Medicare Part B pays for certain health services furnished to rural beneficiaries via an “interactive telecommunications system”—a system that provides for real-time audio and video communication.  Among the covered services are office visits, certain behavioral health services, diabetes self-management training, and medical nutrition therapy.  The practitioner furnishing the service remotely (the “distant site”  provider) may be a physician, physician assistant, nurse practitioner, clinical psychologist, or other provider.  In order for telehealth services to be reimbursed under Medicare, the beneficiary must receive the service from designated “originating sites,” such as a physician’s office, hospital, rural health center, or FQHC.

Changes to the telehealth regulations are considered annually as part of the Medicare physician fee schedule update process, and the final rule for 2014 made several changes to telehealth coverage and reimbursement.  CMS made a number of changes that affect “originating sites.”  First, CMS has expanded the permissible geographic locations for originating sites to include health professional shortage areas (HPSAs) in rural census tracts within metropolitan statistical areas (MSAs).  Previously, CMS defined “rural” areas to mean a HPSA not located in an MSA.  Second, CMS will now determine whether originating sites meet the geographic requirement as of December 31 of the previous year, and originating sites will retain that status for the entire year, even if the geographic designation changes mid-year.  Because of greater difficulty determining eligibility under the new definition of “rural” sites, CMS has also worked with HRSA to develop a web tool that allows providers to determine their eligibility to act as an originating site.  Third, CMS updated the facility fee paid to originating sites.  For 2014, the fee will be 80 percent of the lesser of the actual charge or $24.63.  (Fees to distant site provider are equivalent to the fees for the equivalent face-to-face service under the Medicare physician fee schedule.)  The beneficiary is responsible for Medicare coinsurance and any deductible amount.  Finally, in a change that affects both originating site and distant site providers, CMS added Transitional Care Management Services to the list of permissible Medicare telehealth services.

Photo of Paige Jennings Paige Jennings

Paige Jennings is an associate in Covington’s Washington office. She works with the firm’s Federal–State Programs, Health Care, Antitrust, and Litigation practice groups. Ms. Jennings joined the firm after a number of years working on health policy matters in the government and private…

Paige Jennings is an associate in Covington’s Washington office. She works with the firm’s Federal–State Programs, Health Care, Antitrust, and Litigation practice groups. Ms. Jennings joined the firm after a number of years working on health policy matters in the government and private sectors. Prior to earning her law degree and Master of Public Affairs, she worked in the U.S. Senate for over four years, advising Senators John Breaux and Tom Carper on health and social policy matters. Ms. Jennings later handled federal health policy issues at WellPoint, Inc. During law school, she worked with the U.S. Office of Management and Budget during consideration of the Affordable Care Act, and with the Federal Trade Commission for then-Chairman Jon Leibowitz.