By: Center for Connected Health Policy

Policymakers have typically been cautious about enacting extensive regulations around artificial intelligence (AI), but as AI becomes more common, meaningful policy changes have gradually been accelerating. CCHP is currently monitoring 94 pending policies at both the state and federal levels regarding AI and healthcare through its Telehealth Legislation and Regulation tracker. Most significant AI policy adoption has occurred at the state level thus far, and recent AI developments at the federal level continue to focus around a largely deregulatory approach to its use.   Recent Federal AI Policy Developments As one of his first actions this term, on January 23, 2025, the President signed Executive Order (EO) 14179, Removing Barriers to American Leadership in Artificial Intelligence. The order seeks to revoke any existing policies that may limit American AI innovation, while also positioning the U.S. at the forefront of global AI leadership. In particular, the EO calls for the development of an Artificial Intelligence Action Plan across various federal agencies within 180 days of the order (by July 22, 2025), including identifying inconsistent policies that may be subject to revocation, as well as requiring the Office of Management and Budget (OMB) to revise particular prior administration procurement policies (OMB Memoranda M-24-10 and M-24-18) within 60 days of the order. In response, on April 7, 2025 the OMB released two new policy memos (M-25-21 and M-25-22) regarding federal agency use of AI and federal procurement. According to the fact sheet regarding the memos, they are meant to signal a fundamental shift toward pro-innovation and pro-competition policy, and away from more risk-averse approaches. The fact sheet also notes particular examples of how federal agencies are currently maximizing the benefits of AI, including the Department of Veterans Affairs (VA), which uses AI tools to optimize patient care, such as supporting the identification and analysis of pulmonary nodules during lung cancer screening exams to improve detection and life-saving diagnoses.   The key points included in the two new memos are summarized as follows: OMB Memorandum M-25-21, Accelerating Federal Use of AI through Innovation, Governance, and Public Trust – Rescinds and replaces OMB Memorandum M-24-10, Advancing Governance, Innovation, and Risk Management for Agency Use of Artificial Intelligence. – Directs agencies to: – Accelerate the Federal use of AI by focusing on three key priorities: innovation, governance, and public trust. – Remove unnecessary and bureaucratic requirements that inhibit innovation and responsible adoption, develop strategies that elevate AI adoption and innovation as a priority, while increasing transparency to the American public, civil society, and industry. – Invest in the American AI marketplace and maximize the use of US developed/produced AI products and servicesIdentify Chief AI Officers for each agency and OMB will convene an interagency council to maximize efficiencies and coordination – Implement minimum risk management practices for AI that could have significant impacts when deployed (high-impact AI) and prioritize safe, secure, and resilient AI. OMB Memorandum M-25-22, Driving Efficient Acquisition of Artificial Intelligence in Government – Rescinds and replaces OMB Memorandum M-24-18, Advancing the Responsible Acquisition of Artificial Intelligence in Government. – Seeks to ensure a competitive American Al marketplace – Acquiring solutions at the lowest cost, accelerating adoption of AI while avoiding costly dependencies on a single vendor, as well as communicating clear vendor requirements. – Aims to safeguard taxpayer dollars by tracking AI performance and managing risk – ensuring AI systems are consistent with their stated purpose and deliver consistent results to preserve public trust. – Promotes effective AI acquisition with cross-functional engagement, robust collaboration across agencies. OMB Memorandum M-25-22 also notes that its guidance should be considered in concert with other more general federal policies that may also apply to AI. Additionally, it states that for guidance on regulatory and non-regulatory approaches to AI applications outside of the federal government, agencies should consult OMB Memorandum M-21-06, Guidance for Regulation of Artificial Intelligence Applications, which was released November 17, 2020. The 2020 guidance is largely consistent with the above themes regarding encouraging innovation and growth in AI and reducing unnecessary barriers to the development and deployment of AI. It also notes consideration of non-regulatory approaches, including promoting sector-specific frameworks and voluntary standards. For instance, as mentioned in a recent TechTargetarticle regarding AI, the healthcare industry is already creating frameworks to ensure responsible uses of AI through collaboratives such as the Coalition for Health AI (CHAI)and the Trustworthy & Responsible AI Network (TRAIN). In terms of regulatory approaches, the memo also mentions that “agencies may use their authority to address inconsistent, burdensome, and duplicative state laws that prevent the emergence of a national market.”   Recent State AI Policy Developments As we see states adopting more AI policies, how those laws may interact with federal AI regulations will remain an important area to watch. We have seen a patchwork of inconsistent policy adoption across states and the federal government specific to telehealth over the years, which makes compliance and utilization of remote care increasingly more complicated. Nevertheless, states often have different interests and authorities that drive them to promote specific policy goals – such as improving access to care, protecting patient data, controlling costs, or mitigating risks related to new innovations – that may not always align with federal priorities. Some of the most common areas we have seen state AI policy focus around include states adopting their own AI advisory bodies, procurement related processes, as well as research and reporting policies. For instance, last year Indiana adopted SB 150 to create an artificial intelligence task force to study and assess use of AI technology by state agencies, while Maryland adopted SB 818, which requires state departments to conduct data inventories regarding artificial intelligence systems, as well as a subsequent report and recommendations, regarding the use of systems that employ artificial intelligence in health care