Some states reimburse for both the provider at the consultation site and the provider at the referring or home site for an office visit. States can also reimburse any additional cost, such as technical support, line charges, and depreciation on equipment associated with the delivery of a covered service by electronic means—so long as the payment is “consistent with the requirements of efficiency, economy, and quality of care,” according to CMS. These add-on costs can be incorporated into the fee-for-service rates or separately reimbursed as an administrative cost by the state. If they are separately billed and reimbursed, the costs must be linked to a covered Medicaid service.
At the federal level, partial Medicare reimbursement for telemedicine services was authorized in the Balanced Budget Act of 1997 and was expanded under the Benefits Improvement and Protection Act of 2000. Still, there are limitations related to geographic location, originating sites, and eligible telemedicine services. And CMS says that starting this year it will expand Medicaid coverage for remote healthcare services, including chronic disease management tools.
Despite small measures of progress, payment is still a big challenge, says John P. L. Manke, RN, BSN, PCCN, who manages the telemedicine program at the two-hospital St. Joseph’s Healthcare System in Paterson, NJ.
The conventional wisdom is that payers will only be willing to fully reimburse for telemedicine services when they see hard evidence that the programs are saving them money and improving access and quality.
That proof will lie in outcomes, says Manke, including improvements in quality of care, declines in readmission rates, and increases in volume. “Our regional cranial facial center is one of four centers of excellence in this country. So let’s watch the referral base and see how many more patients are coming to us and getting the care they deserve,” he says. Insurers save money when a patient is able to see the right expert rather than seeing several different doctors before getting a proper referral and diagnosis. “Instead of spending that money and paying five docs, you’re now just paying one.”
Until there’s enough empirical evidence to sway payers, healthcare organizations can find funding in other places.
For example, they can seek out grants and funding from philanthropic sources to help pay for telemedicine programs, says Yadin David, founder and past president of the nonprofit Center for Telemedicine and eHealth Law (CTeL), president of Biomedical Engineering Consultants of Houston, and assistant professor at the University of Texas School of Public Health.
Manke says physicians can also negotiate reimbursement rates privately with payers. Beyond that, he tells them to focus on how the technology can improve their practice. “This technology allows you to deliver better quality,” he says. You might not be able to make money off of it, but the quality of care you can deliver is tenfold.”
Eventually, payers will get it, Manke says. “I see in the future, hopefully, that these insurance companies will understand, embrace, and take advantage of the technology [and] realize the benefit.”