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Telemedicine Reimbursement Report

Prepared by

The Center for Telemedicine Law With the support from the Office for the Advancement of Telehealth
October 2003

The Center for Telemedicine Law
1050 Connecticut Avenue, NW, Suite 700
Washington, DC 20036-5339

The Center for Telemedicine Law (CTL) is a non-profit entity founded by organizations committed to providing high-quality patient services through the use of telemedicine systems throughout the United States and the world. CTL is a leader in the gathering and analysis of information related to the legal and regulatory aspects of telemedicine. Because uncertainty about legal and regulatory issues often serves as a deterrent to the maximum utilization of telemedicine, CTL seeks to identify and clarify the legal and regulatory barriers and to offer solutions for overcoming these barriers.

Since 1996, CTL has provided periodic updates on state reimbursement activity impacting telemedicine. This report provides an overview of existing state telemedicine reimbursement policy as well as the state Medicaid agency survey.

Part I. Reimbursement Overview and Legislation
STATE LEGISLATION IMPACTING TELEMEDICINE REIMBURSEMENT

Introduction

The absence of consistent, comprehensive reimbursement policies is often cited as one of the most serious obstacles to total integration of telemedicine into health care practice. This lack of an overall telemedicine reimbursement policy reflects the multiplicity of payment sources and policies within the current United States health care system. The vast majority of health care costs are paid by private insurers, Medicare, and Medicaid.

Partial Medicare reimbursement for telehealth services was authorized in the Balanced Budget Act (BBA) of 1997. The narrow scope of this reimbursement prompted efforts towards expansion and revision of the Medicare reimbursement regulations. The Benefits Improvement and Protection Act of 2000 (BIPA) included amendments to the Social Security Act and removed some of the prior constraints, yet maintained substantial limitations related to geographic location, originating sites, and eligible telehealth services.

Unlike Medicare, most state Medicaid programs provide reimbursement for health care-related transportation costs. A number of states with telemedicine programs entered into collaboration with state Medicaid programs to develop telemedicine reimbursement policies, often with the anticipation that telemedicine could offer transportation cost savings. Currently, 27 state Medicaid programs acknowledge at least some reimbursement for telehealth services. The most rapid expansion is in the area of behavioral health. Other state Medicaid agencies are amenable to establishing or enhancing telemedicine reimbursement policies, but are facing serious budget constraints; therefore, addition of any new coverage or services must be based on solid cost and benefit data.

As with Medicaid, regulations for telemedicine reimbursement by private insurers are set by the states. Five states have enacted laws requiring that services provided via telemedicine must be reimbursed if the same service would be reimbursed when provided in person. Some insurance programs cover specific telehealth services, e.g., behavioral health. Even in the absence of a definitive policy, some insurers and Medicaid agencies will reimburse for telemedicine services as long as the rationale for using telemedicine is justified to the agency’s satisfaction. State waivers or special programs offering remote diagnostics, remote monitoring for specific disease entities or for particular populations, allow additional coverage of telemedicine services. A few states simply pay claims regardless of whether the encounter was in person or via telemedicine. Introduction of managed care, for both Medicaid and the private sector, complicates the telemedicine reimbursement picture, since a number of state programs acknowledge use of telemedicine within managed care but not to keep specific utilization data. In many cases, state Medicaid managed care and fee-for-service are separate programs with separate guidelines.

The array of non-traditional payers for telemedicine include charitable organizations (including foundations), long-term care and community health providers, special population agencies, self-pay and self-insured groups. Although telemedicine payment policies are evolving at a steady

but somewhat erratic pace, limited reimbursement continues to be a major barrier to the expansion of telemedicine. This barrier may preclude timely, quality, appropriate care for patients throughout the nation--especially those in rural or underserved areas.

Part I of this report includes a roster of state laws impacting telemedicine reimbursement and 2003 state legislative activity related to state reimbursement for telemedicine. Part II includes the results of a comprehensive survey of state Medicaid agencies to determine their telemedicine reimbursement policies, followed by recommendations to enhance telemedicine reimbursement through Medicaid.