delivery and human services. Another common policy found at the state level specific to healthcare is ensuring provider AI oversight and patient transparency related to AI uses. For example, California approved AB 3030 last year, which requires healthcare providers and facilities that use generative artificial intelligence to generate written or verbal patient communications to ensure that those communications include both a disclaimer that indicates to the patient that a communication was generated by generative artificial intelligence, as well as clear instructions describing how a patient may contact a human health care provider, employee, or other appropriate person. The bill would exempt from this requirement a communication read and reviewed by a human licensed or certified health care provider. Additionally, California adopted SB 1120, which requires health plans and insurers that use an artificial intelligence, algorithm, or other software tool for the purpose of utilization review or utilization management functions to ensure compliance with specified requirements, including that the artificial intelligence, algorithm, or other software tool bases its determination on specified information and is fairly and equitably applied. Arizona is also considering similar legislation, HB 2175, which would prohibit AI from being used by insurers to deny claims or prior authorizations for medical services and require a healthcare provider to review each claim or prior authorization request before issuing a denial.   Inconsistent Policies and Lessons from Telehealth As mentioned previously, the confusion that inconsistent policies may create can even be evidenced within the aforementioned federal guidance. For instance, Executive Order (EO) 14179 references a different definition for AI (15 U.S.C. 9401(3)) than OMB Memorandum M-25-21 (Public Law 115-232 (238(g))). Meanwhile, OMB Memorandum M-25-22 references a different definition for “artificial intelligence system” (Public Law 117-263 (7223(4)) and OMB Memorandum M-25-21 creates policies specific to “high-impact AI.” AI is considered high-impact when its output serves as a principal basis for decisions or actions that have a legal, material, binding, or significant effect on rights or safety. Therefore, as part of conducting internal reviews of high impact use, the memo states that agencies should evaluate the AI’s specific output and its potential risks when assessing the applicability of the high-impact definition. A high-impact determination is possible whether there is or is not human oversight for the decision or action. While different definitions often serve different purposes, they can also generate confusion around what is captured and required in each specific instance. This is why CCHP closely tracks the different definitions of telehealth on its website, as jurisdictions often create definitions specific to Medicare/Medicaid and private payers, as well as differing definitions for telehealth specific to provider professional requirements. While this may be common practice – different policy definitions within and across jurisdictions – it also may be an opportunity for policymakers to learn from the path telehealth policy has taken to address potential confusion at the forefront of policy creation, prior to adopting additional AI policies. Oregon for example, enacted HB 4153 last year to establish a task force on artificial intelligence that is required to examine and identify terms and definitions related to AI that may be used for legislation, beginning with examining terms and definitions used by federal agencies. Washington adopted SB 5838, which also creates an AI task force to assess current uses and trends, as well as benefits and risks, and make recommendations regarding AI legislation.   Public policy always has to walk a fine line between promoting technological innovation and protecting consumers, especially in healthcare, where both the care provided and policies implemented should remain as patient-centered as possible. Additionally, clear regulatory guidance across jurisdictions will better ensure policy compliance, though variations are often inevitable and reflective of different jurisdictional policy priorities. Therefore, as AI policy continues to progress, the availability of accurate resources and educational information regarding AI policy remains of utmost importance.   For more information regarding the recent federal AI policy developments, please review Executive Order (EO) 14179, OMB Memorandum M-25-21, and OMB Memorandum M-25-22 in their entirety. For more information on pending AI healthcare policy across jurisdictions, please access CCHP’s Telehealth Legislation and Regulation tracker.   Additional AI resources include: – The National Conference of State Legislatures (NCSL) tracks all AI related legislation on its various websites, including this summary of 2024 AI legislation, 2025 AI legislation, as well as an AI Policy Toolkit. – The Medicaid and CHIP Payment and Access Commission (MACPAC) recently held a panel focusing on the role of AI in the Medicaid prior authorization process, including opportunities to streamline processes as well as concerns related to algorithmic bias, inappropriate denials and oversight. – A recent TechTarget article covered how AI can benefit healthcare and common AI applications. – The California Telehealth Resource Center (CTRC) offers a number of healthcare AI resources in its AI toolkit. – The National Telehealth Technology Assessment Resource Center (TTAC) tracks related technologies, including AI enhanced telehealth devices. – The National Consortium of Telehealth Resource Centers (NCTRC) released an Artificial Intelligence in Rural Health Fact Sheet that can assist rural providers considering adopting AI tools and applications to enhance patient care. – The Coalition for Health AI (CHAI) offers collaborative guidance, including the Blueprint for Trustworthy AI Implementation. – The Trustworthy & Responsible AI Network (TRAIN), a consortium of healthcare leaders seeking to operationalize responsible AI principles. – The Health AI Partnership (HAIP), a multi-stakeholder collaborative seeking to empower healthcare organizations to use AI safely, effectively, and ethically. – The Healthcare Information and Management Systems Society (HIMSS) offers additional digital health resources, such as its AI and Emerging Technologies Toolkit for Healthcare Organizations. – The American Telemedicine Association (ATA) offers specific AI Principles and related resources.

