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Updated May 11, 2017


Telehealth and Medicare



Telehealth is a multidimensional set of health care services
delivered via a range of telecommunications technologies,
including the Internet, video, and telephone, according to
the Medicare Payment Advisory Commission (MedPAC).
Access to telehealth services involves a broad range of
providers, services, settings, modalities, and patients. For
example, telehealth providers include physicians, nurses,
and psychotherapists who examine and prescribe treatment
for patients who are located at home, at a health center, or
other location that separates the provider and patient.
Telehealth providers may consult with patients via
synchronous communication, such as live
videoconferencing, or asynchronous communication, such
as store-and-forward technologies. Store and forward
technologies feature a time delay between the capture and
evaluation of patient data. Store-and-forward telehealth is
used by some providers to assess radiologic images, photos,
and videos that are shared among providers for consultative
purposes, when a face-to-face visit is not required. For
detailed information on telehealth and its applications, see
CRS Report R44437, Telehealth and Telemedicine:
Description and Issues. The rapidly evolving nature of
digital medicine raises questions about newer technologies,
such as mobile applications and wearable technology
systems, which do not always fit with more traditional
concepts of health care delivery (both in private and public
health insurance systems, including Medicare). Although
these and other telehealth modalities have the potential to
increase health care access among certain patient
populations, not all are paid for under programs such as
Medicare. Medicare covers telehealth services to a limited
extent.

The Centers for Medicaid and Medicare Services (CMS),
within the Department of Health and Human Services
(HHS), administers the Medicare program and makes
decisions on telehealth coverage and reimbursement. The
Medicare program was established in 1965 under Title
XVIII of the Social Security Act (SSA, P.L. 74-271, as
amended) to pay for benefits in the form of health insurance
payments to providers who deliver services to beneficiaries.
In 2017, Medicare expects to provide health insurance
benefits to more than 58 million seniors and certain
individuals with disabilities at an estimated annual cost of
$705 million. The program organizes payments for health
services mainly through the following parts: Part A
(inpatient hospital services, skilled nursing facility services,
and hospice care); Part B (physician and non-physician
practitioner services, therapy services, preventive services,
clinical laboratory and other diagnostic tests, Part B drugs
and biologics, and other selected types of outpatient
services); Part A and B (home health services and end-stage


renal disease); Part C (managed care); and Part D
(prescription drugs).



Under Medicare Part A, telehealth services may be utilized
in the treatment of hospital inpatients, but there is no
statutory authority for a separate payment under the hospital
Inpatient Prospective Payment System (IPPS). Although no
payment is involved, CMS guidance for Part A explicitly
identifies telehealth as an alternative to face-to-face
encounters when a physician writes an order for home
health services.

Section 1834(m) of the SSA, which establishes telehealth
requirements for Medicare Part B, has been an area of focus
of recent telehealth-related legislative activities. Statutory
requirements for Part B specify the conditions for payment
for telehealth services. Location, provider, technology, and
other parameters for telehealth service are defined. A
distant site is the site where the physician or practitioner is
located at the time the service is provided via a
telecommunications system. An originating site is a site
where the eligible telehealth patient is located when the
service is furnished via a telecommunications system. The
originating site must be located (1) in an area that is
designated as a rural health professional shortage area
(Section 332(a)(1)(A) of the Public Health Service Act); (2)
in a county that is not included in a Metropolitan Statistical
Area-or a rural county; or (3) from an entity that
participates in a federal telemedicine demonstration project
that has been approved by (or receives funding from) the
Secretary of HHS as of December 31, 2000. Distant
telehealth providers are physicians, nurse practitioners,
physician assistants, nurse-midwives, clinical nurse
specialists, certified registered nurse anesthetists, clinical
psychologists, clinical social workers, and registered
dietitians or nutrition professionals and, under current
regulation, they are the only providers who are eligible to
receive payments as distant site providers (42 CFR
410.78(b)(2)).

Telehealth services for Medicare beneficiaries must be
delivered via a telecommunications system. The systems
must have an interactive audio and video component that
supports real-time (or synchronous) communication
between the provider and patient. Asynchronous or store
and forward technologies, where there is a time delay
between the capture and evaluation of patient data, are paid
for only by federal demonstration programs taking place in
Alaska and Hawaii. Outside of demonstration projects,
telehealth visits must take place at qualified facilities in
rural locations. Note that location is a significant matter for
health centers and rural health clinics because the law or
regulations restrict telehealth payments to location.


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