OVERVIEW OF MAJOR PAYERS AFFECTING REIMBURSEMENT

Medicare

Medicare is the federal health insurance for America’s senior citizens. Most of the financing and reimbursement for telemedicine services comes from Medicare. The Center for Medicare and Medicaid Services (CMS), formerly the Health Care Financing Administration (HCFA), provides health insurance for over 75 million Americans through Medicare, Medicaid, and the State Children’s Health Insurance Program (SCHIP). The expanding role of Medicare in reimbursement began when Congress passed the Balanced Budget Act of 1997 (BBA) that mandated that Medicare reimburse telemedicine care and fund telemedicine demonstration projects.

The BBA called for the coverage and payment for telemedicine consultations to Medicare beneficiaries in rural health professional shortage areas (HPSA). The BBA also required that a Medicare practitioner be with the patient at the time of the consultation and specified that teleconsultant fees had to be shared between the consulting physician and the referring physician. These new rules were seen, by some, to be too restrictive while attempting to implement telemedicine reimbursement schemes. The new statutory language did not match the practical realities of telemedicine practice. Under the BBA, Medicare rules required that a telehealth provider be present to be eligible for Medicare reimbursement. These requirements essentially limited the reimbursement to “live” telemedicine services, which constitute only about 10% of telemedicine services.

There was some hesitation about amending the BBA because of worries that telemedicine reimbursement would somehow threaten the Medicare trust fund. The HCFA had to ensure that health care expenditures did not outstrip funding, a major challenge given the growing senior citizen population.
A major concern in revising the telemedicine reimbursement provisions was the exceedingly high cost (“scoring”) affixed to telemedicine reimbursement legislation by the Congressional Budget Office (CBO). In 2000, the Center for Telemedicine Law, with funding from the Office for the Advancement of Telehealth, coordinated a project to use available telemedicine reimbursement claims data to develop a more accurate funding projection. The results of this project clearly indicated that expanding telemedicine reimbursement would have minimal financial impact. Data from this report was accepted by CBO in scoring proposed telemedicine reimbursement revisions.
After several attempts to amend current law and refine telemedicine reimbursement, the push to improve rural access to telemedicine prevailed in mid-December 2000, when Congress passed the final of its 13 appropriation bills, the Consolidated Appropriations Act of 2001 (CAA). In addition to appropriating funds for Departments of Labor, HHS, and Education, this bill contained a number of smaller bills such as one dealing with telemedicine reimbursement (H.R. 5661, Section 223).
Beginning October 1, 2001, H.R. 5661, also known as the Benefits Improvement and Protection Act of 2000 (BIPA), amended section 1834 of the BBA to provide for a new subsection (m) “Payment for Telehealth Services” which expanded the payment for telemedicine services. However, BIPA also limited reimbursement to those eligible individuals that received services at originating sites. These sites include: office of a physician or practitioner, critical access hospital, rural health clinic, federally qualified health center, or a hospital.
This amendment provided for an expansion of Medicare payment for telehealth services. The newly passed provisions expand the scope of reimbursement by not requiring a telepresenter and adding additional services over a broader geographic area. Among the provisions passed were the following:
  • eliminated the provider "fee sharing" requirement;
  • eliminated the requirement for a Medicare participating "tele-presenter";
  • expanded telemedicine services to include direct patient care, physician consultations, and office psychiatry services;
  • included payment for the physician or practitioner at the Distant Site at the rate applicable to services generally;
  • expanded the definition of Originating Sites to include physician and practitioner offices, critical access hospitals, rural health clinics, federally qualified health centers, and hospitals (but did not include nursing homes);
  • expanded the geographic regions in which Originating Sites are located to include rural health professional shortage areas, any county not located in a Metropolitan Statistical Area, and from any entity approved for a federal telemedicine demonstration project; and
  • permitted use of store and forward applications in Alaska and Hawaii for federal demonstration projects.

These Medicare reimbursement revisions were expected to expand the access of medical care to rural and other medically underserved areas. Just as importantly, it was anticipated that improved Medicare reimbursement would also pave the way for broader private payer reimbursement.

