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CHIP will Mean Healthier Children; Lack of Medicare Payment Hinders Medicine-by-Wire

By Pat Bellinghausen

Getting paid for medical care delivered by two-way, interactive-audiovisual equipment isn’t always easy, even for networks that log hundreds of patient visits. Sometimes it’s impossible.

The Eastern Montana Telemedicine Network is the fourth busiest mental health network in the nation, according to the Association of Telehealth Service Providers annual survey for 2000. The Montana network provided free care to many of those patients.

The network, which stretches from Columbus and Billings to Glasgow and Baker, reported 899 mental health patient visits from July 1, 1998, to June 30, 1999. Among those mental health patients encounters, nearly half were people with no health insurance or with only government programs to cover their care.

  • 235 were Medicaid patients.
  • 147 were covered by Medicare, which paid nothing for mental health services delivered via telemedicine.
  • 36 were self-pay patients with no insurance.

Unreimbursed costs of Deaconess doctors seeing patients are absorbed by the nonprofit hospital organization as charity care or contractual adjustments, according to Thelma McClosky Armstrong, network coordinator at Deaconess Hospital.

In addition, the network has to cover its operating costs, including charges for special telephone lines that carry compressed digital information and the expenses of acquiring and maintaining audiovisual equipment. Grants from federal agencies have helped Montana telemedicine networks get started, and some federal communication tax money is going into rural health telecommunications.

But for most of their operating money, telemedicine systems depend on uses besides seeing patients. Health organizations pay to be part of the Eastern Montana Telemedicine Network and then use it for professional health education and administrative meetings. Network members last year saved nearly $800,000 in travel expenses and staff time away from work by using the network for meetings and training, Armstrong reported. The network also sells its services to community businesses for regional teleconferences.

Montana telemedicine networks have seen more success in receiving reimbursement than many of their counterparts around the country. Blue Cross and Blue Shield of Montana and Montana Medicaid both cover care delivered by telemedicine. Because Montana Medicaid is obligated to pay for some patient travel, telemedicine can save money by reducing travel expenses. But not all state Medicaid programs nor all private insurers will cover telemedicine consultations.

“The frontier in telemedicine is reimbursement,” said Dr. Stephen Sulzbacher, a Seattle clinical psychologist who sees about 30 children and adolescents a year via telemedicine from the University of Washington School of Medicine. “We have to convince Medicare and other third-party payers that this is, in fact, a more cost effective way to deliver care.”

“Payment is still a big issue,” agreed David Masuda, a telemedicine researcher at the University of Washington. The Balanced Budget Act of 1997 law encouraged the use of telemedicine for Medicare, but hasn’t had much effect because regulations written to implement the law are “incredibly complex,” Masuda said. Medicare decisions are important not only because the program covers millions of Americans, but also because some private insurers will cover only what Medicare covers.

In designated health professional shortage areas, Medicare will reimburse for telemedicine consultations, according to rules from the Health Care Financing Administration, the agency that oversees Medicare. Forty-seven of Montana’s 56 counties are designated mental health professional shortage areas and three others have applied for the designation. All of the rural links in the Eastern Montana network are in these shortage areas.

The Medicare rules that took effect this spring require that a referring physician and the specialist split the fee and that both doctors be present for the consultation. In some cases, the referring doctor’s nurse could present the patient.

“Mental health services are not covered under telemedicine regulations when billed with psychiatric procedure codes. However, consultation procedure codes are covered,” according to a spokeswoman in the Denver regional HCFA office.

Those rules don’t mesh with the way telemedicine works in Eastern Montana, said Armstrong who is president of a statewide telemedicine coalition and a board member of the American Telemedicine Association. The psychiatrists, as well as other specialists, use telemedicine for direct patient care.

A referring physician generally isn’t present for the patient visit, just as the referring physician wouldn’t be present if the patient had traveled to the distant specialist’s office, Armstrong said. In the case of psychiatric visits, there often isn’t a referring physician. The psychiatrists are seeing their own patients.

The HCFA rules also state that the specialist must rebate 25 percent of the Medicare fee to the referring physician. The amounts Medicare would be paying are so low that it wouldn’t pay anything when a rebate is subtracted, Armstrong said.

“To set up an accounting system for reimbursing would cost more than the amount rebated,” Armstrong said.

“They’re making it very difficult,” said Jan Smith, telehealth coordinator at St. Vincent Hospital and Health Center. Lack of Medicare coverage is a barrier to making telemedicine more accessible, she said. St. Vincent is working toward starting telemedicine patient care on a regular basis.

Legislation introduced in the both houses of Congress proposes to bypass the HCFA regulations and direct the agency to pay for telemedicine service to Medicare patients. But it is uncertain whether or when these proposals may become law.

Sen. Max Baucus, D-Mont., supports S. 2505, legislation introduced by Sen. James Jeffords, R-Vt. This bill would expand the use of telemedicine in Medicare.

“It’s my sincere hope that we can push it forward in a Medicare bill this year,” Baucus said in a written statement to The Gazette.

Last year, Baucus introduced a rural health bill, which would have expanded “telemedicine’s reach to anything covered by Medicare.” That provision wasn’t enacted.

“Telemedicine has the potential to revolutionize rural medicine by bringing specialty care to the most remote areas in America,” Baucus said.

Sen. Conrad Burns, R-Mont., also supports expanding telemedicine because it brings medical care to rural Montana, Larry Akey, Burns’ director of communications, said from Washington, D.C. However, Akey said, Burns won’t take a position on the Jeffords bill until he sees what comes out of committee. In general, Burns supports expanding Medicare to cover mental health, with the caveat that he needs to look at the cost of specific proposals, his spokesman said.

Used with permission of the Billings Gazette, copyright 1999

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