Medicare will pay for telemedicine consultations at 80% of the physician fee schedule but only when both practitioners are present at a video terminal, according to a set of proposed regulations released last week.
After a 60-day public comment period, the new rules are scheduled to take effect on Jan. 1, 1999.
Medicare coverage for telemedical consultations was mandated by last year's balanced-budget law. According to HCFA estimates, Medicare will spend about $270 million for telemedicine services from 1999-2003.
Prior to that, Medicare didn't pay for most telemedicine services.
Proponents of telemedicine say HCFA has done the bare minimum to satisfy the law but has skirted congressional intent in several areas.
According to Neal Neuberger, chairman of the policy committee of the Washington-based American Telemedicine Association, HCFA's decision not to pay for "store and forward" consultations goes against congressional intent.
Store-and-forward applications occur when both practitioners are not present at the same time. The information is forwarded to the consulting practitioner for review at a later time.
Under the proposed regulations, HCFA would not pay for store-and-forward applications, which Neuberger said make up more than half of all telemedicine services.
"The effect of this is to retard the development of telemedicine technologies," Neuberger said. "This runs counter to the current standard for telehealth. Physicians don't want to have to be in their respective locations when they might be in different time zones." (See related story, p. 100.)
Last September, a group of 10 rural senators sent a letter to HCFA Administrator Nancy-Ann Min DeParle that said "in no way did we intend to limit reimbursement solely to interactive video consultations."
"They are setting this up for failure if they only pay for two-way interactive video," Neuberger said.
HCFA added that "telephones, facsimile machines and electronic mail systems do not meet the definition of interactive telecommunications systems."
Under the new rules, physicians would be reimbursed at 80% of the rate they would normally be paid under the Medicare physician fee schedule. The consulting physician would then be responsible for forwarding 25% of that amount to the referring physician. The consulting physician would be paid at a rate based on his or her location, not the location of the patient. However, the patient must be located in a rural area designated by HCFA as a "health professional shortage area."
HCFA said that in general, a referral to a specialist could run afoul of the federal anti-kickback statutes, which bar any form of remuneration to induce Medicare or Medicaid patient referrals.
However, a presenting physician in a telemedicine case would be considered a "conduit," and the case would not be considered a referral.
"We do not believe this interpretations violates the purpose of the self-referral law," HCFA said.
Under the new rules, not only physicians, but also physician assistants, nurse practitioners and other nonphysician practitioners would be eligible for reimbursement for telemedicine services.