Medicaid

Title XIX of the Social Security Act is a Federal/State entitlement program that pays for medical assistance for certain individuals and families with low incomes and resources. In 1965, this program became known as Medicaid and became law as a joint operation funded by both the Federal and State governments. Following Federal guidelines, a state may (1) establish its own eligibility standards; (2) determine the type, amount, duration, and scope of services; (3) set the rate of payment for services; and (4) administer its own program.

However, some Federal requirements are mandatory if Federal matching funds are to be received. A state’s Medicaid program must provide specific basic services to the categorically needy populations. These services are: inpatient hospital services, outpatient hospital services, prenatal care, vaccines for children, physician services, nursing facility services for persons aged 21 or older, family planning services and supplies, rural health clinic services, home health care for persons eligible for skilled-nursing services, laboratory and x-ray services, pediatric and family nurse practitioner services, nurse-midwife services, federally qualified health-care services, ambulatory services of an FQHC that would be available otherwise, and early periodic screening, diagnostic, and treatment services for children under age 21.

A significant development in Medicaid is the growth in managed care as an alternative service delivery concept, different from the traditional fee-for-service system. Managed care programs seek to enhance access to quality care in a cost-effective manner. Waivers give states greater power and flexibility in their state Medicaid designs. Under sections 1915(b) and 1115 of the Social Security Act, these waivers allow states to develop innovative health care delivery or reimbursement systems and allow for statewide health care reform experimental systems without increasing costs.
CMS has not formally defined telemedicine for the Medicaid program, and Federal Medicaid law does not recognize telemedicine as a distinct service. But, reimbursement for Medicaid services is one of the options states have as a cost-effective alternative to the more traditional ways of providing medical care (face-to-face exams).
Telemedicine is an important component of the future of medicine, and it can be the answer to many problems that are faced today with health care. The practice of telemedicine utilizes technology for many reasons, including increased cost efficiency, reduced transportation expenses, improved patient access to specialists and mental health providers, improved quality of care and better communication among providers.
At least 27 states have acknowledged some reimbursement for services provided via telemedicine for several reasons, such as improved access to specialized health care in rural areas and reduced transportation costs. There are many factors states use to determine the scope of coverage for telemedicine applications, such as the quality of equipment, type of services to be provided, and location of providers (e.g., remote rural sites).
Reimbursement for Medicaid-covered services, including those with telemedicine applications, must also satisfy federal requirements of efficiency, economy, and quality of care. With this in mind, states are encouraged to use the flexibility inherent in federal law to create innovative payment methodologies for services that incorporate telemedicine technology. For example, states covering medical services that utilize telemedicine may reimburse for both the provider at the hub site for the consultation and the provider at the spoke site for an office visit. States also have the flexibility to reimburse any additional cost (i.e., technical support, line-charges, depreciation on equipment, etc.) associated with the delivery of a covered service by electronic means as long as the payment is consistent with the requirements of efficiency, economy, and quality of care. These add-on costs can be incorporated into the fee-for-service rates or separately reimbursed as an administrative cost by the State. If they are separately billed and reimbursed, the costs must be linked to a covered Medicaid service.
Private Payers

Another barrier to the expansion of telemedicine is a lack of reimbursement for services from private insurance providers. In addition to Medicare and Medicaid payments for telemedicine, several Blue Cross/Blue Shield plans, as well as other private insurers, pay for telemedicine services. The telehealth market operates on the assumption that private payers do not pay for telemedicine and will resist any kind of claims if asked. However, AMD Telemedicine conducted a survey that found that there is a critical mass for private payer reimbursement. According to their findings, 38 programs in 25 states currently receive reimbursements from private payers. Three programs receive reimbursement for store and forward, and seven programs receive reimbursement for facility fees. While the market assumption is that private payers do not reimburse for telemedicine, in reality over 100 private payers currently reimburse for telemedicine.
Several states have passed legislation mandating private payer reimbursement of telemedicine services. These states include: Louisiana, California, Oklahoma, Texas, and Kentucky. More private insurers are funding limited telemedicine coverage in certain states. For example, the California Managed Risk Medical Insurance Board awarded $1.8 million to Blue Cross California to expand their telemedicine technology and help to encourage expansion of telehealth services. Blue Cross plans to use the money to help serve the medically underserved populations and provide equipment and support to 22 new telemedicine sites in 18 counties.
The American Telemedicine Association and AMD Telemedicine have created a Private Payer Reimbursement Directory based on a survey they conducted. The directory contains a listing of telemedicine providers receiving private payer reimbursement, private payers providing reimbursement, and state legislation mandating private payer reimbursement of Telemedicine services. This can be found at the website:

