Medicare Reimbursement an Obstacle to Growth of Telemedicine

Original story posted on: October 18, 2017

Despite slow progress, hopes for steady growth endure.

Is telemedicine about to get a big financial boost? Maybe, but regardless, momentum seems to be with it these days regardless.

For many years, telemedicine advocates have worked to put it in the mainstream of healthcare services – no small task, considering the many aspects of the healthcare regulatory structure.

The issues telemedicine faces involve both state and federal jurisdiction,  falling within the domain of at least 51 different jurisdictions and nearly countless regulatory agencies and legislative committees. Despite this messy environment, however, progress has been made, particularly at the state level.

According to many, the most significant barrier to the broader adoption of telemedicine has been the burdensome limited reimbursement offered by Medicare. Recently, Congress has taken steps that have given telemedicine supporters hope on this front:

  • In September, the U.S. Senate, in a rare bit of bipartisanship, adopted the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act, representing the single largest potential expansion of telemedicine reimbursement in a long time. Specifically, the law would:
    • Allow Medicare Advantage plans to include telemedicine as a primary service and not a supplemental benefit;

    • Allow reimbursement for telemedicine check-up visits for at-home dialysis patients; and

    • Expand reimbursement for telestroke programs.

  • While the House is not considering corresponding legislation, it has adopted legislation covering much of what is covered by the CHRONIC Care Act.

  • In addition, the federal legislative bodies have continued to offer and pass legislation calling for further study, analysis, and experimentation with telemedicine – including by the Center for Medicare & Medicaid Innovation (CMMI). 

While these expansions to Medicare coverage and reimbursement are very positive, we must also recognize that obstacles and pitfalls remain. These include the following:

  • First, while the introduction of these bills offers reason for hope, they remain bills and not laws.

  • Second, telemedicine prescribing remains difficult, subject to restrictions imposed by state anti-Internet pharmacy rules dating back many years and the federal Ryan-Haight Act, which restricts electronic prescribing of controlled substances.

  • Third, there is a significant and remarkable lack of public awareness of the extent and degree of integration of telemedicine and other digital health tools into health programs.  Recent surveys of Medicare and non-Medicare beneficiaries indicate a massive disparity between their use of digital health tools – which is quite high – and their understanding of whether digital tools are incorporated into their plans – which is quite low (as low as 9 percent).

  • Finally, even though telemedicine reimbursement represents .00046 percent of Medicare reimbursement, this has not stopped the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) from taking notice and forming a plan for tracking and monitoring certain billing discrepancies, which could have a chilling effect under existing Medicare reimbursement models.

So where does this leave us?

What is important to note, I believe, is that we appear to have reached a tipping point in that support for telemedicine generally appears to be both growing and expanding across many sectors of the healthcare industry. And while issues remain, there now appears a growing consensus that poor Medicare reimbursement for telemedicine services – one of the largest obstacles to the growth of telemedicine so far – should be addressed.  How we get there remains to be seen.

Dale C. Van Demark

Dale C. Van Demark is a partner in the law firm of McDermott Will & Emery. He advises clients in the health industry on strategic transactions, digital health, and the evolution of healthcare delivery models. He has extensive experience in health system affiliations and joint venture transactions, and advises clients with respect to the globalization of healthcare through technology and cross-border affiliations. 

This email address is being protected from spambots. You need JavaScript enabled to view it.

Related Articles

  • Philip Esformes Has Sentence Commuted
    I have written four previous articles on Philip Esformes, who was sentenced to 20 years in federal prison for a truly infamous scheme to defraud Medicare out of millions of dollars. He bribed doctors and other providers of care to…
  • Credible Allegations of Fraud Yield Immediate Medicare Payment Suspension
    Credible allegations of fraud is a low standard to meet. If you are accused of Medicare fraud, your Medicare reimbursements will be immediately cut off without any due process or ability to defend yourself against the allegations. If you accept…
  • COVID Vaccines Begin Rollout as Medicare Announces Coverage
    Moderna’s vaccine is expected to be shipped to providers nationwide, on the heels of Pfizer’s. A reeling nation couldn’t have asked for a better Christmas present. The Food and Drug Administration (FDA) issued an Emergency Use Authorization (EUA) for the…