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PG Briefing


May 2, 2019

Rural Health: Quality & Telehealth

Evangeline Lalangas and Rachel Freeman (Gray Reed & McGraw LLP, Dallas, TX)

This Briefing is brought to you by AHLA’s Post-Acute and Long Term Services Practice Group.

The first Medicare telehealth legislation was passed in 1998, but as of 2016 only 0.25% of Medicare services were telehealth-based.1 Although ripe with potential, telehealth remains a relatively untapped resource for practitioners and patients alike. While plainly beneficial to all patients, it is also clear that certain populations and regions would benefit to a greater extent by increased access to telehealth—particularly individuals residing in rural areas and those receiving long term care services in skilled nursing facilities (SNFs), nursing homes, and assisted living facilities (collectively, LTCFs). Long term care is a division of health care experiencing a rapid increase in utilization, with an estimated four million people in the United States moving or being admitted into a LTCF every year.2 These facilities primarily house and treat individuals age 65 and over with multiple comorbidities, a population that is already one of the biggest users of telehealth.3 Added to that, rural residents are arguably the largest telehealth consumers, particularly those located in Texas, Iowa, California, Missouri, Michigan, Minnesota, Wisconsin, Georgia, Virginia, and Kentucky.4

Rural Health Conundrum

Over the last ten years, more than 440 rural nursing homes have closed their doors.5 It is without question that these closures negatively affect those residents, their families, and communities, many of whom scramble to find alternate care, resulting in loved ones transitioning to less stable environments or another facility that is likely to be significantly further away from the family support system. Deeply intertwined with the trend of long term care facility closure is that rural areas consistently fail to attract and retain a skilled medical workforce, including medical assistants, nurses, and physicians—a fundamental need as the world of health care continues to shift toward value-based payment.

Although hospitals continue to provide post-acute care, particularly critical access hospitals (CAHs) in rural areas, those services are primarily provided to patients admitted for scheduled surgery or during the course of a severe illness. As such, although a CAH can help a patient recuperate through “swing bed” programs, CAHs do not necessarily provide an answer for those regions experiencing LTCF general shortages due to, for example, a recent facility closure.6 Incorporating telehealth presents an opportunity for much needed rural long term care facilities to remain open and provide high-quality care to their patients.

Telehealth Reimbursement

As with payment for any medical service, the rules governing payment for telehealth services differ depending on the state within which the services are rendered and the patient’s insurance.

Medicare Coverage

Traditional Medicare pays for telehealth services, but only within strict parameters that are dictated by the Social Security Act (Act) under Section 1834(m). Medicare Advantage (MA) plans are required to cover at least those telehealth services that traditional Medicare reimburses.7 Medicare refers to “telehealth services” as a specific set of services a practitioner would generally provide in-person, but for which CMS will reimburse when they are instead furnished using interactive, real-time telecommunication technology. The conditions necessary for Medicare to cover telehealth services include that: (1) the beneficiary be located in a qualifying rural area; (2) the beneficiary be located at one of eight qualifying originating sites; (3) the beneficiary receives services from one of ten eligible distant site practitioners; (4) the beneficiary communicates with the distant site practitioner via an interactive audio and video telecommunications system with real-time communication; and (5) the CPT code for the service is included on CMS’ list of covered Medicare telehealth services.8

CMS recently gave providers some “wiggle room” by adopting updated telehealth payment policies, acknowledging that Section 1834(m) of the Act has limited the degree to which the medical community can be compensated for new services that inherently use communication technology.9 Specifically, under a November 23, 2018 Final Rule, CMS acknowledged that while it does not have the authority to change the limitations the Act places on geography, patient setting, or type of furnishing practitioner, there is a distinction between “Medicare telehealth services” governed by Section 1834(m), and simply “telehealth” that is not subject to the same constraints.10 As mentioned above, the distinction hinges on whether the service in question ordinarily involves an in-person encounter.11 Although beyond the scope of this article, it is worth noting that the Final Rule also discusses billing and payment changes for Medicare telehealth services governed by Section 1834(m) of the Act, including loosening its restrictions for treatment associated with end stage renal disease, stroke, and substance use disorders.

