August 4, 2020 Read Advisory Board's take: What to expect—based on what the order doesn't address

President Trump on Monday signed an executive order aimed at making permanent some of the telehealth expansions that his administration facilitated in response to America's coronavirus epidemic and implementing a new payment model to provide financial incentives to rural providers delivering high-quality health care.

Executive order seeks to expand rural, telehealth

The executive order directs the HHS secretary to develop a Medicare payment model that "should give rural providers flexibilities from existing Medicare rules, establish predictable financial payments, and encourage the movement into high-quality, value-based care." Sources told Politico that the administration plans to release the new payment program this week, although the order states that HHS will release the new model within 30 days. According to Politico, sources also said the new payment model will be optional.

The executive order also directs HHS to work alongside the Department of Agriculture and the Federal Communications Commission to "develop and implement a strategy to improve rural health by improving the physical and communications health care infrastructure available to rural Americans."

Further, the order directs the HHS secretary to make permanent "as appropriate" certain temporary measures that the Trump administration established during the federal government's declared public health emergency over the coronavirus epidemic, such as waiving certain regulatory barriers to telehealth. Specifically, the order directs the HHS secretary to review within 60 days temporary measures related to additional telehealth services available to Medicare beneficiaries and flexibilities on services, staffing, supervision, and reporting granted to Medicare providers in rural areas. The HHS secretary within 60 days also must propose a regulation that would extend those measures, as appropriate, beyond the public health emergency, according to the order.

The executive order also directs HHS to issue a report examining policies intended to reduce maternal mortality and morbidity, improve mental health, increase health care access, and boost health outcomes within rural areas.


Administration officials told the Associated Press that, while the executive order is aimed at rural communities, it is intended to signal to Congress that Trump will support legislation to permanently expand telehealth access for all Medicare beneficiaries.

According to the AP, the administration has the power to permanently expand certain services in rural areas, but broader action—including making telehealth a standard option for people in urban areas—would require Congressional action.

HHS Secretary Alex Azar in an op-ed published last week by USA Today wrote that his department already is seeking Congressional input on next steps to expand telehealth. "We're working with members of both parties on that already," he wrote.

Azar added, "The past several months will give us experience and data that can inform regulatory reforms." In fact, the executive order cited data showing that, not only did virtual visits among Medicare beneficiaries increase when hospitals had to limit in-person visits at the start of America's coronavirus epidemic—jumping from 14,000 telehealth visits per week to nearly 1.7 million visits per week—but "telehealth visits continued to be frequent even after in-person primary care visits resumed in May, indicating that the expansion of telehealth services is likely to be a more permanent feature of the health care delivery system."

Separately, CMS Administrator Seema Verma said, "In an earlier age, doctors commonly made house calls," and "[g]iven how effectively and efficiently the health care system has adapted to the advent of telehealth, it's become increasingly clear that it is poised to resurrect that tradition in modern form" (Diamond et. al., Politico, 8/3; Sullivan, The Hill, 8/3; Lee/Stein, Bloomberg, 8/3; Alonso-Zaldivar, Associated Press, 8/3; Executive Order on Improving Rural health and Telehealth Access, 8/3).

Advisory Board's take

What to expect—based on what the order doesn't address

John League, Senior Consultant

The new executive order lays out a lot of goals for telehealth and rural health care—and not a lot of details. Emphasis on addressing the shortage of clinicians in rural areas is welcome, and potential infrastructure investments to support rural health care and broadband access are essential and overdue.

But what stands out about the executive order is what it does not directly address: reimbursement and licensing. The ultimate resolution of these issues will require Congress to act, especially on licensing. For now, however, we can read the executive order for clues about how overall federal health care objectives might require or benefit from expanded use of telehealth.

Reimbursement. The executive order reinforces previous comments by CMS administrator Seema Verma about the need to assess which flexibilities and services offered during the public health emergency (PHE) should continue permanently—for all patients, not just those in rural areas. However, the executive order takes no position on most providers' biggest concern about telehealth: reimbursement. And while Verma has consistently indicated that CMS will make broader use of telehealth for Medicare beneficiaries, she has also stated that she does not see reimbursement for telehealth and in-person visits as a "one-to-one" relationship.

The executive order calls for HHS to develop a new "innovative payment model" for rural providers aimed at pushing providers toward value-based care. The language in the order is suggestive of a capitated model that would offer "predictable financial payments" to providers, and it states that such a model should offer flexibilities from existing Medicare limitations. However, while telehealth would be an essential component of any such model, no specific services, modalities, or payment mechanisms are indicated.

What to expect: Other new-in-kind arrangements between payers and providers around telehealth. Even if reimbursement parity is not an option, such arrangements could help maximize the value of telehealth across the care continuum.

Licensing. Cross-state clinician licensure is a significant obstacle to expanding access to care through telehealth. The executive order touches obliquely on these issues in its mandate for HHS to offer proposals to "increase rural access by eliminating regulatory burdens that limit the availability of clinical professionals" and to evaluate "the services, reporting, staffing, and supervision flexibilities offered to Medicare providers in rural areas."

Ultimately, however, Congress will have to address this issue through legislation. And while bipartisan legislation has been proposed to allow national licensing reciprocity during a PHE, it doesn't address any permanent changes.

What to expect: Continued emphasis on state-level compacts and reciprocity. States have been faster to enact legislation to broaden the use of telehealth, and there are already existing frameworks, compacts, and multi-state boards to support cross-state licensing. Still, the prevailing patchwork of state-level licensing simply does not align with the needs of an industry that relies on telehealth as an essential mode of care delivery.    

How Covid-19 is transforming telehealth⁠—now and in the future

Covid-19 has transformed telehealth from a “nice-to-have” program into an essential element of care delivery. Parallel demands to limit patient travel, prevent potential exposure, and preserve clinical capacity all have telehealth as a solution. The sudden attention from providers, payers, and consumers will also have enormous consequences for telehealth adoption in the future.

Download our ready-to-use slide deck to get the latest updates on the current state of the telehealth market and how Covid-19 will impact the future of telehealth.

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