Changes to Telehealth and Telemedicine Law in Tennessee

By: Clinton Sprinkle

On August 12, during a special session called by Governor Bill Lee, the state legislature passed SB 8003 / HB 8002 which requires health insurance entities to cover medically necessary telehealth and telemedicine services and to reimburse providers for those services with no distinction from an in-person visit.

While virtual meetings have been on a steady rise throughout all industries in the past few years, the response to the COVID-19 crisis brought telehealth and telemedicine to the forefront of agendas for many policymakers.

A bill with similar language failed to pass during the regular legislative session when the House of Representatives and Senate failed to agree on differing versions. Governor Lee announced that telemedicine was one of three issues to be considered in the June special session when he made the call amidst the backdrop of the COVID-19 pandemic.

Governor Lee issued an executive order in March urging insurance carriers to cover telemedicine, but it has since expired. On August 20, the bill became effective as Governor Lee signed it into law.

Telehealth: Payment Parity and Originating Site Fees

Prior to the passage of this legislation, insurance entities were already mandated to cover telehealth services in Tennessee. The bill amends current law and contains two key changes to the provider and payer relationship when patients engage in telehealth services.

First, health insurance entities are now required to “provide reimbursement for healthcare services provided during a telehealth encounter in a manner that is consistent with what the health insurance policy or contract provides for in-person encounters for the same service”.

Coverage and reimbursement are required if the telehealth services are “medically necessary” and are not simply emails or faxes.

The law requires that telehealth and in office visits be paid the same, or in other words, the law requires payment parity.  However, the bill contains a clause that repeals the reimbursement parity section on April 1, 2022. It is presumed the General Assembly will evaluate the success of the reimbursement model and address the end date during future legislative sessions in the next two years.

The second key change is a new mandate that health insurance entities reimburse an originating site hosting the patient as part of a telehealth encounter with an originating site fee.

The fee shall be in accordance with the federal centers for Medicare and Medicaid services telehealth services rule 42 C.F.R. § 410.78 and at an amount established prior to the effective date of this act by the federal centers for Medicare and Medicaid services.

Provider-Based Telemedicine

Another component of the legislation is the addition of the term “provider-based telemedicine” to the Tennessee code in a newly created section, T.C.A. § 56-7-1003.

Distinguished from telehealth, provider-based telemedicine allows patients to receive healthcare at any location “the patient deems appropriate to receive the healthcare service”. This provision puts into law what many patients are already doing -- engaging with providers through a personal computer, tablet, or phone from wherever is convenient.

Under the statute, health insurance entities must cover and reimburse providers for provider-based telemedicine services and pay at parity with an in-person visit. Provider-based telemedicine does not include audio-only conversations, emails, texts, faxes or remote patient monitoring. The law requires the provider to be at a qualified site other than the site where the patient is located and have access to the relevant medical record for that patient.

A qualified site is defined as “the primary or satellite office of a healthcare services provider, a hospital licensed under title 68, a facility recognized as a rural health clinic under federal medicare regulations, a federally qualified health center, a facility licensed under title 33, or any other location deemed acceptable by the health insurance entity”. The same definition is used for qualified site under the telehealth statute.

A pre-existing provider-patient relationship is required for coverage and reimbursement parity under the provider-based telemedicine statute. Providers must submit evidence to payers of an in-person encounter between the healthcare service provider, the healthcare services provider's practice group, or the healthcare system and the patient within sixteen (16) months prior to the interactive visit.

The bill also stipulates that the reimbursement parity of provider-based telemedicine is also repealed on April 1, 2022.

Broadening the Definition of “Healthcare Provider”

While most of the bill focused on changes to Title 56, one significant change was made to Title 63. In T.C.A. § 63-1-155 the definition of “healthcare provider” was expanded to now include any “individual acting within the scope of a valid license issued” under Title 63, as well as, “any alcohol and drug abuse counselor licensed under title 68, chapter 24, part 6”.

While the addition of alcohol and drug counselors is straight forward, many provider types benefited from a nuanced change in the code.

Previously the healthcare provider distinction was limited to those licensed in Title 63 who are authorized to diagnose and treat humans. The change to any “individual acting within the scope of a valid license” allows practitioners such as physical therapists, occupational therapists, speech therapists and others to engage in telehealth and telemedicine under the Tennessee code and affords them the reimbursement parity set forth in Title 56.

However, providers should take note that the new additions will be repealed from the “healthcare provider” definition in Title 63 on April 1, 2022.

What Services are Medically Necessary?

Health insurance entities must cover both telehealth and telemedicine services that are medically necessary and would be covered by the applicable health insurance policy if the same service had been delivered in-person.

For Medicaid patients, “medically necessary” is governed by TennCare’s standard found in T.C.A § 71-5- 144. TennCare recently announced that their MCO’s will be extending all current telehealth coverage policies through December 31, 2020.

For all other services, “medically necessary” means healthcare services that a healthcare professional would provide that are in accordance with accepted standards of practice, clinically appropriate, and not more costly that an alternative service as least as likely to produce equivalent results.

Conclusion

Virtual healthcare interactions are on the rise and have accelerated as patients and providers navigate the realities of the COVID-19 crisis. The new telehealth and telemedicine laws passed in Tennessee provide a framework for practitioners to operate in this new normal.

Providers should note that the coverage mandate for telehealth and telemedicine as well as the reimbursement parity only applies to commercial fully insured plans and cannot apply to ERISA plans. The Tennessee General Assembly will be observing the real-world application of these new laws as the reimbursement parity provisions have repeal dates in 2022.