The new legislation would require Medicaid to reimburse for telehealth service costs.

Health IT Outcomes – January 22, 2015 – Telehealth has become a powerful tool in providing healthcare to underserved populations because of its low costs and ability to reach otherwise inaccessible patients, but legislation supporting it has been slow to develop. That appears to be changing, however. According to Government Technology, New York Governor Andrew Cuomo has signed a telehealth bill designed to help service the populations that would benefit most and also require Medicaid to reimburse the service costs.

This telehealth bill couldn’t have come at a better time. Last fall, CMS issued a final rule updating physician fee schedules and increasing reimbursement fees for telemedicine, while an ML Strategies report explained the lack of appropriate reimbursements remain a significant barrier for expanding the use of telemedicine. The report states, “Current federal law is extremely restrictive on how telehealth is paid for – resulting in a disincentive to provider adoption.” Restrictions only allow reimbursements for patients who receive virtual care at rural clinics and not in metropolitan areas, which has resulted in low reimbursement for telehealth encounters overall.

Furthermore, as Health IT Outcomes reported last month, despite indications telemedicine could provide cost-effective solutions for the predicted physician shortage, the practice of videoconferencing has been caught in the middle of a power struggle between insurers, physicians, and state officials who are reluctant to allow doctors to prescribe drugs or treatment to a patient they have never face to face, according to USA Today.

Health IT Outcomes reports that, despite the regulatory and reimbursement hurdles, a 2014 Telemedicine Survey conducted by Foley & Lardner LLP demonstrated healthcare executives are moving forward with implementation of telemedicine. “Healthcare leaders tell us that their organizations are committed to continuing to implement telemedicine programs, even as they face challenges such as getting doctors to buy into the programs and insurers to pay for them,” write the report’s authors.

The move by Cuomo is seen as a positive in the telehealth community and might indicate a shift in regulatory winds might be coming. Assemblywoman Addie J. Russell explained, “This is a landmark bill that will help expand availability of medical services because it ensures telemedicine services will be paid for through your insurance company. Essentially it’s now been put into law that health insurance can recognize a different kind of treatment using technology most of our community members are familiar and comfortable with and make sure it applicable to our health care providers.”

The bill defines telemedicine services as real time, two-way electronic audiovisual communications, while telehealth services can include telephones calls, remote patient monitoring devices or other electronic means of diagnosis, consultation, education, and treatment.

And David C. Johnson, certified telehealth liaison at North Country Healthcare Providers, said the legislation was “an important step” in surmounting existing barriers to obtaining vital healthcare services, particularly in rural and undeserved regions across the state, according to Government Technology.

View the original release at Health IT Outcomes

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