Telemedicine Requirements for Licensing, Scope of Practice and Reimbursement

Presenting a live 90-minute webinar with interactive Q&A Telemedicine Requirements for Licensing, Scope of Practice and Reimbursement Overcoming Multistate Regulatory Hurdles for Healthcare Providers and Facilities TUESDAY, NOVEMBER 21, 2017 1pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Joseph P. McMenamin, Principal, McMenamin Law Offices, Richmond, Va. René Y. Quashie, Member, Cozen O'Connor, Washington, D.C. Richard K. Rifenbark, Principal, Polsinelli, Los Angeles The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.

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Telehealth Licensing & Scope of Practice Issues Joseph P. McMenamin McMenamin Law Offices 4

The Practice of Medicine Defining the practice of medicine: state law issue Holding oneself out as a doctor to the public Charging for medical services Providing a medical consult Issuing orders (labs, imaging studies) Making a diagnosis Recommending treatment Writing prescriptions Performing treatments/surgery 5 \

Telemedicine and Licensing Licensure is States primary means of regulating providers MD offering care via telemedicine may be subject to licensure rules of: The state in which the patient is physically located at the time of the consult; The state where the physician is located/licensed 6 \

Telemedicine and Licensing, 2 Received wisdom: Governing law is that of patient s state Some states: law or guidance Others: include diagnosing or treating through electronic or other means in definition of the practice of medicine Others: silent An opportunity to challenge the received wisdom? 7

Challenging Convention D radiologist interpreted images sent from Berks County, Pa. in Philadelphia, so venue proper there Wentzel v. Cammarano, 2017 Pa. Super. 223 Care was provided in Houston, where lab located, and to which specimens were shipped, not in La., where the patients were and where samples were collected Quest Diagnostics Clinical Labs., Inc. v. Barfield, No. 2015-0926 (La. App. 1 Cir. 9/9/16) Medicare place of service codes: telemedical care is provided at the health care professional s site Apportioning unrelated business income of tax-exempt hospitals providing distance care: provider s location is a relevant consideration 8

Physician Licensing Exceptions Consultation Unlicensed MD may consult peer to peer with MD licensed in the state Available in most states; significant variances in scope So, requires state-bystate analysis Bordering State MD licensed in bordering state may practice in state A few states only Special License or Registration Abbreviated license or registration for telemedicine -only care Offered in several states Follow-Up Care MD may provide follow-up care to patient (post-op, e.g.) Endorsement Physician licensed in another state can, on that basis, more quickly obtain instate license 9

Consultation Exception MD unlicensed in state may offer consults to MDs licensed there Peer-to-peer: local MD retains control of dx, tx Unlike consultant, interacts with patient State board retains control of its licensee Example: Arizona This [licensing statute] does not apply to (1) A doctor of medicine residing in another jurisdiction who is authorized to practice medicine in that jurisdiction, if the doctor engages in actual single or infrequent consultation with a doctor of medicine licensed in this state and if the consultation regards a specific patient or patients. (emphasis added) Ariz. Rev. Stat. 32-1421 10

Consultation Exception, 2 Highly variable: Frequency of consults Free v. for compensation In-state office or location to meet Primary vs. secondary diagnosis Contractual arrangement or regular contacts 11

12 Bordering State Exception Out-of-state physician licensed in a bordering state Example: Maryland Subject to the rules, regulations, and orders of the Board, the following individuals may practice medicine without a license A physician who resides in and is authorized to practice medicine by any state adjoining this State and whose practice extends into this State, if: (i) The physician does not have an office or other regularly appointed place in this State to meet patients; and (ii) The same privileges are extended to licensed physicians of this State by the adjoining state. Md. Health Occ. Code 14-302 (emphasis added)

Special Telehealth License Abbreviated license or registration for telemedicine-only care provided to state residents Nine states offer special telehealth licenses 13

