Senate-Approved CARES Act Would Provide Temporary Medicare Telehealth “Fix” for Federally Qualified Health Centers

By , Published On: March 27, 2020

On March 25, 2020, the Senate passed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), a large stimulus bill intended to help the health care sector respond to the coronavirus (COVID-19) crisis and assist in economic recovery, and would for the duration of the  COVID-19 emergency, enable FQHCs to bill the Medicare program for telehealth services as distant site providers.  The House is expected to vote on this bill on Friday, March 27, 2020.  This bill would be the Government’s latest response to the COVID-19 emergency.

On January 31, 2020, the Secretary of Health and Human Services issued a declaration of a national public health emergency regarding COVID-19. On March 13, 2020, President Trump declared a national emergency under the National Emergencies Act relating to COVID-19. Health care providers across the country are now looking for ways to connect with patients virtually during the emergency—both to keep patients with routine primary care concerns out of the office, and to screen patients who are concerned they may be experiencing symptoms of the virus.

Unfortunately, however, the Medicare program has limited the qualified providers of telehealth “distant site” services to physicians and practitioners, leaving outpatient health care facilities, such as federally qualified health centers and rural health clinics (FQHCs/RHCs), unable to have their clinicians attend to Medicare patients using telehealth during the COVID-19 crisis. FQHCs and RHCs have been losing their capacity to connect with patients during the crisis, due to instructions to the public to practice social distancing, combined with payors’ limitations on paying FQHCs for telehealth and other virtual services. The telehealth provision in the CARES Act, if enacted, will help address this situation.

As background, the Medicare telehealth service, described in Section 1834(m) of the Social Security Act, is comprised of two parts. A “distant site” provider furnishes “telehealth services” (a range of services, with codes updated annually by the Department of Health and Human Services (“HHS”)), and receives payment according to the relevant fee schedule for the service. In addition, an “originating site facility fee” is available to the health care facility where a Medicare patient receiving telehealth services is located. FQHCs and RHCs may bill Medicare for the originating site facility fee (as of Calendar Year 2020, $26.65), provided that the FQHC/RHC site is located in a remote area that meets the geographic requirements in the statute; however, to date, FQHCs and RHCs have not been authorized to bill Medicare for the distant site component of the telehealth service.

On March 6, 2020, Congress enacted the wide-ranging Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, P.L. 116-123 (the Act).  Among many other provisions, it amended Section 1135 of the Social Security Act, relating to waivers of Medicare and Medicaid requirements during national emergencies, specifically to allow for greater Medicare telehealth flexibility during the COVID-19 crisis. The Medicare law normally requires the “originating site” where Medicare telehealth patients are located to be a health care facility in a remote area, but each of these requirements has been waived during the emergency, so that distant providers can connect with patients who are located in their homes, and in facilities in more densely populated areas.[1] The change in the law also allowed HHS to waive a regulatory prohibition against the use of telephones for Medicare telehealth, so that health care providers can use a broader range of technology (for example, FaceTime on an iPhone) to deliver telehealth.[2] Notably, the device used would still need to offer both audio and video real-time interactive communication.[3] However, the March 6 law did not correct the exclusion of FQHCs and RHCs as distant site telehealth providers.

The CARES Act, in Section 3704, would recognize FQHCs/RHCs as Medicare distant site telehealth providers for the duration of any “emergency period,” as defined in Section 1135(g). The bill would require HHS to develop and implement a payment methodology for FQHCs/RHCs as distant site providers, with the payment rate to be based on payment rates that are “similar to the national average payment rates for comparable telehealth services” under the Medicare Physician Fee Schedule.[4] The bill also specifies that the costs associated with the distant site telehealth service should not be considered in establishing FQHCs’ PPS rate or for purposes of RHCs’ all-inclusive cost-based methodology (i.e., these costs should be excluded from FQHC/RHC service costs on these entities’ cost reports).

If the House passes this bill and the President signs the bill into law, then based on recent experience, we should expect implementing guidance from HHS’ Centers for Medicare & Medicaid Services (CMS) soon concerning the payment methodology and billing requirements for FQHC-provided distant site telehealth services.

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If you have any questions about this update or other matters, please contact Susannah Vance Gopalan (Partner) or Brittney Rudolph (Associate), or call (202) 466-8960.


[1] Note, however, that Medicare will not pay an originating site facility fee if patient is not located in a facility. See Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (P.L. 116-123), Div. B, § 102 (2020) (adding new Social Security Act § 1135(b)(8)(A)).

[2] See Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (P.L. 116-123), Div. B, § 102 (2020) (adding new Social Security Act § 1135(b)(8)(B)).

[3] Medicare Telehealth Frequently Asked Questions (Mar. 17, 2020), p. 2 (“The new waiver in Section 1135(b) of the Social Security Act explicitly allows the Secretary to authorize use of telephones that have audio and video capabilities for the furnishing of Medicare telehealth services during the COVID-19 PHE. In addition, effective immediately, the HHS Office for Civil Rights (OCR) will exercise enforcement discretion and waive penalties for HIPAA violations against health care providers that serve patients in good faith through everyday communications technologies, such as FaceTime or Skype, during the COVID-19 nationwide public health emergency.”

[4] Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), H.R. 748, 116th Cong. §3704(4) (2020).