In the Final Rule, CMS also introduced three new categories of telehealth services. These services are not subject to the limitations on Medicare telehealth services in Section 1834(m) of the Act; rather, Medicare will reimburse them under the Physician Fee Schedule like other physician services.12

Virtual Check In. The first new category of telehealth service is a “Virtual Check In,” which CMS defines as a brief service using communication technology to determine whether or not an office visit or other service is warranted.13 The service can be provided by a physician or other qualified health care professional who can report evaluation and management (E/M) services. The service must stand on its own; it cannot be related to an E/M service provided within the preceding seven days or leading to an E/M service or procedure within the next 24 hours (or soonest available appointment).14 Further, Virtual Check Ins may only be provided to an “established patient,” meaning a patient who within the past three years has been treated by a physician or qualified professional within the same practice.15 The Virtual Check In need not be completed via a specific form of technology and can be as simple as a phone call.16 Patients receiving the service must give verbal consent and this consent is to be documented in the medical record.17

Remote Evaluation. The second category—remote evaluation—contemplates a physician or other qualified health care professional remotely evaluating a patient’s condition using pre-recorded videos or images provided by the patient, and the provider follows up with the patient within 24 business hours.18 CMS does not dictate exactly how the follow up must occur, and it can be by phone, video, secure text message, email, or patient portal.19 As with a Virtual Check In, the service must stand on its own (i.e., not related to a prior E/M service within the last seven days or result in a service or procedure shortly thereafter), the service must be provided to an established patient, and the patient must give verbal consent to be documented in their medical record.20

Interprofessional Internet Consultation. CMS added several new codes concerning care-related consultation between providers. More specifically, Medicare will now reimburse these assessment and management service consultations when a patient’s treating practitioner seeks the opinion or treatment advice of a consulting provider with specific expertise to assist with the patient’s problem.21 This only applies where the consulting provider does not need a face-to-face meeting with the patient. As with the other services discussed, the patient must consent to the consultation and this consent is documented in the record.22

Prior to the Final Rule, the first two categories of services would only be compensated via bundled payment associated with an in-person follow-up visit. Under the new payment policy, the provider is compensated for providing a meaningful determination regarding whether any additional service is needed, which is an important component in coordinating quality patient care and likely decreases unnecessary and expensive follow-up visits.

State Considerations

In addition to payer considerations, state regulation of telehealth will have a significant impact on the manner and extent to which telehealth can be incorporated into long term care facilities. As Texas has one of the highest utilization rates of telehealth,23 this article considers Texas-specific requirements as an example. Texas recently made a step towards modernizing its telehealth rules, with an update in 2017 that notably allows practitioners to establish a patient relationship via telehealth instead of only with an in-person meeting.

It is worth noting that Texas makes a distinction between “telehealth” and “telemedicine,” but for the purposes of this article, they are used to reference the same category of services. Texas’ telemedicine standards relate to those services provided by licensed physicians, or health professionals acting under a physician’s delegation and supervision, to patients located at different physical locations than the physicians or professionals using telecommunications or information technology.24 Subject to limited exceptions, a physician must be licensed in Texas to provide telemedicine services to Texas patients.25 In most instances, the same requirements apply regardless of whether a services is provided via telemedicine or in-person. For example, a physician must still establish a physician-patient relationship and will still be subject to the same standard of care that would apply if the service had been rendered in-person.26 Similarly, the rules concerning medical records or patient privacy do not change when providing telemedicine services. In addition, the patient must specifically consent to treatment via telemedicine. The consent must outline telemedicine’s appropriate use, limitations, and risks, as well as potential fees.

In terms of payment, Texas payers are prohibited from excluding a covered telemedicine medical service from coverage solely because the service is not provided through an in-person consultation.27 Private payers generally reimburse at the same rates as for an in-person visit, but the rates and associated requirements will vary. Typically, private payers will publish their policies about telemedicine coverage on their websites. Lastly, Texas Medicaid generally will reimburse limited telemedicine medical services in the same manner as in-person professional services, subject to certain conditions.28 

Quality-Based Opportunities

In light of CMS’ loosening of its telehealth rules, practitioners, specifically long term care practitioners, and their patients may stand to gain substantially from the increased quality of care that telehealth can provide. For example, nursing homes are evaluated by CMS under the Five-Star Quality Rating System via the “Nursing Home Compare” website. The goal of this system is to provide consumers with quality information about nursing homes, which in turn assists them in making important decisions about where to receive long term care. The system rates a nursing home on a scale of one to five based on health inspections, quality of care, and staffing. In theory, a nursing home with a low rating will experience decreased business. From this perspective, telemedicine presents an opportunity for nursing home providers to increase these scores.

