Medicare Compliance & Reimbursement

New legislation would greatly expand Medicare coverage of telehealth.

Big changes are on the drawing board for coverage of remote, tech-savvy healthcare, aka “telehealth.” In late July, the House of Representatives introduced the Medicare Telehealth Parity Act of 2014. Medicare coverage for telemedicine has been scanty for quite some time, and, if passed, this bill would give the healthcare industry quite the booster shot in this arena.

“This bill would be immediately important for some beneficiaries and uses while helping create the experience, data, etc. for broader expansions toward full parity with other Medicare benefits,” says Gary Capistrant, director of public policy for the American Telemedicine Association.

Currently: Medicare will reimburse only specific cases of telehealth, within four parameters:

1. A patient must be in a rural area (as defined by the Centers for Medicare & Medicaid Services’ [CMS’s] criteria).
2. The patient may only receive telemedicine at certain sites (e.g., at a critical access hospital).
3. Telehealth services are limited to certain providers.
4. Only certain service lines are reimbursable.

“The first three limits are all based on statues, so part of the problem is, it doesn’t matter how hard we knock on CMS’ door to cover more — they don’t have the legal authority to do so, explains Alexis Gilroy, JD, partner with Jones Day in Washington, D.C. and co-chair of the American Health Lawyers Association’s Telemedicine and E-Health Affinity Group.

The Medicare Telehealth Parity Act, however, would statutorily change those three limiting factors. 

Another hurdle that the Medicare Telehealth Parity Act would overcome is that current Medicare telehealth coverage is limited to real-time video and audio conferencing. That happens to leave out the growingly popular “store-and-forward” technology.

Example: A family care practitioner evaluates a patient with a questionable skin lesion and wants to consult with a dermatologist. He takes a high-resolution photograph of the lesion and forwards it electronically to a dermatologist for an opinion. The dermatologist examines the photo and consults with the family care provider via email to confirm a spider bite. Under Medicare, this dermatology consult would not be covered because the consult was done via store-and-forward technology and wasn’t real-time. 

Expect a Slow and Steady Phase-In Approach

The Medicare Telehealth Parity Act, if passed, would expand telehealth coverage over the course of four years. First and foremost, the bill offers a gradual expansion of telehealth coverage into more populated areas. In addition, acceptable sites for telemedicine are expanded.

“Rather than go in gangbusters and ask Congress to turn on the complete faucet of telehealth, they decided to phase it in over time in this bill, I imagine, as a bit of a compromise due to cost concerns,” Gilroy says. 

Year 1: Six months after the bill passes, telehealth must be covered in areas with a population of 50,000 or less. In addition, “convenient care” or retail clinics would be allowed to bill Medicare for telemedicine. 

Also, “right off the bat, they proposed to cover store-and-forward technology,” Gilroy says. “That would be a huge bump for the dermatology industry.”

Remote patient management services would also be covered for patients with “chronic health conditions.” The legislation specifically limits these to:

• congestive heart failure
• COPD
• diabetes (covered only at a federally qualified health center).

Phone calls and emails alone, however, would not count toward remote patient monitoring.

Year 2: Telemedicine coverage would be expanded to populations of 100,000 or less and would expand acceptable sites to the patient’s home. More practitioners would be able to bill Medicare for telehealth in year two, including, audiologists, respiratory therapists, speech-language pathologists, physical therapists, and occupational therapists. The law would also require the Comptroller General to conduct a report at this point, on the effectiveness of telemedicine and cost savings.

Year 4: Population would no longer be a limiting factor, and telemedicine would be reimbursable anywhere.

“The bill keeps the ultimate goal of telehealth ‘parity’ for Medicare,” Capistrant says. “In this ‘national’ program, telehealth is the only benefit that is limited by geography — it is time to end this unequal treatment under the law.”

Capistrant also finds the targeted coverage expansion for federally funded community health centers “interesting” — that is, to have federal reimbursement support federal investment. “This would address one of the concerns of Congressional Budget Office about open-ended expansions,” he says. “Furthermore, CMS has a special way of paying community health centers that could be adjusted to deter any inappropriate utilization of telehealth.”

Hesitations to Be Expected — on Several Fronts

It’s no question that technology has grown in leaps and bounds, so why the stalling on CMS’ end to keep up with it, some ask.

“Back when the telehealth statues were originally added for Medicare, there was concern that this would create a waterfall of additional claims,” Gilroy recalls. “So there’s always the question about cost.” 

For example, expanding telemedicine into the patient’s home “is likely to draw some concerns about cost because it creates the potential for a lot of telemedicine encounters,” Gilroy says. 

Another significant hurdle, for both patients and physicians, is having a shift in mindset to find a comfort level with telehealth, says Mark Silberman, health care partner for Duane Morris in Chicago and former prosecutor for state of Illinois. “There’s a certain inherent comfort we’ve all grown to feel with personal touch and being in the same room with the doctor and nurse.”

That’s not all: Even medical boards are struggling with their comfort levels in healthcare providers’ capabilities to perform services remotely without any other care providers present with the patient, Gilroy reports. “I’ve seen telehealth conveyed quite fantastically and believe it is a phenomenal business case, but it’s a matter of familiarity and comfort.”

A good counterargument to the cost argument, however, is that telemedicine could potentially save a lot of costs, especially in the chronic cases the bill names for remote patient monitoring (congestive heart failure, COPD, and diabetes).

“The more free flow of information, the more monitoring, guidance and input of the physician, the lower the likelihood of acute instances and hospitalizations, and therefore less high-cost instances,” Silberman says. “Technology can offer exceptional support to healthcare professionals in the performance of their duties, and this [bill] does not appear designed to usurp.

Safety net: The bill also smoothes over any additional cost concerns with mandates for reports and studies to demonstrate both the effectiveness of telemedicine and its cost-saving abilities.