JANUARY 1997 PRESS RELEASE
Establishment of New Telemedicine Reimbursement Policies In California
Medford, Oregon (January 8, 1997): Until now, telemedicine has been regarded as a relatively speculative system of health care delivery, but government and industry representatives in California have changed the status-quo. A flurry of activities supporting advancement of telemedicine during the past 18 months has resulted in enactment of a new California law. Effective January 1st, legislation requires private sector health care providers to establish reimbursement policies for telemedicine procedures considered to be equivalent to face-to-face visits. Public sector health care providers such as Medi-Cal have until July 1st to structure their telemedicine-reimbursement policies. The direction taken in California is considered a model for other state governments for successfully demonstrating the power of cooperation and education among industry and legislative forces.
Interestingly, there was a great deal of support and relatively little objection to implementing this new telemedicine reimbursement policy within the health care industry, even among powerful lobbies representing insurance and managed care companies. This level of acceptance is not unique to California. There have been assertive, long-term efforts by medical professionals and equipment vendors to increase awareness of telemedicine applications. Selected forms of telemedicine-based services such as remote cardiac or fetal monitoring, telepathology, and teleradiology have been reimbursed by Medicare on a national basis. Additionally, Medicaid reimbursement for telemedicine-mediated medical consultations is being provided in Arkansas, Georgia, Montana, and West Virginia (among others). One area of cost-savings already being demonstrated by these programs is reduction of Medicaid-reimbursed travel expenditures associated with patient referrals to distant specialists.
However, from informal surveys and discussions with telemedicine advocates in California, insurance and managed care policy-makers appear to be somewhat behind schedule in establishing formal reimbursement schedules. In the near future, on-going educational efforts are expected to pay off. For example, a grant has been approved to extend funding for seminars and speaking engagements at hospitals and long-term care facilities throughout California to heighten awareness of telemedicine-mediated services. Efforts to date have already targeted associations representing third-party payers such as health maintenance organizations and Workers’ Compensation. One of the groups responsible for spreading the word is The California Telehealth/ Telemedicine Project.
Despite the alternating hype and uncertainty associated with telemedicine, there does seems to be demand for such services. The focus until recently has been on federally and state funded programs, but industry experts suggest there may be ten times as many total systems in use when privately-funded telemedicine networks are included. Also, the barriers associated with reimbursement may ultimately not be of concern to doctors and health care providers, some of whom have already been billing for telemedicine-mediated services as regular visits.
For a national perspective, The U.S. Telemedicine Market report published by Feedback Research Services describes issues, trends, and revenues forecasts for the period from 1995 - 2000. The content is based on 500 hours of research. A comprehensive review of factors of importance to health care professionals (without the market analysis) is provided in New Developments in Telemedicine, a report scheduled for publication on January 15th. Feedback Research Services publishes reports that analyze emergent health care markets. For information about current titles, visit: Market Reports
