NEW YORK (TheStreet) -- Technology is capable of improving health care for elderly and rural patients, but so far the lack of a standardized reimbursements has been a major obstacle.
States needs to step in with legislation that standardizes Medicare and Medicaid reimbursements for what has come to be known as telemedicine, or the use of communications technology to exchange information between patients and medical professionals in different geographic locations. (Sometimes people also use the technically broader term "telehealth" to describe this technology.)
Although many industries have already transitioned smoothly to incorporate innovative technologies into their business models, the health care industry has moved too slowly.
Telemedicine has actually been practiced in some form for a long time. As early as the 1960s, NASA was regularly monitoring U.S. astronauts' vital signs including blood pressure and pulse oximetry during space missions. Fifty years, later, devices for remotely monitoring a wide range of needy patients, particularly elderly Americans living with chronic diseases or conditions, are available, but their use has been stymied.
A key factor has been the lack of standardized reimbursement for telemedicine technology and services.
In a recent report, the American Telemedicine Association said:
"Payment and coverage for services delivered via telemedicine are one of the biggest challenges for telemedicine adoption. Patients and health care providers may encounter a patchwork of arbitrary insurance requirements and disparate payment streams that do not allow them to fully take advantage of telemedicine."
Standardized telehealth reimbursement policies that reflect the multiplicity of payment sources within the U.S. health care system are needed.
It's true that over the past several years, state policies on telehealth have been evolving, mandating reimbursements by private insurers, Medicare or Medicaid in more states, and expanding the scope of existing reimbursement regulations.
For instance, the number of states with telemedicine parity laws that require private insurers to cover telehealth expenses as they would in-person consultations has doubled in the past few year, and Medicaid has also been incorporating telehealth reimbursement in its policy reforms.
Even with these developments, however, there remain significant limitations in reimbursement programs, limitations that are largely dictated by myriad factors: no standardized payment methodology, and unevenly circumscribed requirements related to the distance of the eligible patient population from eligible telehealth services and technologies to be used for them at remote locations.
We also seem to be overdoing the telemedicine pilot study phase, rather than focusing on getting the tools to remote patients who need them and paying providers for their services.
Take a look at an article about the passage in January 2012 of the Centers for Medicare & Medicaid Services' telehealth code to be used for submitting claims, and known as Code S9110. Use of the code appears wrought with confusion, and the pilot demonstration project testing telemedicine's value stayed an object of study for more than six years.
In 1997, the Balanced Budget Act mandated the Centers for Medicare & Medicaid Services to pay providers partial Medicare reimbursement for telehealth expenses.
True, some legislation related to telemedicine's use has been passed, but much of it is limiting. For example, Medicare's stringent specifications on "eligible provider facilities" and "eligible patient location" have been preventing full utilization of service delivery.
Medicare will only reimburse telehealth services if the "originating site" (where the patient is located) is within what's called Health Professional Shortage Area and is a medical facility (not the patient's residence). This precludes the utility of telehealth in increasing access and convenience of care in patients' homes and reducing transport costs.
Also, Medicare mainly covers real-time services that use video to mimic face-to-face doctor-patient consultations, although it does cover "store-and-forward" services for specialty care (such asteleradiology, or teledermatology) in some states.
Medicaid, on the other hand, has been used in most state telehealth programs since it has allocations for health care transport costs, and these costs are anticipated to decline with telehealth utilization.
To date, Medicaid has been providing some form of telehealth reimbursement program in up to 46 states. The recently published "50 State Telemedicine Gaps Analysis" by the American Telemedicine Association notes that Connecticut, Iowa and Rhode Island are the only states which do not have Medicaid telemedicine reimbursement policies, while Hawaii, Nevada, Utah and West Virginia are among the few states that apply Medicaid reimbursement restrictions on geography, service provision type, provider eligibility and patient location.
Notably, Medicaid programs provide options for remote patient monitoring, which include long-term care services in home settings rather than institutional settings. This is possible through a federal waiver under the Social Security Act, to which states could apply for enabling home patient monitoring for chronically ill patients living with chronic diseases and conditions such as diabetes, asthma, obesity, mental disorders and substance abuse.
As with Medicaid, telehealth reimbursements by private insurers are dictated by state policy. At present, there is no standardized state regulation for private-payer reimbursements of telehealth expenses. Recently, the National Conference of State Legislatures reported that 19 states plus the District of Columbia have enacted full parity laws. Arizona and Colorado, on the other hand, have enacted only partial parity laws that stipulate limitations in geographic coverage and follow a predetermined list of telehealth services.
The issue of national telehealth implementation is a multifaceted problem that requires state support through legislation that will standardize Medicare and Medicaid reimbursements and encourage comprehensive coverage from private insurers and employers' health plans. With the current state of affairs, health care providers will most likely bear much of the initial financial burden of moving towards telehealth, and in order to provide the economic incentive, they must be assured of a return on their investment.
Health care personnel working in rural areas are already stretched to the limits. Patients are not getting the medical care that they need. Telehealth offers a cost-effective solution to bridging this gap. The evidence is there. See, for instance, an April 2015 report from the American Telemedicine Association titled "Research Outcomes: Telemedicine's Impact On Healthcare Cost and Quality"
Although there have been notable developments in telehealth reimbursement policies in recent years,, promoters of telemedicine have been unable to drive national telehealth expansion to its fruition. Standardized and comprehensive state policies must be legislated to address this barrier, which interferes with efforts to provide timely and quality care for patients across the nation, particularly in remote and underserved areas.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.