The Impact Advisor: April 2020

The Impact Advisor: April 2020

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April 15, 2020

Impact of Telehealth Policy and Reimbursement Changes in Response to COVID-19: The CARES Act and Beyond

On March 27, Congress passed the $2 trillion federal stimulus package – the “Coronavirus Aid, Relief, and Economic Security Act” (or CARES Act) – which was signed into law by the President. Although the most notable part of the legislation for provider organizations (especially in the near term) is the $100 billion in relief funding, the CARES Act also includes provisions aimed at encouraging use of – and reducing barriers to – telehealth.

Specifically, the CARES Act eases some of the reimbursement requirements for telehealth services provided to Medicare patients and expands the authority of the HHS Secretary to waive certain other telehealth restrictions during the crisis. The Act also allows high-deductible health plans with an HSA to cover virtual or remote services before the deductible is reached – and appropriates funding that the federal government can use to invest in efforts to improve telehealth access and infrastructure. (For a complete list of telehealth-related provisions in the CARES Act, we recommend this summary from the American Telemedicine Association.)

Additionally, the FCC recently announced plans to use $200 million from the economic stimulus package to help organizations across the country expand telehealth services during this crisis. The program will fully fund provider purchases of telecommunications, information services, and connected medical devices to provide remote services. This program is available to nonprofit organizations at this time with an emphasis on those that help low-income Americans and veterans.

With such a rapidly evolving crisis though, it is important to note that the CARES Act passed by Congress is only one of the vehicles driving telehealth policy and reimbursement changes. The Centers for Medicare & Medicaid Services (CMS), individual states, and some private payors are also implementing important telehealth changes to respond to the COVID-19 pandemic – many of which were enacted weeks before the CARES Act was signed into law. See chart below.

Recent Telehealth Policy/Reimbursement Changes in Response to the COVID-19 Pandemic


  • Passed the $2 trillion CARES Act (click here for list of telehealth-specific provisions)
  • Future legislation is possible to provide additional relief during the emergency period


  • Expansion of Medicaid coverage for telehealth services continues to be at the state level
  • Many states are broadening Medicaid telehealth reimbursement to cover uninsured patients for COVID-19 testing, treatment, and recovery

CMS (Medicare changes)

  • Nationwide reimbursement for telehealth services including services into the home
  • Prescribing ability for controlled substances via telehealth without a prior in-person evaluation
  • Relaxed HIPAA regulations to ease access to deliver telehealth services (i.e., allows use of everyday video conferencing solutions like FaceTime, Zoom, etc.)
  • Provider medical licensing and practicing across state lines is now allowed, but state laws also govern so providers need to verify state regulations

Private payors

  • Commercial payors are increasing telehealth coverage and will likely follow Medicare
  • Some states are working on legislation to facilitate or mandate private payor reimbursement for telehealth services

Why It Matters:

Telehealth has rapidly become a first line of response against the pandemic and a vital tool for remote care delivery while preventing human exposures. Providers, patients, and payors alike have all had to get comfortable with brand new telehealth use cases in an extremely short period of time (and without any preparation). Near term, the variety of policy and reimbursement changes being enacted by Congress, federal agencies like CMS, individual states, and some private payors will at least help providers receive standard “in-person” payment rates for a broader scope of services delivered virtually during the crisis.

More telehealth policy and reimbursement changes have occurred in the last few weeks than the last 10 years and new changes will continue to be announced as this crisis continues. Additionally, some state laws may supersede new CMS policies, so understanding and navigating the federal and state regulatory impacts to reimbursement can be an ongoing challenge for organizations. Organizations should identify a resource that can focus on these ongoing policy and regulatory changes and the impacts to their organization to fully maximize reimbursement opportunities.

Longer term, there is no way of predicting what the “new normal” will look like for health delivery after COVID-19. This pandemic is certainly shifting the paradigm of where care is delivered though – which will have a lasting impact on the telehealth regulations currently being enacted at the federal, state, and private payor levels. While most of those telehealth policy and reimbursement changes technically only apply for the duration of the emergency period, it is possible – perhaps even likely – that many will ultimately be extended beyond COVID-19, fueled by a greater understanding of the value of virtual care in the wake of an unprecedented public health crisis. As such, having a clear understanding of the rapidly evolving telehealth policies at the federal, state, and private payor level will not only help providers navigate reimbursement during the COVID-19 pandemic; it will also be critical for the transition into a sustainable future after this crisis eventually subsides.

HHS Begins Distributing Part of $100B in CARES Act Emergency Funding to Providers

HHS announced that beginning April 10, the agency was “immediately distributing” $30 billion of the $100 billion in emergency relief funding that was appropriated by the CARES Act to help provider organizations “prevent, prepare for, and respond to coronavirus.” The amount that a given provider has received (or will soon receive) is “based on their share of total Medicare FFS reimbursements in 2019.” Importantly, HHS emphasizes that unlike some of the other provisions in the CARES Act, “these are payments, not loans, to healthcare providers, and will not need to be repaid.” In terms of priorities for the remaining $70 billion in emergency funding, HHS indicated it is looking at “targeted distributions that will focus on providers in areas particularly impacted by the COVID-19 outbreak, rural providers, providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicaid population, and providers requesting reimbursement for the treatment of uninsured Americans.”

Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment. The portal for signing the attestation will be open the week of April 13, 2020, and will be linked on this page.”


Why It Matters:

The $100 billion in relief funding is the key provision in the CARES Act for most hospitals and health systems (especially in the near term), so the announcement that a portion of those funds are now being distributed is extremely welcome news. Language in the CARES Act indicated that providers would need to submit an application to HHS “justifying the need of the provider for the payment” – but given the announcement, it appears HHS ultimately was granted enough authority during the emergency period to make the payments directly. The rapid – and somewhat unexpected – distribution of emergency funding without any applications being required is definitely a positive, but we think it also underscores the uncertainty right now about the process for getting the remaining $70 billion to providers. For example, there are still unknowns about how HHS will specifically prioritize and calculate the next round of payments, when those payments will be distributed, whether applications will be required in some circumstances for a portion of the remaining funding, and if any specific documentation will need to be maintained by providers who receive a payment in the next round. The process could very well be the same, but there is no way to knowing until HHS provides more details.

Rare Collaboration Between Apple and Google Aims to Help Reduce Spread of COVID-19

Late last week, Google and Apple announced “a joint effort to enable the use of Bluetooth technology to help governments and health agencies reduce the spread of the [COVID-19] virus.” Per this excellent article in Wired: “In mid-May, [Google and Apple] plan to release an application programming interface that apps from public health organizations can tap into. The API will let those apps use a phone’s Bluetooth radios – which have a range of about 30 feet – to keep track of whether a smartphone’s owner has come into contact with someone who later turns out to have been infected with COVID-19. Once alerted, that user can then self-isolate or get tested themselves.” Wired adds: “In a second iteration of the system rolling out in June, Apple and Google say they’ll allow users to enable Bluetooth-based contact-tracing even without an app installed, building the system into the operating systems themselves.”

Source: Google and Apple via Wired, 4/10/20


Source: Google and Apple via Wired, 4/10/20


Why It Matters:

The collaboration is fascinating – and the article from Wired in particular is highly recommended reading. If nothing else, we think the announcement underscores the critical role that tech giants can – and almost certainly will – play in healthcare’s data-driven future. We also think the announcement serves as an important reminder that there will be a lot of innovation – and many cutting-edge new tools – that result from this unprecedented public health crisis. Many of the solutions that emerge will also likely have potential uses that go far beyond just COVID-19. The challenge for health delivery organizations once this pandemic eventually subsides will be rationalizing, standardizing, and effectively integrating the host of new tools and technologies that will be available to create a truly cohesive patient and provider experience.

Physicians Give the Usability of Their EHRs an “F”

Physicians give the usability of their EHRs an “F,” according to a study in Mayo Clinic Proceedings that was conducted prior to the COVID-19 pandemic. Per the study, “[the results] indicate that the current state of EHR usability as measured using a standard technology usability scale is poor and considerably below the usability of many everyday technologies.” (See chart below.) The authors acknowledged that “substantial variation in EHR usability ratings was observed by medical specialty and practice setting” – which they note “could reflect the variability of how EHRs are used to support clinical work and documentation across specialties.” Overall, the study found that “EHR usability scores were strongly and independently associated with physician burnout in a dose-response relationship.”

Image source: Mayo Clin Proc. March 2020;95(3):476-487


Why It Matters:

To be clear, this study was conducted prior to the COVID-19 pandemic – but the findings remain just as important. On the surface, it may seem unusual to compare the usability of something as complex as an EHR to the usability of a microwave – but we think the chart above underscores a very important point. The concept of “usability” does not exist in a vacuum. Physicians – just like patients – have expectations for the technology they use, based on their experiences in everyday life. When a product fails to meet those expectations – regardless of whether they are realistic – the level of frustration grows. Every EHR vendor certainly has room for improvement when it comes to making their products more intuitive and streamlined. However, usability is not solely a vendor issue. It is also critical that hospitals and health systems provide the right end-user training, communication, and ongoing support.


Q: I want to apply for the FCC COVID-19 Telehealth Program funding. What do I need to know?

A: Up to $1 million is available per organization. The scope is broad; while the funding is related to COVID-19, it goes beyond the pandemic and supports different services that may have started or expanded during this time. That may include remote patient monitoring, text messaging, virtual rounding or other types of video/digital solutions.

Funds are evaluated on a rolling basis until the $200 million in available funding is exhausted. That means funding requests will be evaluated on a “first-come, first-served basis,” so completing and submitting your application as soon as possible is crucial. If you wait too long, the money might be gone.

Applications opened at noon EST on Monday, so immediate action is required. The application process already shifted somewhat from initial plans, now using a PDF form instead of a portal as previously announced. If you’ve applied for federal funds before, have your federal number and eligibility forms ready to get a jumpstart on your application. If you’ve not, you’ll need to complete some prerequisite applications, as well (but these can be done in parallel with your funding application, so no need to delay).

(Response provided by Dan Golder, Principal at Impact Advisors)