Health Law Checkup

Deadline Approaching for Medicare Telehealth Waivers: What Providers Need to Know

Dec 18, 2024

Paul J. Giancola, Of Counsel

Paul J. Giancola,

Of Counsel

Claudia E. Stedman, Associate

Claudia E. Stedman,

Associate

By: Claudia E. Stedman and Paul J. Giancola

During the COVID-19 pandemic, both federal and state governments enacted a host of laws and implemented flexibilities to ensure health care providers, hospitals, and health systems could move traditional brick-and-mortar care settings to telehealth platforms (where appropriate). While virtual care models existed pre-pandemic, practitioners, patients, regulators, and legislators alike saw a dramatic rise in the popularity of telehealth spurred by the public health emergency (PHE). In order to deliver care efficiently and effectively in response to growing need, agencies such as Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) waived a number of regulatory requirements so that participating Medicare providers could deploy a greater array of virtual services to Medicare beneficiaries.

In the years following the PHE, some Medicare telehealth flexibilities have been made permanent, while others, through a series of Consolidated Appropriations Acts and CMS Physician Fee Schedules, only temporarily extended telehealth waivers. The most recent extension created by the Consolidated Appropriations Act of 2023 extended telehealth flexibilities for two years, and those waivers are set to expire on December 31, 2024.[i] While murmurs earlier this week indicated that lawmakers in Washington, D.C. had reached a deal on the evening of December 16^th to extend some of the expiring healthcare programs, nothing has been finalized yet.[ii] An examination of the current telehealth landscape shows what will remain if Congress cannot reach a deal, and what may change.

What Happens if Telehealth Flexibilities Expire?
Below is a summary of the telehealth flexibilities that were waived during the PHE, and which are expected to go back into effect if the waivers expire on December 31, 2024:[iii]

Location Restrictions

Existing Medicare Flexibility:

Currently, telehealth services (including non-mental health services) are available to Medicare beneficiaries in both rural and urban areas, and patients can receive telehealth services from any location, including their home, as the “originating site.”

Medicare Requirements Without Waiver:

Non-mental health telehealth services will only be reimbursable if the patient is located in a specific medical facility, deemed as an approved “originating site,” in a rural area (except for services delivered for purposes of treating substance use disorder (SUD), end stage renal disease (ESRD) treatment, or acute stroke).

Telehealth for non-mental health services provided to patients in their homes will no longer be considered “covered services” under Medicare (except for SUD treatment or ESRD treatment).

Covered Telehealth Services

Existing Medicare Flexibility:

Medicare significantly expanded coverage for telehealth services[iv] under the waivers, including physical and occupational therapy, emergency department visits, and nursing facility care.

Medicare Requirements Without Waiver:

Covered services will likely be reduced back to behavioral and/or mental health services, preventative health screenings, and office visits.

Coverage of Audio-Only Telehealth Encounters

Existing Medicare Flexibility:

Medicare waivers expanded the types of telehealth services[v] that could be provided to patients via audio-only platforms.

Medicare Requirements Without Waiver:

If the waivers expire, those audio-only telehealth services that will be covered by Medicare will be significantly reduced (likely only to behavioral and/or mental health services). It is likely that Medicare would require the vast majority of telehealth services to be provided via two-way audio/video connection.

Provider Eligibility

Existing Medicare Flexibility:

Under the current waivers, any healthcare provider who is eligible to bill for Medicare-covered services[vi] can provide and bill for telehealth services as a “distant site” provider. Additionally, eligible providers can conduct an initial telehealth visit, regardless of whether they have treated the Medicare beneficiary previously.

Medicare Requirements Without Waiver:

Prior to the expansion in flexibilities, only physician and certain other provider types (physician assistants, clinical social workers, and clinical psychologists) were permitted to bill for telehealth services as the distant site provider. Additionally, those providers must have treated the Medicare beneficiary receiving those services within the last three years.

Occupational therapists, physical therapists, and speech-language pathologists are “ineligible providers” under the permanent Medicare laws. Accordingly, if the waivers expire, these practitioners will no longer be eligible for reimbursement for telehealth services, unless they bill incident-to an “eligible provider” (e.g., physicians, nurse practitioners, physician assistants, among others).

Mental Health Services

Existing Medicare Flexibility:

Under the existing waivers Medicare beneficiaries receiving behavioral and/or mental health services could opt to receive these services via telehealth without any in-person visit requirements.

Medicare Requirements Without Waiver:

Mental health services will remain eligible for telehealth reimbursement without the accompanying location requirements. However, there will be strict in-person requirements for the provision of telehealth services, including:

Patients must have an in-person encounter with their provider within six months of their initial telehealth appointment; and

Subsequent in-person visits will be required every 12 months unless the patient and provider agree that the risks and burdens of in-person care outweigh the benefits.