http://www.americanmeddev.com/private_payer/about_survey.cfm.

State Reimbursement Policies

Several states reimburse for medical services based on policy or on a case-by-case basis rather than by codified state laws. The information in the accompanying charts is based solely on the state telemedicine reimbursement laws that have been enacted or legislation affecting reimbursement. The CMS website offers a list of states where Medicaid reimbursement of services utilizing telemedicine is available. However, according to CMS, this listing has not been updated in about three years.

More states are beginning to enact legislation acknowledging telemedicine as a legitimate medical service, and many of these states have enacted telemedicine reimbursement laws, and incorporated them into their respective state codes. These eleven states are: Arizona, California, Colorado, Hawaii, Kentucky, Louisiana, Minnesota, Nebraska, Oklahoma, Texas, and Virginia. In addition to these states, four more have enacted state legislation concerning telemedicine reimbursement. These states are: Massachusetts ( S 503, SC 1252), New Mexico ( NM H 665), New York ( A 7155, S 463), and Oregon ( HJR 4). There are several other states where Medicaid reimbursement for telemedicine is available; however, this report is only focused on those states with enacted state statutes or legislation.
While states are becoming more aware of this new medical technology called telemedicine, five states with telemedicine reimbursement enacted codes will not reimburse for services that are provided via phone or fax (Hawaii, Kentucky, Oklahoma, California, and Minnesota). Some of these states have a definition of telemedicine or telehealth that blurs the line between what is reimbursable as telemedicine and what is not. For example, Hawaii offers a broad definition of telehealth as the “use of telecommunications services. . . to deliver health care and health care service and information to parties separated by distance.” On the other hand, Kentucky defines telehealth more narrowly as the use of interactive audio, video, or other electronic media to deliver health care. The trend towards telemedicine consultations made through electronic media, two-way interactive video, or store and forward techniques is strong and growing. The overwhelming consensus is that consultation via telephone conversations or faxes is not eligible for reimbursement.
The purpose of telemedicine is to remove distance as a barrier to health care. Special telemedicine programs are now starting to be used to assure that physically and mentally needy individuals receive the best care medically possible. In Minnesota, state statutes provide funding for medical assistance and telehome care devices to improve the quality of life of needy patients. Nebraska has established a telehealth system to provide access for deaf and hard-of-hearing persons in remote locations to mental health, alcoholism, and drug abuse services. Pending legislation in other states, such as Hawaii and California, illustrates a movement toward utilizing telemedicine as a way to reach those with special needs and those in need of behavioral health care services.
Where does the money go? Six of the 11 states enacting state reimbursement laws have specifically addressed the manner in which physicians should be reimbursed. The trend seems to that telemedicine consultations should be reimbursed at the full allowable rate or at the same rate as provided by medical assistance for a comparable in-person examination/consultation. Of the

six states, only Louisiana set the reimbursement rate lower by states that the physician will be reimbursed for not less than 75% of the reasonable and customary amount of payment. Legislation in other states, for example California, will provide mental health providers with equal reimbursement as providers of acute psychiatric inpatient hospital services.

What’s Next?

The world is changing, and along with this change comes a new wave of technology. This new high-tech world has the power of minimizing distance as a barrier to health care. With the help of telemedicine, optimum health care can be available to patients around the world and right in their own backyard. One of the barriers to telemedicine becoming completely integrated into the US medical system is the absence of consistent, federal and state reimbursement policies. In order to optimize this new world of telemedicine, the financial challenges of reimbursement must be confronted. Within each of the major payer groups changes must occur.

