President Obama signed the 21st Century Cures Act (Cures Act) into law on Tuesday, December 13. The 966-page piece of legislation represents the largest reform of the U.S. health sector since the passage of the Affordable Care Act in 2010. The $6.3 billion bill makes reforms across the healthcare industry, including exploration of telehealth solutions, mental health and substance abuse reform, and provisions impacting rural healthcare providers.

Exploration of Telehealth Solutions

The Cures Act requires CMS and the Medicare Payment Advisory Commission (MedPAC) to create a report for Congress detailing current and potential uses of telehealth for Medicare beneficiaries. Specifically, the bill tasks CMS and MedPAC with gathering and analyzing data for Congress to make an informed decision on the potential of telehealth to improve patient care for Medicare recipients and the associated financial costs.

Though the Cures Act will not immediately impact Medicare’s approach to telehealth, the legislation signals Congress’ commitment to exploring telehealth’s potential of lowering costs of healthcare delivery, while simultaneously providing better quality patient care.

Mental Health and Substance Abuse Reform

A major portion of the Cures Act relates to mental health and substance abuse disorders. The final version of the Cures Act incorporates provisions from the Senate’s Mental Health Reform Act of 2016 and the House’s Helping Families in Mental Health Crisis Act of 2016. Mental health reforms found in the Cures Act include a directive for increased cooperation among federal agencies in combating mental health, funding to develop evidence-based models to treat mental health, and a dictate to ensure parity in terms of reimbursement for mental health treatment.

Since requiring parity in for mental health reimbursement with the enactment of the Mental Health Parity and Addiction Equity Act of 2008, concerns have been raised whether parity is being achieved. To address these concerns, the Cures Act includes requirements that the Department of Human and Health Services (HHS), the U.S. Department of the Treasury, and the U.S. Department of Labor (DOL) develop compliance guidance with detailed examples for health plans to ensure parity is met for mental health reimbursement. Recognizing the impact of substance abuse and the opioid abuse epidemic, especially in rural America, the Cures Act places $1 billion over two years in a fund to directly award grants to states in their efforts to combat opioid abuse.

Impacts on Rural Healthcare Providers

Several provisions of the Cures Act relate directly to rural healthcare providers. The Cures Act bars CMS from enforcing direct physician supervision requirements for outpatient therapeutic services obtained in Critical Access Hospitals (CAHs) and small rural hospitals (hospitals located in rural areas with less than 100 beds) through the end of 2016. The direct supervision requirements for outpatient therapy services were changed by CMS in 2009 for all hospitals, requiring either a physician or a non-physician healthcare provider directly supervise when Medicare beneficiaries receive outpatient therapies. The regulation has been met with considerable criticism from rural healthcare providers for being impractical and failing to account for the realities of staffing rural healthcare facilities. Though 2016 is almost over, the provision is noteworthy if a hospital becomes the subject of a CMS supervision-related action for an event that occurred during calendar year 2016.

In addition, the Cures Act extends the Rural Community Hospital Demonstration Program through the end of calendar year 2021 while expanding the program to new states. The Rural Community Hospital Demonstration Program provides Medicare cost-based reimbursement to certain small rural hospitals that fail to qualify for cost-based reimbursement under a CAH designation. Applications for the program were previously limited to rural hospitals located in the twenty least densely populated states in the country. The Cures Act changes this requirement and the program application to is now open a select number of hospitals located in any state.