The appeal for an employer is that telemedicine services generally reduce benefit costs and increase convenience and access to care for group health plan participants.
If you’re like most people, you don’t enjoy sitting in a doctor’s office with other coughing and sneezing people while waiting for your appointment, or wasting half a day just to get a prescription refilled. The concept of telemedicine is growing in popularity because it can make routine medical care easier to access and less expensive. But although it can be a great solution, employers are often unaware of the legal risks associated with introducing telemedicine to the workplace.
WHAT EXACTLY IS TELEMEDICINE?
Telemedicine generally refers to the provision of medical services by health care professionals through technology, rather than in person. It can be provided via either real-time communications – think phone calls or video conference – or “store and forward” technology, such as sending medical images or biosignals. Common services offered through telemedicine range from patient consultations and primary care diagnoses, to prescription drug refills and behavioral health counseling.
The appeal for an employer is that telemedicine services generally reduce benefit costs and increase convenience and access to care for group health plan participants. Plan costs are reduced because medical services offered through telemedicine are often less expensive than an office visit. Telemedicine can also reduce time off needed to visit the doctor. It may be especially attractive to employers with operations in rural settings (where some advanced or specialty health care options are inaccessible or inconvenient), and to employers whose employees have irregular schedules or travel frequently (because a physician consultation can be accessed remotely).
Telemedicine can be offered in a variety of forms, but it’s most easily classified into two types – provider-sponsored and employer/ group health plan-sponsored. Provider- sponsored telemedicine is simply an electronic “visit” with a provider, typically through provider-authorized software or apps. The group health plan receives a charge for the visit, and it’s paid in the same way as an in-person visit. This type poses little risk for employers.
Employer/group health plan-centered telemedicine involves an arrangement with a telemedicine company that provides the conduit to on-call physicians. Under this type of plan, an employee talks with a doctor who is on retainer with the telemedicine provider. Many of these arrangements include a monthly maintenance fee that then provide free or reduced cost “visits.” This arrangement can create risks for employers.
LEGAL RISKS FOR EMPLOYERS
Providing telemedicine services to employees can raise a number of legal issues – the most common being compliance with federal laws such as ERISA, COBRA and HIPAA, as well as state laws concerning medical licensure and practice and informed consent. Employers offering access to a telemedicine program for all employees – regardless of group health plan enrollment status – could inadvertently create a separate ERISA group health plan. If the program provides primary care or prescription drug services, it would qualify as a separate group health plan under ERISA, COBRA, HIPAA and other federal laws, and the program would have to meet the requirements under law. Further, all telemedicine programs are subject to HIPAA’s privacy, security and breach notification requirements.
In addition, each state has medical licensing laws that may preclude or restrict a provider licensed in one state from delivering telemedicine services to individuals in another state. Some states may also have laws restricting the scope of benefits that providers can deliver over the telephone or internet. Further, some local rules may require “informed consent” from patients before a provider is permitted to give telemedicine services. The consent must explain what telemedicine is, laying out the expected benefits and possible risks associated with using telemedicine services.
Employers must also be careful to not disqualify employees from using their health savings accounts (HSA). Employers who adopt a telemedicine program alongside a high-deductible health plan (HDP) need to be sure they don’t inadvertently disqualify their covered employees from HSA eligibility. An HSA allows individuals covered under a high-deductible to defer compensation on a pre-tax basis for the purpose of paying eligible medical expenses. In addition, the HSA participant must not be covered under any disqualifying coverage, which generally includes any health coverage that provides a benefit prior to meeting the HDHP deductible (unless one of the IRS limited exceptions apply). Thus, a telemedicine benefit could count as disqualifying coverage, for example, if the employer pays a portion of the telemedicine consultation, or if the participant pays less than fair market value for the consultation before meeting the HDHP deductible. A provider-sponsored program, or a telemedicine program requiring a separate charge for each “visit” would avoid this HSA issue.
BEST PRACTICES TO FOLLOW
Employers considering the adoption of a telemedicine program should take compliance requirements into consideration when designing and implementing the program. The best way to minimize the risk of creating a separate group health plan – and thus triggering additional compliance obligations under various federal laws – is by permitting only employees who are enrolled in a group health plan to use the telemedicine benefits. In this way, the telemedicine program can be integrated with the group health plan to meet federal requirements. As such, it must be available to qualified beneficiaries through COBRA as well.