The advancement of telemedicine promotes access to services, increases competition, has the potential top reduce costs, and is a good investment. AMD Telemedicine suggests that private payers treat telemedicine services as usual and customary medical practices, instead of singling it out and requiring a special modifier on the claim. Their survey shows that certain telemedicine programs have been successful in obtaining private-payer reimbursement by sending a letter to private payers and stating their intent to provide services, providing notification of future claims submittals, and encouraging questions. The Office for Advancement of Telehealth has indicated a willingness to collaborate with CMS, state Medicaid programs, and private third payers to create forums to encourage discussion of telemedicine reimbursement issues.
At the recent Second Annual Telehealth Leadership conference on June 2 -4, 2003 in Washington, DC, several suggestions for Medicare Reform for Telehealth were discussed and included in a Fact Sheet for dissemination to Congress, including inclusion of provisions that were deleted from BIPA 2000. The leadership conference participants agreed that any new Medicare language should include the following corrections to the existing telemedicine Medicare regulations:
  • Add the following to the list of eligible originating sites for Medicare reimbursement: Skilled Nursing Facilities, Community Mental Health Centers (or other publicly funded mental health facility), and Indian Health Service sites.
  • Allow the Secretary the discretion to expand Medicare reimbursement for store and forward telehealth services beyond Alaska and Hawaii.
  • Make provider reimbursement independent of the Originating Site fee. Inappropriate restrictions were placed on practitioners’ reimbursement by linking their professional payment only to sites eligible for facility fees. For example, a practitioner providing a telehealth service to an assisted living facility would not be reimbursed because that is not an eligible site for a Medicare telehealth facility fee.

Conclusion

Each of these measures represents small steps in promoting the future of telemedicine. The federal government has passed statutes that demonstrate its willingness to promote telemedicine, but these provisions do not go far enough in providing physicians and healthcare organization incentives to implement costly telemedicine programs. As illustrated by the map(s), there is a movement in much of the United States to incorporate some kind of reimbursement for telemedicine. However, these policies are not uniform, making application for and receiving payments difficult for health care providers and patients. In order for telemedicine to thrive, reimbursement must be a joint effort between the states, federal government, and private payers to help establish a reimbursement scheme that promotes the best interests of the patient and creates an environment in which the best health care possible is available to all those in need.

Sources:

 STATE TELEMEDICINE REIMBURSEMENT LAWS (ENACTED) 