By: Center for Connected Health Policy

The Drug Enforcement Administration (DEA) and the Department of Health and Human Services (HHS) recently released an additional extension of the effective date for two previously published federal final rules: Expansion of Buprenorphine Treatment via Telemedicine Encounter (Now Effective December 31, 2025)Continuity of Care via Telemedicine for Veterans Affairs Patients (Now Effective December 31, 2025)According to the new rule, the two telemedicine prescribing rules specific to buprenorphine and Veterans Affairs patients noted above, are now to be effective December 31, 2025. This date is consistent with the overall Temporary Extension of COVID-19 Telemedicine Flexibilities for Prescription of Controlled Medications rule, which permits providers to prescribe via telemedicine without meeting statutory in-person visit requirements through December 31, 2025. The announcement comes after another previous delay in these two particular rules taking effect (see more information in CCHP’s February 25th newsletter), as well as amidst the recent extension of the temporary Medicare telehealth waivers to September 30, 2025.   It is important to highlight that these telehealth extensions are specific to federal controlled substances prescribing rules and the federal Medicare program only. In addition, states have their own policies in place that may also impact the use of telehealth, including telehealth policies in state Medicaid programs, state private payer laws, and state professional requirements (all of which can be searched by topic and jurisdiction utilizing CCHP’s Policy Finder tool). While federal telehealth policy is mostly still governed by temporary allowances, state telehealth policies have largely stabilized since the onset of telehealth expansions in 2020, with many temporary changes already absorbed into permanent state policies. As you navigate through the following information it is important to remember that both federal and state policies govern a provider’s utilization of telehealth to provide care.   This week’s newsletter seeks to provide an overview of the recent federal telehealth extensions, a recap of the original prescribing rules released in January 2025, including the proposed special registration rule, while additionally highlighting potentially applicable state policies that providers should also be aware of to ensure full compliance when delivering care via telehealth.   FEDERAL PRESCRIBING RULES   Initial Release:The federal prescribing rules put forth by the DEA were released by the prior administration in January 2025.The original effective date for the final rules was set for February 18, 2025.(See CCHP’s January 21st summary for more details).Initial Delay:In February 2025, the effective date of the final rules was delayed until March 21, 2025.(See CCHP’s February 25th newsletter for more details).Latest Update (as of this newsletter’s writing):The most recent rule issued by the DEA further delays the effective date for:Telemedicine Prescribing of BuprenorphineTelemedicine for Veterans Affairs Patients The new effective date for both is now December 31, 2025.December 31, 2025 is the same date the currently in effect Third Temporary Extension of COVID-19 Telemedicine Flexibilities for Prescription of Controlled Medications expires.The Special Registration rule proposed in January 2025 with the Buprenorphine and Veterans Affairs final rules remains in proposed status with no current effective date. The public comment period for this rule closed on March 18, 2025. The initial delay of the final rules regarding buprenorphine and Veteran’s Affairs patients noted above sought to solicit public comment regarding the rules in response to the new administration’s White House memorandum, which called for “A Regulatory Freeze Pending Review” allowing agencies time for further review of any fact, law, and policy considerations prior to proposing, issuing, or finalizing any regulatory activities. In the latest rule, the DEA and HHS note receiving 32 comments related to the initial delayed effective date, and in response, “wishes to further postpone the effective dates for the purpose of further reviewing any questions of fact, law, and policy that the rules may raise.” Additionally, the rule notes that new effective dates for these rules do not functionally limit the ability to prescribe via telemedicine in the meantime, because the broader Temporary Extension of COVID-19 Telemedicine Flexibilities for Prescription of Controlled Medications permits telemedicine prescribing, without meeting in-person requirements, through December 31, 2025.   Final Buprenorphine Rule – Effective Date: December 31, 2025   Under the Controlled Substances Act, existing permanent prescribing law (which was active prior to the temporary telehealth waivers going into effect) authorizes telemedicine prescribing only under specified circumstances when no in-person visit has occurred, with few exceptions. The final rule, titled Expansion of Buprenorphine Treatment via Telemedicine Encounter, now creates an additional avenue for practitioners to meet an exception from the Controlled Substances Act when an in-person visit does not need to be conducted. The key provisions of this buprenorphine treatment expansion rule authorizing DEA-registered providers to prescribe buprenorphine for treatment of opioid use disorder (OUD) via audio-only or audio-video telemedicine include:  Prescription Drug Monitoring Program (PDMP) Review: Before issuing a telemedicine prescription for a Schedule III-V controlled substance approved for opioid use disorder (OUD) treatment, the provider must review the PDMP data for the patient’s state.Initial Prescription Limitations: Providers may prescribe an initial six-month supply (split among several prescriptions) without an in-person evaluation. Additional prescriptions require an in-person evaluation or must comply with other forms of telemedicine authorized under the Controlled Substances Act (CSA).Pharmacist Identity Verification: Pharmacists must verify patient identity before filling prescriptions.Notably, the rule does not impact provider-patient relationships where a prior in-person medical evaluation has occurred.   Final Veterans Affairs Rule – Effective Date: December 31, 2025   This final rule, titled Continuity of Care via Telemedicine for Veterans Affairs Patients, authorizes Department of Veterans Affairs (VA) practitioners to prescribe controlled substances via telemedicine to VA patients without a prior in-person evaluation, provided another VA practitioner has conducted an in-person evaluation at any time. Conditions include: Reviewing both the VA electronic health record (EHR) and the state PDMP where the patient is located.If the VA EHR or PDMP is unavailable, prescriptions must be limited to a seven-day supply until the provider can review the required data.This rule does not apply to non-VA-contracted practitioners or those providing care via the community care network (CCN).The DEA has indicated that while this rule is specific to VA practitioners due to their closed-system operation, it may consider extending similar authorities to non-VA providers in the future. Meanwhile, as noted previously, the DEA’s exemption from in-person requirements remains in place through December 31, 2025.   Proposed Special Registration Rule – Effective Date: TBD   The DEA has also proposed a rule, titled Special Registrations for Telemedicine and Limited State Telemedicine Registrations, to establish a permanent framework for telemedicine prescribing of controlled substances, outside of specific buprenorphine and Veterans Affairs circumstances discussed above, and after the expiration of the temporary expansions (discussed more below). The special registration rule was also released in January 2025 with the above two final rules, though because it was released as a proposed rule, rather than a final rule, it is not subject to the latest effective date extensions. This proposed rule creates a special registration framework that authorizes three types of telemedicine registration, in addition to additional prescribing, recordkeeping, and reporting requirements. The special registration framework requires registrants to utilize both audio and video components of an audio-video telecommunication system for each telemedicine encounter. The three types of special registration, include: Telemedicine Prescribing Registration: Allows qualified practitioners to prescribe Schedule III-V controlled substances.Advanced Telemedicine Prescribing Registration: Allows specialized practitioners (e.g., psychiatrists, hospice physicians) to prescribe Schedule II-V controlled substances.Telemedicine Platform Registration: Allows approved online telemedicine platforms to dispense Schedule II-V controlled substances through authorized providers.The proposed special registration rule also requires special registrants to maintain a State Telemedicine Registration issued by the DEA for every state in which a patient is treated by the special registrant, unless otherwise exempted. For additional information on special registration