February 1, 2021

The law firm of Ropes & Gray examines the major trends expected by 2021 in the digital health and healthcare space, including the continued expansion of BigData, AI and telehealth, and a move toward greater portability of patient health information.

This has been a year like no other in which the world has responded to the public health emergency of a pandemic by deploying telehealth solutions to meet social distancing orders and the rapid development and deployment of Covid-19 diagnostics, therapies, and vaccines.

As we move into 2021, we expect that BigData collaborations and analysis through artificial intelligence (AI) will continue to drive innovation in clinical decision support (CDS) software, patient treatment, and pharmaceutical research. In addition, the movement toward greater portability of patient health information and use of telehealth, driven by the public health emergency (PHE), is expected to continue in the coming years.

Some of the major trends to be expected, as well as transaction and compliance concerns, are summarized below.

Data exchange agreements

Data sharing and collaborative agreements on artificial intelligence are likely to increase as companies seek to efficiently extract useful insights and conclusions from broader and more diverse data sets.

Since data rights are not uniformly governed by law, contractual provisions are critical to addressing novel issues in collaborators’ rights. Participants in data collection initiatives need to consider what data will be shared, the rights of participants to use the data sets collected, and the rights that each collaborator retains over those data and the inferences drawn from them outside of the agreements.

It is essential that the artificial intelligence platform providers and proprietary data set owners examine whether the artificial intelligence platform is allowed to retain any lessons derived from the data set that can be used for other customers, including potential competitors of the data set owner.

In addition, developments in the regulatory framework for data privacy, including the passage of the California Privacy Rights Act (CPRA) in November, and with the California Consumer Privacy Act (CCPA) coming into effect in January 2020, may impose more stringent obligations for previously “lightly” regulated datasets.

For example, personal fitness information collected by smart devices, while probably not covered by the Health Information Portability and Accountability Act (HIPAA), may be covered by the CCPA and may receive greater protection as “sensitive personal information” under the CPRA. Data sharing partnerships will continue to be determined by the rapidly evolving regulatory landscape.

Technologies, Software Innovations

Innovative digital health software, such as artificial intelligence tools and cardiovascular disease screening software, will continue to proliferate, but require careful consideration of rapidly evolving regulatory and statutory regimes.

The Food and Drug Administration’s risk-based approaches to regulation of e-Health software during the PHE are largely consistent with its pre-pandemic regulations, focusing on exercising discretion in the execution of low-risk software products that could help minimize physical contact between patients and their health care providers.

We anticipate that in 2021, FDA will renew its broader efforts to clarify the regulatory approach to medical software products, led by the Center for Digital Health Excellence, which the agency established in September 2020. Notably, finalizing the draft CDS guidance and publishing the draft IA guidance are both on the FDA’s Center for Devices and Radiological Health’s priority list for 2021.

Information Change

The development of information technologies in the field of health will be affected by new regulations that promote interaction and exchange of electronic health information.

In 2020, the Centers for Medicare and Medicaid Services and the Office of the National Coordinator for Health IT issued standards implementing the interoperability, information closure, and patient access provisions of the 21st Century Cures Act to facilitate access to and sharing of electronic health information.

The new requirements that take effect in 2021 include

Information lock-out is prohibited, which applies to developers and providers of health information technology, health information exchanges, and health information networks; Electronic admission, discharge and transfer notices, required for hospitals enrolled in Medicare; Patient access application programming interfaces (APIs), required for Medicare Advantage, Medicaid, Children’s Health Insurance Program (CHIP) and qualified health plan insurers; and

The API provider directory, required for Medicare Advantage, Medicaid, and CHIP.

Drug Development and Real-World Data

Regulatory agencies are expected to clarify their approach to drug development that incorporates analysis of real-world data driven by health technology platforms.

While the adoption of real-world evidence-based approaches to drug development has been limited by a lack of clear regulatory guidance or comfort with real-world evidence-based approaches, by 2020, regulators and industry have relied heavily on real-world data to understand Covid-19 and assess potential treatment options.

In 2021, the FDA is expected to issue guidance on how sponsors can use real-world testing in drug development, as required by the 21st Century Cures Act. This guidance, along with the increased comfort that stakeholders have gained from RWE during the pandemic, may lead to greater use of real-world testing in drug development.


Government and commercial payers are increasingly expected to reimburse for services provided remotely through telehealth and other digital health technologies.

Insurance coverage for remotely delivered services has historically varied by insurer and geographic region, and Medicare coverage, in particular, has been limited. However, CMS and other payers have relaxed requirements for reimbursement of telehealth services during PHE.

By 2021, CMS is adding new Medicare reimbursable telehealth services, and state Medicaid programs and private insurance companies may follow suit.

Starting with the pandemic

As the pandemic subsides and the focus of regulators changes, the digital health landscape will continue to be shaped by the legacy of the Covid-19 PHE.

The continued growth of BigData, AI, telehealth, and other innovative digital health tools will require commercial actors to carefully consider the contract language and insurance coverage for new technologies. Anticipated FDA and CMS regulations and guidelines are likely to affect both software and drug development, and new and clarified privacy obligations may impact any use of data in that development.

Those at the forefront of innovation in digital health should continue to monitor these current legal issues and plan accordingly in 2021.

Source: Bloomber Glaw