Legal hurdles may stall telehealth’s role in work force crisis

As thousands of baby boomers age into Medicare every day and millions of newly insured Americans seek health care, analysts point to expanded utilization of telehealth services as one way to alleviate physician shortages and ensure access to care.

Based on a partnership with Urology Times, articles from the American Association of Clinical Urologists (AACU) provide updates on legislative processes and issues affecting urologists. We welcome your comments and suggestions. Contact the AACU government affairs office at 847-517-1050 or for more information.

As thousands of baby boomers age into Medicare every day and millions of newly insured Americans seek health care, analysts point to expanded utilization of telehealth services as one way to alleviate physician shortages and ensure access to care. Because lawmakers and insurers failed to update professional licensing and reimbursement standards as technology made remote health care delivery possible, the health system is not prepared for such a transition. Policy makers and private payers are therefore scrambling to incentivize provider and patient participation in telehealth programs.

According to the National Conference of State Legislatures, Medicaid programs in 43 states and the District of Columbia reimburse certain telehealth services. Commercial plans are required to offer similar coverage in 19 states, with another 15 legislatures considering telehealth payment parity insurance mandates in 2014.

These seemingly positive facts notwithstanding, most states have not fully integrated telehealth into their health care delivery system. Remote providers’ appeals for relaxed licensure procedures and fees are generally met with fierce resistance from in-state providers. The American Telemedicine Association (ATA) estimates that physicians pay $300 million per year to obtain additional licenses for telemedicine. Exceptions are made in a few states, but according to the ATA, they are neither broad nor consistently defined.

For example, while every state allows remote post-surgical consultations, each defines consultation differently and some require that such visits be provided free of charge. Similarly, some states authorize reimbursement for telehealth services only if the doctor-patient relationship was established face to face.

Neal Neuberger, executive director of the Institute for e-Health Policy at the Healthcare Information and Management Systems Society, summed up telehealth advocates’ frustration during a September 2013 Alliance for Health Reform Briefing, saying licensure requirements have “nothing to do with science, technology, or health and has everything to do with state business practices.”

Telehealth providers’ exposure to liability in multiple states and uncertainty about their insurance coverage of cross-border activities also generate concern in the remote care community. Industry-funded research published in the January 2014 edition of Telemedicine and e-Health found “limited public policy” and “no major court rulings to provide clarity.”

Although the words “Congress” and “clarity” are rarely associated, U.S. Representatives Doris Matsui (D-CA) and Bill Johnson (R-OH) introduced a bill Dec. 12, 2013, that attempts to clean up the telemedicine mess that’s been created in recent years. According to the sponsors, “The Telehealth Modernization Act [HR 3750] will provide guidance to states as they look to utilize telehealth technologies in the safest, most secure manner possible.” The legislation proposes a definition of telehealth enacted in California that is more expansive than many other laws and includes doctor-patient communications that take place outside of hospitals, physician offices, and skilled nursing facilities.


This measure is the third major telehealth bill introduced in the current Congress. The two others, the Telehealth Enhancement Act (HR 3306) and the TELEhealth for MEDicare (TELE-MED) Act (HR 3077), accelerate Medicare’s support for remote health care delivery, which has been stalled at approximately $6 million for each of the last 10 years. HR 3306 would expand the sites available for telemedicine reimbursements, add incentives for fewer hospital readmissions, and facilitate home-based kidney dialysis. HR 3077 would allow Medicare providers to treat patients electronically across state lines without having to obtain multiple state medical licenses.

These bills stand little chance of becoming law, but the provisions of HR 3306 expanding telehealth coverage areas were included in the Centers for Medicare & Medicaid Services’ 2014 physician fee schedule. CMS also added coverage for patient-physician communications in transitional care management and chronic care to the list of approximately 30 telehealth services, and slightly increased telehealth reimbursement for physicians from $24.43 to $24.63, up from $20 in 2011.

Despite Medicare’s anemic telehealth expenditures under the current fee-for-service system, analysts anticipate explosive growth for the industry as public and private payers migrate to bundled payments. In a December 2013 interview with Forbes magazine, a respected market analyst predicted that the U.S. telehealth market will grow to $1.9 billion in 2018, up from $240 million today (56% annually).

Providers’ concerns about licensure and liability will not be alleviated any time soon. The Federation of State Medical Boards is close to agreeing on language for an interstate compact for physician licensing, but securing participation state by state may take 10 years or more.

As the multidimensional work force crisis plays out in Washington and across the country, organizations such as the AACU aggressively advocate on behalf of the urologic community. We cannot do it alone, however, and encourage support via membership and participation in grassroots mobilization campaigns.

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