eligibility by provider type and limited exemptions to the state telemedicine registration requirement, as well as proposed registration processes, fees and reporting requirements, please see the proposed rule in its entirety. The public comment period for this rule closed on March 18, 2025. It is unknown how the rule and its review process may unfold as it moves forward within the current administration. Stay tuned to future CCHP newsletters for updates. Current Temporary Extension Rule – Expiration Date: December 31, 2025   While these final and proposed federal regulations discussed above would expand permanent controlled substance prescribing policies, they will not be as broad as what some have become accustomed to during the temporary waiver period, currently set to expire December 31, 2025. Under the latest Temporary Extension of COVID-19 Telemedicine Flexibilities for Prescription of Controlled Medications, which has now been extended three times since the flexibilities were initially implemented in 2020 (and is the only federal telehealth prescribing rule currently in effect), providers may prescribe controlled medications via telemedicine without conducting the statutorily required in-person medical evaluation of the patient. Meanwhile, the final and proposed prescribing regulations discussed above create more tailored and limited exceptions to the in-person medical evaluation requirement. Additionally, as noted above and discussed in more detail below, it is important to highlight that current state requirements should also be considered, as they may also apply to the provision of care and prescribing via telehealth.   FEDERAL MEDICARE POLICIES   As previously reported, another temporary federal telehealth policy extension occurred recently, specific to expanded Medicare coverage allowances also initially implemented in 2020. Under permanent federal Medicare policy, telehealth coverage is fairly limited and restricted to patients in rural areas and specific healthcare settings. Under the most recent federal Medicare policy extension, waivers of these limitations and related telehealth expansions are now maintained through September 30, 2025, including: Waiving geographic and specific site requirementsAllowing all eligible practitioners to furnish telehealth services, including federally qualified health centers (FQHCs) and rural health clinics (RHCs)Delaying mental health in-person requirementsAllowances for audio-onlyContinue to allow telehealth to be used to conduct the face-to-face encounter recertification for beneficiaries eligible for hospice care Extending the acute hospital at home programThe temporary Medicare telehealth waivers have been extended multiple times since they were initially enacted five years ago, similar to what has occurred with the federal prescribing allowances. The previous Medicare extension was set to expire yesterday (3/31/25), until Congress passed the latest Continuing Resolution in mid-March, adding at least six more months before the temporary Medicare waivers may potentially expire. As discussed in CCHP’s March 18 newsletter, while this extension can be seen as a step in the right direction, many telehealth stakeholders would prefer a longer and more permanent solution. However, as can be seen in some of the federal prescribing policies being considered, permanent solutions may come with additional stipulations and limitations as well.    STATE TELEHEALTH POLICIES   Individual states hold much of the authority around regulating telehealth. This includes implementing telehealth coverage rules that apply to state Medicaid programs and private payers. States are also responsible for adopting telehealth practice standards for providers licensed by state agencies. These standards may include various consent and prescribing requirements specific to the use of telehealth by a particular provider within the state’s borders. Additionally, telehealth is considered rendered at the patient’s location, so providers must be aware of and comply with multiple state policy frameworks applicable to telehealth if seeking to provide care across state lines. Federal laws applicable to Medicare and telehealth prescribing also stress that federal allowances are conditional upon providers additionally abiding by relevant state laws. Therefore, while federal policies (and the instability surrounding them) are very important to the overall telehealth landscape (especially if treating Medicare patients and prescribing controlled substances), state policies are potentially even more impactful, though often overlooked.   For instance, if a provider seeks to deliver care to Medicaid and commercially insured patients, coverage and reimbursement are primarily governed by state policy. Regardless of Medicare expansions, billing rules for other payers vary and may be more expansive or restrictive. Additionally, in regard to prescribing, providers should be aware that even though federal law establishes a baseline for controlled substance prescribing policies, states may impose stricter requirements, such as mandating in-person visits. For instance, Colorado statute prohibits providers registered as out-of-state telehealth providers from prescribing controlled substances. Similarly, Oklahoma statute states that telemedicine encounters cannot establish a valid physician-patient relationship for purposes of prescribing opiates, benzodiazepines, carisoprodol, or synthetic and semisynthetic opiates — unless it’s for prescribing opioid antagonists, partial agonists, or Schedule III, IV, or V controlled substances approved by the FDA for medication-assisted treatment or detoxification for substance use disorder. These examples illustrate how state laws can either entirely prohibit certain types of prescribing or impose additional criteria, even when federal law permits prescribing controlled substances without prior in-person visits or established physician-patient relationships (as a result of the telehealth waivers discussed previously).   Providers should be mindful of various state-specific nuances. For more prescribing details, refer to the online prescribing section of CCHP’s Policy Finder. Additionally, providers should also consult with the state agency that holds primary authority around licensing and overseeing their particular profession, both in their state as well as the state the patient is located, if applicable, to determine additional state professional requirements regarding the use of telehealth.   As mentioned previously, CCHP tracks both federal and state policies applicable to telehealth, which can be searched using CCHP’s Policy Finder tool by both jurisdiction and topic, including: Federal Telehealth PoliciesMedicare and State Medicaid Telehealth PoliciesLive VideoStore-and-ForwardRemote Patient MonitoringAudio-OnlyConsentOut-of-State ProvidersState Private Payer Telehealth RequirementsCoverage and Reimbursement ParityState Professional RequirementsConsentPrescribing/Establishing Provider-Patient RelationshipCross-State PracticeLicensure Compact MembershipAdditional topics are included in the Policy Finder that aren’t listed above, such as definitions for telehealth, miscellaneous telehealth policies, pending legislation/regulation, and professional board standards that may have been found specific to certain providers and states. As CCHP continues to track federal changes to telehealth policies, it is important to remain mindful of these state telehealth policies as well, and that they are also subject to change. CCHP is committed to keeping readers apprised of the latest telehealth developments at all policy levels, both through our weekly #TelehealthTuesday emails and through ongoing updates to the Policy Finder.   For more information on the recent Medicare telehealth waiver extension, please review the latest Continuing Resolution. For more information on the recent federal prescribing rule delay, review the latest rule in its entirety. Additional information on the individual federal prescribing rules referenced in this write-up and a timeline regarding the evolution of telehealth in federal prescribing policy can be accessed through the following links:Temporary Extension Rule (Currently in effect, expires December 31, 2025): Third Temporary Extension of COVID-19 Telemedicine Flexibilities for Prescription of Controlled MedicationsBuprenorphine/VA Effective Date Delay to December 31, 2025: Expansion of Buprenorphine Treatment via Telemedicine Encounter and Continuity of Care via Telemedicine for Veterans Affairs PatientsPrevious Buprenorphine/VA Effective Date Delay to March 21, 2025: Initial Buprenorphine & VA Rule Delay Announcement and Comment RequestBuprenorphine Final Rule (New effective date December 31): Expansion of Buprenorphine Treatment via Telemedicine EncounterVA Final Rule (New effective date December 31): Continuity of Care via Telemedicine for Veterans Affairs PatientsSpecial Registration Proposed Rule (No effective date): Special Registrations for Telemedicine and Limited State Telemedicine RegistrationsCCHP Resource: Evolution of Telehealth Controlled Substance Prescribing Timeline (updated March 28, 2025)

