With the global telehealth market projected to more than quadruple in value over the next five years, even slow-moving government payors have responded to the pressure to expand reimbursement options for telemedicine services. But reimbursement woes continue to top the list of concerns voiced by providers, and the U.S. Department of Health and Human Services, Office of Inspector General (“OIG”) is keeping a watchful eye on reimbursement-related growing pains. On April 30, 2018, OIG released a report that identifies the impact of some of these growing pains on Medicare claims payments.

How common are these billing mistakes?  

The review, conducted by OIG’s Office of Audit Services Findings and Opinions, revealed that up to a third of the $17.6 million in payments from Medicare for telehealth services in 2014 and 2015 were paid in error as a result of lax oversight and poor practitioner education on Medicare’s billing requirements for telehealth services. OIG reviewed 100 paid telehealth claims, focusing on claims billed through a distant site that did not have a corresponding originating-site fee. Thirty-one of those claims were paid for services that did not meet federal reimbursement requirements, leading OIG to conclude that Medicare overpaid telehealth providers by approximately $3.7 million during the two-year audit period. The overwhelming majority of the erroneously paid claims (63% of those found in OIG’s audit) were not reimbursable because the patients received services at non-rural originating sites. Other errors arose from services provided by ineligible institutional providers, at unauthorized originating sites, by an unallowable means of communication, or by a physician located outside the United States, or from claims billed for non-covered services.

How can providers ensure their telehealth claims are reimbursable? 

Under federal regulations, reimbursable claims are restricted based on the location of the patient receiving services, the facility or practitioner billing for the service, the means of communication used, and the type of services provided.

OIG auditors found that, by far, the most common errors in claims submitted for telehealth services were related to the location of the originating site. The originating site of a telehealth service is the location of the patient at the time the service is being furnished. An originating site can be a physician’s offices, a critical access hospital (“CAH”), a rural health clinic, a federally qualified health center, a hospital, a hospital-based or CAH-based renal dialysis center, a skilled nursing facility, or a community mental health center. But, importantly, the site must be located

in a rural area. Specifically, the regulations require that originating sites must be:

  • Located in a county that is outside of a metropolitan statistical area (“MSA”)
  • Located in a health professional shortage area (HPSA) that is either outside of an MSA or is within a rural census tract
  • An entity participating in a federal telemedicine demonstration project, approved by or receiving funding from the Secretary of Health and Human Services as of December 31, 2000

These regulations make clear that claims for telehealth services are not payable by Medicare when the services are provided to a patient when the patient is in his or her home or in an independent renal dialysis center. Additionally, although a separately billable facility fee can be claimed and paid to an eligible originating site, opting not to submit a claim for the facility fee does not render the service reimbursable if it is provided to a patient in a location other than an eligible site. The report points out that, without the addition of a new field to the standard claim forms, there is no capability to institute a claim payment edit to detect claims that should be denied based on the patient’s geographic location. Because CMS has no plans to make such a significant change to its standard claim forms, post-payment reviews are the only means available for regulators to detect claims that don’t meet federal requirements. To help practitioners avoid this common billing error, Medicare offers an online tool that determines whether a facility’s physical address is geographically eligible to serve as an originating site for telehealth services.

Regulations also restrict which providers may furnish telehealth services. Most practitioners can receive Medicare reimbursement for services provided via telehealth technologies. Eligible practitioners are physicians, nurse practitioners, physician assistants, nurse midwives, clinical nurse specialists, clinical psychologists, clinical social workers, registered dieticians or nutrition professionals, and certified registered nurse anesthetists. Institutional providers, however, are generally not permitted to collect from Medicare for telehealth services. Per the Medicare Claims Processing Manual, these claims are payable by Medicare only if the institutional provider is (1) a CAH that has elected the Method II payment option, where telehealth services are provided by a practitioner who has assigned his or her billing rights to the CAH or (2) a CAH, where medical nutrition therapy services are provided via telehealth technology.

Additionally, certain telehealth technologies are not approved to provide services otherwise reimbursable by Medicare. Providers must use a real-time, interactive telecommunications system but they are not allowed to bill for telehealth services for providing care via telephone, fax, or email. There is a very narrow exception to the interactivity requirement that allows for certain telemedicine demonstration programs in Alaska and Hawaii to receive reimbursement for the use of “asynchronous store-and-forward” services, wherein clinical data, images, sound, or video is acquired and stored and later forwarded to another location for clinical evaluation.

Practitioners should also ensure that the telehealth services provided are included on Medicare’s list of allowable HCPCS codes. Not all services that are reimbursable when provided in a face-to-face clinical encounter will remain reimbursable if provided via telehealth technology.

How will CMS enforce these requirements?

OIG has recommended that CMS should conduct post-payment reviews of telehealth claims, but, while CMS continues to use Comprehensive Error Rate Testing (“CERT”) reviews to determine claim error rates, the agency’s comments to the OIG report suggest that there are no plans to undertake any new initiatives related to telehealth claims issues. Unfortunately, these comments also indicate that, despite the fact that Medicare Administrative Contractors will be implementing new telehealth claim edits as a result of this report, there are also no plans to increase the availability of training on Medicare’s telehealth requirements.

For now, all indications are that federal regulators will continue to prioritize the expanded access to services that telehealth providers offer. As Medicare expenditures on telehealth services continue to grow exponentially, however, telemedicine providers should be prepared for priorities to shift. If you would like more information on the regulatory implications for your telehealth practice, please contact an attorney in Husch Blackwell’s Healthcare, Life Sciences and Education team.