State Telemedicine Reimbursement Laws
CITATION PROVISIONS
Arizona H.B. 2531, 2003 Ariz. Sess. Laws. Appropriates funds for the use of telemedicine in immunization as well as $1.16 million for a telemedicine network.
California Cal. Ins. Code § 10123.85 (Deering 2003) Cal. Ins. Code § 10123.13 (2003). Cal. Ins. Code § 10123.147 (2003). Cal. Health & Saf. Code § 1375.1 (Deering 1999). Cal. Wel. & Ins. Code § 14132.72 (Deering 1999). Cal. Health & Saf. Code § 1374.13 (Deering 1999). On and after January 1, 1997, no disability insurance contract that is issued, amended, or renewed for hospital, medical, or surgical coverage shall require face-to-face contact between a health care provider and a patient for services appropriately provided through telemedicine. Requires every insurer issuing group or individual policies of disability insurance that cover medical, hospital, or surgical expenses, including telemedicine services, shall reimburse each claim as soon as practical but no later than 30 working days after receipt of the claim. Same as above (§ 10123.13), expands on procedure for contested claims. Requires that all health care service plans under the Knox-Keene Act have a procedure for the prompt payment or denial of claims, including those of telemedicine services. Provides reimbursement for telemedicine by Medi-Cal for health care services that are otherwise covered through Medi-Cal. Specifically excludes telephone and fax. Amends Medi-Cal contracts with health care service plans to add coverage of telemedicine and make any capitation rate adjustments.
Colorado Colo. Rev. Stat. § 10-16-123 (2001). Colo. Rev. Stat § 26-4-421(2001). Similar to §10-16-123. On or after January 1, 2002, no health benefit plan that is issued, amended, or renewed for a person residing in a county with 150,000 or fewer residents may require face-to-face contact between a provider and a covered person for services appropriately provided through telemedicine, if such county has the technology necessary for the provisions of telemedicine. Any health benefits provided through telemedicine shall meet the same standard of care as for in-person care. Specifically excludes telephone and fax consultations. On or after January 1, 2002, face-to-face contact between a health care provider and a patient in a county with 150,000 residents or less may not be required under the managed care system for services appropriately provided through telemedicine, subject to reimbursement policies developed by the department of he alth care policy and financing to compensate providers who provide health care services covered by the program. The department of health care policy and financing may accept and expend gifts, grants, and donations from any source to conduct the valuation of the cost-effectiveness and quality of health care provided through telemedicine by those providers who are reimbursed for telemedicine services by the managed care system.
Hawaii Haw. Rev. Stat. § 431:10A -116.3 (2003). Defines telehealth as the “use of telecommunications services. . . to deliver health care and health care service and information to parties separated by distance.” Specifies that “no accident and health or sickness insurance plan. . . Shall require face-to-face contact between a health care provider
Haw. Rev. Stat. § 432:1-601.5 (2003). Haw. Rev. Stat. § 432D-23.5 (2003). and a patient as a prerequisite for payment for services appropriately provided through telehealth.” Specifically excludes telephone and fax in the absence of other integrated information and data. Same language as above, only change in law applies to “mutual benefit society plan.” Same language as above, only change in law applies to “health maintenance organization plans.”
Kentucky KRS § 205.510 to 205.630 KRS § 304.17A-138 (2002) Medicaid will reimburse for telehealth consultations that are provided by Medicaid-participating practitioners who are licensed in Kentucky and that are provided in the telehealth network. A telehealth consultation in Kentucky means a medical or health consultation for the purposes of patient diagnosis or treatment, that requires the use of advanced telecommunications technology. Telemedicine consultations will not be reimbursed if provided with an audio-only telephone, fax machine, or e-mail. A health benefit plan shall not exclude coverage solely because the service is provided through the telehealth network. Specifies that “a health benefit plan shall not exclude a service from coverage solely because the service is provided through telehealth and not provided through a face-to-face consultation” if the consultation is provided through an approved network. Further states that “a health benefit plan may provide coverage for a consultation at a site not within the telehealth network at the discretion of the insurer.” Specifies that a telehealth consultation is not reimbursable if provided through use of an audio-only telephone, fax, or email.
KRS Acts 130 (2002) KRS Acts 430 (2002) Defines telehealth as the use of interactive audio, video, or other electronic media to deliver health care. Authorizes the commissioner, to the extent that he finds it feasible and appropriate, require the use of telemedicine and telehealth in the independent medical evaluation process.
Louisiana La. R.S. 22:657 (2003). La. R.S. 45:835 (1999). Requires insurance or health benefit policies to pay for any health care service provided for in the plan regardless if that service is preformed via telemedicine or face-to-face. The physician at the “originating health care facility or terminus who is physically present with the individual who is the subject” will be reimbursed for not less than 75% of the reasonable and customary amount of payment. Also adds that any health care service performed by telemedicine is subject to the applicable utilization review criteria and requirements of the insurer. Creates the Coordinating Counsel on Telemedicine and Distance Education. Repealed by Acts 2001, No. 1137, § 1.
Minnesota Minn. Stat. § 256b.0913 (2001). Minn. Stat. § 256b.0625 (1999). Provides funding for “telehome care” devices to monitor patients in their homes if they qualify for the Minnesota Alternative Care Program. (Amendment substitutes the word “telehome care” in place of “telemedicine”.) Provides for medical assistance coverage for telemedicine consultations, with payments to be made to both the referring provider and the consulting physician specialist. To be covered under medical assistance, telemedicine consultations must be made via two-way, interactive video or store-and-forward technology. Store-and-forward technology includes telemedicine consultations that do not occur in real time via synchronous transmissions and that do not require a face-to-face encounter with the patient for all or any part of any such telemedicine consultation. The patient record must include a written opinion from the consulting physician providing the telemedicine consultation. A communication between two physicians that consists solely of a telephone conversation is not a telemedicine consultation. Coverage is limited to three telemedicine consultations per recipient per calendar week. Telemedicine consultations shall be paid at the full allowable rate. Provides funding for telemedicine devices to monitor patients in their homes if they qualify for the Minnesota Alternative Care Program. Minnesota Medical Assistance for Needy Persons. Amended by 1999 Minn. ALS 245, specifically including telemedicine as covered under medical assistance. The patient record must include a written opinion from the consulting physic ian providing the telemedicine consultation.