Source: Center for Connected Health Policy, personal communication, April 1, 2025

In Burke County, a visit to the local pharmacy is more than just a routine errand it’s a familiar stop where you can count on a friendly smile behind the counter and personalized care. 

But small-town pharmacies across the country are facing a looming threat, one that many residents might not even realize exists: Pharmacy Benefits Managers or

PBMs. 

PBMs are the “middle- men” in the prescription drug supply chain. Originally established in the 1960s to help manage prescription benefits for insurers and negotiate drug prices with manufacturers, PBMs have grown into powerful Wall Street-traded corporations with significant control over what medications cost and how pharmacies are reimbursed.

According to the Federal Trade Commissions second interim staff report on prescription drugs released on Jan. 25, the three largest PBMs – CVS Caremark, Express Scripts, and OptumRx—now control about 79% of the market, and dictate anti-competitive contracts that leave small pharmacies struggling to survive.

One local pharmacy owner, who asked to remain anonymous, shed light on the harsh reality of below-cost reimbursements. We are losing on scrips,” they said. “A popular drug like Ozempic was $900-$950, and now that median price has jumped to $1,250. Of-ten, on brand-name drugs sold at the pharmacy, we net a loss of $20, sometimes even $60. Even with generics, we are still getting squeezed.”

These financial strains are the result of practices like spread pricing and below-cost reimbursements — two of the many complex strategies employed by PBMs.

Cristy Gupton, president of

Custom Health Solutions explained how this works: “PBMs reimburse the pharmacy at a lower amount while charging the health plan much more. The spread in between is what the PBM keeps.” The result is a situation where pharmacies often dispense medication at a loss, unable to cover even their acquisition costs.

These financial losses aren’t just a numbers game. When a PBM reimburses a pharmacy below cost, the pharmacy is left to make up the difference.

This is particularly difficult for brick-and-mortar pharmacies that lack the financial cushion of large chains.

“When our contract with the PBM causes a customer to either pay more or change what they have been taking, they blame us.” the pharmacist® said. “And then the PBM will redirect the customer to their pharmacy or mail order in-stead.” This is called patient steering, where the PBM steers patients to their commercial pharmacies promising lower co-pays and faster delivery of medication.

Gupton echoed this senti-ment, pointing to the opaque nature of PBM practices. “If it weren’t for PBMs. the price of insulin would be about $1.000 a year, about $80 a month.” she said. “The manufacturer’s cost has stayed fairly flat, but the margin that the patient has to pay is all in the PBM rebate. It’s extortion, in my opinion.” 

PBMs not only control pricing but also engage in practices that many see as anti-competitive. For example. PBMs often own their own pharmacies, including specialty and mail-order services.

The PBM can direct patients to these in-network options, leaving independent pharmacies out in the cold. “If we try to fight back against it then we risk getting audited, but PBMs won’t audit them-selves,” the local pharmacist said

Gupton explained how this anti-competitive behavior works: “PBMs come back later to the community pharmacy and charge them back DIR (Direct and Indirect Remuneration) fees. often called claw-backs. They create bureaucratic red tape that essentially says the community pharmacy didn’t follow all of the rules, so they take back the reimbursement.”

This practice creates an environment where local pharmacies operate under constant financial threat. “I’m trying to provide a service to my customers, but I can’t keep taking losses on scrips forever or I’ll have to close down,” shared the pharmacist.

Without state intervention, closure of small-town pharmacies across towns in Burke County could be a real outcome. According to the North Carolina Association of Pharmacists, more than 100 pharmacies closed between 2022 and 2024 with that number only projected to increase without legislation.

At the start of 2025, House Bill 246, which aimed to regulate Pharmacy Benefit Manager (PBM) practices in North Carolina, stalled in the state Senate and ultimately died from inaction.

In response, Rep. Heather Rhyne, along with several other members of the N.C. General Assembly, including Rep.Hugh Blackwell, introduced House Bill 163. a renewed effort to bring transparency and fair practices to the PBM industry in the state.

“We’re at a tipping point,” Gupton said. “If these trends continue, small-town pharmacies could disappear, leaving residents with fewer options, higher costs. and reduced access to critical medications.”

Nathanael Eure is a staff writer with The Paper. He mav be reached at 828-445-8595 or nathanael@thepaper.media.