What Telehealth Flexibilities Will Not Change?
Regardless of whether a deal is reached on or before December 31, 2024, there are a subset of telehealth flexibilities that CMS has made permanent since the PHE.[vii] These include:

Federally Qualified Health Centers and Rural Health Clinics can continue to serve as the distant site providers for behavioral and/or mental health services;

Medicare patients can continue to receive telehealth services for behavioral and/or mental healthcare in their home;

There are no geographic restrictions for the originating site for behavioral and/or mental telehealth services;

Behavioral and/or mental telehealth services can continue to be delivered using audio-only communication platforms; and

Rural Emergency Hospitals continue to be eligible for originating sites for telehealth.

What Can Providers Do to Prepare?
There is bipartisan support for the extension of telehealth flexibilities before a new Congress takes office in 2025, and other government agencies have already extended telehealth flexibilities. For example, in November 2024, the U.S. Drug Enforcement Administration (DEA) and HHS announced a third extension of telehealth flexibilities for prescribing controlled substances, which will remain in effect through 2025.[viii] This extension will permit DEA-registered practitioners to continue prescribing Schedule II-V controlled substances via telehealth without conducting an in-person evaluation first. Likewise, the U.S. Department of Veterans Affairs, also in November 2024, announced an initiative to enhance telehealth services, particularly for veterans in rural and underserved areas.[ix] The proposal seeks to eliminate copayments for all telehealth services, and establish “telehealth access points” for veterans through Accessing Telehealth through Local Area Stations program.

It is important to note that while there is anxiety from patients and providers, if the Medicare telehealth flexibilities expire on December 31, 2024 it does not mean that telehealth services will become altogether unavailable. The existing Medicare waivers have expanded the list of eligible providers and covered services under the Medicare program so that providers can be reimbursed for that care. If the waivers expire, providers who offer previously-covered telehealth services to Medicare beneficiaries may be able to offer those services on a cash-pay basis (subject to their provider eligibility status and notice requirements to the patient). Additionally, providers who accept Medicare Advantage plans, commercial plans, or Medicaid may be able to continue to offer telehealth services to patients and receive reimbursement through these payors. It is possible that if these waivers expire, Medicare Advantage plans and commercial insurers will modify their policies to match Medicare coverage, but those changes would not take effect immediately on January 1, 2025.

Finally, many states, including Arizona, enacted robust laws to expand telehealth services to patients and ease licensing restrictions for providers. While the expiration of Medicare waivers may affect reimbursement guidelines in these states, it remains to be seen whether other state laws surrounding licensing or provision of certain services for non-Medicare beneficiaries will be impacted.
Healthcare stakeholders should consider the impact that the expiration of these waivers may have on their practice and may want to consider discussing compliance strategies with legal counsel. Snell & Wilmer’s healthcare services team is constantly monitoring developments with respect to telehealth regulatory changes and will continue to provide guidance on those regulations once updates are made.

[i] There is a pending Congressional proposal, H.R. 7623, called the “Telehealth Modernization Act of 2024,” to extend Medicare telehealth waivers. If H.R. 7623 or a line item in a forthcoming appropriations law passes, it is likely that that some or all of the Medicare telehealth flexibilities will be extended by two years, until December 31, 2026.
[ii] https://www.fiercehealthcare.com/regulatory/two-year-extension-telehealth-likely-negotiations-crest-congress
[iii] https://mailchi.mp/cchpca/year-end-telehealth-update-key-changes-for-medicare-dea-extension-and-va-expansion; https://mailchi.mp/cchpca/deadline-approaching-for-federal-medicare-waivers-what-might-happen-next; https://www.kff.org/medicare/issue-brief/what-to-know-about-medicare-coverage-of-telehealth/
[iv] https://www.cms.gov/medicare/coverage/telehealth/list-services
[v] https://telehealth.hhs.gov/providers/best-practice-guides/telehealth-for-behavioral-health/billing-for-telebehavioral-health
[vi] https://www.cms.gov/medicare/enrollment-renewal/providers-suppliers/chain-ownership-system-pecos/ordering-certifying
[vii] https://telehealth.hhs.gov/providers/telehealth-policy/policy-changes-after-the-covid-19-public-health-emergency#:~:text=Recent%20legislation%20authorized%20an%20extension,emergency%20through%20December%2031%2C%202024
[viii] https://www.dea.gov/documents/2024/2024-11/2024-11-15/dea-and-hhs-extend-telemedicine-flexibilities-through-2025
[ix] https://news.va.gov/press-room/va-proposes-to-eliminate-copays-for-telehealth-expand-access-to-telehealth-for-rural-veterans/#:~:text=WASHINGTON%20%E2%80%94%20Today%2C%20the%20U.S.%20Department,rural%20and%20medically%20underserved%20communities