Nebraska NE ALS 49 (2002) NE L.B. 559 (1999). Establishes a telehealth system to provide access for deaf and hard-of-hearing persons in remote locations to mental health, alcoholism, and drug abuse services. The commission shall set and charge a fee between $20 and $150 per hour for use of the telehealth system. The Nebraska Telehealth Act provides reimbursement for health care services delivered through telehealth under the Medicaid fee-for-service program; amends managed care plans to cover services delivered via telehealth. Sets the minimum reimbursement rate for telehealth consultations at the same rate as provided by medical assistance for a comparable in-person consultation.
Oklahoma 36 Okla. Stat. Tit. §6802 (1997, 1998, 2002, 2003). 36 Okla. Stat. Tit. § 6803 (1997, 1998, 2003). 36 Okla. Stat. Tit. § 6804 (1997, 1998, 2003). 17 Okla. Stat. Tit. § 139.109 (2002). Defines telemedicine as the practice of health care delivery, diagnosis, consultation, treatment, transfer of medical data, or exchange of medical education information by means of audio, video, or data communications. Excludes consultations by telephone or fax machines. For services that a health care provider determines to be appropriately provided by means of telemedicine, health care service plans, disability insurance, workers comp, or state Medicaid shall not require person-to-person contact. Telemedicine services are covered by, and reimbursed under, the fee-for-service provisions of the state Medicaid managed care program and state Medicaid managed care program contracts with health care service plans are amended to add coverage of telemedicine services and make any appropriate capitation rate adjustments. Informed consent provision for the use of telemedicine. Specifies that the health care practitioner who is in physical contact with the patient has ultimate authority over the care of the patient and is accountable for ensuring that patient information is provided. Consultations between health care practitioners are exempted. Each not-for-profit hospital in this state shall, upon written request, receive, free of charge, one telecommunications line or wireless connection sufficient for providing such telemedicine services as the hospital is equipped to provide. The telecommunications carrier shall be entitled to reimbursement from the Oklahoma Universal Service Fund for providing the line or connection. In no case, however, shall reimbursement from the fund be made for an Internet subscriber fee. House concurrent resolution calling on Congress to require HCFA to revise Medicare to make payments to health care providers that encourage telemedicine. Short title for “Oklahoma Telemedicine Act.”
Texas Tex. Ins. Code art. 21.53F (2002) Tex. Occ. Code § 153.004 (2001). Tex. Gov’t Code § 531.0216 (2001). Provides definition of health benefit plan, health professional and telemedicine service. Specifies plans covered by this act. States that “a health benefit plan may not exclude a telemedicine medical service or a telehealth service from coverage under the plan solely because the service is not provided through a face-to-face consultation.” Providers must adhere to informed consent and confidentiality guidelines. Reaffirms that the medical board has oversight of the quality of care provided through telemedicine or telehealth encounters. Permits the board to adopt rules to ensure that appropriate care is provided to Medicaid and Medicare patients who receive telemedicine medical services and to prevent abuse and fraud. Amends § 531.0215. In developing a system to reimburse telemedicine providers under the Medicaid program, the commission must consult with the Texas Department of Health and the telemedicine advisory committee, establish pilot programs under which the commission may reimburse a health professional who participates, and establish a separate provider identifier for telemedicine medical services providers. The commission by rule shall establish policies that permit reimbursement under the state Medicaid and children's health insurance program for services provided through telemedicine medical services and telehealth services to children with special health care needs. The policies must be designed to provide for reimbursement of multiple providers of different services who participate in a single telemedicine medical service if the commission determines it to be cost-effective. The commission and the Telecommunications Infrastructure Fund Board by joint rule shall establish and adopt minimum standards for an operating system used in the provision of telemedicine medical services by a health care facility participating in the state Medicaid program, including standards for electronic transmission, software, and hardware. The commission by rule shall require each HHS agency that administers a part of the Medicaid program to provide Medicaid reimbursement for a telemedicine medical service initiated or provided by a physician at the same rate as the Medicaid program reimburses for a comparable in-person medical service. A health care facility that receives reimbursement shall establish quality-of-care protocols and patient confidentiality guidelines to ensure that the telemedicine medical service meets legal requirements and acceptable patient care standards. Establishes the Telemedicine Advisory Committee to monitor the types of telemedicine programs receiving reimbursement. Requires Texas HHS to develop and implement a system to reimburse telemedicine providers under the state Medicaid program. In doing so HHS must review programs, establish billing codes and fees, and provide an approval process before a provider can be reimbursed for services. Requires Medicaid reimbursement for telemedical consultation provided by a physician licensed in TX who practices in: (i) a rural health facility, (ii) an accredited medical school, or (iii) a teaching hospital that is affiliated with an accredited medical school. Requires that reimbursement for telemedical services is at the same rate the Medicaid program would provide for a comparable in-person consultation. HHS may not require a telemedical consult if an in-person consult with a physician is reasonably available. (Note: TX S.B. 1368 (1999) renames this law as Tex. Gov’t. Code § 531.0217.) Disallows health benefit plans to exclude a service from coverage solely because the service is provided through telemedicine. The telemedicine services are subject to the same deductibles as face-to-face services, but they may not be higher. The physician must ensure the informed consent of the patient and is responsible for the confidentiality of the patient’s information. Medical Practice Act requires the medical board to ensure, in consultation with HHS and the commissioner of insurance, that appropriate care is provided to Medicaid and Medicare patients who receive telemedicine services.
Virginia VA ALS 814 (2002). Requires the department of health to evalua te current telemedicine reimbursement policy and identify any additional services for which telemedicine reimbursement would be appropriate and cost effective.

