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A look ahead: digital health in 2023
2023 PRINDBRF 0138
• Practitioner Insights Commentaries
• March 20, 2023
(March 20, 2023) - McDermott Will & Emery attorneys Lisa Mazur, Dale Van Demark, Amanda Enyeart and Marshall Jackson Jr. offer takeaways from the panel discussion "Digital Health: What's on the Horizon For 2023 and Beyond" at the recent J.P. Morgan Health Care Conference.
Digital health outlook from JPM 2023: challenges and opportunities for digital health investment
In January 2023, industry leaders, investors and entrepreneurs gathered at the 41st annual J.P. Morgan Health Care Conference (JPM 2023). The panel "Digital Health: What's on the Horizon For 2023 and Beyond," moderated by McDermott partner Dale Van Demark, provided an outlook on investments in the digital health space in 2023.
In light of the constrained market, the panelists observed that the same digital health companies that could have been funded just a few years ago are facing much more scrutiny today. In the current market, this means that digital health entrepreneurs need immediate use cases: ideas that that can serve immediate needs, can be monetized very quickly, and can show impact and identify cost-savings immediately.
The panelists predicted that investment opportunities will be at the center of the established health care system, where digital health companies will need to engage with providers, payers and employers to create value.
One panelist also observed that market conditions are ripe for a wave of digital health consolidation, which will see smaller startups that have not reached profitability consolidated on larger platforms.
There is excitement for deal activity around complex diseases, improvements in efficiency and clinical workflow, enabling technologies for the transition to value-based care, and AI-driven patient navigation.
Driven both by lessons from the COVID-19 pandemic and the current market, the focus of entrepreneurs and investors has shifted to partnerships and collaborative models. Panelists discussed how the focus on value-based care will present digital health companies with more of an opportunity for collaboration with providers and payers, as well as opportunities to play matchmaker between partners.
In particular, these collaborative opportunities may come with small- to medium-sized companies, who may be more willing to take on risk and be more flexible with their systems compared to incumbent health system companies.
Increased focus on privacy and security
We expect to see continued focus on privacy and security1 at the federal and state level. For example, California, Virginia, Colorado, Utah and Connecticut have new privacy laws coming into effect in 2023. As part of our State Law Privacy Video Series,2 McDermott described how these laws will affect health data and health care entities — in particular, those entities that are regulated by HIPAA.
In addition, at the end of 2022, HHS proposed long-awaited changes to the regulations3 protecting the confidentiality of substance-use disorder patient records under Part 2 of Title 42 of the Code of Federal Regulations (42 CFR Part 2, or Part 2).
Specifically, the proposed rule would implement provisions of Section 3221 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which required HHS to align Part 2 with certain provisions of HIPAA and to make certain changes to the HIPAA Notice of Privacy Practices, the form given to patients and plan members that describes patient privacy rights, covered entity duties, and the covered entity's uses and disclosures of protected health information.
Making Medicare telehealth flexibilities permanent
The year-end omnibus legislative package4 passed in December 2022 extended key Medicare telehealth flexibilities implemented as part of the Public Health Emergency (PHE) waivers. The PHE remains in effect at least through January 2023 and is now expected to end May 11, 2023.
However, stakeholders remained concerned about the potential termination of these flexibilities when the PHE ends and the instability it will cause for patients and providers. The health care provisions in the omnibus package continue the Medicare telehealth flexibilities for two calendar years, regardless of the status of the PHE, through December 31, 2024.
These include:
•Waiving the geographic restrictions and originating site requirements
•Expanding the list of practitioners eligible to furnish telehealth services
•Allowing telehealth services for rural health clinics and federally qualified health centers
•Delaying the in-person visit requirement before a patient receives mental health services furnished through telehealth and telecommunications
•Allowing for telehealth services through audio-only telecommunications
•Allowing for telehealth to be used for a required face-to-face encounter prior to the recertification of a patient's eligibility for hospice care.
As these flexibilities are extended on a temporary basis through December 31, 2024, stakeholders will need to continue to engage with Congress on a more permanent solution.
Controlled substance prescribing via telehealth
A key area to watch relates to enforcement of the Ryan Haight Act, which requires practitioners issuing a prescription for a controlled substance to conduct an in-person medical evaluation.
During the PHE, the Drug Enforcement Agency (DEA) triggered an exception5 to the requirement for an in-person medical evaluation provided certain conditions are met, allowing practitioners to prescribe controlled substances via telehealth to the extent permitted by applicable state law.
While the special registration does not appear to be under consideration by the DEA right now, there are two proposed rules that will provide additional controlled substance remote prescribing pathways for health care providers.
Stakeholders are busy preparing comments to these proposed rules. It remains an open question when the DEA will issue such rules — and whether the rules, or an interim plan, will be finalized before the expiration of the PHE exception.
New telehealth rules for methadone and buprenorphine treatment
The Substance Abuse and Mental Health Services Administration (SAMHSA) has proposed a new rule6 that would allow authorized physicians to treat patients with buprenorphine and methadone-assisted treatment via telehealth.
The proposed rule would make permanent PHE flexibilities for the prescribing of buprenorphine via telehealth, allowing authorized clinicians to initiate buprenorphine through audio-only or audio-visual technology. The proposed rules would include new flexibilities for methadone-assisted treatment via audio-visual telehealth.
State telehealth legislative and regulatory outlook
Continuing the trends in 2022, we expect to see more activity around regulating the use of telehealth by various provider types, as well as continued activity around cross-state licensing.
Notes
1 http://bit.ly/3l8y5Sf
2 http://bit.ly/42kT6Ke
3 http://bit.ly/3Fk04oK4
4 https://bit.ly/408Lzwd
5 http://bit.ly/3JCnlFa
6 https://bit.ly/3mQvBsd
Lisa Mazur is co-head of McDermott Will & Emery's digital health practice based in Chicago. She helps clients in the health care, technology and retail sectors pursue innovative digital health solutions with an eye toward proactive, practical compliance and creative legal solutions. She can be reached at [email protected]. Dale Van Demark is co-head of the firm's digital health practice based in New York. He works at the forefront of strategic transactions and digital health matters in the health, life sciences and technology industries. He can be reached at [email protected]. Amanda Enyeart is a Chicago-based partner in the firm's health care practice. Focused on compliance, transactions and sector-specific counseling, she works with clients to deploy digital health technology in compliance with a wide range of health law regulations. She can be reached at [email protected]. Marshall Jackson Jr. is a partner in the firm's health care practice based in Washington, D.C. He focuses on transactional and regulatory counseling for clients in the health care industry and advises on the legal, regulatory and compliance aspects of digital health. He can be reached at [email protected]. This article was originally published Feb. 1, 2023, on the firm's website. Republished with permission.
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Marshall Jackson Jr.| End of Document | © 2024 Thomson Reuters. No claim to original U.S. Government Works. |