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Reimbursement for Telemedicine Services

The Centers for Medicare & Medicaid Services (Formerly the Health Care Financing Administration or HCFA) has not formally endorsed reimbursement for telemedicine by the Medicaid program, and Federal Medicaid law still does not recognize telemedicine as a distinct service. However, there are currently more than 15 states that have reimbursement policies for services furnished through telemedicine applications

Most states that provide payment for services furnished using telemedicine technology do so in the form of a physician consultation. Non-physician practitioners may also be covered depending on their scope of practice under state law. However, except under special arrangements and demonstration projects, physical, speech and occupational therapy services have not yet been approved for telemedicine reimbursement, which is surprising in lieu of the fact that all these professionals currently obtain Medicare and Medicaid reimbursement for services provided in person.

States covering medical services that utilize telemedicine may pay both the provider at the hub site for the consultation, and the provider at the spoke site for an office visit. States also have the flexibility to reimburse any additional cost (i.e., technical support, line-charges, depreciation on equipment, etc.) associated with the delivery of a covered service by electronic means as long as the payment is consistent with the requirements of efficiency, economy, and quality of care. These add-on costs can be incorporated into the fee-for-service rates or separately reimbursed as an administrative cost by the State.

Effective October 1, 2001, the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (H.R. 5661), proposes several changes to the reimbursement requirements for telemedicine services, including:

1) Eliminating the requirement that an eligible telehealth individual to be presented by a physician or practitioner at the originating site for the furnishing of a service via a telecommunications system, unless it is medically necessary (as determined by the physician or practitioner at the distant site).

2) Establishing a facility fee payment of $20 per visit to the originating site as compensation for the costs of the equipment and support required to conduct telemedicine consultations

3) Eliminating the requirement that the physician payment be split between the originating and the distant site. The originating site will receive a facility fee. The distant site will receive the full physician payment.

4) Defining telehealth service as professional physician consultations, office visits, and office psychiatry services (identified as of July 1, 2000, by HCPCS codes 99241-99275,99201-99215, 90804-90809, and 90862.

Due to current (February 2002) budget constraints, North Carolina has adopted HR 5661 for Medicare payment (which is federally mandated) but not for Medicaid or SCHIP (-personal communication with Janet Tudor on 2/12/02)

As of 2/12/02, in North Carolina, the Department of Medical Assistance (DMA) pays for "initial, follow-up, or confirming consultations in hospitals and outpatient facilities when furnished using real-time interactive video teleconferencing" (not store and forward) and the patient must be present during the teleconsultation.

Payment is on a fee for service basis. Teleconsultations are billed with code modifiers to identify which portion of the teleconsult visit is being billed; (The consulting practitioner at the hub site uses a GT modifier and the referring practitioner at the spoke site uses a YS modifier). The consulting practitioner at the hub site receives 75 percent of the fee schedule amount for the consultation code and the referring practitioner at the spoke site receives 25 percent of the applicable fee. The North Carolina state contact is Janet Tudor, (919)-857-4049.

References and Resources:

Medicaid and Telemedicine

States Where Medicaid Reimbursement of Services Utilizing Telemedicine is Available

Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000