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Telemedicine Facing Financial, Regulatory Headwinds

Nancy Vorhees

Nancy Vorhees (A. Kotok)

Health care organizations with telemedicine programs run into challenges implementing their services, particularly in getting acceptance from payers, and meeting legal or regulatory requirements across multiple jurisdictions. These issues arose in two sessions today at the mHealth + TeleHealth World Congress in Boston.

A key financial issue is reimbursement by insurance companies for telemedicine services. Nancy Vorhees, chief operating officer of Inland Northwest Health Services in Spokane, Washington told the audience that only 19 of the 50 states require insurance companies to cover telemedicine services, but Washington State is not one of them. Another funding challenge is Medicare, which reimburses for providers for telemedicine services only to patients in rural areas, defined as those living in a county outside of a Census Bureau Metropolitan Statistical Area.

Vorhees said Inland Northwest, which provides administrative, technical, consulting, and educational services in telemedicine, funds its telemedicine work through service contracts or fees charged to client health care providers. She notes that telemedicine offers health care providers a number of potential financial benefits, from the expansion of their service areas with increases in revenue and a more efficient delivery model that results many times in a more cost-effective solution than brick-and-mortar facilities.

Vorhees adds that health care providers first need to carefully evaluate if telemedicine is a good fit for their organizations. It must meet the needs of the rural locations where most patients are found, complement current services, fit in with the existing work flow, and be consistent with the provider’s overall mission.

Karen Rheuban, who directs the telehealth center at University of Virginia Health System in Charlottesville described some of the unique challenges of telemedicine in an academic medical center. The University of Virginia medical center has many of the same reimbursement issues as non-academic providers offering telemedicine services, but must also support research collaborations, what she calls “serving the dean as well as the CEO.” Unlike Washington State, Virginia is one of the 19 states that requires insurance companies to cover telemedicine.

In addition, the university’s telemedicine program supports international outreach and collaborations, including those in Guatemala, Kazakhstan, Rwanda, Uganda, and Tanzania. Closer to home, says Rheuban, Virginia’s telemedicine services focuses on the high incidence of stroke in rural areas, that increased the use of tissue plasminogen activator, or tPA, a drug that dissolves clots and restores blood flow. Another telemedicine program helped reduce high-risk pregnancies in the state, resulting in better pre-natal care and lower rates of pre-term births.

One outcome of the high-risk pregnancy project was fewer missed appointments among the expectant mothers — from 11% before telemedicine to 4.4% after. Rheuban pointed out fewer missed appointments is one of the financial benefits of telemedicine. Telemedicine also helps reduce hospital readmissions as called for by the Affordable Care Act.

Telemedicine faces legal and regulatory issues that normally does not concern medicine practiced face-to-face. Terrence Lewis, associate counsel at University of Pittsburgh Medical Center spelled out some of those issues, which he attributed in large part to the rapid advance of technology, while legal precedents and standards struggled to keep up. He noted that new laws, such as the Affordable Care Act, coupled with lower reimbursements for services and an impending physician shortage, makes telemedice more attractive, but at the same time makes the legal landscape that much more complex.

University of Pittsburgh Medical Center consists of 20 hospitals and 400 clinics in western Pennsylvania, with 55,000 employees, making it the largest employer in the state. An affiliated health plan has some 1.8 million members. Its telemedicine services started with stroke in 2007, but have since added dermatology, psychiatry, pediatrics, pre- and post-operative colorectal consultations, and outpatient teleconsulting centers.

Licensing is one of those issues on the landscape that gets complicated when telemedicine is involved. The practice of medicine, said Lewis, is primarily regulated at the state level, which means the practice of telemedine across state boundaries requires dealing with multiple state licensing boards. Licensing also becomes an issue when a physician consults on a case or is asked for a second opinion. At Pittsburgh, said Lewis, the medical center will obtain the needed out-of-state licenses if telemedical practice crosses state lines.

A related issue is credentialing, the granting of medical staff privileges to a physician, a process that can takes two to three months. Two years ago, the U.S. Center for Medicare and Medicaid Services began allowing hospitals to grant privileges to telehealth providers at a second hospital by accepting accepting the distant-site hospital’s credentialing approvals, a process called privileging by proxy.

Natasa Sokolovich, executive director of telemedicine at Pittsburgh, said the health system now has a streamlined credentialing process that cuts start-up time for telemedicine staffing. The new process amends the bylaws of each hospital in the Pittsburgh health system to permit the use of a global proxy credentialing agreement. The agreement covers all domestic hospital locations.

Sokolovich added Pittsburgh centralized the telemedicine programs across its system, which encourages standardization, especially in medical records, and provides a dedicated full-time telemedicine support line.

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