By Mark Spurlin, CPA
At the recent ABA Health Law Section conference in Washington D.C., multiple panelists discussed the rapid adoption of telehealth during the COVID-19 pandemic, and challenges that lie ahead for the industry. The positives and negatives of telehealth services vs. in-person care can be hard to weigh. Services requiring more hands-on evaluation and testing will continue the need to be performed in a healthcare facility. However, follow-ups and medication management could shift to tele-visits and technology that can remotely monitor patients and/or allow the patient to provide simple information like vitals which will ultimately reduce the overall number of in-person encounters. Services that rely less on physical patient interaction, like mental health services especially, have broad support and consensus on the benefits of expanded access to telehealth. There is also no doubt telehealth is especially beneficial for patients in rural areas; additionally, telehealth can decrease the time it takes to receive care and prevent unnecessary utilization of more costly emergent care such as urgent treatment clinics and emergency departments.
During the pandemic, a number of changes were made to the regulatory and reimbursement framework for telehealth. These changes included temporary waivers to certain regulatory restrictions to access, as well as reimbursement parity between telemedicine and in-person visits. The 2022 Medicare Physician Fee Schedule (“MPFS”) extends parity in reimbursement with in-person visits through the end of 2023, but the long-term future is much less certain for reimbursement. Multiple variables, including the economics of telemedicine, the quality of care, new technology and market participants, utilization rates and patient/provider habits in a post-pandemic world are hard to predict individually, much less in the aggregate. We believe it is reasonable to assume tele-health services will eventually be paid at a lower rate than in-office services and many practices will see an overall decline of in-person visits, but increased efficiency and lower costs will offset a majority of the decline, potentially allowing for even better margins.
Regarding the regulatory framework and temporary waivers, these too are likely to evolve. It is apparent that the Department of Justice and the OIG are still concerned about the potential for fraud and abuse within telehealth services, and have dedicated significant recourses to identify, investigate, and eliminate waste, fraud, and abuse in our federal health care programs. Ironically, new technology and datamining capabilities have created tremendous efficiencies, increasing the detection, investigation and prosecution of bad actors. We believe these technological efficiencies will ultimately deter fraud and abuse, give regulators and lawmakers more confidence to prevent much of the rollback after the PHE, and even promote even greater expansion and experimentation of telehealth services in the future.
Through our valuation and advisory services practice, Root has been on the forefront of the telehealth expansion and has had the privilege to work with numerous companies that are introducing new and innovative technology and care delivery models. While the pandemic opened the floodgates and lead to a huge rush to market for many new products and services, it is as important as ever to be mindful of compliance. Root understands time is of the essence when new products and/or services are brought to market. Our expertise and philosophy of providing a more consultative and collaborative approach to valuation services, when going to market, are achieved by working in tandem with clients and counsel to help develop commercialization strategies and agreements to maximize value, while remaining compliant and within fair market value.