Special Telehealth License, 2 Example: Minnesota (a) A physician not licensed to practice medicine in this state may provide medical services to a patient located in this state through interstate telemedicine if the following conditions are met: (1) the physician is licensed without restriction to practice medicine in the state from which the physician provides telemedicine services; (2) the physician has not had a license to practice medicine revoked or restricted in any state or jurisdiction; (3) the physician does not open an office in this state, does not meet with patients in this state, and does not receive calls in this state from patients; and (4) the physician annually registers with the board, on a form provided by the board. Minn. Stat. Ann. 147.032 (emphasis added) 14

Follow-Up Care Exception MD may provide follow-up care (post-op, e.g.) Example: Indiana In addition to the exceptions described in section 2 [IC 25-22.5-1-2] of this chapter, a nonresident physician who is located outside Indiana does not practice medicine or osteopathy in Indiana by providing treatment services to a patient in Indiana following medical care originally provided to the patient while outside Indiana. Ind. Code Ann. 25-22.5-1-1.1 (emphasis added) 15

Endorsement Based on his out-of-state credentials, physician licensed elsewhere can obtain in-state license faster Example: New Mexico The board may grant a license by endorsement to an applicant who: (1) has graduated from an accredited U.S. or Canadian medical school; (2) is board certified in a specialty recognized by the American Board of Medical Specialties; (3) has been a licensed physician in the U.S. or Canada and has practiced medicine in the U.S. or Canada immediately preceding the application for at least three years; (4) holds an unrestricted license in another state or Canada; and (5) was not the subject of a disciplinary action in a state or province. N.M. Stat. Ann. 61-6-13 (emphasis added) 16

Licensing Compacts Interstate Medical License Compact Nurse Licensure Compact and APRN Compact Psychology Interjurisdictional Compact Physical Therapy Licensure Compact No others on the horizon at present 17

Interstate Medical License Compact Additional licensure approach for physicians in Compact-participating states Physician licensure portability and practice of crossborder services Complements existing licensing and regulatory authority of state medical boards Must still become fully licensed in each state Must still pay fees Twenty-two states have joined (as of 11/17) 18

Nurse Licensure Compact Permits nurse to practice in own state and other Compact states If a Compact state is the primary state of residence, the license automatically becomes a Compact/multistate license 25 states have adopted the Compact to date National Council for State Boards of Nursing approved APRN Compact (5/4/15) 19

Psychology Interjurisdictional Compact Association of State and Provincial Psychology Boards approved (2/15) Goal: facilitate telehealth and temporary, in-person, face-toface [not defined] practice of psychology across state lines Became operative after seven states adopted the Compact At present, no provision for Provinces Three states have adopted to date: Arizona, Utah, and Nevada 20

21 Physical Therapy Licensure Compact From Federation of State Boards of Physical Therapy Enacted 5/15/17 Purpose: increase access to PT services by reducing regulatory barriers to cross state practice To date, fourteen states have adopted the Compact Public comment has closed, rules were voted upon on 11/5/17 Results not publicly available as of 14 Nov. 2017 Compact expected to be up and running in early 18

Federation of State Medical Boards Telemedicine Policy Adopted in 2014 Provides TM guidance to state medical boards Topics: Physician licensure Establishment of physician-patient relationship Evaluation and treatment of patient Informed consent Continuity of care 22

Federation of State Medical Boards Telemedicine Policy, 2 Topics, cont d Medical records Privacy and security Disclosures and functionality of online services Prescribing Referrals for emergency services 23

Telehealth Informed Consent 24 30 states expressly require informed consent for telehealth services Not necessarily applicable to all telehealth; may apply to Medicaid only or to identified specialties Example: California Prior to the delivery of health care via telehealth, the health care provider initiating the use of telehealth shall inform the patient about the use of telehealth and obtain verbal or written consent from the patient for the use of telehealth as an acceptable mode of delivering health care services and public health. The consent shall be documented. Cal. Bus. & Prof. Code 2290.5(b) (emphasis added) Future?

