Beyond the Pandemic: Telemedicine Reimbursement and Health Policy

Telemedicine Reimbursemnt

Telemedicine reimbursement and other regulatory flexibilities enabled providers to quickly pivot operations for COVID-19, but temporary policies also poised the health policy landscape for significant change after the pandemic.

In the wake of the first confirmed cases of COVID-19 in the US, policymakers quickly relaxed long-standing healthcare regulations, including telemedicine reimbursement and healthcare fraud prevention laws. HHS and Congress alike also developed new, temporary health policies to support the industry’s response to the pandemic.

Regulatory flexibilities and waivers during the newly declared public health emergency enabled providers to quickly pivot operations. Practices swapped nearly all their in-person visits for virtual care services to minimize unnecessary exposure to the novel coronavirus and hospitals converted hotels, dormitories, and even sports arenas into temporary healthcare facilities to manage an unexpected surge in patients. And many organizations accomplished these feats in a matter of days.

Quick thinking and execution on the part of providers have helped to flatten the curve in places like New York and Massachusetts, which were some of the nation’s first COVID-19 hotspots. But many providers are hesitant to sunset the capabilities they developed during the pandemic as the public health emergency – and temporary flexibilities and waivers – expire on July 25, 2020.

COVID-19 has transformed the way healthcare is delivered, and consequently the policies that govern care delivery, according to Chris DeMeo, a partner in Seyfarth’s corporate department and a member of the Health Care, Life Sciences & Pharmaceuticals industry group.


During the public health emergency, a large portion of the regulatory flexibilities and waivers offered to providers involved telemedicine. The policies largely centered on expanding access to telephonic and virtual care services by reimbursing providers for more telemedicine services, including those delivered via FaceTime, Zoom, Skype, and other video and chat-based applications and at different originating sites, including patient homes.

These flexibilities are temporary, designed only to pay providers for greater telemedicine use during the pandemic. But now that providers know public and private payers are willing to pay for virtual care, reimbursement is likely to stick for telemedicine, DeMeo reasoned.

“There is going to be some upward movement in the reimbursement from the traditional one-half of the value of an in-person visit. That’s going to creep up as [telemedicine] is used more, and I think it’s going to align more with the cost to deliver the service at the same time.”

“However, I don’t think it’s going to completely match the same as an in-person visit,” DeMeo stressed.

Telemedicine is unlikely to replace in-person visits in the long run despite burgeoning health policies that expand coverage and payment for virtual care. But now that virtual care relationships have been established due to COVID-19, industry stakeholders realize many clinician-patient interactions can occur remotely and at a lower cost. These remote interactions may also be more convenient for patients, resulting in greater demand for telemedicine from the consumer.

But for the services fee-for-service reimbursement won’t pay for, value-based contracts will, predicted DeMeo who foresees an evolution of alternative payment models in response to greater telemedicine use post-pandemic.

Alternative payment models give providers the flexibility to invest in telemedicine without fee-for-service payment limitations. Telemedicine has the potential to lower costs and improve outcomes through virtual care coordination, enabling providers to earn shared savings or performance-based payments.

Providers will increasingly seek value-based contracts to get paid for telemedicine services beyond the pandemic, and these contracts may include telemedicine as part of its set-up, DeMeo said. The contracts could require providers to deliver or coordinate care virtually for a certain number of services.


As demonstrated by telemedicine coverage flexibilities granted during the pandemic, nurse practitioners, physician assistants, and other advanced practice providers are likely to play a larger role in the delivery of healthcare after COVID-19.

“What we see happening based on the initial reaction to the pandemic is that physicians are not going to be the sole providers of certain types of visits,” DeMeo said. “We already see that advanced nurse practitioners and physician assistants can do many of the day-to-day evaluation and management service, but they’re not fully utilized for that purpose yet.”

The COVID-19 recession, however, could change that.

Allowing advanced practice providers to perform at the top of their license without supervision requirements can significantly reduce costs for the healthcare system as a whole and generate a larger return on investment for providers. For example, if payers continue to allow mid-level providers to conduct telemedicine visits after the pandemic, it becomes “more efficient for both the payer and provider to deliver that service,” DeMeo explained.

The push to eliminate or at least alter scope of practice laws is at a tipping point, stated DeMeo and his colleagues who predict a “noticeable restructuring of the delivery of health care by professionals,” including social workers and other types of clinicians.

The recession is putting pressure on payers to significantly reduce spending. But as providers start to resume elective, non-urgent procedures, payers may start to consider new care pathways to avoid costly surgeries and other services.

“What you’ll see is the surgeon’s role being pushed towards the end of the disease spectrum and therapists or even dieticians working through social determinants of health, which is another huge factor that’s gaining steam in this pandemic environment,” DeMeo said.

For example, payers may have a patient presenting with back pain meet with other clinicians to address social determinants of health before surgery. For providers, this would mean greater care coordination among clinicians to determine which patients would actually benefit from additional interventions and which should go straight to surgery to avoid costly, ineffective care.

“In those areas, you’re going to see more people or more types of licenses being involved in the spectrum of care, and the types of interventions that are covered,” DeMeo stated.


Long before the COVID-19 pandemic, industry stakeholders have been calling for changes to healthcare fraud, waste, and abuse laws. Last year, those pleas seemed to be coming to fruition with official proposals to update the Stark Law and Anti-Kickback Statute to better align with the delivery of value-based care.

Stakeholders had been anticipating final rules when the COVID-19 pandemic hit, instead, they received temporary regulatory flexibilities and waivers during the public health emergency.

However, these flexibilities could signal the direction HHS is aiming at for updates to healthcare fraud and abuse laws, DeMeo suggested.

“These interim waivers were entirely consistent with what the government was saying before the pandemic,” said DeMeo. “When those fall off because the declared emergency expires, I think you’ll see the government’s focus jump right back on Stark Law and Anti-Kickback Statute requirements, as well as those patient inducement regulations, to allow for more coordination of care, more sharing of information, or the joint investment in infrastructure to do so.”

While the government may be willing to relax – or at least refocus – healthcare fraud, waste, and abuse laws, law enforcement agencies are likely to focus on fraud and abuse more acutely, DeMeo warned.

“I don’t think that government enforcement is going to subside. The focus is going to be much more on the traditional fraud and abuse notions,” DeMeo said.

Through the CARES Act, policymakers allocated approximately $175 billion to healthcare providers to offset financial losses incurred as a result of COVID-19, and some providers have also received loans through the Payroll Protection Program to prevent furloughs and layoffs during the pandemic. Healthcare fraud and abuse investigations will focus on ensuring providers used the funds appropriately, DeMeo predicted, while audits focused on specific Stark Law and Anti-Kickback Statute violations are likely to subside.


COVID-19 primed the healthcare regulatory landscape for modernization. Long sought-after flexibilities and waivers were immediately granted during the public health emergency, resulting in significant care transformations that will be difficult to unwind after official emergency declarations expire.

The pandemic has also brought to light new areas of healthcare regulation and policy that require attention. Medical liability, for example, became a major regulatory issue, prompting states to enact protections for providers caring for patients in emergency situations.

Medical liability protections passed by some state governments are likely to stick in some form moving forward, as well as other regulations and policies that enabled providers to meet the demand of a healthcare system in crisis, DeMeo concluded.

For More Information:


Request a Free Quote