Telemedicine may help control costly emergency room visits and hospitalizations, but immediate reimbursement is still problematical.
"The Balanced Budget Act of 1997 first opened the door for (telemedicine) reimbursement, but there was enough statutory vagueness that when the final rules were promulgated by HCFA, reimbursement could actually occur (only under very limited circumstances)," says Glenn Wachter, research associate with the Portland, Ore.-based Telemedicine Research Center, which is affiliated with the Association of Telehealth Service Providers.
Those limited circumstances are defined by where telemedicine patients live. In Temple, Texas, where Scott and White Memorial Hospital and Clinic runs a 15-site telemedicine operation, Medicaid reimbursement is only permitted when the patients receiving care live in "medically underserved areas."
HCFA defines those areas as counties with fewer than 50,000 people, according to Gregory Hobbs, M.D., Scott and White's director of telehealth.
The problem for Scott and White, Hobbs says, is that some counties with populations greater than 50,000 are spread over a wide geographic area and include people without access to care--ideal candidates for telemedicine.
"I can't charge Medicaid yet unless (patients) live in medically underserved areas," Hobbs says. "We're probably saving hospitalizations and the cost of transportation but (Medicaid) hasn't figured that out yet."
Reimbursement under Medicare is subject to a similar standard, says Jeff Bauer, senior vice president at Southfield, Mich.-based Superior Consultant Co., and co-author of Telemedicine and the Reinvention of Healthcare: the Seventh Revolution in Medicine, published last year.
According to Bauer, Medicare patients must live in a "health professional shortage area"--similar in HCFA terminology to a medically underserved area--to qualify for federal reimbursement.
Legislation now before Congress seeks to provide reimbursement for beneficiaries who do not live in a shortage area.
Sen. James Jeffords (R-Vt.), who introduced the Telehealth Improvement and Modernization Act in Congress last May, says that only about 6% of telemedicine consultations in 1999 were eligible for Medicare reimbursement.
Jeffords, chairman of the Senate Health, Education, Labor and Pensions Committee, says his bipartisan legislation "will ensure that the federal government is a leader and not a follower when it comes to telemedicine."
Bauer views Jeffords' number of reimbursed consultations more optimistically: "That 6% could be as many as one-third of patients living in areas where reimbursement is possible," he says.
Earlier this month, two additional bills seeking new standards for telemedicine reimbursement were introduced in the House of Representatives. One of those measures, sponsored by Rep. Tom Bliley Jr. (R-Va.), requires that telemedicine consultations be reimbursed at the same rate as traditional in-office visits.
Meanwhile, "a larger number of private payers, including some Blue Cross plans, are beginning to pay for telemedicine," Bauer says. "Very quietly they are quite willing to reimburse for properly documented care over telemedicine networks."