Telehealth Malpractice Considerations Few claims Many are not med mal at all, but 42 USC 1983 cases Standard negligence analysis This renegade s view: Beware clinical practice guidelines Many states: Standard is the same as that for in-person care With videoconferencing, practitioner may inspect and (sometimes) auscultate; can neither percuss nor palpate Rx: Decline to offer telemedicine where full PE needed 25

Telemedicine Credentialing CMS Conditions of Participation for Hospitals Hospital must have a credentialing and privileging process for practitioners providing services to its patients Includes those who provide services via telehealth CMS permits hospital receiving telehealth services to rely on the privileging and credentialing decisions of hospital or entity providing them, if certain requirements are met Hospital must have a written agreement with the distant-site hospital/telehealth entity 42 C.F.R. 482.12(a)(8), (a)(9) 26

Speaker Information Joseph P. ( Joe ) McMenamin McMenamin Law Offices, PLLC mcmenamin@medicalawfirm.com 804.921.4856 Special thanks to Rick Rifenbark, Foley 27

Telehealth Compliance Issues Rick Rifenbark Principal, Polsinelli LLP November 21, 2017 28

Telehealth Compliance Issues Review of the following: Corporate practice of medicine doctrine Anti-kickback & fee splitting laws State insurance laws Telehealth action items 29

Corporate Practice of Medicine A number of states prohibit the corporate practice of medicine (CPOM) to varying degrees The CPOM is generally defined as a prohibition on the operation of a medical practice, or the employment of physicians or other licensed professionals, by entities that are not themselves licensed to practice medicine 30

Corporate Practice of Medicine Rationale for CPOM: Protects independent judgment of physicians Limits commercialization of the profession Unlicensed corporate entities are not subject to the same professional standards and regulatory control Most states have some form of the CPOM doctrine, but key states include CA, TX, SC, NY, TN, WA, IL 31

Corporate Practice of Medicine Sources of the CPOM doctrine include: State statutes and regulations Example: Cal. Bus. & Prof. Code 2400: Corporations and other artificial legal entities shall have no professional rights, privileges, or powers. Cal. Bus. & Prof. Code 2052: "Any person who practices or attempts to practice, or who holds himself or herself out as practicing...[medicine] without having at the time of so doing a valid, unrevoked, or unsuspended certificate...is guilty of a public offense. Example: Colo. Rev. Stat. Ann. 12-36-134(7)(a): Corporations shall not practice medicine. 32

Corporate Practice of Medicine Case law Example: State Farm Mutual Automobile Insurance Co. v. Mallela, 175 F. Supp. 2d 401, 414 (E.D. N.Y. 2001): [W]hen a professional health services corporation is owned by an unlicensed individual, there is a danger that the doctor, knowing that he or she had to split his or her fees with one who did not render medical services, might be hesitant to provide proper services to a patient. (internal citation omitted) Example: Garcia v. Texas State Board of Medical Examiners, 384 F. Supp. 434, 437 (W.D. Tex. 1974): Texas courts have held that when a corporation employs a licensed physician to treat patients and itself receives a fee, the corporation is unlawfully engaged in the practice of medicine. 33

Corporate Practice of Medicine Attorney General opinions Example: N.C. Atty. Gen. Op. (Sept. 3, 1999): A dental practice management company would be deemed to be practicing dentistry if payment to the management company were based on the revenues of the dental practice Example: Mich. Atty. Gen. Op. 6592 (July 10, 1989): A domestic corporation formed under the Business Corporation Act may not engage in activities which may only be performed by one of the learned professions 34

Corporate Practice of Medicine Medical Board guidance Example: The Medical Board of California The CA Medical Board views the following as health care decisions that should be made by a physician: Determining what diagnostic tests are appropriate for a particular condition Determining the need for referrals to, or consultation with, another physician/specialist Responsibility for the ultimate overall care of the patient, including treatment options available to the patient Determining how many patients a physician must see in a given period of time or how many hours a physician must work available to the patient 35

