Telehealth: The Legal and Regulatory Issues Amid the COVID-19 Pandemic and the Return to Pre-Pandemic Life

9 Min Read By: Timothy R. McTaggart, Jacob Seransky

The increased use of digitalized healthcare technologies amid the global pandemic continues to pique the interest of many institutional healthcare organizations and professionals, emphasizing its utility as an influential healthcare delivery segment; however, telehealth’s accelerated growth and fast-tracked implementation raise many concerns, including physicians’ licensure compliance and fraudulent behavior by healthcare providers.[1] Although the pandemic’s exit is not yet foreseeable, governments are now better equipped to manage its repercussions without imposing another set of stringent lockdowns, which begs the question: what is the future of this potentially robust healthcare sector? Many proponents, such as the American Medical Association (“AMA”), have advocated for Congress to facilitate a smooth transition so patients can continue to address their healthcare needs via telehealth processes.[2]

Prior to the global pandemic, state and federal regulations partially inhibited patients’ and physicians’ ability to convene by utilizing digitalized healthcare systems. Regulations dictated that physicians adhere to state licensure requirements when providing patient care. Moreover, Section 1834(m) of the Social Security Act restricts the usage of telehealth services unless such care is provided at an approved site—a provision that has traditionally been used in rural communities.[3] The Public Health Emergency (“PHE”) declaration partially suspended these strict regulatory requirements. Further, the passage of the CARES Act authorized the Centers of Medicare and Medicaid Services (“CMS”) to waive geographic barriers for the duration of the PHE.[4] As a result, many patients are able to receive medical services from the comfort of their residences instead of strictly at an approved site.[5] As CMS waived many of these geographic barriers in March of 2020, Medicare, Medicaid, private insurance companies, and state governments enabled reimbursements for telehealth services at the same rate as physical visits.[6] Additionally, during the peak of the pandemic, 41 states temporarily suspended licensure requirements, authorizing out-of-state physicians to administer services across state lines by utilizing telehealth infrastructure.

On January 14, 2022, the U.S. Department of Health & Human Services (“HHS”) extended the PHE until April 16, 2022.[7] Coinciding with the continuance of the PHE declaration is the issuance of Section 1135 Waivers of the Social Security Act. Section 1135 grants the HHS the authority to modify or suspend federal requirements for the duration of a PHE. Among the significant modifications issued by the HHS and CMS are state-specific Medicaid waivers, which allow providers to administer care by utilizing telehealth across state lines.[8] Moreover, Medicare telehealth coverage and federal oversight reporting requirements continue to be modified to ensure healthcare accessibility during the PHE.[9] These waivers and similar modifications will cease when the PHE expires; thus, uncertainty looms regarding the future of telehealth and its accessibility. Absent Congressional action, the flexibilities of Medicare reimbursements and temporary suspension of geographic restrictions will cease at the expiration of the PHE.

Some federal developments are under consideration to ensure that access to these services is not inhibited after the PHE expires. For example, legislation has been introduced in the Senate, including the Creating Opportunities Now for Necessary and Effective Care Technologies for Health Act of 2021 (“CONNECT Act”). This act would permanently remove the geographic restrictions under Medicare, allowing patients to access mental telehealth services from their residence rather than an approved location; additionally, the CONNECT Act would also remove the geographic restrictions for rural health clinics and federally qualified health centers.[10] Similarly, H.R. 2903 (a companion bill to the CONNECT Act) amends the Social Security Act to expand access and reimbursement of telehealth services.[11] Although a step in the right direction, these bills have experienced little momentum in their respective houses. As the new PHE declaration will soon expire, and as COVID immunity builds, maybe lawmakers will prioritize this bipartisan and bicameral legislation.

With respect to physicians’ licensure requirements, uniformity is nearly impossible to ensure. As referenced prior, licensing requirements are state-specific. Therefore, state legislatures must determine if they wish to continue, or make permanent, flexible licensure procedures. State legislatures are seeking to make their temporary waiver exemptions permanent, granting out-of-state practitioners the ability to deliver telehealth services across state lines if they comply with local state practices and requirements. Specifically, many states have entered interstate compacts, which allow certain providers to practice across state lines if they remain in good standing with their home jurisdiction.

Notably, 29 states and the District of Columbia are members of the Interstate Medical Licensure Compact.[12] Some states, such as Florida, have allowed temporary waivers to expire.[13] Although this may complicate physicians’ ability to deliver out-of-state care via telehealth platforms, some of these states provide expedited licensing to out-of-state physicians who seek to offer telehealth services. On a federal level, some proponents have argued for a uniform system of physician licensure reciprocity; however, it is unlikely states will individually honor widespread reciprocity. Still, a situation could arise, although unlikely, where the federal government compels states to honor such a reciprocity agreement.[14] For example, the receipt of federal funds, such as Medicaid, could be linked to the acceptance of a federal initiative aimed at implementing a system of widespread state licensure reciprocity.

It is also likely that more precise procedures for providing care when utilizing telehealth platforms will be implemented. As the declaration of the PHE was abrupt and unforeseeable, the delivery method of telehealth services was not a primary concern. But, as restrictions are lifted across the country, state and federal regulations will likely address telehealth delivery methods and their compliance with medical standards.

Lawmakers and medical practitioners must address the exponential increase in the number of patients seen via telehealth outlets. In some instances, physicians are now attending to more than 100 times the number of patients through telehealth practices than they saw in person before the COVID-19, prompting the need for increased safeguards so that physicians and telehealth platforms do not become overwhelmed and overmanipulated. It was not possible to foresee the level of chaos that ensued as a result of the global pandemic. Consequently, to meet patient demands, physicians had to quickly adapt to the new normal by adopting and incorporating telehealth services in their practices. Because physicians had to quickly pivot to keep pace during such a volatile time, there was no easement period.

