Population Health Insights

Report: Telemedicine Reimbursement Limitations Cost Millions, ‘Impede Expansion’


With the finding that an estimated $3.7 million in telehealth claims per year “did not meet Medicare requirements,” the Office of Inspector General (OIG) at the Department of Health & Human Services (HHS) has thrust new light upon America’s byzantine telemedicine reimbursement policies and the limitations they place on the expansion of value-based care.

Representing about a third of all Medicare telemedicine claims over a year-long period in 2014 and 2015, the errors were caused by “deficiencies … because CMS did not ensure that (1) there was oversight to disallow payments for errors where telehealth claim edits could not be implemented, (2) all contractor claim edits were in place, and (3) practitioners were aware of Medicare telehealth requirements,” the OIG report states.

“The OIG reviewed 191,118 claims from 2014 and 2015 for distant-site telehealth services that resulted in payments of about $13.8 million,” writes Rachel Z. Arndt for Modern Healthcare. “Of a representative sample of 100 claims, the OIG found that 31 claims did not meet Medicare requirements. Most of those 31 did not qualify because the patients received care in locations not considered rural.”

To get at a solution to the issue, the OIG is urging greater oversight into claims, as well as an expansion of training and education among providers and practitioners on the finer points of what services are and aren’t eligible for telemedicine reimbursement, and why.

Solving the Problem of Telemedicine Reimbursement

Commentators are generally in agreement that the errors seem to stem more from hard-to-follow regulations rather than harmful intent. Better defining the rules of telemedicine reimbursement can allow payors, including government-backed services like CMS, to better realize the potential to reduce operational costs using technology embodied by remote patient management or virtual visits.

“Telehealth continues to grow as more services and policies are being implemented on the state and federal level,” according to the Center for Connected Health Policy. “However, reimbursement gaps remain” that “impede expansion of telehealth services,” leading to “a lack of cohesiveness of policies both within and between public and private payers."

“Extrapolating the data, OIG estimated that Medicare could have saved approximately $3.7 million during its audit period if practitioners had provided telehealth services in accordance with Medicare requirements,” as Nathaniel M. Lacktman writes for the National Law Review.

Medicare remains one of the most restrictive payors for telemedicine services, with exceptionally limiting reimbursement rules,” agrees Marki Stewart at the Dickinson Wright Health Law Blog. Writing just weeks before the OIG issued its report, she went on to list some of the requirements that, “with some exceptions,” are mandated by the Medicare reimbursement rules, including:

  • The need for the patient to be located in a rural area
  • The need for an originating site to meet location requirements
  • The need for delivery of care by “one of 8 eligible professionals
  • That the modality used must be “real-time, interactive, and face-to-face” (which in turn prohibits “store and forward” technology)

“In general, limited reimbursement has hindered providers' use of telemedicine,” adds Arndt. Indeed, so arcane have the varying limitations and allowances become that many providers simply don't know how the reimbursements work, or what the requirements are at any given time.

And that confusion isn’t limited to payers and providers. A recent survey by the American Telemedicine Association and WEGO Health “shows that consumers are interested in using telehealth as a replacement or complement to in-person care, citing convenience as the top motivator. Confusion persists, however, largely on whether their health provider offers telehealth options or if telehealth is covered by their insurer.” 

  • The CCHP offers a detailed guide to telehealth reimbursement: Find it here.

Telemedicine Reimbursement ‘Is Improving Every Month’

Despite this reluctance by Medicare “to shed its restrictive reimbursement rules, several drafts of legislation have been proposed to expand Medicare payment for telemedicine services, typically targeted to particular conditions and disease states,” Stewart points out. “Accordingly, Medicare payment restrictions may soon be eased, albeit gradually.”

Bearing witness to this progress is the recent unbundling by the CMS of a key payment code that increased reimbursement allowance for remote care. And the federal Chronic Care Act, which was passed into law in February, is set to expand reimbursement services even further.

“Reimbursement is improving every month for remote patient management,” says Care Innovations® COO Marcus Grindstaff. “There are some really great examples like the state of Mississippi, where they've seen such a fantastic return on their investment from a Medicaid perspective, as well as great quality outcomes, that they've passed reimbursement and it's paid for by the state.”

Lessons from the UMMC Diabetes Network

In the meantime, the OIG is recommending a campaign of education and awareness around telehealth reimbursements, suggesting that the CMS interact more to engage practitioners and payers.

“We recommended that CMS (1) conduct periodic postpayment reviews to disallow payments for errors for which telehealth claim edits cannot be implemented; (2) work with Medicare contractors to implement all telehealth claim edits listed in the Medicare Claims Processing Manual; and (3) offer education and training sessions to practitioners on Medicare telehealth requirements and related resources,” the statement concluded (emphasis ours).

Some experts agree that, beyond further reimbursement reform, education and training may well be the key to helping unlock the true cost-savings potential embodied by telemedicine — a potential that’s so far mostly unrealized.

“With some advance planning and knowledge of the reimbursement rules for the specific telemedicine modalities used in their practice, providers can develop a workable plan for generating telemedicine revenue,” as Wright puts it.

From reimbursement policies to implementation best practices, our team of telemedicine experts are standing by to help you explore the full possibilities of this revolutionary method of care delivery: Contact us today to arrange a complimentary consultation.

Contact Care Innovations