Corporate Practice of Medicine Medical Board guidance (continued) Example: The Medical Board of California The following business or management decisions should be made by a licensed physician: Ownership is an indicator of control of a patient's medical records, including determining the contents thereof, and should be retained by a California-licensed physician Selection, hiring/firing (as it relates to clinical competency or proficiency) of physicians, allied health staff and medical assistants Setting the parameters under which the physician will enter into contractual relationships with third-party payers. Decisions regarding coding and billing procedures for patient care services Approving of the selection of medical equipment and medical supplies for the medical practice 36

Corporate Practice of Medicine Medical Board guidance (continued) Example: The Medical Board of California The following structures are prohibited: Non-physicians owning or operating a business that offers patient evaluation, diagnosis, care and/or treatment Physician(s) operating a medical practice as a limited liability company, a limited liability partnership, or a general corporation MSOs arranging for, advertising, or providing medical services rather than only providing administrative staff and services for a physician's medical practice A physician acting as "medical director" when the physician does not own the practice http://www.mbc.ca.gov/licensees/corporate_practice.aspx 37

Corporate Practice of Medicine Common CPOM exceptions (state specific): Professional corporations HMOs Public hospitals Certain other licensed health care facilities Penalties for violating the CPOM doctrine include: Enforcement action by state AG Enforcement action by applicable professional board Debarment of the professional Civil, criminal penalties, injunctive relief 38

Corporate Practice of Medicine How do telehealth arrangements implicate the CPOM? Non physician investment in medical practices Multistate arrangements Management company services and compensation Employment of licensed professionals by non-professional entities 39

Corporate Practice of Medicine What should I do to evaluate whether I have a CPOM issue? Where are you operating? One state or multiple states? Determine whether you are operating in a state (or states) with a CPOM doctrine. If yes, do any exceptions apply? Evaluate who is providing the medical care (MDs, PAs, MFTs, NPs) Who owns the entity that employs or contracts with the licensed professionals? Who manages the medical practice? How is that entity paid? 40

Anti-Kickback Laws Federal Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b) Federal criminal statute, also civil penalties Intent-based statute Covers all types of arrangements & individuals Safe harbors (provide immunity for certain arrangements; not required) OIG Advisory Opinions 41

Anti-Kickback Laws A violation requires three elements: Remuneration, which means anything of value, in cash or in kind The remuneration must be made knowingly and willfully The remuneration must be made with intent to induce referrals or business; according to certain federal courts, a violation may be found if only one purpose of the remuneration is to induce referrals, even if there are also legitimate reasons for the payment 42

Anti-Kickback Laws Liability under the Anti-Kickback Statute applies to the offeror and recipient of the kickback June 2015 OIG Fraud Alert: Physician Compensation Arrangements May Result in Significant Liability OIG cautioned physicians to carefully consider the terms and conditions of medical directorships and other compensation arrangements before entering into them Fraud alert discussed 12 settlements involving physicians Compensation was above FMV Services not actually provided Payments took into account referrals Health care entities paid for office staff 43

Anti-Kickback Laws Potential penalties for Anti-Kickback Statute violations include: Up to $25,000 per offense Up to five years imprisonment per offense Mandatory exclusion from federal health programs Civil monetary penalties Liability under the FCA 44

Anti-Kickback Laws Common safe harbors for telehealth arrangements Personal services and management contracts Space rental Equipment rental Employees EHR donations Small entity investments 45

Anti-Kickback Laws OIG Advisory Opinions OIG Adv. Op. 11-12 (telehealth stroke arrangement) OIG Adv. Op. 99-14 (rural telehealth arrangement funded with federal grants) Advisory opinions provide certainty for parties, but: All material facts must be presented Only apply to parties who submitted the opinion request Time consuming process 46

