Medicare will begin reimbursing doctors across the country for services delivered through telemedicine systems in fiscal 1999 under a provision in the balanced-budget law.
Experts say the move could foster the growth of telemedicine systems to serve physician-depleted rural areas nationwide. That's a task the federal government has been slow to take on, even though telemedicine potentially could expand rural patients' access to specialty care.
"We think (the budget provision) will definitely expand the use of telemedicine," said Darin Johnson, government affairs director at the National Rural Health Association.
Last year HCFA authorized a three-year demonstration of Medicare reimbursement for telemedicine services at 57 sites nationwide (Dec. 2, 1996, p. 34).
Meanwhile, the Federal Communications Commission earlier this year authorized the use of up to $400 million a year in subsidies to pay for telecommunications network upgrades and continuing costs related to rural hospitals' use of telemedicine services (May 19, p. 26). That money will come from a fund derived from telephone companies and their customers.
The balanced-budget law will add another $200 million in Medicare telemedicine compensation from 1999 to 2002.
Referring doctors and consulting specialists would share a bundled payment no bigger than existing Medicare physician fee schedule payments for the service being reimbursed.
Payment would be for services delivered to patients in one of about 1,200 rural health professional shortage areas. Those are defined as areas where the ratio of people to primary-care physicians is more than 3,500 to 1 and there are no nearby health facilities.
Payment to the consulting physician may overcome one of the barriers to further use of telemedicine services.
"Getting consulting physicians to get involved without getting paid has been a problem," said Lisa Potetz, senior associate director for policy development at the American Hospital Association.
In fact, the reimbursement for consulting physicians combined with the infrastructure funding will eliminate the two biggest barriers to use of telemedicine services, said Neal Neuberger, senior partner for the Center for Public Service Communication, an Arlington, Va.-based consulting firm.
"(HCFA) cannot just sit back and continue to pass this thing around," Neuberger said. "After many years of trying, they'll have to do something."
In addition, experts said Medicare reimbursement of telemedicine services may spur private insurers to do the same, encouraging even more physicians to get involved.