Telemedicine: Reimbursement liability patient consent and HIPAA

By Robert M. Portman, JD, MPP, Rebecca Burke, JD, and Christina L. Krysinski, JD, September 3, 2018

This month, we follow up on our May 2018 column — Telehealth and state licensure: What you need to know — with additional information for physicians who provide teledermatology services, or those wishing to provide care via telemedicine, specifically in the areas of reimbursement, malpractice liability, informed consent, and HIPAA.

Telemedicine and reimbursement

Telemedicine modalities have been in use for decades and there are ample studies showing them to be as effective as in-person care in many situations. Yet, reimbursement for telemedicine often lags behind and is cited by physicians as one of the top barriers to adoption of virtual care. Health care providers across the country are being asked to improve access to care — while at the same time, reducing costs and increasing quality — so there is growing interest in telemedicine among health plans and state lawmakers.

Is reimbursement for services provided through telemedicine on par with non-telemedicine services?

The biggest factor in answering this question is the state in which the physician practices. Currently, 35 states and the District of Columbia have coverage parity for telehealth services. This requires insurers to provide the same coverage whether the service or encounter occurs in person or via telehealth. However, only 10 states have some form of payment parity. Payment parity requires insurers to pay the same rates for a service provided through telemedicine as provided in person.

Coverage and payment parity laws vary from state to state. In determining whether services are likely to be covered, physicians should first determine whether they are in a state that has coverage and/or payment parity. If they are not, a payer could still include telemedicine as a covered benefit, but it would be up to the individual payer to determine what to cover and how much to pay. If the state has passed coverage parity laws, it may still condition coverage on a variety of factors. In determining whether a service can be reimbursed, you should consider the following questions:

• Who is the third-party payer?
• What modality of telemedicine is being used?
• Is the service provided directly to the patient or to another clinician?
• Where is the patient located?
• What type of health care provider is delivering the service?

The most widely reimbursed modality is live, interactive audio and video encounters. However, despite the prevalence of cell phones, a handful of states prohibit the use of “cell phone video” to facilitate a telemedicine encounter. Store-and-forward technology, used in many teledermatology programs, is covered in a little more than half of states.

Some state coverage parity laws are limited to certain specialties. Fortunately, teledermatology is one of the most established and well known uses of telemedicine and even if state law limits telemedicine parity to certain specialties, dermatology is usually one of them.

Even if a telemedicine service is covered, there is still the question of payment. Most states do not require payment parity. Therefore, there would be nothing to stop a commercial payer from reimbursing providers less for services provided virtually. Physicians may therefore need to check with the plan to determine what level of reimbursement is provided. 

Are the rules different for Medicaid?

Rules for Medicaid may differ from those applicable to commercial payers. The Centers for Medicare and Medicaid Services (CMS) allows states to establish their own coverage and payment rules for Medicaid, and states have generally taken a very expansive approach to telemedicine. Currently, 49 states and the District of Columbia reimburse for live, video telemedicine through Medicaid and 15 reimburse for store-and-forward technology. In addition, there are currently 40 states that specifically cover telemedicine when the patient is in the home, while 23 recognize schools as an originating site.

What about Medicare?

With limited exceptions, Medicare coverage of telemedicine is currently very restricted. Under the current rules, Medicare will only cover telemedicine services that take place through interactive audio and visual technology and only if the patient is located in a rural area and receives the service in an approved originating site such as a hospital, physician’s office, or other health care facility. However, CMS recently proposed to update some of its payment policies. Under the proposed changes, Medicare would reimburse physicians for time spent communicating with patients over the phone or other devices to decide whether an in-person visit is needed (CMS calls these “virtual check-ins”), as well as for time spent reviewing videos or photos sent remotely by a patient. CMS also proposes to expand Medicare-covered telehealth services to include prolonged preventive services. CMS hopes that these changes will increase efficiency for practitioners and convenience for patients.

