Design: FDA Issues New Final Guidance for Connected Medical Devices