On August 12, 2016, the U.S. Department of Health and Human Services ("HHS") released its Report to Congress: E-health and Telemedicine ("Report") in response to a Congressional request for HHS to provide an update on its telehealth efforts. The Report offers background on telehealth modalities, discusses current telehealth policy challenges, and highlights federal telehealth activity. As background, the Report cites the importance of telehealth services (defined broadly to include live video interactions, store-and-forward technologies, remote patient monitoring, and mobile health apps) as a means to increase access to care, improve health outcomes, and reduce health care costs.

The Report then highlights a number of challenges to widespread use of telehealth, including reimbursement/payment issues, state licensure barriers, and gaps in access to affordable high-speed broadband connections in rural hospitals and clinics. According to the Report, four out of five states require out-of-state clinicians providing telehealth services to be licensed in the state where the patient resides, highlighting the importance of licensure flexibility for physicians utilizing telehealth modalities. In addition, the Report notes that the payment environment for telehealth services continues to evolve. Medicare fee-for-service spending on telehealth services amounted to less than 0.01 percent of total spending by Medicare on health care services in 2015, while reimbursement for telehealth by Medicaid and private insurers varies greatly (48 state Medicaid programs currently provide some level of telehealth coverage, and 22 percent of large employers in 2014 covered telemedicine consultations, with more than 68 percent set to do so by 2017).

Despite challenges, HHS continues to invest in telehealth, particularly through Medicare, Medicaid, and the Indian Health Service. In addition, other HHS Operating Divisions, such as the Health Resources and Service Administration ("HRSA"), the Agency for Healthcare Research and Quality, and the Office of the National Coordinator for Health Information Technology ("ONC") support telehealth activities, the development of mobile technologies, and other research programs. Importantly, the Report concludes by noting that HHS's legislative proposal for 2017 would expand the ability of Medicare Advantage organizations to deliver certain medical services via telehealth by eliminating otherwise applicable Part B requirements that certain covered services be provided exclusively through in-person encounters.

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