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    How COVID Changed the Landscape for Telemedicine

    Jennifer Schoenthal, Underwriter and Global Virtual Care Product Leader, Beazley Heather Pfeffer, Claims Manager, Beazley Lynn Sessions, Partner, Baker Hostetler

    The field of telemedicine was already growing at a very steady pace when COVID-19 hit two years ago, but after the virus emerged and the severity became clearer, the telemedicine industry really exploded. Companies were forced to start using telemedicine in their practices to keep their doors open and to provide a continuum of care for their existing patients, which created its own unique set of challenges.

    When brick and mortar companies started offering telemedicine without having done so before, the shift to a new way of providing medicine was done at such a rapid pace that providers and entities weren't always able to fully work out all of the bugs before launching. Some companies purchased platform software (and in some cases got it for free) and immediately started to use it, raising concerns over who owned the data on the platform and how the platform interacted with current electronic medical records. Not to mention how some of the new software users had to learn how to use it on the fly.

    There was one platform that started to offer its product free to anyone who wanted to use it for 60 days. After the 60 days, practitioners had to pay a steep fee to continue using the platform within their practice. At that point, the practitioners discovered that they didn’t own the data, so in most cases they were forced to continue paying a fee so they could continue to access the medical records that they had created on the platform.

    We also saw companies change their scope of services. True telemedicine companies that had been focused on areas as varied as lifestyle, wellness, vision, and dental services suddenly wanted to capitalize on the immediate need for COVID-19 testing, COVID-19 prevention, and COVID-19 treatment. They moved away from their core business models into infectious disease, certainly stirring the question as to whether a dermatologist is the best specialist to be treating or diagnosing COVID-19. 

    In the insurance market, things got complicated. Some carriers were non-renewing policies, some were pulling active quotes for both new and renewal policies, and others began adding blanket exclusions for COVID-19 and other communicable diseases onto their policy. Other insurers stopped quoting any new business until they could get a handle on how COVID-19 would play out. Two years later, there are many carriers who are capitalizing on COVID and are targeting those accounts that are providing rapid testing and COVID-19 treatment.

    The Public Readiness and Emergency Preparedness (“PREP”) act was enacted at the beginning of the COVID pandemic to provide immunity to qualified individuals administering covered countermeasures in the fight against the virus. The purpose of the PREP act was to combat COVID as quickly and as effectively as possible, and to provide immunity to certain individuals under specific circumstances. But it’s not all-encompassing. In fact, there's now a countermeasures injury compensation program that's associated with the PREP act. There is also a willful misconduct exception to the PREP act which is important when considering whether you may have immunity if a lawsuit is brought against you while fighting COVID.

    From a regulatory perspective, there were a lot of emergency measures that went into place at the federal and state levels. Most state law with respect to telemedicine was very welcoming, and it allowed throughout the pandemic for providers to offer their services even when it wasn't practical for folks to come into brick and mortar offices. Since that time, we've seen some of those emergency measures sunsetted, while others have been renewed or left alone. This has left a lot of organizations unsure where they sit in the legal landscape. Depending on where the services are being provided and where the providers are licensed, they need to be sure that they're keeping up with applicable state law requirements to remain in compliance and not outside of any of the licensing requirements.

    With respect to reimbursement, the government had been reluctant to reimburse for telemedicine charges, as there was historically a concern about whether medicine was really being provided. But during COVID-19, providers have shown that they can certainly provide medical services via remote devices. We now anticipate that the government is going to start looking at reimbursements, particularly for Medicare and Medicaid, to ensure that there’s appropriate documentation for the services and that services were in fact provided. The government is perceived to be very distrustful of healthcare providers and when they see a new and more novel approach to providing medicine, they anticipate that it could be fraught with fraud. We're anticipating seeing some regulatory enforcement actions around that or at least some inquiries starting to come into our healthcare clients with respect to the enforcement of any fraudulent charges that may be on the horizon.

    COVID-19 has truly propelled change in the landscape for telemedicine, especially from an insurance perspective. As the field of virtual health continues to evolve, Beazley will be watching closely, preparing to advise brokers and insureds about how best to navigate this shifting market.

    The information set forth in this document is intended as general risk management information. It is made available with the understanding that Beazley does not render legal services or advice. It should not be construed or relied upon as legal advice and is not intended as a substitute for consultation with counsel. Beazley has not examined and/ or had access to any particular circumstances, needs, contracts and/or operations of any party having access to this document. There may be specific issues under applicable law, or related to the particular circumstances of your contracts or operations, for which you may wish the assistance of counsel. Although reasonable care has been taken in preparing the information set forth in this document, Beazley accepts no responsibility for any errors it may contain or for any losses allegedly attributable to this information.

    Beazley plc (BEZ.L), is the parent company of specialist insurance businesses with operations in Europe, North America, Latin America and Asia. Beazley manages seven Lloyd's syndicates and, in 2021, underwrote gross premiums worldwide of $4,618.9 million. All Lloyd's syndicates are rated A by A.M. Best.

    Beazley's underwriters in the United States focus on writing a range of specialist insurance products. In the admitted market, coverage is provided by Beazley Insurance Company, Inc., an A.M. Best A rated carrier licensed in all 50 states. In the surplus lines market, coverage is provided by the Beazley syndicates at Lloyd's.

    Beazley's European insurance company, Beazley Insurance dac, is regulated by the Central Bank of Ireland and is A rated by A.M. Best and A+ by Fitch.

    Beazley is a market leader in many of its chosen lines, which include professional indemnity, cyber liability, property, marine, reinsurance, accident and life, and political risks and contingency business.

    About the author:

    Jennifer joined Beazley in October 2013 as an Underwriter for the Miscellaneous Medical team.

    Jennifer Schoenthal

    About the author:

    Heather Pfeffer
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