The 'Real Story' about Medicare Telemedicine Reimbursements
Now we know that the Centers for Medicare & Medicaid Services (CMS) and the Congressional Budget Office (CBO) were all wet when it came to determining how much the nation would be reimbursing physicians for telemedicine services.
The Congressional Budget Office, which history shows has rarely OVERestimated the cost of programs, told Congress that reimbursing physicians for telemedicine services would cost $150 million the first five years, or about $30 million per year. The CBO based its estimates on the program limits that CMS was proposing. At the time, the agency was concerned that physicians would overuse telemedicine services if they were reimbursed at the same rate as in-person medical visits and treatment. These limitations prohibit reimbursements for "store-and-forward," the ability of capturing medical images and forwarding them to a distant provider (CMS allowed exclusions from this rule for Hawaii and Alaska). CMS also imposed restrictions that allow reimbursements only for telemedicine services delivered to underserved medical areas and to patients who are 25 miles or more from a metropolitan area.
The reimbursement issue has plagued the telemedicine industry from the beginning. Instead of wide adoption to provide greater access to quality healthcare, physicians and healthcare facilities for the past 11 years have been reluctant to invest in telemedicine programs because of what we now know were incorrect assumptions by CMS and overblown projections by CBO.
Thankfully, the Robert J. Waters Center for Telemedicine & e-Health Law
(CTel) exposes the fallacy of the CMS argument and the CBO estimate in its new report, "Medicare Reimbursement for Telehealth Services through The Centers for Medicare & Medicaid Services
." The CMS reimbursement total for the year 2011 was $5.6 million. Remember, the first five years, the yearly figure was supposed to be $30 million, so the CBO and CMS were only off about 24 and a half million dollars. The total for the eleven years from 2001 - 2011 is $20.1 million, less than $2 million a year.
The question you need to ask now is how could these two agencies have been so wrong? CTeL provides us with the answer. Dr. Karen Edison, a former CTeL Board Member and the Director of the Center for Health Policy at the University of Missouri, was instrumental in getting the current telehealth legislation approved. She is a dermatologist and had been practicing teledermatology for several years prior. However, she was unfamiliar with how Congress operated. So in 1999, she turned to the late Robert Waters, a veteran congressional staffer, who was a pioneer in telemedicine legal and regulatory issues. They worked together in developing the foundation for the CMS telehealth reimbursement policy. To win approval, they had to agree with CMS on the limitations to get broad support, or otherwise the proposal would go nowhere.
Without the restrictions on telemedicine services, perhaps the reimbursements would approach the 2001 CBO projections, but we won't know unless CMS drops them. GlobalMed, and I venture to say everyone else in the industry, believes Congress and CMS should remove the restrictions on telemedicine reimbursements now that we know that the use of telemedicine technology is so very cost-effective.
Everyone involved in telemedicine owes a debt of gratitude to Dr. Edison and Robert Waters for their groundbreaking efforts in 1999 and to CTeL for their report that tells the real story behind CMS reimbursements.