[Federal Register Volume 63, Number 119 (Monday, June 22, 1998)]
[Proposed Rules]
[Pages 33882-33890]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16278]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Parts 410 and 414
[HCFA-1906-P]
RIN 0938-AI44
Medicare Program; Payment for Teleconsultations in Rural Health
Professional Shortage Areas
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement parts of section 4206 of
the Balanced Budget Act of 1997 by amending our regulations to provide
for payment for professional consultation by a physician and certain
other practitioners via interactive telecommunication systems. Payment
may be made if the physician or other practitioner is furnishing a
service for which payment may be made under Medicare to a beneficiary
residing in a rural area that is designated as a health professional
shortage area.
This proposed rule would also establish a methodology for
determining the amount of payments made for the consultation.
DATES: Comments will be considered if we receive them at the
appropriate address, as provided below, no later than 5 p.m. on August
21, 1998.
ADDRESSES: Mail written comments (1 original and 3 copies) to the
following address: Health Care Financing Administration, Department of
Health and Human Services, Attention: HCFA-1906-P, P.O. Box 26676,
Baltimore, MD 21207-0519.
If you prefer, you may deliver your written comments (1 original
and 3 copies) to one of the following addresses:
Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20201, or
Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.
Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting, please refer
to file code HCFA-1906-P. Comments received timely will be available
for public inspection as they are received, generally beginning
approximately 3 weeks after publication of a document, in Room 309-G of
the Department's offices at 200 Independence Avenue, SW., Washington,
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m.
(phone: (202) 690-7890).
FOR FURTHER INFORMATION CONTACT: Craig Dobyski, (410) 786-4584.
SUPPLEMENTARY INFORMATION:
I. Background
A. General
Telemedicine is the use of telecommunications to furnish medical
information and services. Generally, two different kinds of technology
are in use in telemedicine. One technology is two-way interactive
video. This technology is used, for example, when a consultation
involving the patient, the primary care giver, and a specialist is
necessary. The videoconferencing equipment at two (or more) locations
permits a ``real-time'' or ``live'' consultation to take place,
providing for two-way exchange of information between the locations
during the examination. We refer to this process as
``teleconsultation.'' Teleconsultation typically involves a primary
care practitioner with a patient at a remote, rural (spoke) site and a
medical specialist (consultant) at an urban or referral center (hub)
facility, with the primary care practitioner seeking advice from the
consultant concerning the patient's condition or course of treatment.
The other technology, called ``store and forward,'' is used to
transfer video images from one location to another. A camera or similar
device records (stores) an image(s) that is then sent (forwarded) via
telecommunications media to another location for later viewing. The
sending of x-rays, computed tomography scans, or magnetic resonance
images are common store-and-forward applications. The original image
may be recorded and/or forwarded in digital or analog format and may
include video ``clips'' such as ultrasound examinations, where the
series of images that are sent may show full motion when reviewed at
the receiving location.
Currently, Medicare allows payment for those telemedicine
applications in which, under conventional health care delivery, the
medical service does not require face-to-face ``hands on'' contact
between patient and physician. For example, Medicare permits coverage
of teleradiology, which is the most widely used and reimbursed form of
telemedicine, as well as physician interpretation of electrocardiogram
and electroencephalogram readings that are transmitted electronically.
In contrast, Medicare does not cover other physicians services
delivered through telecommunications systems because,
[[Page 33883]]
under the conventional delivery of medicine, those services are
furnished in person.
B. Legislation
In section 4206 of the Balanced Budget Act of 1997 (BBA)(Public Law
105-33), the Congress required that, not later than January 1, 1999,
Medicare Part B (Supplementary Medical Insurance) pay for professional
consultation via telecommunications systems. Under section 4206(a), the
provision applies to consultations with a physician or with certain
other practitioners (identified below) furnishing a service for which
payment may be made under Part B, provided the service is furnished to
a beneficiary who resides in a county in a rural area that is
designated as a health professional shortage area, and notwithstanding
that the physician or other practitioner furnishing the consultation is
not at the same location as the physician or other practitioner
furnishing the service to the beneficiary.
The practitioners listed in section 4206(a) are physicians (as
defined in section 1861(r) of the Social Security Act (the Act)) and
those practitioners described in section 1842(b)(18)(C) of the Act. The
practitioners described in 1842(b)(18)(C) include: physician
assistants, nurse practitioners, clinical nurse specialists, certified
registered nurse anesthetists, anesthesiologist's assistants, nurse-
midwives, clinical social workers, and clinical psychologists.
Section 4206(b) requires that the Secretary establish a methodology
for determining the amount of payments made for a consultation, within
the following parameters:
The payment is to be shared between the referring
practitioner and the consulting practitioner. The amount of the payment
is not to exceed the current fee schedule amount that would be paid to
the consulting practitioner.
The payment is not to include any reimbursement for any
telephone line charges or any facility fees, and a beneficiary may not
be billed for these charges or fees.
The payment is to be subject to the coinsurance and
deductible requirements under section 1833(a)(1) and (b) of the Act.
The payment differential of section 1848(a)(3) of the Act
is to be applied to services furnished by nonparticipating physicians.
(Section 1848(a)(3) specifies that, in the case of physicians services
furnished by a nonparticipating physician, the payment basis is 95
percent of what it would have been had the service been furnished by a
participating physician.)
