Legal Considerations Prior to Practicing Telemedicine

May 29, 2013

Opportunities to practice telemedicine are emerging due to improved technology and reimbursement. Still, there are some legal issues to consider.

Although many Americans think of telemedicine primarily as the way in which patients in rural areas are able to access medical specialists, advances in technology and improved reimbursement related to telemedicine present new opportunities for physicians across the country. 

Telemedicine may also prove to be helpful in light of healthcare reform, as previously uninsured patients seek out physician care while physician shortages grow. A 2012 report from Massachusetts-based market research firm BCC Research said the global telehealth market is expected to grow from about $11.6 billion in 2011 to about $27.3 billion by 2016.

If you or your practice is thinking about engaging in telemedicine, there are some legal issues to consider. First, there are clear restrictions if you want to provide telemedicine outside of your state. At this point, every state requires a physician to have a license to provide services in the state in which the patient is located. Some states do offer a special telemedicine license to practice across state lines, but for such telemedicine licensing to work there must be cooperation among the states (and there is currently little such cooperation).

This means that, for now, physicians practicing telemedicine must become licensed in every state in which potential patients are located. Unfortunately, this restriction does somewhat limit the growth and appeal of telemedicine, since obtaining licensure in multiple states can be time-consuming and expensive. The good news is that there is a trend for states to collaborate more on telemedicine licensure.

The many issues that states will be forced to address in creating a workable telemedicine approach include aligning credentials and licensing requirements (which may vary between states) and determining by whom and how enforcement of licensure and credentialing should be handled. Additionally, the cost of enforcement of telemedicine licenses and whether fees should be paid in every state in which a telemedicine license would apply must also be negotiated.

Over the past few years, Medicare has expanded its policies and reimbursement related to telemedicine, as have private insurers. There are approximately 19 states that mandate that private insurance cover telemedicine services and another 10 or so states have proposed or have pending legislation that would require the same. This increased coverage offers physicians the unprecedented opportunity to be reimbursed for telemedicine services.

Although certain conditions must often be satisfied by the provider (such as the patient’s location), reimbursement for delivering the medical services is typically the same as under the payer’s current fee schedule for the service provided. Thus, for physicians with the technological capabilities, telemedicine is a viable option.

Other forms of telemedicine which are growing in popularity and can be performed in a provider’s own state include using technology to measure and track patients’ health without the requirement that that patients be in the office. Some insurers now offer patients the ability, via the web, to have online video consultations with any physician in their state that is contracted by the health insurer. Physicians are hooked up to the system for free and are paid a fee for each visit, which typically is based on an office visit charge. This model is being tested by several insurers and is likely to lead to huge growth in telemedicine, as timely care and reduced health spending remain the focus of payers across the country.

There is no doubt that there is a benefit in telemedicine for patients and physicians, whether it means a doctor can see more patients (wherever they are located) or simply interact more with the physician’s own chronic care patients (especially given new payment methodologies that emphasize quality and prevention).

While the technology required for telemedicine may require an investment by physicians, the growth in reimbursement for telemedicine by payers, and the greater efficiency with which patients may be managed using technology, should make telemedicine an appealing option for providers across the country.

Before you become involved in telemedicine, be sure to check the licensing requirements in your own state as well as the state in which you hope to “see” patients. It’s also advisable to confirm with counsel whether other liability and state-related issues might exist.