Anti-Kickback Laws Watch out for state anti-kickback statutes and fee splitting prohibitions! Some form of state anti-kickback law and/or fee splitting prohibition exists in most states Types of state anti-kickback laws: All payer Insurance Medicaid 47

Anti-Kickback Laws Example: Cal. Bus.& Prof. Code 650:. the offer, delivery, receipt, or acceptance by any person licensed under this division or the Chiropractic Initiative Act of any rebate, refund, commission, preference, patronage dividend, discount, or other consideration, whether in the form of money or otherwise, as compensation or inducement for referring patients, clients, or customers to any person, irrespective of any membership, proprietary interest, or coownership in or with any person to whom these patients, clients, or customers are referred is unlawful. Important exception: The payment or receipt of consideration for services other than the referral of patients which is based on a percentage of gross revenue or similar type of contractual arrangement shall not be unlawful if the consideration is commensurate with the value of the services furnished or with the fair rental value of any premises or equipment leased or provided by the recipient to the payer 48

Anti-Kickback Laws Example: 225 Ill. Comp. Stat. 60/22.2 A licensee under this Act may not directly or indirectly divide, share or split any professional fee or other form of compensation for professional services with anyone in exchange for a referral or otherwise, other than as provided in this Section 22.2 Includes payments to a company for the marketing or management of the medical practice Exception exists for FMV payments to billing company 49

Anti-Kickback Laws Example: Epic Medical Management v. Paquette, 244 Cal.App.4 th 504 (2015) Dispute over MSO compensation and services Services provided by MSO: Lease office space to physician Lease all equipment to physician Provide support services Provide non-physician personnel Establish and implement a marketing plan Conduct billing and collections Perform accounting services 50

Anti-Kickback Laws MSO compensation 50% of office medical services 25% of surgical services 75% of pharmaceutical expenses Physician argued that because some of the fees were for marketing services, the payments were illegal kickbacks for referred patients (and the MSO did refer patients to the practice) 51

Anti-Kickback Laws Holdings No state anti-kickback statute violation: No evidence that the amount the MSO received was for referrals No CPOM violation: the Court found a strict delineation between non-medical services provided by the MSO and medical services provided by the practice 52

Anti-Kickback Laws How do telehealth arrangements implicate federal or state antikickback and fee-splitting laws? Payments for referrals Payments for services that are above-fmv Payments among providers What should I do to determine if I have an anti-kickback statute or fee-splitting issue with my telehealth arrangement? Review financial arrangements with referral sources Evaluate payment sources (e.g., Medicare, private insurance, etc.) Do the states in which you operate have state anti-kickback laws or fee-splitting statutes? Evaluate whether financial arrangements fall within safe harbors Critically review the purpose of the payments 53

State Insurance Laws Some telehealth models can implicate state health insurance laws (e.g., subscription models) For example, California s Knox-Keene Health Care Service Plan Act of 1975 regulates health care service plans, which are generally defined as: Any person who undertakes to arrange for the provision of health care services to subscribers or enrollees, or to pay for or to reimburse any part of the cost for those services, in return for a prepaid or periodic charge paid by or on behalf of the subscribers or enrollees. Cal. Health & Safety Code 1345(f)(1). 54

State Insurance Laws How do telehealth arrangements implicate state insurance laws? Payment structures can sometimes implicate insurance statutes if the provider is at risk for payment For example, a subscription model in which a patient pays $100 per month for all the telehealth consults he/she needs What can I do to evaluate whether my telehealth arrangement implicates state insurance laws? Review payment structures What services are being provided for the payments? Who is at risk and for what? Review state insurance/hmo laws 55

Contact Information Rick Rifenbark, Polsinelli LLP Principal Los Angeles, CA 310-203-5321 rrifenbark@polsinelli.com 56

RENÉ QUASHIE M E M B E R COZ E N O CONNOR r q u a s h i e @ c o z e n. c o m 202-912- 4884