Committed Capital

Sidecar: From Codes to Clicks — Telehealth in the Consumer-First Era

• Dechert LLP • Episode 18

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How will Medicare’s telehealth back-and-forth – and new developments like the 10-year CMS ACCESS Model – reshape the investor playbook? Markus Bolsinger, co-head of Dechert’s global private equity practice, joins Dechert partner Jennifer Hutchens and associate Brooke Meadowcroft to unpack shifts from pandemic-era expansion to the October 1, 2025 “telehealth cliff” and reinstatement through January 30, and what they mean for strategics and PE. They explore the convergence with DTC pharma and how digital-first infrastructure, data integration and safeguards can make telehealth the connective tissue between coverage and access to care.

Intro:

Welcome to Dechert's Committed Capital. This is an episode of Sidecar, a special bite-sized discussion of the latest market issues.

Markus Bolsinger:

Happy New Year! Welcome back to Committed Capital, Dechert's podcast on corporate and private equity legal trends. Today, our Sidecar is From Codes to Clicks: Telehealth in the Consumer-First era. I'm Markus Bolsinger, co-head of Dechert's global private equity practice and Dechert's healthcare transactional practice. Today, we'll be talking about current shifts in Medicare coverage for telehealth services here in the U.S. and recent developments as relevant to strategics, private equity and other investors in the telehealth space more generally. If you have been following this issue, you will note that Medicare coverage for telehealth services has been existing in a liminal space. Recently, telehealth services were covered quite broadly by Medicare up until October 1 of last year, 2025, when this coverage reverted back to its pre-pandemic model. We will discuss why this specifically happened a little bit later. But if the date October 1, 2025, rings any bells, you know that's also when the U.S. federal government shutdown started. While the act ending the government shutdown did reinstate Medicare coverage for telehealth services, there's reason to believe this back-and-forth saga is far from over. I'm excited to welcome back my Dechert partner, Jennifer Hutchins, based in Charlotte, with our global healthcare transactional regulatory team. Jennifer regularly works with our PE and strategic clients to provide commercial guidance to navigate the ever changing federal and U.S. 50-state compliance landscape. I'm also joined by Washington, D.C.-based attorney Brooke Meadowcroft, who has been with us at the front lines, helping our clients assess opportunities and risk mitigate, given the dynamics of the U.S. telehealth environment. So, let's get started. Brooke, stats from a report conducted by the American Telemedicine Association Center of Digital Excellence indicated that"telehealth replaces 74% of office visits," according to data from 2019 to 2023 across nine health systems in the U.S. That "includes 7.2 million patients, almost 1.7 million of whom were Medicare beneficiaries." This data is representative of 30 states and D.C. Even each of us as consumers of telehealth know that the use of telehealth services has really exploded over the past decade. For clarification, what exactly do we mean by telehealth services?

Brooke Meadowcroft:

So, telehealth services can encompass a broad range of different things. For our purposes, at least here, when we refer to telehealth services we're mostly referring to virtual appointments. However, virtual appointments may encompass mental health services, acute irregular care services, drug prescription appointments and more. And these appointments will most likely be taken from home, but you could also take them in other remote locations, provided that these locations are secure.

Markus Bolsinger:

So, the popularity of telehealth services even moreso markedly increased during the COVID pandemic, which makes sense given the circumstances of people being stuck at home. The use of these services still remains high, even after the pandemic. Jennifer, tell us what you've been seeing in your client practice as to how the space has grown and why strategics and investors have become increasingly interested in the telehealth space.

Jennifer Hutchens:

Thanks, Markus, it's great to be here again for Committed Capital with you, and also happy 2026 to you. I think particularly innovation-minded strategics and investors are really interested in this telehealth space as part of what we're really seeing, a growing digitalization of our world. It's been a truly exciting time to be counseling our clients in this space, because they are very largely forward thinking and looking for that open white space to do so. Our understanding of how certain medical or medical-adjacent services are provided, and really what's possible in those types of remote settings is rapidly changing. I think that telehealth specifically, given how this space has become extraordinarily relied upon, of course, during COVID, as you've mentioned, and also just given the efficiencies generated, it's really become an industry to watch. Also, when you layer in Medicare, the single-largest payer in the U.S. for healthcare services, which has been reimbursing for telehealth to a large degree, there has been a monumentous explosion and expansion of access to telehealth services to a large number of people. So that's been a really, really thrilling development for expanding access to care.