The Drug Enforcement Administration (DEA) and the Department of Health and Human Services (HHS) have announced a delay in the effective date for the recently issued final rules regarding the telemedicine prescribing of buprenorphine and telemedicine for Veterans Affairs Patients (which are further detailed below). Originally scheduled to become effective February 18, the rules will now take effect on March 21, 2025. This decision aligns with the White House memorandum issued on January 20, which called for “A Regulatory Freeze Pending Review” to allow agencies further review of any fact, law, and policy considerations prior to proposing, issuing, or finalizing any regulatory activities. In particular, the DEA/HHS announcement cites the third paragraph of the Freeze Memo, which ordered agencies to consider postponing the effective dates for any recently published rules that have yet to take effect. The DEA and HHS have also confirmed that the waiver provisions established in the third extension of telemedicine flexibilities for prescribing controlled substances will remain in effect through December 31, 2025, ensuring that in-person visit requirements continue to be waived for the remainder of 2025. Public comments are being solicited on the postponement and whether the effective dates of the final rules should be extended beyond March 21. The notice also requests any comments related to potential issues of fact, law, or policy raised by the rules that should be considered. The comment period deadline is February 28. Below is a summary of the contents of the buprenorphine rule and Veterans Affairs rule, as well as a recap of the recently proposed Telemedicine Special Registration rule.  These rules were also summarized in a previous newsletter by the Center for Connected Health Policy (CCHP) when they were initially issued in January 2025. BUPRENORPHINE RULE Existing permanent law (which was active prior to the telehealth waivers going into effect) authorizes telemedicine prescribing only under specified circumstances when no in-person visit has occurred, with few exceptions. The new final rule, titled Expansion of Buprenorphine Treatment via Telemedicine Encounter, creates an additional avenue for practitioners to meet the requirements of the Controlled Substances Act when an in-person visit has not been conducted.  The key provisions addressing audio-only and audio-video telemedicine in the final buprenorphine rule include: – Prescription Drug Monitoring Program (PDMP) Review: Before issuing a telemedicine prescription for a Schedule III-V controlled substance approved for opioid use disorder (OUD) treatment, the provider must review the PDMP data for the patient’s state. – Initial Prescription Limitations: Providers may prescribe an initial six-month supply (split among several prescriptions) without an in-person evaluation. Additional prescriptions require an in-person evaluation or must comply with other forms of telemedicine authorized under the Controlled Substances Act (CSA). – Pharmacist Identity Verification: Pharmacists must verify patient identity before filling prescriptions. Notably, the rule does not impact provider-patient relationships where a prior in-person medical evaluation has occurred. VETERANS AFFAIRS RULE This final rule, titled Continuity of Care via Telemedicine for Veterans Affairs Patients, authorizes Department of Veterans Affairs (VA) practitioners to prescribe controlled substances via telemedicine to VA patients without a prior in-person evaluation, provided another VA practitioner has conducted an in-person evaluation at any time. Conditions include: – Reviewing both the VA electronic health record (EHR) and the state PDMP where the patient is located. – If the VA EHR or PDMP is unavailable, prescriptions must be limited to a seven-day supply until the provider can review the required data. – This rule does not apply to non-VA-contracted practitioners or those providing care via the community care network (CCN). The DEA has indicated that while this rule is specific to VA practitioners due to their closed-system operation, it may consider extending similar authorities to non-VA providers in the future. Meanwhile, as noted previously, the DEA’s exemption from in-person requirements remains in place through December 31, 2025. SPECIAL REGISTRATION RULE (Proposed Rule) The DEA has also proposed a special registration rule to establish a framework for telemedicine prescribing of controlled substances. This rule introduces three types of special registrations: 1. Telemedicine Prescribing Registration: Allows qualified practitioners to prescribe Schedule III-V controlled substances. 2. Advanced Telemedicine Prescribing Registration: Allows specialized practitioners (e.g., psychiatrists, hospice physicians) to prescribe Schedule II-V controlled substances. 3. Telemedicine Platform Registration: Allows approved online telemedicine platforms to dispense Schedule II-V controlled substances through authorized providers. Registrants under this rule must use both audio and video components for telemedicine encounters and obtain a State Telemedicine Registration for each state in which they treat patients unless exempted. Prescriptions must be issued electronically through Electronic Prescribing for Controlled Substances (EPCS) after verifying patient identity. Additionally, providers must conduct a nationwide PDMP check, though this requirement will have a delayed implementation timeline of three years. Until then, PDMP checks will be required for the patient’s state, the provider’s state, and any states with reciprocity agreements. For Schedule II controlled substances, further restrictions apply, such as requiring the prescribing practitioner to be in the same state as the patient and limiting the proportion of Schedule II prescriptions issued via special registration telemedicine encounters to 50% of the practitioner’s total Schedule II prescriptions in a calendar month.  Finally, the proposed rule establishes specific regulations for online telemedicine platforms that facilitate prescribing. It defines “covered online telemedicine platforms” based on criteria such as promoting or advertising-controlled substance prescriptions, financial incentives tied to prescribing volume, exerting control over clinicians’ prescribing decisions, and controlling patient medical records or prescriptions. Hospitals, clinics, insurers, and local in-person medical practices are exempt from these platform classifications. The proposed Special Registration Rule was published in the Federal Register on January 17, 2025, and public comments will be accepted through March 18, 2025. Again, the general DEA in-person requirement waiver remains in effect until the end of 2025. However, it is possible that state professional requirements around prescribing may also apply in the meantime – please utilize CCHP’s Policy Finder tool to search by state and topic for additional information. For full details on all the recent federal prescribing rules, refer to the following DEA regulations: – Effective Date Delay, Comments due February 28:  Buprenorphine & VA Rule Delay Announcement and Comment Request – Final Rule (New effective date March 21): Expansion of Buprenorphine Treatment via Telemedicine Encounter – Final Rule (New effective date March 21): Continuity of Care via Telemedicine for Veterans Affairs Patients – Proposed Rule, Comments Due March 18, 2025: Special Registrations for Telemedicine and Limited State Telemedicine Registrations For more background on past DEA attempts to adopt permanent telehealth prescribing regulations, please access: – CCHP’s September 2024 Newsletter Article: DEA Prepares New Regulations for Telemedicine Prescribing of Controlled Substances – CCHP’s July 2024 Newsletter Article: Regulatory Crossroads: Past, Present and Potential Future – Telemedicine Controlled Substance Prescribing Amid Fraud Concerns  – CCHP Resource: Evolution of Telehealth Controlled Substance Prescribing Timeline.

Source: Center for Connected Health Policy, personal communication, February 25 2025

Source: Center for Connected Health Policy, personal communication, February 4, 2025

Mount Laurel, NJ – January 20, 2025 – We’re happy to announce that David Sherman has joined the Health & Voluntary Benefits Association® (HVBA) as our Chief Revenue Officer. 

Dave brings over 40 years of expertise in the employee benefits industry, specializing in designing, enrolling, and administering comprehensive benefit programs.

“We’re excited to welcome Dave onto the HVBA team, and I know he is bringing important skills and knowledge to help us reach the next level,” says Rob Shestack, HVBA Chairman and CEO. “He’s an outstanding leader and teammate and will be a big part of our next growth phase.”

Sherman joins HVBA’s Executive Board after a year-long commitment to the Advisory Board. During that time, he stood out for his deep experience in growing companies smartly and sustainably and his passion for HVBA’s mission to improve the health of its partners and their teams by sharing proven strategies and success stories of employee benefits and healthcare solutions.

“I am thrilled to join HVBA as Chief Revenue Officer and am eager to focus on optimizing revenue streams, enhancing operational efficiencies, and driving sustainable growth. I look forward to collaborating with the team to create impactful strategies that deliver measurable results and elevate HVBA’s position in the industry,” said Dave Sherman.

Sherman currently serves as the Director of Channel and Partnerships at PTO Exchange. 

