Reimbursement lags, legal hurdles slow telemedicine adoption

Telemedicine is gaining broader acceptance, yet legal restrictions and reimbursement barriers continue to slow its momentum.

Telemedicine is gaining broader acceptance, yet legal restrictions and reimbursement barriers continue to slow its momentum. "The real limiting factor [to wider telemedicine use] is not that Medicare beneficiaries don’t want to use telehealth, it’s that providers aren’t offering a lot of services, in part, because Medicare, as a payer, is restrictive in how it views and pays for telehealth,” says Jonathan Neufeld, clinical director, Upper Midwest Telehealth Resource Center, a consortium of active telehealth organizations that focuses on telehealth programs and technical assistance needs within Illinois, Indiana, Michigan, and Ohio.

NeufeldIn the last few years, Neufeld sees a loosening of the grip of federal funding for telehealth services as Medicare moves away from paying for episodic fee-for-service visits and toward rewarding value in patient care, saying “I’ve seen rapid movement paying for value.”  Specifically, he points to the Centers for Medicare and Medicaid Services (CMS) shared-savings program, also known as the accountable care organization program. "The way that program’s been revamped and extended each year, shows CMS is very serious about paying for health and not treatment,” he says.

Jonathan Linkous, chief executive officer of the American Telemedicine Association (ATA), says that the fear that telemedicine could lead to more unnecessary care and more unnecessary costs is one of the key barriers to broader reimbursement. Still, he says, "A lot of payers don’t have that concern anymore with the exception of a few-most notably Medicare-which is a very, very late and slow adopter of new technology.”




Currently, Medicare limits telehealth access to beneficiaries in eligible origination sites outside the metropolitan statistical area, known as rural health professional shortage areas. Though the physician, providing the service can be located anywhere, the patient receiving the service must be in an authorized medical facility such as a practitioner's office, hospital, or health clinic for the physician to receive reimbursement.

“Medicare started paying for telehealth in 1997 with a significant upgrade in 2007. They’ve always conceptualized healthcare as a valid originating site with certain procedures that are valid to do,” explains Neufeld who notes that Medicare rules protect patient security and privacy. “If the patient’s at a clinical facility, at least you can be assured about the nature of that facility. Whereas when the patient’s coming from home, you lose all control over the physical environment."

In 2015, Medicare began offering separate payments for non-visit-based services to manage Medicare patients with two or more chronic conditions. It also added new codes to the 2015 Physician Fee Schedule that cover wellness visits, psychotherapy, and prolonged office services delivered via telehealth.

The Medicare Telehealth Parity Act of 2015, recently re-introduced to the U.S. House of Representatives last month, would remove geographic barriers to accommodate rural, underserved and metropolitan areas with the eventual goal of achieving equivalence between in-person and virtual coverage.

Jay Wolfson, senior associate dean for health policy and practice at the University of South Florida Morsani College of Medicine, endorses these origination site expansions. “For the past three decades, rural markets have benefited from telehealth, but this will, and should, change to include urban shortage areas and any location for the array of monitoring and management services that telehealth can support," he says. “Filling hospital beds, outpatient rooms, physician offices, and other locations to perform procedures and follow up has been a driving force in U.S. healthcare. The combination of comparable, if not better, technologic capacity to monitor and manage and cost vicissitudes, will drive the future of much of healthcare into a virtual space."




While it varies how payers handle telemedicine reimbursement, state laws vary when it comes to telemedicine regulations. Most states, for example, require that a physician is licensed in the state where his or her remote patient is located.

Within the past year, more than 25 states have considered proposals, with varied results, to revise

health professional standards and licensure requirements when using telemedicine, according to the ATA. Some are creating new laws that impact access to care via telemedicine; others are amending existing policies with greater implications.

A few state medical boards are considering requiring an initial examination be conducted in-person and a physician-patient relationship be established in-person prior to the physician engaging in telemedicine with that patient.