December
1998
Issue:
Telemedicine
reimbursement
Few payers reimburse telemedicine services,
but on January 1, 1999, Medicare begins
paying for teleconsultations in rural health
professional shortage areas. This new provision,
enacted in the Balanced Budget Act of 1997,
represents Medicare's first national reimbursement
policy for telemedicine services. These
new payment regulations are fairly restrictive
but provide a significant first step toward
covering telehealth services while also
raising some important issues about how
best to pay for these services.
Discussion
On January 1, 1999, Medicare joins approximately
11 state Medicaid programs and a handful
of private health insurers in paying for
telemedicine services. Medicare’s
move into the telemedicine reimbursement
arena represents a step into new and unfamiliar
territory for the Health Care Financing
Administration. As the largest payer of
medical claims in the country, Medicare
often sets the standard for how other
payers will handle new or innovative services.
More details
What You Need to Know
The Health Care Financing Administration
published a final rule for this provision
Nov. 2, 1998, in the Federal
Register.
This final rule explains the regulations:
What's Next
Related sites:
First Steps Toward Telemedicine
Reimbursement
December 1998
The new Health Care Financing Administration’s
(HCFA) telemedicine reimbursement rule
is a notable change for the Medicare program.
The program raises some critical questions
for policy makers, practitioners and telemedicine
networks on how best to pay for telemedicine
services. As policy makers, practitioners
and telemedicine service providers sift
through the new regulations, several key
issues have emerged about which services
will be covered, which health care practitioners
can take part in a consultation and what
kind of telecommunications technology
can be used.
Background
While telemedicine technology has made
it easy to deliver health care services
over a distance, few payers are covering
these services. Currently, at least 11
state Medicaid programs and several Blue
Cross/Blue Shield plans and some other
private insurers pay for telemedicine
services. Several other states have also
recently passed laws requiring all insurers
to pay for telemedicine services. Medicare,
however, has been more cautious. Prior
to enactment of the Balanced Budget Act
(BBA) of 1997, Medicare did not have an
explicit policy to pay for telemedicine
services. Nevertheless, telemedicine services
that did not traditionally require face-to-face
contact between a patient and practitioner,
such as EKG or EEG interpretation, teleradiology,
and telepathology were covered under Medicare
in most areas of the nation, in accordance
with individual Medicare carrier policies.
The passage of the BBA required Medicare
to pay for telemedicine consultation services
using interactive video (i.e., teleconsultation)
in rural "Health Professional Shortage
Areas" (HPSAs) by Jan. 1, 1999. This
signaled a major change in policy. The
legislation limits eligibility for coverage
to rural HPSAs and prohibits payment for
line charges or for facility fees. In
addition, Medicare payment is set at the
consultant’s fee schedule and requires
referring and consulting practitioners
to share the payment. The final regulation,
which was published in the Federal Register
on Nov. 2, 1999, explains how Medicare
initially will pay for these services
and which services will be covered.
Site of Coverage
Under the BBA, there is only one type
of shortage area applicable to the Medicare
teleconsultation regulation: a "geographic"
rural HPSA (Health Professional Shortage
Area). Although some geographic rural
HPSAs encompass an entire county, while
others are only located in a portion of
a county, HCFA decided to include all
rural geographic HPSAs as eligible regardless
of whether the entire county is a HPSA
or not. The final rule stipulates the
use of the site of presentation (patient
location) as a proxy, or substitution,
for beneficiary residence. However, if
the beneficiary can show that he or she
lives in a rural HPSA, Medicare will make
payment regardless of where the teleconsultation
occurred.
Eligible
Presenting Practitioners
One of the more contentious issues in
the formation of this regulation was deciding
which health care practitioners should
be paid for consultation. Telemedicine
practitioners have used a variety of settings
and practitioners for presenting patients
to specialists and other consultants.
For instance, some health care practitioners
will refer a patient for a telemedicine
consultation and then let a nurse at the
telemedicine site present the patient
to the specialist. Other primary care
practitioners may present the patient
themselves. Under this rule, however,
Medicare has strictly defined which practitioners
can be paid for participating in a teleconsultation
at both ends, based on the parameters
specified in the BBA.