Before joining PTO Exchange in 2021, Dave founded and led Preferred Benefit Solutions, a national consulting firm specializing in innovative benefit programs. He worked closely with early-stage startups, guiding their growth and collaborating with industry-leading platforms to deliver tailored solutions, including pharmacy analytics, financial wellness initiatives, and lifestyle benefits. 

By leveraging his extensive experience and passion, Dave brings tremendous value. He will help oversee the customer-facing side of the business, building diverse routes to market, developing customer support systems, and positioning the company’s offerings to drive growth with new markets and client segments. 

Press Contact:

Sarah Hunt
Senior Vice President of Administration
shunt@vbassociation.com

Camden, NJ – December 20, 2024 – The Health & Voluntary Benefits Association® (HVBA) concluded its 17th Annual Board Meeting and Benefits Roadshow in Philadelphia on November 21, 2024. The event was marked by strategic planning sessions to enhance member and corporate partner experiences, showcasing a commitment to staying at the forefront of the industry.

The meeting provided a dynamic platform for exchanging innovative ideas, fostering collaboration, and unparalleled business networking opportunities that left attendees enthused about the Association’s future direction. The HVBA remains a trailblazer in the health and voluntary benefits sector, primarily focusing on delivering education, news, and the most up-to-date information and resources to its subscribers and members while connecting with its community through networking and innovative partnerships.

Among the event’s highlights were the acknowledgments and honors awarded to outstanding partners and board members who have pivotal roles in elevating the Association’s stature and creating valuable experiences for current and future members.

2024 HVBA Leadership Award Sponsor

We sincerely thank Aflac for sponsoring this year’s award ceremony, Leadership awards, and Hall of Fame award.

The Health & Voluntary Benefits Association® (HVBA) is pleased to recognize the following professionals for their exceptional contributions during 2024:

Rob Shestack, Chairman & CEO of the HVBA, praises these award recipients: “These exceptional individuals have played a pivotal role in HVBA’s growth throughout 2024, fostering enhanced collaboration and networking opportunities for members, corporate sponsors, and partners. A heartfelt congratulations to Don Cahalan on his induction into the HVBA Hall of Fame, joining an esteemed group of industry leaders.”

Mike Hirschberg shared his gratitude, saying: “On behalf of MassMutual, I am thrilled to accept the award of Sponsor of The Year from the HVBA.  MassMutual is a proud sponsor of the HVBA and their mission to raise awareness of the advantages of Health and Voluntary Benefits have for employees and employers alike.”

As we celebrate the achievements of 2024, the Health & Voluntary Benefits Association® (HVBA) eagerly anticipates the opportunities that 2025 will bring. We remain dedicated to excellence and take pride in honoring the hardworking efforts of our board and team members in the year ahead.

Click here to learn more about HVBA’s Annual Leadership Awards, including past recipients, eligibility, and award sponsorship opportunities.

For more information about the Health & Voluntary Benefits Association® (HVBA) and its initiatives, please visit www.vbassociation.com.

About Health & Voluntary Benefits Association® (HVBA): The Health & Voluntary Benefits Association® (HVBA) is a leading organization that provides valuable resources, networking opportunities, and the latest health and voluntary benefits sector information. Comprised of a diverse group of professionals, the association is committed to elevating industry standards and fostering collaboration among its members, corporate sponsors, and partners.

Press Contact:
Sarah Hunt
Senior Vice President of Administration
shunt@vbassociation.com