One exception to existing restrictions on telehealth reimbursement is for Next Generation Accountable Care Organizations, which are permitted to provide telehealth services remotely when the patient is in the home. It also covers asynchronous store-and-forward services, but only for dermatology and ophthalmology. “Store-and-forward” technology is also covered under certain demonstration projects in Alaska and Hawaii. More recently, in the Bipartisan Budget Act of 2018, Congress allowed Medicare Advantage plans, which cover approximately one-third of Medicare beneficiaries, to provide additional telehealth benefits beyond what traditional Medicare covers.

Telemedicine has attracted the scrutiny of the HHS Office of Inspector General, which recently released a report finding that almost one-third of claims submitted to Medicare for telemedicine were incorrect because patients received services at non-rural originating sites, and the program only reimbursed for telehealth services if the patient lives in a rural area. Therefore, physicians billing Medicare for telemedicine services may want to review their policies to ensure they are following Medicare’s rules.

Telemedicine and malpractice liability

The fundamental elements of medical malpractice are the same whether the service is delivered in person or via telehealth. A patient can recover damages if a physician-patient relationship existed and the physician’s failure to meet an accepted standard of care resulted in an injury to the patient. The Academy’s Position Statement on Teledermatology states that, where a physician provides telehealth services directly to a patient, “the consulting dermatologist bears full responsibility (and potential liability) for the patient’s care.” Alternatively, where a physician provides consultative services to another provider via telehealth, as opposed to directly to the patient, “the allocation of responsibilities will vary on a case-by-case and state-by-state basis.”

There have been very few telehealth-related medical malpractice cases so far. As a result, little information exists about telehealth-specific liability risks. According to a 2015 survey conducted by the Physician Insurers Association of America, however, the chief factors involved in telehealth malpractice incidents were diagnostic errors, failure to properly respond, and medication errors. 

What standard of care applies in telehealth malpractice cases?

Some states have laws or regulations that specifically address the standard of care that applies in telehealth cases. For example, under Texas regulations, the same standard of care that would apply to the provision of the same health care service or procedure in an in-person setting applies in telehealth (22 Tex. Admin. Code § 174.6(a)(1)). In addition, states that participate in the Interstate Medical Licensure Compact (IMLC) may specifically require that out-of-state physicians, who are registered to practice telehealth within the state, are subject to the jurisdiction of that state’s courts. For example, under Minnesota law, by registering to provide interstate telehealth services in Minnesota, an out-of-state physician agrees to be subject to the state’s laws, courts, and medical board (Minn. Stat. 147.032). Visit staging.aad.org/dw/monthly/2018/may/telehealth-and-state-licensure-what-you-need-to-know for more information.

Do I need special malpractice insurance for telehealth?

You should check with your malpractice insurance carrier to verify that your policy covers telehealth services, including services provided across state lines if applicable. Your insurance provider can also inform you of any requirements or limitations on the provision of telehealth services under your policy, such as licensing requirements for telehealth services provided across state lines.

Informed consent and telemedicine

Physicians should obtain informed consent for telehealth services whenever the physician would otherwise be expected to obtain informed consent for the service, unless a broader state law requirement applies. According to the American Medical Association’s standards for ethical practice in telemedicine, informed consent for telehealth services should include information such as, “how telemedicine technologies will be used in care, the limitations of those technologies, the credentials of health care professionals involved, and what will be expected of patients for using these technologies.” See www.ama-assn.org/delivering-care/ethical-practice-telemedicine.

Twenty-seven states and D.C. have unique patient informed consent requirements for telemedicine encounters. Some states require a physician to obtain informed consent before providing any services via telehealth. For example, under California law, a health care provider must obtain verbal or written consent from the patient for the use of telehealth services prior to providing any care via telehealth (Cal. Business & Professions Code 2290.50(b)). Physicians should be sure to document that they obtained informed consent from a patient prior to providing telehealth services if required under state law.

HIPAA and telemedicine

The same HIPAA security and privacy rules apply to telemedicine services as apply to services provided in person. However, dermatologists need to be sure that the technology used in providing telemedicine services is HIPAA compliant. We recommend doing your own risk assessment and not simply relying on assurances made by vendors.

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