Telehealth and the law: how policy shapes the marketplace

In today’s age of advanced connectivity, technology is shaping the delivery of healthcare services. By engaging in telehealth, providers can utilize technologies such as mobile devices, video conferencing, and real-time data sharing to provide healthcare services remotely. 

Despite the vast opportunities for healthcare delivery available through technology, legal policy poses a great barrier to telehealth. In the United States, 49 states have some form of legislation relating to telehealth, the Medicaid programs in 48 states and the District of Columbia provide coverage for some form of telehealth, and the Medicare program has its own set of telehealth coverage rules. These state and Medicare telehealth policies vary widely, although there have been attempts to establish more uniform rules. 

While many different aspects of telehealth are regulated, telehealth policies tend to revolve around where the services take place, who provides the services, and the technology utilized. Typically, a telehealth encounter is considered to occur at the “originating site,” which is where the patient is physically located when receiving telehealth treatment. Medicare typically limits telehealth services to rural or underserved areas, and requires a patient to be at certain specified origination sites, such as a practitioner’s office, a hospital, a rural health clinic or a skilled nursing facility. Like Medicare, a few states also restrict telehealth services to rural and underserved areas. While certain states, such as New York, also restrict telehealth services to certain originating sites, more than half of the states, including New Jersey and California, allow patients to receive telehealth services at any location.

Who provides the services is another issue that must be carefully considered. Medicare and most states, including New Jersey, New York, and California, require a provider to be licensed in the state where the telehealth patient is located, thus requiring the practitioner to follow that state’s professional practice rules and recordkeeping requirements. Over 20 states have adopted the Interstate Licensure Compact that makes it easier for member-state physicians to obtain a license in another member state, and almost 30 states have adopted the Nurses Licensing Compact that allows member-state licensed nurses licensed to practice in another member state. Several states, including Ohio and Texas, even offer special telehealth certifications to out-of-state practitioners.

The technology used to provide the services also matters. Most states and Medicare require the use of live or interactive technology, such as video conferencing, that permits two-way communication, and limits the use of real-time data sharing to certain specified services. A few states, however, are more relaxed regarding the types of technologies that may be used, and an increasing number of states are permitting physicians to remotely monitor patients with chronic conditions through real-time data sharing technology.

Other aspects of telemedicine that are typically regulated under state laws include the types of services that may be provided through telehealth, whether private payers must cover telehealth services, and remote prescribing. For example, New Jersey and California allow physicians to prescribe medications to telehealth patients, except that certain classes of controlled substances may only be prescribed after an initial in-person physician-patient encounter. Contrast that with New York, which does not have any specific telehealth prescription rules.

Telehealth and other technology can be useful tools in providing broader access to healthcare services. Telehealth also creates opportunities for providers to expand their patient base and grow their medical businesses by reaching across borders that have historically been barriers. Despite the benefits of telehealth to consumers, laws designed to protect state healthcare providers and patients often stand in the way. As with any other business, the business of telehealth requires providers to understand the rules where they intend to conduct business. Therefore, before a telehealth provider expands into a new state, it is imperative that the provider seeks the right information, asks the right questions, and engages the right advisers in order to ensure compliance with the law. 

John D. Fanburg is chair of the Health Law Practice and the managing member at Brach Eichler LLC, a law firm based in Roseland, NJ. He can be reached at (973) 403-3107 or jfanburg@bracheichler.com. Jonathan J. Walzman is an associate in Brach Eichler’s Health Law Practice. He can be reached at (973) 403-3120 or jwalzman@bracheichler.com.