On October 31, 2014, the Centers for Medicare and Medicaid Services (CMS) released the final rule for the physician fee schedule, an annual list of what the federal government pays physicians for seeing patients who have Medicare in different regions of the country. This year, according to CMS, the schedule “adds procedures to the telehealth list“. Let’s take a closer look at the changes and what they may mean for clinicians interested in using telehealth and digital health technology in their day-to-day practice.

To understand what the changes mean, we’ll start with some basics about reimbursement for telehealth services. A number of conditions remain for practitioners seeking reimbursement for telehealth services. The highlights are that:

  • The service must be furnished via an interactive telecommunications system.
  • The practitioner furnishing the service must meet the telehealth requirements, as well as the usual Medicare requirements.
  • The service must be furnished to an eligible telehealth individual.
  • The individual receiving the services must be in an eligible originating site.

The “eligible originating site” condition refers to certain rural areas lacking in health services, aptly called rural health professional shortage areas (HSPAs). The definition of these regions was expanded by CMS in 2014 to include more rural areas but still covers a minority of Americans.

Key changes made were the expansion of telehealth services being covered by Medicare and an increase in the amount of coverage for the “originating site” — this is the location of the patient receiving telehealth services from a distant site (location of the remote physician). Every year, Medicare accepts requests from the public for adding or deleting telehealth services. This year, seven new services were added. They are:

  • Psychotherapy services CPT codes 90845, 90846 and 90847.
  • Prolonged service office CPT codes 99354 and 99355.
  • Annual wellness visit HCPCS codes G0438 and G0439.

As an aside, if you’re interested in adding or deleting telehealth services, you can get more details on the format of these requests from this CMS website. Requests have to be sent to Telehealth_Review_Process@cms.hhs.gov. A list of currently covered telehealth services can also be found online.

Reimbursement didn’t change much; the payment amount for the originating site (where the patient is located) was increased by 0.8 percent in 2015, from $24.63 to $24.83. The amount that the distant site receives does not change because the service is being offered remotely. According to CMS, “a practitioner who furnishes a telehealth service to an eligible telehealth individual will be paid an amount equal to the amount that the practitioner would have been paid if the service had been furnished without the use of a telecommunications system.”

Another important point is that the conditions to be eligible to deliver or receive telehealth services didn’t change much. Some proponents would like to expand this area more to include other service shortage areas or patients’ homes regardless of where they are located. For example, some patients in urban areas that are not located near a specialist or unable to travel for some reason might be able to benefit from telehealth services. And if there’s equipoise between receiving a particular service via telehealth or in person, many patients and clinicians may prefer the telehealth approach for sparing patients the burden of a trip and physicians the additional expenses associated with an in-person visit. Expansion of the area where people can receive telehealth services would be in line with other CMS and private insurer efforts to increase interaction with patients electronically via email and patient portals in EHR’s.

Some media outlets and organizations that support telemedicine are also reporting that CMS is paying for remote monitoring of chronic care management patients because of a new rule that offers providers reimbursement for non-visit based services for chronic care management patients. However, this change is not focused on telehealth or digital health services as it can include many other activities. It does, however, present opportunities to offer telehealth services since one of the ways that providers can interact with patients to manage their chronic diseases is through telehealth and digital health systems.

A number of opportunities exist for medical apps in this area that are primarily focused on tools that enhance the interaction between physicians and patients in some way, such as providing the distant site with additional information (e.g., imaging, vital signs) while talking with a patient or offering the patient additional information while talking with a remote provider. There are a number of novel tools for providing an ever increasing range of services remotely. And the newly added eligible services seem particularly ripe for innovation.