Capitol Hill breathes new life into telehealth with landmark bipartisan bill

In what is being heralded by advocates as a landmark victory, President Clinton has signed legislation that overcomes a number of critical barriers to broader implementation of telemedicine. The new law, which goes into effect Oct. 1, 2001, was piggybacked on the combined budget package passed by both the Senate and the House of Representatives.

The legislation is important because it redefines existing regulations long considered by telemedicine backers to be overly restrictive. Most of these regulations were first set down in the Balanced Budget Act of 1997, which directed the Health Care Financing Administration (the overseer of Medicare) to develop a Medicare payment scheme for telemedical services. The BBA Medicare mandate was considered an important step forward for telemedicine when originally passed, but HCFA's intepretation has stymied telemedicine proponents for two years.

Foremost among the rules imposed by HCFA is the provider "fee-sharing" stipulation that requires consulting physicians and specialists in a telemedicine encounter to split Medicare reimbursement on a 75%/25% basis. The existing legislation also restricts reimbursement for telemedical services to rural health professional shortage areas (HPSAs), which actually constitute a very small percentage of rural and remote areas in the U.S.

The new law stems in large part from a "telemedicine improvement" bill proposed by Sen. James Jeffords (R-VT) in early 2000. It overturns several of the existing provisions and dramatically enhances Medicare coverage of telemedicine, in terms of both services and populations covered. It also calls for HCFA to provide coverage for store-and-forward services for the first time, although only in Alaska and Hawaii to start. The agency has long considered store-and-forward too difficult to define, regulate, and reimburse for. Under the new law, however, HCFA will have to come up with an additional payment scheme specific to store and forward.

Other major improvements provided by the bill include the following:

- expansion of the eligible telemedical services that can be billed to Medicare to include all medical services covered by CPT codes;

- broadening of the eligible service areas for telemedicine services covered by Medicare from HPSAs to all nonmetropolitan counties and urban Medicare demonstration sites;

- elimination of the fee-splitting requirement and the need for a healthcare professional to be present during consultations;

- inclusion of a new $20 facility fee for sites utilizing telemedicine technologies; and

- retention of existing Medicare reimbursement for teleradiology, remote cardiac monitoring, and related services.

"I think this is a very exciting development for telemedicine," said Jonathon Linkous, executive director of the American Telemedicine Association, which was heavily involved in lobbying in favor of the legislation. "If I were a doctor or medical institution, I would start looking more closely at telemedicine and start talking to the private payers about their support of it."

The bill is also important in that it garnered strong bipartisan support in Congress despite opposition from the Clinton administration, according to Linkous. And telemedicine is likely to pick up even more steam from the incoming Bush administration. As governor of Texas, George W. Bush signed several pieces of legislation that have made Texas one of the leading providers and payers of telemedicine services in the country.

"This legislation makes telemedicine a viable service and, from an economic perspective, a viable market," Linkous said. "It is also a huge symbolic victory. We have a very conservative Congress that has been pushing for increased access to medical services via telemedicine, and they won against a Democratic administration and HCFA."

The next step is for HCFA to develop the necessary regulations to put the new law into effect. While this should not be as tedious or time-consuming a process as the two years it took to draft and implement the original reimbursement scheme, the agency is famous for foot-dragging when it comes to telemedicine. Although the law takes effect next October, there is no telling how long it will take HCFA to write, let alone finalize, its new reimbursement regs.