Omnibus Bill Extends Medicare Telehealth Flexibilities and HDHP Telehealth Safe Harbor - McDermott+Consulting

Omnibus Bill Extends Medicare Telehealth Flexibilities and HDHP Telehealth Safe Harbor

On December 23, 2022, the US Congress approved a year-end omnibus legislative package, Consolidated Appropriations Act, 2023 (CAA 2023), which consists of all 12 fiscal year 2023 appropriations bills and numerous other provisions, including health policy changes. The healthcare provisions in this omnibus package extend key Medicare telehealth flexibilities and the temporary telehealth safe harbor for High Deductible Health Plans (HDHP) first-dollar coverage.


Historically, Medicare has provided coverage for telehealth services in instances where patients would otherwise be geographically distant from approved providers (e.g., physicians, nurse practitioners and clinical psychologists). Section 1834(m) of the Social Security Act provides that telehealth services are covered if the beneficiary is seen: (1) at an approved “originating site” (e.g., physician office, hospital or skilled nursing facility) that is located within a rural Health Professional Shortage Area that is either outside of a Metropolitan Statistical Area (MSA), in a rural census tract or in a county outside of an MSA; (2) by an approved provider; (3) for a defined set of services, including consultations, office visits, pharmacological management and individual and group diabetes self-management training services; and (4) using certain telecommunications technologies.

As part of the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the US Secretary of the Department of Health and Human Services (HHS Secretary) was given authority to waive certain Medicare restrictions regarding coverage and payment for telehealth services during the COVID-19 Public Health Emergency (PHE). Through delegated authority from the HHS Secretary, the Centers for Medicare & Medicaid Services implemented a temporary expansion of Medicare coverage and payment for telehealth services. This, in turn, increased access to care for Medicare beneficiaries while reducing the risk of exposure to COVID-19. While originally initiated in response to the pandemic, these flexibilities have proven beneficial for patients and providers, and stakeholders have advocated that they remain in place beyond the end of the PHE. Congress did take steps through the Consolidated Appropriations Act, 2022 (CA 2022), which passed in March 2022, to extend these flexibilities (albeit temporarily) for 151 days after the end of the PHE.

The PHE remains in effect at least through January 2023 and is expected be extended at least one more time per the promised 60-day notification from the Biden administration. However, stakeholders remain concerned about the potential termination of these flexibilities when the PHE ends and the instability it will cause for patients and providers. Congress has again acted to provide a longer extension and has officially untied the flexibilities from the existence of the PHE. CAA 2023 continues 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 (Sec. 4113(a))
  • Expanding the list of practitioners eligible to furnish telehealth services (Sec. 4113(b))
  • Allowing telehealth services for Rural Health Clinics and Federally Qualified Health Centers (Sec. 4113(c))
  • Delaying the in-person visit requirement before a patient receives mental health services furnished through telehealth and telecommunications (Sec. 4113(d))
  • Allowing for telehealth services through audio-only telecommunications (Sec. 4113(e))
  • 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 (Sec. 4113(f)).


In addition to creating telehealth flexibilities under Medicare, the CARES Act established a temporary safe harbor that permitted HDHPs to cover telehealth and remote care services on a first-dollar basis without jeopardizing Health Savings Account (HSA) contributions. By providing HDHP participants coverage for telehealth services without requiring them to first meet the minimum required deductible, the safe harbor increased access to telehealth services. Additionally, covered individuals who received these services were still able to contribute to their HSAs because telehealth services were temporarily disregarded for purposes of HSA eligibility in determining whether an individual can make an HSA contribution.

The original safe harbor applied to plan years beginning on or before December 31, 2021, and was set to expire at the end of 2021. In March 2022, Congress extended the safe harbor until December 31, 2022, through the CAA 2022, providing the same telehealth protections for HDHPs between April 1, 2022, and December 31, 2022. Although many expected the extension to be retroactive, the CAA 2022 created a gap in the safe harbor application. Between January 1, 2022, and March 31, 2022, HDHPs could not provide telehealth services to participants who had not yet satisfied their minimum deductible ($1,400 for individuals and $2,800 for families in 2022) without providing disqualifying coverage for HSA contributions. Further, the bill adjusted the original CARES Act language and limited the safe harbor until December 31, 2022, regardless of when the plan year started.

Through Section 4151 of the CAA 2023, Congress has extended the safe harbor period again, now through December 31, 2024. This extension will allow HDHPs with plan years beginning after December 31, 2022, and before January 1, 2025, to rely on the safe harbor and continue coverage of telehealth services without constituting disqualifying coverage for HSA contributions. Unlike the previous extension, this extension does not create a gap in the safe harbor. Therefore, HDHPs can continue to cover telehealth services on a first-dollar basis without disqualifying HDHP participants from making HSA contributions.

While CAA 2023 would resolve many of the open Medicare coverage questions for telehealth providers (at least for the next two years), it does not address any waivers for controlled substance prescribing, which may leave telehealth providers without a clear, compliant path to continuing to treat patients virtually.


The passing of the omnibus package presents a victory for industry advocates that have sought to extend the COVID-19 Medicare flexibilities and the HDHP safe harbor. The Medicare provisions will continue the flexibilities for providers and, coupled with the HDHP safe harbor, will enable beneficiaries to access expanded healthcare options through telehealth services. However, as the COVID-19 flexibilities and HDHP safe harbor are extended on a temporary basis through December 31, 2024, stakeholders will need to continue to engage with Congress on a more permanent solution.

For more information contact: Rachel Stauffer, Amanda Enyeart (McDermott Will & Emery – Partner), Marshall E. Jackson, Jr. (McDermott Will & Emery – Partner), Lisa Mazur (McDermott Will & Emery – Partner), Grayson Dimick (McDermott Will & Emery – Associate), Jayda Greco (McDermott Will & Emery – Associate), Abby Higgins (McDermott Will & Emery – Associate), Ashley Ogedegbe (McDermott Will & Emery – Associate), Sarah Raai (McDermott Will & Emery – Associate) and Angela Theodoropoulos (McDermott Will & Emery – Associate).