Special to OWM: Telemedicine, Home Care, and Reimbursement: Legal Considerations

    Reimbursement for telemedicine services is important to their provision.^1,2 The primer on telemedicine, available at https://www.amdtelemedicine.com/primer.cfm, sums up many of the issues surrounding telemedicine utilized in the following discussion of the reimbursement for home care and telemedicine.

    The Balanced Budget Act of 1997 (BBA) required payment for telemedicine services that meet certain criteria. Under the BBA, Medicare required the presence of a Medicare-participating telepresenter to be eligible for Medicare reimbursement. Due to limitations on the telecommunications infrastructure in remote or hostile environments, the predominant telemedicine methodology is “store and forward.” In store-and-forward applications, the presence of a Medicare participating provider as the telepresenter adds little clinical value and substantially increases the cost of telemedicine services.

    Medicare rules also required that the telepresenter participate in mandated fee sharing between the telepresenter and the consulting physician, a practice contrary to other Medicare rules that prohibit payment of remuneration in exchange for referrals. Such requirements essentially limited reimbursement to “live” telemedicine services (comprising 10% or less of telemedicine interactions), effectively chilling physician willingness to participate under the perceived risk of criminal liability.

    In December 2000, Congress passed an omnibus appropriations bill (H.R. 5661) that dramatically revised Medicare rules for reimbursement for telemedicine services. The legislation (see Section 223), effective October 1, 2001:
  • eliminated the provider fee sharing requirement
  • eliminated the requirement for a Medicare participating telepresenter
  • allowed Originating Sites (where patient examination and data collection occur) to be paid a fee of $20 per visit to recover facility costs, with increases commencing in 2003
  • expanded telemedicine services to include direct patient care, physician consultations, and office psychiatry services
  • included payment for the physician or practitioner at the Distant Site at the rate applicable to services
  • expanded the definition of Originating Sites to include physician and practitioner offices, critical access hospitals, rural health clinics, and federally qualified health centers and hospitals (not including nursing homes)
  • expanded the geographic regions in which Originating Sites are located to include rural health professional shortage areas, any county not located in a Metropolitan Statistical Area (ie, an urban area assumed to have adequate levels of medical service), and any entity approved for a federal telemedicine demonstration project
  • permitted use of store-and-forward applications in Alaska and Hawaii.

    The store-and-forward experiment in Alaska has been a success. Senator Ted Stevens³ noted that the Alaska Federal Health Care Access Network (AFHCAN), which now has telemedicine stations in 235 sites across Alaska, is working well. More than $40 million has been allocated for this award-winning project, the largest telemedicine network in the world. At the 2005 meeting of the American Telemedicine Association, Patricoski and Ferguson⁴ noted the positive impact that store-and-forward telemedicine has had in Alaska. The success of store-and-forward telemedicine augurs well for the Centers for Medicare and Medicaid Services (CMS) to eventually pay for telemedicine services for home care and wound care.

Home Care

    Medicare commenced payment for home health services pursuant to the Prospective Payment System (PPS), which provides a fixed payment for each Medicare beneficiary for a 60-day period based on the assigned Home Health Resource Group (HHRG) effective October 1, 2000. The PPS creates an incentive for home health providers to proactively and innovatively manage delivery of care while reducing costs. Home health care providers whose costs are lower than Medicare payment rates are entitled to retain the difference as a profit. Section 504 of the omnibus appropriations bill approved the use of telemedicine services to deliver care under the PPS applicable to home care, uniting home care and telemedicine in one rubric.

    Telemedicine is one innovative approach healthcare providers may adopt to manage care while reducing the number of direct visits to the patient in the home. Telemedicine technology utilizes digital photographs and Internet-based wound care specialty consults. In addition, monitoring devices connected to specialized computer modems reliably measure and transmit physiological parameters such as blood pressure, heart rate, blood glucose level, and pulse oximetry data. According to Field and Grisby⁵, telemedicine may prove cost-effective if it provides equivalent or better (eg, more timely) monitoring of a patient’s medical condition at home while substituting for and costing less than home care visits that are needed only for monitoring. In 2002, informal conversations between Field and Grisby and equipment vendors suggested that home health care via telemedicine was currently used on a limited basis by fewer than 200 home health care agencies nationwide. Schneider and Harris⁶ report that PinnacleHealth Home Care has had success from care and financial standpoints using telemedicine to provide home care. The extent of current use of telemedicine remains unclear.