By way of example, in a SNF nursing staff typically deal with fragile, complicated patients, with physicians rounding on a weekly or bi-weekly basis in addition to telephone availability. Adding a physician available via telemedicine for virtual check in, remote evaluation, or interprofessional consultation could significantly increase quality of care and thus the SNF’s Nursing Home Compare quality metrics, including:

  1. Percentage of short-stay residents who were re-hospitalized after a nursing home admission;
  2. Percentage of short-stay residents who had an outpatient emergency visit;
  3. Rate of successful return to home and community from a short-stay;
  4. Rate of successful return to home and community from SNF; and/or
  5. Rate of potentially preventable hospital readmissions 30 days after discharge form a SNF.

Going beyond just the rating, telehealth-related quality improvement also presents an opportunity for SNFs under the Skilled Nursing Facility Value-Based Purchasing (SNF VPB) Program.29 All SNFs paid under the SNF Prospective Payment System are included in the SNF VPB Program and are eligible for payment incentives based on their performance on the program’s measures. Specifically, SNFs are evaluated on hospital readmission measures within 30 days after a patient is discharged. SNFs then receive a performance score that is compared to other SNFs around the country and will or will not receive a corresponding incentive payment based on its performance score.


While there are many opportunities to be gained for LTCFs by incorporating telehealth into their services, challenges still exist, particularly for those in rural communities regularly struggling with access to care. CMS specifically rejected adding additional telehealth services with the 2018 changes. In addition, there is a lack of synergy across government and commercial payers regarding how “telehealth” is defined, covered, and reimbursed, which arguably creates confusion and disincentives for providers. LTCFs generally struggle with reimbursement particularly because many of the services their patients need can be non-medical in nature and thus, not reimbursable by federal and commercial health plans.

Providers and patients living in rural areas face unique challenges, but telehealth can help to bridge many of the gaps by increasing quality and access to care. Easing pathways for providers to use technology to manage and treat their patients via telehealth is an important way to ensure these goals are met and the rural population has the proper avenues to receive long term care services.

1 Ctrs. for Medicare & Medicaid Servs., Information on Medicare Telehealth (Nov. 15, 2018), available at [hereinafter Information on Medicare Telehealth].
2 Ctrs. for Disease Control and Prevention, Nursing Homes and Assisted Living (Long-term Care Facilities [LTCFs]),
3 Interestingly, psychotherapy services have been the most utilized type of telehealth-based services, with 84% of patients having at least one mental health diagnosis.    
4 Information on Medicare Telehealth, supra note1. . 
5 Jack Healy, Nursing Homes Are Closing Across Rural America, Scattering Residents, N.Y. Times, Mar. 4, 2019,; Guy Boulton, The Last of 105 Patients Were Moved to New Homes on Thursday, Milwaukee J. Sentinel, Mar. 1, 2019,
6 Jenn Lukens, Rural Post-Acute Care: Improving Transitions to Enhance Patient Recovery, Rural Health Information Hub (May 8, 2018),
7 It is worth noting that the Bipartisan Budget Act of 2018 created new authority for MA plans to offer additional telehealth services under Part B beyond those payable by traditional Medicare. See Bipartisan Budget Act of 2018, amending Section 1852 of the Social Security Act.
8 42 U.S.C. § 1395(m).
9 83 Fed. Reg. 59452, 59483 (to be codified at 42 C.F.R. pt. 414).
10 Id.
11 Id.
12 Id.
13 Id.
14 83 Fed. Reg. at 59486.
15 Id. at 59485.
16 Id. at 59486.
17 Id.
18 Id. at 59488.
19 Id. at 59489.
20 83 Fed. Reg. at 59452, 59488, and 59489.
21 Id. at 59489.
22 Id. at 59452 and 59491.
23 SeeInformation on Medicare Telehealth, supra note 1.
24 Tex. Occ. Code § 111.005.
25 See Tex. Occ. Code § 111.151.056. While Texas is among a number of states that offer a limited license to out-of-state physicians who want to practice telemedicine within their borders, this license is quite limited in scope as it only allows interpretation of diagnostic tests or follow up of patients where the majority of patient care was rendered in another state. See 22 Tex. Admin. Code §§ 172.12; 174.8.
26 Tex. Occ. Code § 111.007.
27 Tex. Ins. Code § 1455.004.
28 1 Tex. Admin. Code § 355.7001.
29 See Ctrs. for Medicare & Medicaid Servs., The Skilled Nursing Facility Value-Based Purchasing Program (SNF VBP), (last accessed Mar. 25, 2019).
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