Consultants
The BBA’s language only allows certain
practitioners to be a teleconsultant,
and specifies that the referring medical
professional is either a physician or
a practitioner as defined in the Social
Security Act. This act very specifically
defines which medical professionals are
considered "practitioners" under
the Medicare program. As a result, there
are some practitioners who are eligible
only to act as consulting practitioners
and others who are eligible only to act
as referring practitioners. For example,
clinical nurse specialists, physician
assistants, nurse practitioners, and certified
nurse-midwifes can act as both referring
and consulting practitioners for this
provision. However, clinical social workers
and clinical psychologists can only act
as referring practitioners under this
rule. Registered nurses, licensed practical
nurses and other types of similar health
care professionals cannot present patients
for consultations because they are not
considered practitioners under the Medicare
program as defined by the Social Security
Act.
Scope
of Coverage
According to HCFA, the BBA limits the
scope of coverage to a consultation for
which payment may be made under the Medicare
program. These services include initial,
follow-up, or confirmatory consultations
in hospitals, outpatient facilities, or
medical offices. Eligible Current Procedural
Terminology (CPT) codes are:
- 99241-99245;
- 99251-99355;
- 99261-99263;
- 99271-99275.
The Medicare final rule on teleconsultation
specifies that these codes can be used
for a number of medical specialties, such
as cardiology, dermatology, gastrology,
neurology, pulmonary, and psychiatry.
According to HCFA, it will cover additional
consultations for the same or a new problem
if the attending physician or practitioner
requests the consultation, and if it is
documented in the medical records of the
beneficiary.
Sharing
of Fees
The BBA mandates that consulting and referring
practitioners share payments. HCFA requires
that 75 percent of the fee go to the consultant
and the remaining 25 percent go to the
referring practitioner. HCFA came up with
this split based on the relative work
for practitioners at both ends. There
was also an inherent recognition that
different consultations call for different
levels of effort. As a result, the fee
split reflects the projected level of
new work done by each practitioner over
the course of various teleconsultations.
Types
of Technology Covered
HCFA’s payment policy
was developed to replicate a standard
consultation as closely as possible. Under
Medicare, a separate payment for a consultation
requires a face to face examination of
the patient. This requirement is consistent
with the American Medical Associations
description of a consultation. To that
end, Medicare’s teleconsultation
rule requires a certain level of interaction
between the patient and consulting practitioner
because it offers the best substitute
for a "face-to-face" consultation.
Regardless of the technology, the patient
must be present during the consultation.
That is because Medicare does not currently
make separate payment for the review and
interpretation of a previous examination
or dermatology photos. Thus, this policy
may preclude the use of standard store-and-forward
technologies. In most store-and-forward
applications, a practitioner at the remote
site will typically examine the patient
and send a video clip or a photographic
scan, along with the patient's medical
record to a distant consulting practitioner.
The consulting practitioner will then
review the file and make a diagnosis.
Medicare will not cover this type of telemedicine
application because it does not allow
for live interaction between the consulting
practitioner and the patient and the referring
practitioner at the rural site. Medicare
will cover some uses of store-and-forward
technology as a consultation if the patient
is present and there is real-time video
and audio interaction level of video or
audio interaction between the consulting
practitioner and the patient.
Next Steps
Medicare’s telemedicine reimbursement
rule represents a significant departure
in policy for Medicare and how it pays
for telemedicine services. Consequently,
this new rule may undergo some changes
in the years to come. The Secretary of
Health and Human Services has asked HCFA
to reexamine some key points, including
what services are covered, which medical
professionals are eligible to present
the patient, and uses of store-and-forward
technology. The Department will develop
recommendations for Congress within the
next year on potential modifications to
the reimbursement rule. HCFA will be working
with the Agency for Health Care Policy
and Research (AHCPR) and HRSA’s
Office for the Advancement of Telehealth
in the development of these recommendations.
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