    The present Medicare regulations do not sufficiently explicate the use of telemedicine-based services to satisfy the obligation to care for patients under PPS. Presumably, use of such innovative services is not limited. As stated above, in order to clarify the situation, H.R. 5661 specifically permits the use of telemedicine services to satisfy the home health care delivery obligations under PPS. Unfortunately, however, telemedicine “visits” do not constitute a visit under the Outcome Assessment and Information Set (“OASIS”) evaluation tool for purposes of determining assignment to an HHRG. In addition, if the number of home care visits for a 60-day period declines to less than an established threshold of visits (which can be achieved through the use of telemedicine), the home care provider may be subject to a Low Utilization Payment Adjustment (LUPA) or the assignment of the patient to a lower paying HHRG.

    The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) passed new legislation that affected payment for telemedicine. Section 417 extends the telemedicine demonstration four additional years and authorizes an additional $30 million in funding. This demonstration uses high-capacity computer systems and medical informatics to improve primary care and prevent health complications in Medicare-eligible individuals with diabetes mellitus who live in isolated rural and inner-city areas. Beginning on January 1, 2006, under MMA Section 418, the Health Resources and Services Administration (HRSA), in consultation with CMS, will evaluate the feasibility of including skilled nursing facilities in the list of permissible originating sites for telehealth services. These new laws show that Congress continues to be interested in funding telehealth projects.

    Another possible tele-homecare application is providing specialty consultations. Interestingly, emails or phone calls between physicians to receive a second opinion do not establish a physician-patient relationship when a healthcare provider consults a distant clinician.⁷ In Reynolds v. Decatur Memorial Hospital 660 N.E.2d 235, 240 (Ill. App. 1996), a court declared that a physician-patient relationship is not established when two physicians merely speak about a patient on the telephone because the effect of this “would have a chilling effect upon [the] [sic] practice of medicine.” In Kenneth Newborn v. US Civil Action No 01-0750 District Court of District Court of Columbia,⁸ a physician at Walter Reed Army Medical Center in Washington, DC, did not form a relationship with a patient about whom she consulted via email and telephone with direct care providers at a military hospital in Germany because it did not constitute the “close management and control” needed to establish a duty of care. In Newborn and Reynolds, the court’s reasoning was similar — imposing a duty of care on physicians providing second opinions is against public policy because such a duty would make consultant physicians reluctant to consult on cases, potentially undermining the provision of care of complex patients.

Conclusion

    The use of telemedicine in all contexts is increasing. The requirement that services be provided by live interactive visits has limited its widespread application. The use of store-and-forward technology likely will increase telemedicine use, particularly promising in the area of home health care and the provision of wound care. Even though the PPS schema may thwart payment, limiting its adoption in this context, the future for the provision of tele-healthcare looks bright.

1. Silverman RD. Current legal and ethical concerns in telemedicine and e-medicine. J Telemed Telecare. 2003;9(suppl 1):S67–S69.

2. Gulick PG. E-Health and the future of medicine: the economic, legal, regulatory, cultural and organizational obstacles facing telemedicine and cybermedicine programs. Albany Law Journal of Science and Technology. 2002;12:351–407.

3. Available at: http://stevens.senate.gov/pr/2005/february/akleg05.htm. Accessed August 22, 2005.

4. Available at: http://www.atmeda.org/news/2005_presentations/t3b4.Patricoski.ppt. Accessed August 22, 2005.

5. Field MJ, Grisby J. Telemedicine and remote patient monitoring. JAMA. 2002;Jul 24-31;288(4):423-425.

6. Schneider N, Harris DK. Telemedicine success story. Telemed J E Health. 2003;9(1):115–116.

7. Scheinfeld N. Telemedicine legal update 2004: reimbursement, the doctor-patient relationship, teleconsultations, and the legal status of digital images. J Drugs Dermatol. 2005;4(1):102–105.

8. Available at: http://www.dcd.uscourts.gov/01-750a.pdf. Accessed September 20, 2004.