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Health Care Industry

Many payers cover Telemedicine, but payments for e-visits remain in infancy

Physician Compensation Report, June, 2003

Telemedicine--remote medical office visits and consultations--has achieved a "critical mass" of commercial health insurers and plans that reimburse physicians and other providers for at least some procedures. However, reimbursement for "e-visits"--physician office visits or consultations by e-mail--still is in the very early stages.

Teleradiology, the interpretation by radiologists of images taken remotely and transmitted electronically to them, has been widely practiced for several years and is reimbursed by commercial carriers and Medicare almost indistinguishably from on-site radiological interpretation. Early in 2002, Medicare began covering office visits and consultations if the "originating site"--the site the patient visits--is in a rural area (PCR 8/02, p. 1). The program pays a flat $20 to the originating site, and regular reimbursements to the "distant site" where the medical interpretation and decision-making are done.

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On April 28, 2003, the American Telemedicine Association (ATA) in Washington, D.C., and AMD Telemedicine in Boston, a consulting firm, released a survey showing that commercial reimbursement of "telemed" services other than teleradiology is more widespread than even many industry participants had thought. Among the survey's findings are:

* More than 100 commercial payers around the nation reimburse one or more telemedicine procedures. These include Blue Cross and Blue Shield plans in at least 21 states, national HMO/PPO firms such as CIGNA, local plans such as Medica in Minneapolis, traditional health insurers such as Wausau Insurance, and self-insuring employers such as Wal-Mart. (A list of such payers will be on AMD's Web site, www.amdtelemedicine.com, the last week of May, and shortly thereafter on ATA's Web site, www.americantelemed.org.)

* Of 72 providers of potentially billable "telemed" services interviewed by phone in the survey, 38 receive reimbursement from commercial plans.

* Of those, seven receive reimbursement, beyond the amounts paid for the medical service, for their telemed facilities, much as a hospital receives facility fees for hosting surgery. Telemed facilities are very expensive to set up.

* Only three programs get reimbursed for "store and forward" services other than teleradiology. Those are services not done in real time, but stored digitally and reviewed by a physician later. AMD President Mark VanDerWerf says two common examples are telepathology and teledermatology, which, like teleradiology, often work well as fixed images.

* Five states--California, Texas, Oklahoma, Louisiana and Kentucky--have laws mandating private-payer reimbursement of telemedicine services.

Payers Follow Blues' Lead

Private payers appear to follow the leadership of their states' Blue Cross and Blue Shield plans on telemedicine reimbursement, rather than that of Medicare, according to the study. Blue Cross of California has provided grants to implement telemed in some areas of its state.

Some payers "are not only willing but motivated to pay," the study adds, because they have found that telemedicine:

* Increases competition and works around single rates in a region for a given service.

* Reduces costs by keeping patients in lower-cost facilities closer to home, and potentially by keeping patients out of hospitals.

ATA Executive Director Jonathan Linkous says that at the recent ATA conference where the survey was released, members interpreted it as a "light at the end of the tunnel" in their efforts to win commercial reimbursement, and a sign of major progress over the last two years. The study shows, Linkous adds, that "private payers are far ahead of the federal government in recognizing the value of telemedicine."

VanDerWerf says the study shows that the reimbursement picture, rather than being a "half empty cup" as many industry people had feared, "is way past half full. The barrier is not the payers," he continues, "but getting more telemed programs implemented and billing in more states."

Telemed providers adhere to "customary billing procedures," the study says. Most providers sent letters to payers before they started billing, informing the latter that such services were performed and would form the basis of claims. One leading telemed program sent such letters to its 11 top payers, and asked whether such claims should have special modifiers after CPT codes. All the payers acknowledged that such billing would take place, but just one required modifiers. Some modifiers used by providers around the country are "Telemedicine," "TM," "GT," and "-01."

VanDerWerf emphasizes that when telemed providers bill for services, they do so with the same codes, and for the full amount, as they do when providing services face-to-face. Insurers also are paying the full amount, he notes.

e-Visit Payments Mostly in Pilot Stage

Health Care Industry

Many payers cover Telemedicine, but payments for e-visits remain in infancy

Physician Compensation Report, June, 2003

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