The Supreme Court’s recent decision upholding the Patient Protection and Affordable Care Act underscores the need to deliver and make accessible quality healthcare to patients throughout the United States in an efficient and cost-effective manner. The stage has been set for an upsurge in telemedicine practices.

What is telemedicine?

The Federal Department of Health and Human Services and its Centers for Medicare and Medicaid Services (“CMS”) defines “telemedicine” as “the provision of clinical services to patients by practitioners from a distance via electronic communications.” Telemedicine covers a broad range of services, from remote monitoring of stroke and cardiac patients to diagnostic interpretations completed at a distant location. Telemedicine is transforming the way healthcare is delivered and monitored, permitting the delivery of a wide-range of healthcare services anywhere at any time.

Why the recent interest in telemedicine?

Telemedicine practices have been discussed within the healthcare industry for several decades. In recent years, as technological innovations more rapidly influence how healthcare organizations provide care to patients and the shortage of specialty providers becomes more apparent, the relevance and popularity of telemedicine services has grown remarkably.

In May 2011, to help patients receive medically necessary interventions in a more timely manner, CMS issued a much-awaited final rule on telemedicine credentialing and privileging, effective July 5, 2011. This final rule revised the federal Medicare Conditions of Participation (“CoPs”) for hospitals and critical access hospitals (“CAHs”) to permit a more flexible process when credentialing and privileging practitioners who provide telemedicine services. Under the revised CoPs, hospitals and CAHs may now rely on the credentialing and privileging decisions made by distant-site hospitals or the information provided by other telemedicine entities when determining privileges for distant-site practitioners who provide telemedicine services without an independent review, as long as certain conditions are met, including a compliant written agreement, an internal review process for evaluating telemedicine practitioners, and revised medical staff bylaws.

What legal pitfalls must healthcare organizations avoid to effectively implement telemedicine practices?

Recognizing the benefits of telemedicine, and encouraged by recent developments in federal laws, healthcare organizations have increased their reliance on telemedicine technologies and services to meet their patients’ healthcare needs. Nevertheless, new legislation provides little guidance as to how healthcare organizations should implement changes to effectively provide telemedicine services while appropriately protecting patient safety. Therefore, when providing healthcare via telemedicine, these organizations must take into account the following significant unaddressed legal issues to ensure that their telemedicine services are compliant with federal and state requirements:

• Reimbursement: Currently, Medicare reimbursement for telemedicine services is limited. Medicaid reimbursement varies from state-to-state, and only about thirteen states have enacted statutes that recognize or require reimbursement for certain telemedicine services by commercial insurers. Due to this varied climate, healthcare organizations should be aware of the federal and state reimbursement requirements and restrictions that may affect their billing practices, know what telemedicine services will and will not be reimbursed, know how to bill for telemedicine services, and only submit compliant claims to avoid liability for fraud and abuse and false claims.
• Physician Credentialing and Privileging: To mitigate possible negligent credentialing claims and associated risks, when entering into written agreements with distant sites that claim to credential and privilege their practitioners, healthcare organizations must determine that any written agreement they sign reflects current legal requirements, establish specific responsibilities of distant-site hospitals and other telemedicine entities, and ensure that written agreements include adequate representations, warranties, and indemnifications regarding the quality of services provided by the distant site and any entity with which the distant site subcontracts.
• Medical Staff Bylaws: Healthcare organizations that rely on information from a distant site to credential and privilege telemedicine practitioners must review and revise their medical staff bylaws and credentialing and privileging policies to include criteria for granting privileges to distant-site practitioners, and a procedure for applying the criteria to those practitioners. Revisions should also address what category of the medical staff distant-site telemedicine practitioners will join, the level of involvement they may have in medical staff committees, and what procedural rights they should be given.
• Physician Peer Review: Healthcare organizations and telemedicine entities must develop policies and procedures for monitoring telemedicine practitioners and sharing internal review information so that the privacy of physician peer review and patient information is protected while information needed to make accurate credentialing and privileging decisions is regularly shared. At a minimum, this information must include all adverse events that result from telemedicine services provided by a practitioner to patients, and all complaints the healthcare organization has received about a practitioner. Information should only be disclosed in a manner that preserves all peer review privileges under state law.
• Patient Privacy and Consent: Prior to relying on any telemedicine technology to collect and transfer patients’ protected health information, healthcare organizations should ensure that they have secure communication channels in place; have implemented entity- and technology-specific business associate and other confidentiality and privacy agreements; have created policies and educated all administrators, employees, and medical staff members regarding the appropriate use of telemedicine technologies; and understand how and what patient information is being collected, communicated, and stored. When information is shared between two distinct entities, all disclosures must comply with federal privacy laws, including the Health Insurance Portability and Accountability Act and the Health Information Technology for Economic and Clinical Health Act. Written agreements between entities should identify what patient health information may be shared and how telemedicine practitioners will use or maintain patient health records for both patient care and healthcare liability purposes. Likewise, to mitigate the risk of malpractice claims, practitioners must comply with individual state requirements, which vary from state to state, when providing telemedicine services to ensure that patients are properly aware of the method in which healthcare is being delivered.

Telemedicine is an exciting area of healthcare that opens the door to greater access, greater efficiency, and more effective healthcare delivery. As can be seen, successful implementation of telemedicine practices requires a preemptive approach to addressing potential pitfalls.

Jee-Young Kim is an Associate at Fulbright & Jaworski LLP
jkim@fulbright.com; 213-892-9360