Telehealth: A New Frontier for Compliance Officers

Health Highlights

Editor’s Note: In the July issue of Compliance Today (Copyright 2018, Compliance Today, a publication of the Health Care Compliance Association (HCCA)), Manatt Health examines the unique compliance issues raised by the delivery of telehealth services. The article, summarized below, discusses the inconsistent statutes, regulations and guidance various states are implementing around the provision of telehealth services. Click here to read the full article, including state-specific examples and insights. For more information on telehealth, see our June article, “Telehealth: From Competitive Advantage to Strategic Imperative.”


Defining Telemedicine and Telehealth

States take varying approaches to defining the terms telemedicine and telehealth. Even within states, there may be varying bodies of law and regulatory agencies. For example, New York has one definition for the purposes of coverage by health insurers and another for the purposes of reimbursement by the Medicaid program.

Although states have varying definitions of telemedicine and telehealth, they generally exclude provider-to-provider consultations and the use of solely telephone or fax. Understanding whether a state’s definition of telehealth and telemedicine encompasses a proposed service is key to assessing the risks associated with the program, as well as understanding whether the professional practice, licensure, disclosure and consent requirements apply and whether reimbursement can be sought.

Professional Practice and Licensure Requirements

Ensuring that a provider holds the required license to provide services to a patient located within a given state is crucial to ensuring compliance with state licensure laws. With regard to physician licensure, 22 states currently participate in the Interstate Medical Licensure Compact, which allows physicians to practice across states that participate in the Compact, if they meet certain requirements.

In states that do not participate in the Compact and for other medical professionals, however, most states require that providers who render care to patients located within the state be licensed by that state and hold either a full license or a temporary or provisional license for rendering telehealth services. Some states have even more burdensome requirements for telemedicine providers, requiring that the provider be located within the state when delivering services.

Prior Patient Relationship Requirements

As more and more patients access care through telemedicine, regulators have expressed concerns over the quality of care provided. Although some states apply the same standard of care to telehealth as they do to traditional in-person encounters, many states have implemented additional guardrails for the provision of telehealth services. These guardrails focus mostly on ensuring that patients are seen in person, when appropriate, and that a provider-patient relationship is established, such that the provider remains responsible for the patient’s care.

Disclosure and Consent

Virtually all states place some sort of requirement on the practitioner to inform the patient about the use of telehealth services and obtain the patient’s consent. The information that must be disclosed and the form of consent vary from state to state.

Providers should be sure to understand and comply with the specific requirements applicable in the state in which they practice and/or provide telehealth services. At a minimum, obtaining informed consent in accordance with the applicable state law or regulation—and maintaining documentation of it in the patient’s medical record—is highly recommended.

Corporate Practice of Medicine

The corporate practice of medicine doctrine is a well-established and long-standing principle that generally prevents corporate entities from employing medical professionals or practicing medicine. There are 33 states where the corporate practice of medicine doctrine is alive and well. It is critical that companies offering telehealth services comply with the restrictions imposed by the doctrine.


The ability to seek reimbursement for telehealth services from Medicare and state Medicaid programs varies widely. Medicare fee for service provides telehealth coverage for a very limited set of services that meet strict requirements related to the technology used, the originating site and the provider type.

Other than in the federal telemedicine demonstration projects in Alaska and Hawaii, the only type of telehealth encounters eligible for reimbursement by Medicare are real-time, audiovisual communications between providers and patients. Moreover, telemedicine services are covered only when the originating site is located in a rural area—either in a county outside of a Metropolitan Statistical Area (MSA) or in a Health Professional Shortage Area (HPSA)—and when the originating site is in a physician or practitioner office, a hospital, a critical access hospital (CAH), a rural health clinic, a Federally Qualified Health Center, a CAH-based renal dialysis center, a skilled nursing facility or a community mental health center.

Medicare also limits which types of practitioners may render telehealth services. Only physicians, nurse practitioners, physician assistants, nurse midwives, clinical nurse specialists, certified registered nurse anesthetists, clinical psychologists, clinical social workers, and registered dieticians or nutrition professionals are eligible.

Currently, Medicare Advantage Plans must cover the set of telehealth services that are covered by fee-for-service Medicare, but they can provide additional telehealth services by using rebate dollars or charging beneficiaries a supplemental premium with approval from the Centers for Medicare & Medicaid Services (CMS). Recent legislation, however, will allow Medicare Advantage Plans to be reimbursed beginning in 2020 for telehealth benefits that do not meet the strict coverage requirements of fee for service.

Medicaid reimbursement for telehealth varies widely across states. States limit coverage in a variety of ways, such as through the technology eligible for reimbursement, the provider types eligible to provide those services or the types of services for which telehealth may be used.

When seeking reimbursement for telehealth services, it is critical to know and comply with the payer’s requirements. It is equally important to ensure that services are medically necessary and documented in the record—and that the record contains all required elements to support a billable service.


Checklists for evaluating new telemedicine offerings or relationships should include the following:

  • Does the service being rendered meet the state’s definition(s) of telehealth or telemedicine services?
  • Are the providers appropriately licensed to provide telehealth or telemedicine services?
  • Will the providers need to have a pre-existing or other relationship with the patient before providing telehealth or telemedicine services?
  • Is there a process in place for providers engaged in telehealth encounters to comply with the disclosure and consent requirements that states impose on them?
  • Is the telehealth provider operating in compliance with any restrictions on the corporate practice of medicine or of the professions?
  • How will compliance with government program requirements be ensured and monitored?


pursuant to New York DR 2-101(f)

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