Markus Bolsinger:

That makes total sense, and Medicare coverage definitely plays into this. Brooke, can you provide a brief overview of the timeline of Medicare coverage for the telehealth services?

Brooke Meadowcroft:

Sure. So, at least prior to the pandemic in 2020, some telehealth services were covered by Medicare, which would be reimbursable to the provider, but not to the extent that exists today. For example, virtual check-ins and e-isits were covered pre-pandemic, but these generally were short patient check-ins with their providers. When the pandemic started in early 2020, obviously, how healthcare had been provided in the past wasn't going to work. So, on what was termed at that time a "temporary and emergency basis," Medicare coverage for telehealth services was expanded, covering a wide range of healthcare professionals providing virtual services. However, this"temporary and emergency basis" kept getting extended because of stakeholder input and for need and convenience, to the point that Medicare coverage for these services was ultimately extended for nearly a five-year period, up until October 1 of 2025, as mentioned.

Markus Bolsinger:

Right. So, on October 1 when the government shut down in the U.S., which is when the extension of Medicare coverage for telehealth services did actually end. When the government shut down, what happened to Medicare coverage for telehealth services?

Brooke Meadowcroft:

Well, these services became limited again. We reverted back to a form of pre-pandemic Medicare coverage, which, as you could imagine, was quite a shock. Stakeholders referred to this as the"telehealth cliff" for how great of a change in coverage this was.

Markus Bolsinger:

And when you say telehealth cliff, it really gives a stark idea of how different Medicare coverage in these periods were. Tell me about some of the differences of coverage from October 1 and onward, Jennifer.

Jennifer Hutchens:

So, for starters, I think probably the most overarching difference in coverage before October 1 and afterwards was that uncertainty of reimbursement by Medicare. Coverage was limited again, as mentioned, so patients largely had to pay out of pocket to receive these services to the extent that it was previously provided. Second, following October 1, nearly all appointments had to be taken from an approved originating site, which would generally be a doctor's office, a hospital, things of that nature. Patients really could only take certain medical appointments from their homes, particularly on the mental health side of things - and even then, they would still have to visit an in-person doctor's appointment, for example, to qualify for virtual appointments. So, the types of practitioners who could provide telehealth services was dramatically limited.

Markus Bolsinger:

But is it correct that those restrictions are no longer in place?

Jennifer Hutchens:

Yes. So, the Continuing Resolution signed by President Trump to end the government shutdown in the United States contained a provision re-extending Medicare coverage for telehealth services. So, Medicare coverage for telehealth services is currently back to its pandemic-era form, but that's at least and only until January 30 of this year. So 2026, which is as far as the continuing resolution goes. I also wanted to note that other payors, like third-party payors (private insurance, commercial insurance), they largely, generally, will take cue from Medicare's coverage. So, this is why we've been shorthanding reimbursement considerations by referring to Medicare telehealth developments in our world.

Markus Bolsinger:

Thank you. Jennifer, got it. Wow, that space really seems to be changing fast or going back-and-forth, and given the resolution only goes until the end of this month, who knows what's coming next? That said, the reimbursement space for telehealth services appears somewhat chaotic at the moment, given the back-and-forth in coverage, at least as with regard to public and private payors, how should strategics and investors approach this space?

Jennifer Hutchens:

It's a really interesting question, Markus. Given the back-and-forth, I think what's key for any strategic or investor that we've been working with at this moment is to really treat this space on a long-term basis. This relative flip-flop in coverage is somewhat due to exigent circumstances, like the government shutdown, hitting pause on all issues under consideration. In other words, in some ways, telehealth was sort of pulled into the larger undercurrent. Telehealth services remain extraordinarily popular, and these services are here to stay. Not only that, telehealth offerings are becoming more and more nuanced and patient facing each and every day.