2003 STATE LEGISLATION IMPACTING REIMBURSEMENT FOR TELEMEDICINE AND TELEHEALTH

BILL
PROVISIONS
ACTION
Arizona S 1230
Concerns money allocation from tobacco tax for telemedicine pilot programs in medically underserved areas by the Health Care Cost Containment System.
2/20/03 Held in Senate Committee on Health
California A 939
Provides that mental health providers that provide services to Medi-Cal benefic iaries under a contract with a provider of psychiatric inpatient hospital services and mental health providers that provide mental health services to Medi-Cal beneficiaries through telemedicine shall be reimbursed in the same manner as providers of acute psychiatric inpatient hospital services.
3/03/03 To Assembly Committee on Health
Hawaii S 1647
Appropriates funds from the universal service program special fund to provide individuals who are blind or visually impaired with telephonic access to time-sensitive information.
4/15/03 To Conference Committee
Massachusetts S 503 SC 1252
Authorizes and directs the Division of Health Care Finance and policy and the Division of Medical Assistance to establish a rate of reimbursement for home health agencies that allow for the use of technology. Relates to Medicaid telemedicine services program.
1/1/03 To Joint Committee on Health Care Profile, language of legislation pending study group report
New Mexico NM H 665
The New Mexico Telehealth Act. Specifies rationale for the bill, defines terms and adds language stating: “The delivery of health care via telehealth is recognized and encouraged as a safe, practical and necessary practice in New Mexico. No health care provider or operator of an originating site shall be disciplined for or discouraged from participating in telehealth pursuant