To alleviate compliance concerns that may have been reasonably neglected, the AMA is asking the federal government to provide physicians with adequate time to meet HIPAA and other compliance measures, rather than immediately subjecting them to enforcement actions and federal audits.[15] This request calls for HHS to provide a one-year glide path to compliance.[16] If implemented, physicians who had to quickly adapt to the global pandemic by utilizing telehealth delivery services will have sufficient time to meet compliance measures.[17] Further, the request also urges telehealth vendors to offer guidance to physicians, thereby ensuring that physicians’ utilization of telehealth technology is compliant with security concerns and standards of patient care.[18]

Telehealth services have proven to be indispensable to health care practitioners and patients during the global pandemic, allowing for greater accessibility and alignment with technological innovation. Still, after the expiration of the PHE, many factors will need to be addressed to ensure an adequate telehealth infrastructure. The potential for rampant fraud is a key concern. On May 26, 2021, the Department of Justice (“DOJ”) embarked on a coordinated action against 14 entities, including physicians, healthcare providers, and telehealth executives, alleging fraudulent Medicare claims totaling over $143 million in false billing.[19] Further, to combat healthcare fraud during the pandemic and abuse of CMS programs, the CMS issued penalties for more than 50 medical providers.[20] In a press release on September 17, 2021, the DOJ announced criminal charges against 138 defendants, spanning across 31 federal districts, for their involvement in alleged healthcare fraud. Of the $1.4 billion in alleged losses, nearly $1.1 billion in fraudulent and falsified claims to Medicare/government insurers was perpetrated via telehealth services. The DOJ’s release emphasizes the inevitable crackdown on providers’ attempts to guise and misrepresent telemedicine services and consultations to exploit the CMS’s expansion of telehealth services during the global pandemic.

With that in mind, federal audits may prove necessary to hinder fraudulent practices and ensure compliance with state and federal laws governing telehealth services. With the emergence of fraudulent practices by providers during the PHE, the HHS’s Office of the Inspector General (“OIG”) started auditing telehealth providers.[21] The auditing procedures initiated by HHS may provide a glimpse into the future of telemedicine while implementing future safeguards and guidelines for patients and providers.[22] Therefore, the OIG’s audits and subsequent recommendations/findings may prove to be an invaluable tool for lawmakers when they consider the future of the telehealth industry.

Overall, there seems to be a consensus that telehealth services will expand to levels of accessibility well above pre-COVID numbers. Hence, regulatory responses to alleviate potential fraudulent behavior are inevitable. With the issuance of new audits of telehealth services by the HHS in 2021, a warning stage has arisen. This seems to point out that the government is preparing to cleanse unscrupulous providers from the market.

Conclusion:

Telehealth is here to stay, but the future of its use remains uncertain. Once the PHE expires, and COVID-19 concerns dissipate, a multitude of adjustments are necessary to ensure that telehealth infrastructures are suitable for long-term, widescale dissemination. First, continued reimbursement for telehealth services must continue, which seems likely. Next, DOJ actions aimed at cleansing the telehealth arena of fraudulent actors and federal audits will signal the necessity of complying with telehealth procedures and protocols to telehealth providers. Lastly, continued cooperation by states via interstate compacts and expedited licensing procedures are vital to the future accessibility of telehealth services.


  1. Although “telehealth” and “telemedicine” may seem to be identical terminology, “telehealth” is much more broad in scope, encompassing many different types of remote health care services. Conversely, “telemedicine” refers to remote clinical services.

  2. https://www.ama-assn.org/practice-management/digital/pandemic-s-telehealth-advances-will-be-lost-if-congress-doesn-t-act

  3. https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Information-on-Medicare-Telehealth-Report.pdf

  4. https://www.kff.org/womens-health-policy/issue-brief/opportunities-and-barriers-for-telemedicine-in-the-u-s-during-the-covid-19-emergency-and-beyond/

  5. Id.

  6. https://www.cchpca.org/resources/covid-19-telehealth-coverage-policies/

  7. https://www.phe.gov/emergency/news/healthactions/phe/Pages/default.aspx

  8. https://www.cms.gov/files/document/summary-covid-19-emergency-declaration-waivers.pdf

  9. https://www.commonwealthfund.org/publications/issue-briefs/2021/jun/states-actions-expand-telemedicine-access-covid-19; https://www.natlawreview.com/article/oig-has-seven-yes-seven-different-national-telemedicine-audits

  10. https://www.congress.gov/bill/116th-congress/senate-bill/2741/text; https://www.jdsupra.com/legalnews/executive-summary-tracking-telehealth-2030567/

  11. https://www.congress.gov/bill/117th-congress/house-bill/2903/text

  12. https://www.natlawreview.com/article/telemental-health-laws-overview

  13. https://www.marketplace.org/shows/marketplace-tech/telemedicine-is-trying-to-lean-into-the-future-its-complicated/

  14. https://www.nejm.org/doi/full/10.1056/NEJMp2031608

  15. https://www.ama-assn.org/practice-management/digital/need-glide-path-hipaa-telehealth-rules-pandemic-s-end

  16. Id.

  17. Id.

  18. Id.

  19. https://www.jdsupra.com/legalnews/doj-s-recent-telehealth-enforcement-3562330/

  20. Id.

  21. https://news.bloomberglaw.com/health-law-and-business/federal-audits-of-telehealth-to-shape-its-post-pandemic-future

  22. Id.

By: Timothy R. McTaggart, Jacob Seransky

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