Markus Bolsinger:

Thanks, Jennifer. Brooke, I also want to quickly get your input on new Medicare reimbursement developments in the telehealth space. CMS announced at the start of December, so late last year, that they will launch a new novel payment model for providers offering technology supported care to individuals with Original Medicare for managing common chronic conditions. CMS said that it will pay participants in fixed installments for managing patients' qualifying conditions, with full payment tied to achieving measurable health outcomes. The model will begin July one of this year, 2026 for a 10-year span. Do you think that the launch of the ACCESS model sheds any light on the future of the relationship between telehealth services and Medicare? Does the 10-year provision mean anything important for patients, strategics and/or investors?

Brooke Meadowcroft:

Well, I think the launch of this model further supports the idea that the telehealth space is continuing to push care boundaries which, in turn, just opens up reimbursement incentives. I know the back-and-forth in Medicare coverage that we just discussed is a bit muddled, but my sense is that this is a blip along the timeline. With CMS working to institute a 10-year trial period for this coverage model, by way of example, the U.S. government's approach to telehealth at this point in time is pretty positive from a macro perspective.

Markus Bolsinger:

Thanks, Brooke. As we've covered the ins and outs here of Medicare coverage for telehealth services, I also want to end with your thoughts on the broader telehealth space. Jennifer, you are knee deep in crafting client telehealth offerings, navigating this evolving regulatory framework and chartering new solutions - many times firsts of their kind. Can you talk a little bit about telehealth industry evolution and the wave of transformation, please?

Jennifer Hutchens:

Sure. You know, stepping back, telehealth isn't just a set of reimbursement codes. In my mind, it really is the front door of a consumer-centered health ecosystem that we have just never seen before. And it is exciting and it's innovative, and I think there's so much more to come. From my perspective, telehealth allows us to meet the people, the patients, where they are, turning waiting rooms into living rooms, visits into conversations. We're seeing virtual triage, remote monitoring, secure messaging - all giving patients choice and opportunity for continuity of care. In-person care steps in when it is adding value, certainly, of course. Integrated Data helps to personalize care and coordinate medication and diagnostics. We're certainly seeing, for rural and behavioral health, the expansion of access, which is something that I think is critical for chronic disease. We've been seeing that it is making care much more continuous for patients instead of episodic. Medicare and other reimbursement coverage - or even self pay, for that matter - we see that really as kind of a reimbursement infrastructure or a mechanic that makes all of this work. And I think it is a fascinating time to really dovetail into more of the direct-to-consumer facing models that we're seeing. So DTC, let's say, even in the current drug waves, for example, where you've got condition-specific, ad-to-visit-to-doorstep journeys, where telehealth is really a clinical gateway for the patients. On the policy front, it's interesting because this administration, as Brooke alluded to, has really normalized digital-first access and patient consumer choice, and I see those as very much kind of the rails that Medicare plans and DTC platforms both run on. The opportunity now is really to connect those types of retail or consumer tracks to longitudinal care - with e-prescribing to the patient's chosen pharmacy, coverage integration, data sharing with primary care, and, of course, from a regulatory lawyer's perspective, keeping guardrails on appropriateness, advertising, privacy, equity, those are the types of issues that we need to wrestle down quite often in this. And when we do that, telehealth really becomes that connective tissue between coverage and care and convenient access to medications and healthcare, very much on patient terms, which is tremendous.

Markus Bolsinger:

Thank you very much. That was super interesting. And showing us those parallels, that's definitely the future of where we're going. Jennifer, Brooke, thank you for joining us. This concludes our Committed Capital telehealth Sidecar From Codes to Clicks: Telehealth in the Consumer-First Era. The Dechert healthcare team prides ourselves on helping leaders lead by keeping our finger on the pulse of the fast-paced and dynamic healthcare industry. We stand ready to face the challenges of this evolving healthcare regulatory landscape for our clients. Thank you all for listening, and we look forward to keeping you all updated.

Outro:

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