Anthea Daniels

In our previous article, we discussed what telemedicine is, its benefits and how to make it work for your LTC center. In this article, we turn to payment issues, specifically, how does one get paid for providing telehealth services?  

This is a complex area that has four components: Medicare, Medicaid, commercial and self-pay patients. Obviously self-pay patients are the easiest to address since federal and state payment regulations will typically not apply. Next is the commercial payor who provides healthcare covered by selling such healthcare insurance policies to either employers or individuals.

The payment terms for coverage of telehealth services to both the originating site provider of the telehealth services and the provider of the telehealth services will be covered by the provider agreement, which is the insurance company’s document. What are the terms wherein the insurance company will pay for telehealth providers and how much? This is obviously a negotiated term but often such terms somewhat follow the Medicare corresponding regulations. Thus, it is important to review all commercial payor agreements to see if they will reimburse for telehealth services and, if so, under what conditions and for how much.

Next is Medicaid. As a joint state and federally funded program, each state is in the process or has already established laws to address telemedicine.

For example, the Ohio Revised Code Annotated defines telemedicine as “the practice of medicine in this state through the use of any communication, including oral, written, or electronic communication, by a physician located outside the state.” Thus, there are rules which address a professional outside of Ohio rendering services in Ohio via telemedicine and their need to obtain an Ohio medical license. On January 2, 2015, the Ohio Department of Medicaid established reimbursement rules for telehealth services. This is not uncommon. Ohio limits the originating site for telemedicine to a hospital setting, physician office or other unique healthcare settings, including a nursing facility. Only doctors and psychologists can provide the telehealth services. Medicaid will pay the professional component for evaluations and management services (e.g., office visits), inpatient (meaning a person in a hospital) consults, or psychiatry services.  Additionally, providers must be at least 5 miles from each other. Ohio has a viable mechanism for paying certain healthcare providers for rendering telehealth services.

Last, there is Medicare. In a typical rural or urban hospital setting, Medicare will potentially account for 30-50% of the receivables for services rendered. While certain aspects of Medicare coverage are broader than Ohio’s Medicaid rules, other aspects are more restrictive. For example, Medicare allows physician assistants, nurse practitioners and clinical social workers to render telehealth services.  

However, in order for Medicare to reimburse, the patient must be located in a rural setting. Telehealth services provided between two providers within a large city is not possible. Thus, the patient must be located in an area not designated as a Metropolitan Statistical Area. The Government Accountability Office is studying this payment limitation, and its reports are due April 2017.  

Congress passed a medical innovation bill last July which would require The Centers for Medicare & Medicaid Services and MedPAC to study possible expansion of telehealth.  Thus, in order for telehealth to assist the Medicare population, these coverage rules will have to be broadened and allow for more services to be reimbursed.  

At the end of January, the Next Generation Accountable Care Organization Model (the model of an ACO established by the Centers for Medicare and Medicaid Services and launched in January of 2016) has included a telehealth waiver to allow telehealth services to be rendered to patients in their home whether in a rural location or not. The American Telemedicine Association has acknowledged that this model is important for the progression of telehealth services. Humana has become important also in the reform of telehealth, with providers, payors and patients not wanting to wait for possible reform in 2017 or later.

Thus, as the ACA and healthcare continues to gobble up a significant part of the federal and state dollar with the aging of the baby boomers, telehealth, in certain circumstances, is one vehicle to potentially lower costs, improve access and enhance quality and patient outcomes.

In addition to payment, ensuring compliance of a telehealth arrangement with the federal and state anti-kickback statutes is key. It is important to review state statutes for compliance with your specific laws.  

Turning to the federal AKS, it is important to review your specific arrangement since this law has both criminal and civil penalties. The Office of the Inspector General to Health and Human Services has issued advisory opinions and commentary on telehealth services wherein, even though a telestroke arrangement did not fit within an AKS Safe Harbor, the arrangement would not be deemed to violate the AKS since the arrangement improved health outcomes, cut costs and actually reduced future referrals between a community hospital and acute care hospital.  

In addition to AKS, there are a myriad of other legal issues concerning contract law and the relationship between the two healthcare facilities as well as HIPAA, risk management and physician and allied health professional credentialing issues. These areas of the law will continue to evolve and be stretched to new limits as payors increase the coverage and scope of telehealth services.

Christy Tosh Crider and Anthea Daniels are shareholders at Baker Donelson. John L. Shuster Jr. is CMO at MindCare Solutions.