Telemedicine has a big role in the coronavirus fight, but doctors say the laws remain murky

Key Points
  • Telemedicine is surging, but there's a complex patchwork of state and federal laws governing the business.
  • While the rules are starting to get relaxed, the changes are confusing to many in the industry. 
  • "There's massive information asymmetry in a crisis," said Lisa Bari, a health-tech policy consultant.
Two staff members wheel Amwell telemedicine carts into the entrance of the University of California San Francisco (UCSF) Benioff Children's Hospital in Mission Bay, San Francisco, California during an outbreak of the COVID-19 coronavirus, March 16, 2020.
Smith Collection | Gado | Getty Images

As part of its effort to extend health services to seniors, the Trump administration announced a major expansion of telemedicine options, allowing Americans enrolled in Medicare to talk to a doctor by phone or video chat for no additional cost. 

States including Massachusetts and Florida have also expanded telehealth coverage amid the COVID-19 crisis to make it easier for doctors and patients to connect online and to ensure that physicians get paid. Washington is among states moving to let doctors volunteer to treat patients even if they're not licensed in the state as long as they can legally practice elsewhere.

More than 260 doctors have already volunteered, though it will take time for them to be vetted, said Stephanie Mason of the Washington State Medical Commission. Getting licensed in other states can still take months and cost tens of thousands of dollars.

The coronavirus, which as of Wednesday has infected more than 6,400 people in the United States, killing at least 114, is threatening to overwhelm the U.S. health system in the coming weeks, creating a need for increased use of remote health services. But a patchwork of state-by-state regulations and a lack of clarity about what's allowed is causing telemedicine providers to move cautiously. Health plans, meanwhile, aren't moving as quickly as the federal government to reimburse doctors. 

PlushCare, a Bay Area-based telemedicine company.
Source: Plushcare

PlushCare is one of the companies trying to figure out how to proceed. The San Francisco-based company has focused on helping patients access birth control and other drugs through a network of online doctors. Now, it's helping patients with symptoms of COVID-19 who aren't critically ill and can be monitored remotely.

Co-founder and Chief Medical Officer James Wantuck said his doctors are available to start treating patients in states where they're not currently licensed. They have started to reach out to state medical commissions. Some responded faster than others, in part because many employees were working from home. But Wantuck also learned that states were still in the midst of determining what their telemedicine policies were going to be.

"Oregon just rejected us because we didn't have a facility there, and they told us to get one before we reapplied," Wantuck said. "North Carolina, we found out, is really targeting retired doctors who previously had a license in that state, while other states like Mississippi, Colorado and Florida are making it very easy for our doctors to get licensed there."


Because of the inconsistencies, medical providers, particularly those who work for small practices or start-ups, have to do their own research to determine what's allowed. The answer isn't always evident.

"It's confusing right now," said Andrea Lee, a health-focused attorney and partner at Honigman LLP. "The federal rules open up Medicare reimbursement around telemedicine, but providers need to be careful before immediately providing services, especially if they're trying to expand to new states."

Beyond the legal restrictions, there's the money. Seema Verma, administrator of the Centers for Medicare and Medicaid Services, told CNBC that reimbursement rates set by her agency will be the same for a telehealth visit as an office visit. Virtual check-ins will be billed as shorter visits, so the rates will be lower.

"The doctor can use their phone (and) use their computer, and there aren't a whole lot of restrictions on what types of modes of communication that they use," Verma said. "That should allow them to move very quickly on this."

While the federal government might increasingly be paying for telemedicine, a commercial health plan might not.

"There's massive information asymmetry in a crisis," said Lisa Bari, a health-tech policy consultant who previously worked at the CMS. "In any other time, the feds would have coordinated this announcement about Medicare flexibilities with commercial and state payers." 

The trend is clear — telemedicine is growing. Shares of Teladoc a provider of health services by phone and video, are flat since Feb. 20, while the S&P 500 has plunged 25% over that stretch. As the coronavirus spreads, usage of telemedicine services is spiking to the point where companies can barely keep up with demand. 

Companies in the market have to decide how aggressively they want to expand as the rules are in the process of being written.

"My advice is, yes do it, because you could go out of business in the next few months if you don't," said Farzad Mostashari, CEO of Aledade, a start-up that helps health practices adopt new technology and shift their payment models. He stressed that they still need to comply with federal and state laws. 

Mostashari said Aledade is providing guidance to doctors on how to use telemedicine to treat patients who suspect they have symptoms of the coronavirus, and is also compiling a list of different health plans' policies.

"Patients don't want to go out to doctors' offices where they might be exposed on the way there, or at the office," Mostashari said. 

— CNBC's Bertha Coombs contributed to this report.

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