Last month, the U.S. Department of Health and Human Services Office of Inspector General (OIG) released a new report regarding remote patient monitoring (RPM), which describes existing federal coverage policies and recent utilization rates, as well as recommending additional oversight of the telehealth modality’s use within the Medicare program. In particular, OIG’s review sought to understand how RPM, which is the collection and transmission of health data in a patient’s home to assist providers in managing a patient’s condition, is being used by Medicare patients and billed by Medicare providers. OIG found a dramatic increase in RPM use over the past few years and made a number of recommendations to ensure sufficient oversight and billing of RPM services going forward.   OIG provided a brief history of Medicare RPM coverage and rules to provide context for its findings, mentioning how federal coverage first began for the modality, which Medicare refers to as remote physiologic monitoring, in 2018. Medicare also doesn’t consider RPM to be telehealth, rather it falls under a completely separate policy umbrella (see more information on Medicare RPM and Medicare Communication Technology-Based Services [CTBS] on CCHP’s website). Additional RPM coverage and billing rules include:Medicare covers RPM for any type of physiologic data collection using a Food and Drug Administration (FDA) approved medical device for chronic and acute conditions that require monitoringProviders bill Medicare using a specific set of procedure codes (Current Procedural Terminology [CPT] codes: 99091, 99453, 99454, 99457, and 99458) that represent three main components of the monitoring: 1) education and setup, 2) device supply, and 3) treatment management Health data must be collected and transmitted at least for 16 days every 30 daysMedicare pays for each component separately and at the same rate There is no limit on the length of time an enrollee can be monitored“Incident to” billing is allowed and both non-clinical (e.g., office staff) and clinical staff (e.g., a registered nurse) can deliver remote patient monitoring education and device supply, while only clinical staff can deliver treatment managementGiven that RPM coverage began in 2018, it is unsurprising that RPM use increased substantially over the following years (which included the COVID-19 pandemic as well). OIG’s report found that the number of Medicare enrollees receiving RPM was more than 10 times higher in 2022 than in 2019, increasing from 55,000 in 2019 to 570,000 in 2022. The increase in traditional Medicare enrollees utilizing RPM was 9 times higher, while the increase in Medicare Advantage was found to be 14 times higher in 2022, in comparison to 2019. Additionally, OIG reported that Medicare payments were over 20 times higher in 2022 than in 2019. OIG attributes the higher payment amounts to both the increase in the number of enrollees using RPM, as well as the average payment per enrollee, which were found to have doubled by 2022. While patients on average used RPM for less than 3 months in 2019, in 2022 enrollees were receiving RPM for an average of more than 5 months. The number of patients receiving RPM long-term – or over 9 months – also increased, with only 5 percent receiving long-term RPM in 2019 and 25 percent receiving long-term RPM in 2022.   Other findings from the OIG RPM report include:Most Medicare enrollees received RPM to treat chronic conditions (94%)More than half of enrollees received RPM to monitor hypertension, followed by diabetesBlack enrollees and those dually eligible for Medicare and Medicaid received RPM at higher ratesAn additional finding reported by OIG in its review of billing data was that around 43 percent of enrollees who received RPM did not seem to receive all three monitoring components (education and setup, device supply, and treatment management). While Medicare doesn’t require billing for each component, the lack of claims or encounter data confirming patients are receiving all necessary components left OIG concerned whether RPM is being used as intended. For instance, these enrollees appeared to not receive education about how to use and set-up their device, didn’t receive a device, or didn’t transmit their health data as required – all of which OIG states are critical to ensuring the proper use of RPM. Additionally, some enrollees didn’t appear to receive treatment management, meaning they may not have received the true benefits of RPM, or that it may have been unnecessary. OIG flags these issues in relation to its previous telefraud alerts (see OIG RPM Consumer Alert and CCHP OIG Fraud Alert article [dated July 26, 2022] for more information), highlighting its past concerns with unscrupulous companies utilizing telemarketing tactics to sign up Medicare enrollees for unnecessary services they typically never receive. Again, these telefraud alerts are not specific to the modality in which the services are being provided, but rather specific to the activities of the company potentially billing fraudulently (see CCHP Telefraud vs. Telehealth [dated Oct. 5, 2021] and QFRs Provide Insight on OIG Telehealth Perspective [dated Dec. 7, 2021] articles for additional background on the distinctions between telehealth and telefraud).   To address these concerns in relation to RPM, OIG makes a number of recommendations to increase the types of information Medicare receives to ensure more sufficient oversight. For instance, Medicare currently doesn’t receive information on the type of data being collected (i.e. blood pressure) and devices (i.e. blood pressure cuff) being used, nor does it have a way to identify companies specializing in RPM services. In some instances, Medicare is not receiving enough information to ensure RPM is being used to treat eligible conditions, and for 44 percent of enrollees, Medicare didn’t receive any information on the provider ordering RPM. OIG’s recommendations include:Institute safeguards including periodic analysis/follow-up to identify providers frequently billing for enrollees not receiving all three RPM components or without specific diagnosis codesRequire RPM to be ordered by a physician or other qualified provider and that identifying provider information be included on claims/encounter data, similar to existing requirements for ordering durable medical equipment (DME) and other laboratory and imaging servicesDevelop more specific RPM codes that specify types of data collected and device usedConduct provider education about RPM billing that summarize guidelines and safeguardsIdentify and monitor companies specializing in RPM, such as developing a new provider enrollment classification and ensuring appropriate billingImproving incident-to billing transparency by requiring a modifier and additional provider identification (previously a past OIG recommendation)The Centers for Medicare and Medicaid Services (CMS), which administers the Medicare program, concurred with or agreed to take into consideration all of OIG’s recommendations. OIG highlighted in its report that its findings are additionally important when considering that the use, and need, for RPM is likely to increase given that more than 60 percent of Medicare enrollees have hypertension – the most frequent chronic condition associated with current RPM use – however, only a small amount of those particular enrollees were found to already be receiving RPM.    While Medicare doesn’t technically consider RPM to be telehealth, reports evaluating the use of remote care generally are important to policymakers considering telehealth policy needs at the federal level. Additionally, state Medicaid programs, whether they consider RPM to formally be telehealth or not, often do incorporate the same Medicare codes and guidelines into their RPM coverage rules, if such policies exist – see more information by state on CCHP’s Medicaid RPM page. A Medicaid report from earlier this year by Health Affairs had similar RPM findings to those documented by OIG as well. For instance, RPM use increased by more 1,300 percent from 2019 to 2021 among the Medicaid population, particularly for patients with hypertension and diabetes. In addition, Health Affairs assessed the variability of RPM use in context with state Medicaid coverage policies, finding that while only 34 states as of March 2023 had explicitly documented RPM reimbursement policies, providers from all states except Vermont billed RPM codes on billing claims in 2021. The rate of RPM use in 2021, however, was more than 30% higher in states with documented reimbursement policies, showcasing the importance of provider education and outreach and clear coverage policies in ensuring appropriate remote care accessibility. As state and federal policymakers consider these findings, it is vital that reoccurring themes be identified and that concerns be placed in context with any oversight measures planned, as well as the benefits and need for these modalities to ensure additional policies properly promote access to necessary medical care.   For more information on the Medicare RPM study, please view the OIG report in its entirety. The Medicaid RPM study can be accessed on the Health Affairs website.  Potential DEA Temporary Rules Extension for Prescribing Controlled Substances via Telehealth Politico recently reported (subscription required) that the U.S. Drug Enforcement Administration (DEA) is indicating another extension is likely for the temporary federal flexibilities allowing providers to prescribe controlled substances via telehealth without an in-person visit. The previous policy extension is set to expire at the end of 2024. The new final rule titled, “Third Temporary Extension of COVID-19 Telemedicine Flexibilities for Prescription of Controlled Medications,” reportedly reached the White House for review earlier this month. This will be the second time that the DEA attempted to draft permanent policy on the subject but due to various concerns and stakeholder push back, the DEA appears to be moving forward with another additional extension instead. Earlier this year, the DEA crafted a proposal (that wasn’t made public) allegedly containing substantial prescribing limitations, although it stalled at the White House review stage due to purported concerns from the U.S. Department of Health and Human Services (HHS). Last year, prior to this latest attempt, the DEA publicly released another proposed permanent policy that received nearly 40,000 public comments, leading to the currently in effect policy extension. CCHP has covered the issue extensively and produced a timeline related to the DEA telehealth prescribing policy history – see the latest CCHP DEA articles for more information: DEA Rules (dated Oct. 8, 2024), Updates Regarding Upcoming DEA Rules (dated Sept. 10, 2024), and Regulatory Crossroads (dated July 16, 2024). It is unclear how long the latest DEA telehealth prescribing extension would be for, but CCHP will continue to update readers as additional developments occur.

Source: Center for Connected Health Policy, personal communication, October 22, 2024