Payment for Telemedicine Gaining Momentum

Annie Macios

July 14, 2010

July 14, 2010 — Recent actions of the Centers for Medicare and Medicaid Services and the American Medical Association (AMA) are aimed at mapping out a plan to ensure that clinicians are compensated for "virtual visits," as clinicians more regularly find themselves consulting, diagnosing, and treating patients using wireless technology such as texting, smartphones, and Web-based communication.

The American Telemedicine Association (ATA) reports that in a proposed rulemaking scheduled to be in the Federal Register on July 13, the Centers for Medicare and Medicaid Services will propose some additional Current Procedural Terminology and Healthcare Common Procedural Coding System codes for coverage when care is provided by telehealth, many of which were recommended by the ATA. This rule is aimed at ensuring that payment systems are updated to reflect changes in medical practice and the relative value of services.

In a separate action intended to incorporate reimbursement for telemedicine services, the AMA Council on Medical Service recently issued a report, adopted by the AMA's House of Delegates, that puts into motion the payment models for care provided by electronic means. According to the newly adopted policy, as reported in American Medical News, all "non-face-to-face electronic visits" should be adequately paid for. The question arises, however, as to who will pay and for what services, and whether the funds will come from a federal pocket, a state pocket, or both.

"Current payment for telemedicine includes private insurers, employers, Medicaid, and Medicare. All pay for some forms of telemedicine, such as teleradiology — offsite reading of medical images. However, payment for interactive consultations and remote monitoring of chronic care patients is limited," Jonathan D. Linkous, chief executive officer of the ATA, Washington, DC, told Medscape Medical News.

"Over the past 10 years, the amount of coverage from all different types of payers has grown slowly but steadily," Linkous added.

At the state level, Virginia has recently become the 12th state to mandate that health plans cover telemedicine, joining California, Colorado, Georgia, Hawaii, Kansas, Kentucky, Louisiana, Texas, Oklahoma, Maine, and New Hampshire.

At this time, each state enacts its own set of guidelines for physician payment. For example, under Virginia's new statute, telemedicine services include the use of interactive audio, video, or other electronic media used for the purpose of diagnosis, consultation, or treatment, according to American Medical News. In Maine, the law supplements Medicaid reimbursement for telemedicine services delivered by interactive video sessions, and in New Hampshire, Medicaid does not cover telemedicine except in selected pilot waiver programs.

Telemedicine on the Rise

A study by Pike & Fischer, a Silver Spring, Maryland, research firm, predicts that the market for telemedicine devices and services will generate $3.6 billion in annual revenue within 5 years, and that wireless applications, devices, and services will account for more than 70% of the telemedicine market within 5 years. The report points to the undeniable need to control healthcare costs, as well as advances in wireless broadband networks, smartphones, and data compression technologies, which the report predicts will fuel telemedicine growth.

In line with market predictions, in November 2009 the US Department of Agriculture announced $34.9 million in grants for 111 projects in 35 states to expand access to healthcare services in rural areas. The program, funded through the department's Rural Development's Distant Learning and Telemedicine Program, aims to help expand telecommunications, educational resources, and computer networks throughout rural communities.

"Payment models for telehealth 'visits' are long overdue," Claudia Tessier, RHIA, president of mHealth Initiative, Inc, in Boston, Massachusetts, told Medscape Medical News. "Electronic visits via mobile devices — smartphones, tablets, etc — can facilitate access to care at the same time that they enable faster diagnosis and treatment. This is particularly so when restricting eligibility for care to office, clinic, or [emergency department] visits may not only delay but potentially preclude access to care. Further mobile communications can 'cut to the chase,' so to speak," she explained.

Through email, texting, and patient portals, clinicians can guide patients in a more timely and effective manner than waiting for a physical visit. "Indeed, they can aid in determining whether such a visit is warranted," Tessier said.

"Further, with such advanced communications, clinicians can order tests and initiate treatment so that if a physical visit is warranted, it can be a better informed visit. Of course, costs are also reduced, and both the patient's and the clinician's time is more efficiently used," she added.

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