The Institute for Healthcare Improvement developed a framework called the Triple Aim:  Improve the patient experience of care (including quality and satisfaction), improve the health of populations; and reduce the per capita cost of health care.  One very viable and increasingly popular way to achieve the Triple Aim is telemedicine.  When the Triple Aim is combined with people’s increasing comfort with technology, technology’s ubiquitous adoption by the population, and the decreasing cost of that same technology, people believe that the age of telemedicine is here.  Yet, most health systems are still working to develop a business case or billing model that will make telemedicine a viable delivery mechanism for the long term.

Past funding for telemedicine has been primarily through grants awarded by the Department of Agriculture, the Federal Communications Commission, and many private foundations and donors.  The impetus for funding the equipment and communications was to enable people primarily located in a rural setting to receive care from the physicians located in an urban setting.  When Medicare began to fund telemedicine, payment for clinical services delivered via telemedicine was structured around distance and remote or rural geography.  That is still largely the case.  The current broad spectrum of telemedicine services use varying technologies, providers, and processes.  Yet, the funding environment still significantly revolves around geography.

The value of telemedicine is greater than simply the ability to bill for it, however, like most viable businesses, the demand is, “Show me the money!”  There are ways to get compensated for telehealth visits.  However, it is quite complex and convoluted.

The telemedicine service that is consistently funded through traditional means remains the provider to provider to patient service delivery.  In other words, a patient is “seen” by an off-site physician using a telemedicine cart or other technology that includes a web camera enabling a synchronous transaction.

Determining whether or not a telemedicine encounter is billable 

There are several key elements that impact whether or not a telehealth encounter is billable.  They are as follows:

Definition of telehealth (synchronous/asynchronous)(and now, continuous monitoring)

  1. Location (rural designation required?  And if so, how is it defined?)
  2. Type of originating site (or spoke site)
  3. Eligible Distant site providers
  4. Require practitioner to be present during the synchronous interaction
  5. Covered Specialties
  6. CPT Codes and modification factors
  7. Other ad hoc factors
    1. Restrictions
    2. Transportation

Payor Sources

Each payer source, Medicare, Medicaid, and Private Payers, has different definitions and parameters for each of the key elements.  The most important aspect of determining their definitions is to refer to their guiding policy.  Medicare has eight different source documents to guide telehealth billing.

Telemedicine Parity and State Legislation

Some of the private payors are or were either denying telemedicine coverage or they were paying at a reduced rate.  Therefore, many state legislatures are increasingly passing legislation that requires the private payors to pay at parity.  However, sometimes the legislation adds new parameters, like redefining the “rural.”  Each state’s parity laws are unique.

Other financial impact models for telemedicine

As discussed in a previous article, there are also financial models for telemedicine that may not generate direct revenue but generate savings, manage populations, allow organizations to balance their workforce and avoid costs.

There are reasons to adopt and promote telemedicine as a viable healthcare delivery mechanism.  While it is not as easy as a straight fee-for-service model, there is little in healthcare today that is straightforward and easy.  With the new and changing payment models in the dynamic landscape of healthcare, telemedicine provides a viable and valuable means to achieve the Triple Aim and deliver revenue, control costs, and provide more convenient care for patients.