Are State Laws Holding Back Telehealth?

June 11, 2015
While there has been evidence showing the benefits of telehealth in the healthcare industry, the realization of those benefits may come to an abrupt stop at the state border.

When it comes to telemedicine—a market that stood at $17.8 billion globally in 2014, and is anticipated to grow at a compound annual growth rate of 18.4 percent through 2020, according to recent research—one of the segment’s most critical issues is that there is so much variance in its regulatory policy. While there has been evidence showing the benefits of telemedicine in the healthcare industry, the realization of those benefits may come to an abrupt stop at the state border.

In fact, the American Telemedicine Association (ATA) recently analyzed how all 50 U.S. states grade out on telemedicine policy, finding a supportive landscape for physician practice standards and licensure in slightly less than half of them. The widespread differences in state law that prevent the seamless use of telemedicine across state borders include diverse state medical practice rules, restrictions on the interstate practice of medicine, the complex state insurance landscape, state privacy laws, and conflicting rules and guidance across state agencies.

“Telehealth has the ability to breakdown geographic barriers to care, but the lack of uniformity in state law makes it very challenging to operate in a multi-state environment,” says Dale Van Demark, partner in the health law group at the Chicago-based McDermott Will & Emery, a full service law firm with an active healthcare practice representing provider organizations that are interacting with telemedicine companies, and the companies themselves. Van Demark recently spoke with HCI Associate Editor Rajiv Leventhal about these telehealth variances, possible ways to break regulatory barriers, and what the future holds. Below are excerpts from that interview.

How big of a barrier is it to the telehealth industry that states have varying laws?

Healthcare is a highly regulated industry; any business has to think about the regulatory environment, as they have to act in within the confines of the legal and regulatory structure. Insurance companies are regulated by each state and they have to comply with the state law. Telemedicine companies are no different. In addition to that, states are not consistent from a policy perspective in how they view telemedicine. While there has been a general and rapid acceptance of this form of care in many states over the years, it’s not a universal truth. Some states have taken a much more restrictive approach, be it via a legislative body or board of medicine. There is more acceptance generally, but plenty of states are not marching down that path in the same way. As a national business in some instances, there are vastly different requirements via telemedicine, and in some instances, these variances are impractical.

Dale Van Demark

What are some examples of the variances you’re seeing?

When you talk about the delivery of care in any situation, you’re thinking about in a basic sense, someone needing a license to practice medicine. One issue is the practice of medicine itself—What does it mean and require? In Texas, you’re seeing a rulemaking body taking a conservative approach to telemedicine. They have accepted that certain kinds of care can be delivered by telemedicine, but they believe it’s important for a patient to first see a doctor physically prior to any services being delivered via telemedicine. That falls into the category of “What is a telemedicine encounter and what’s required?” In Texas, an initial first visit is required.

Separately, each state has its own licensing rules. A New York license doesn’t permit me to practice in Colorado.  If I wanted to start a telemedicine company in South Carolina and treat patients across the country somewhere, you have to ask that if I am a doctor in South Carolina and I’M seeking video conferencing with a patient in Arizona, am I appropriately licensed to do that? As a general matter, states take the view that if you’re going to do that, you need a license in that state to engage in the state where the patient is. The multi-state licensure issue is another big one. Some states are more open to accepting “foreign” doctors and will be more liberal in the recognition of an out-of-state license. You can get a telemedicine license specifically in some cases too. There are different ways, but it’s another variation.

Other variances are with reimbursement and privacy. On the reimbursement side, some telemedicine services are reimbursed by Medicare or Medicaid. That is fairly restrictive, especially on the Medicare side where a number of circumstances have to be met. The structure of Medicare telemedicine reimbursement has been geared towards communities with a lack of healthcare resources. That element is often necessary, though it has been expanding slowly. Individual states have mandated that insurance companies to reimburse for telemedicine services, but again, it’s not uniform.

There is also a whole array of state privacy laws that come into play when dealing with healthcare that need to be addressed for any sort of healthcare company. This is another layer of complexity, as laws could be stricter than the Health Insurance Portability and Accountability Act (HIPAA).

With so many variances, are there ways to eventually get around these barriers and make things more uniform?

It’s a great question. We tend to think of the government as a single entity when it isn’t. What we’re talking about here are 50 jurisdictions—each state has different privacy laws, ways to govern medicine, and approaches to reimbursement. The feds have their own approach, and within governments you have different perspectives. A state legislature may pass a law saying you have to reimburse for telemedicine, but that state medical board could do what they did in Texas. If you have that dynamic, you have essentially two different parts of the government heading in two different directions. And that’s overlaid with privacy, which may be more restrictive than HIPAA.

You take a look and wonder if the state is supportive of telemedicine or not. The answer could be a little bit of everything. You need to keep in mind that we’re talking about multiple governments and multiple branches that have an impact on the delivery of healthcare via telemedicine. So a governmental fix to all of this is a little unrealistic and optimistic. Having said that, there has been a clear movement across governments to accept and embrace the delivery of healthcare via telemedicine. But it is a lack of coordination that creates the problem.

The only multi-jurisdictional effort that I have seen that could impact the nation broadly is the proposed Federation of State Medical Boards Compact Act, which provides a way for states to more readily accept a physician practicing within its boarders who does not have a license in that state, but does in another state. It’s a form of reciprocity, like your driver’s license. If states adopt the Compact, and a number have or are considering, then the licensure issue could be addressed. But that’s just one issue, and it doesn’t address the others such as privacy and reimbursement. But it’s the one effort I can point to where you would see a barrier to multi-state telemedicine licensures being lifted.

How does the physician community feel about all this?

The physician community is very diverse, so you can’t really make a broad statement. The advent of telemedicine, like the advent of urgent care centers that are out there, present a potential economic threat to other types of practices of medicine that we think of more traditional. There is an economic impact there, so you can see there being a reaction to this, and you are seeing that in places.  

There is also a reaction to telemedicine in terms of what a physician should be able to do in a telemedicine encounter as opposed to a face-to-face clinical encounter. If you’re there with a patient and able to perform a full clinical examination, a physician has more information than if he or she is speaking with the patient over the phone. No one would argue with that. Technology can overcome some of those limitations, but there are so many different versions. It’s a legitimate issue that the physician community is still wrestling with. What is it that a telemedicine encounter should be able to do? What are the best practices?

Moving forward, how will this play out— in the favor of telemedicine or against it?

I think it will be generally embraced, and the reason I say that is assuming efficacy of telemedicine programs, that they do no harm and benefit the patient, there is the the promise of telemedicine being cheaper and expanding access to care—both things we want to have in our healthcare system. Will we see it die away or be embraced? I would say embraced, not in every version, but definitely in general. In the history of humanity, we haven’t had many instances in which we made technological advances and not used them.

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