The provisions of sections 1848(g) and 1842(b)(18) of the
Act are to apply. (Section 1848(g) provides a limitation on charges to
beneficiaries and provides sanctions if a physician, supplier, or other
person knowingly and willfully repeatedly bills or collects for
services in violation on the limitation. It also provides for sanctions
if a physician, supplier, or other person fails (1) to timely correct
excess charges by reducing the actual charge billed for the service to
an amount that does not exceed the limiting charge for the service, or
(2) to timely refund excess collections. In addition, it requires that
physicians and suppliers submit claims, for services they furnished to
a beneficiary, to a carrier on behalf of the beneficiary using a
standard claim form specified by the Secretary. The statute imposes a
penalty for failure to so submit the claim. In addition, section
1848(g) prohibits imposing any charge relating to completing and
submitting the claim. Section 1842(b)(18) provides that services
furnished by a physician assistant, nurse practitioner, clinical nurse
specialist, certified registered nurse anesthetist, anesthesiologist's
assistant, certified nurse-midwife, clinical social worker, or clinical
psychologist for which payment may be made on a reasonable charge or
fee schedule basis may be made only on an assignment-related basis. It
also limits the beneficiary's liability to any applicable deductible
and coinsurance amounts. It further provides for sanctions against a
practitioner who knowingly and willfully bills (or collects an amount)
in violation of the limitation.)
Further, payment for the consultation service is to be
increased annually by the update factor for physicians services
determined under section 1848(d) of the Act.
In addition, the statute directs that, in establishing the
methodology for determining the amount of payment, the Secretary take
into account the findings of the report required by section 192 of the
Health Insurance Portability and Accountability Act of 1996 (Public Law
104-191), the findings of the report required by section 4206(c) of the
BBA, and any other findings related to clinical efficacy and cost-
effectiveness of telehealth applications.
C. HCFA Telemedicine Demonstration Program
In October 1996, we began a demonstration of Medicare fee-for-
service payment for teleconsultation services. The demonstration is
expected to run through fiscal year 2001. Under the demonstration,
providers at selected sites in Iowa, Georgia, North Carolina, and West
Virginia have been furnishing teleconsultation services. These sites
were selected as a result of proposals submitted during our 1993 and
1994 general research solicitations and a subsequent expansion request
in 1998. Special data collection plans are in place for those health
care providers participating in the demonstration. The demonstration is
being independently evaluated through a cooperative agreement with the
Center for Health Policy Research in Denver.
In this demonstration, we are experimenting with a variety of
payment options beyond that proposed under this rule. Since relatively
little is known at present about either the process or content of
telemedicine service delivery, we expect to learn from the
demonstration about the general characteristics and practice patterns
of telemedicine practitioners. After completion of the demonstration,
we will compare the results to operations under the reimbursement
strategy that would be established under this proposed rule, and we may
propose adjustments, as appropriate.
II. Provisions of This Proposed Rule
This rule proposes to establish policies for implementing the
provisions of section 4206 of the BBA that address Medicare
reimbursement for telehealth services.
A. Professional Consultation Services Via Telecommunications Systems
The title of section 4206 of the BBA refers to telehealth services,
although the text specifically refers to professional consultation
services via telecommunications systems. In this document, we will
refer to professional consultation services via telecommunications
systems as teleconsultations.
A consultation is a type of service provided by a physician (or,
under section 4206, certain other health care practitioners) ``whose
opinion or advice regarding evaluation and/or management of a specific
problem is requested by another physician or other appropriate source.
A [physician] consultant may initiate diagnostic and/or therapeutic
services. The request for a consultation from the attending physician
or other appropriate source and the need for consultation must be
documented in the patient's medical record. The consultant's opinion
and any services that were ordered or performed must also be documented
in the patient's medical record and
[[Page 33884]]
communicated to the requesting physician or other appropriate source.''
1 We do not consider a teleconsultation to be a new medical
service; rather, we consider it to be a new way or process of
delivering a consultation.
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\1\ [Physicians'] Current Procedural Terminology (4th Edition,
1998, copyrighted by the American Medical Association), p. 20.
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Earlier in this document we included a discussion of the two
general technologies used in telemedicine, that is, store and forward,
and interactive video. We believe that, although asynchronous
transmission may be sufficient for diagnostic interpretation of images
(such as radiological images), a teleconsultation is equivalent to a
traditional, face-to-face consultation only if it permits the
consultant to control the examination of the patient as the examination
is taking place. With store-and-forward technology, the consultant is
reviewing an examination that has already occurred and is limited to
whatever information was recorded at that time.
We believe that a teleconsultation instead must be an interactive
patient encounter. The teleconsultation must meet the criteria included
in the descriptor quoted above for a given consultation service and
include--
Clinical assessment via medical examination directed by
the consultant (specialist);
The use of multimedia communications equipment that
includes, at a minimum, audio-video equipment permitting two-way real
time communication;
Participation of the referring practitioner as appropriate
to the medical needs of the patient and as needed to provide
information to and at the direction of the consultant; and
Feedback of the consultation assessment to the referring
practitioner.
Note that, to qualify for Medicare payment, the patient must be
present and the telecommunications technology must allow the consulting
practitioner to control an interactive medical examination of the
patient. Store and forward technologies would not allow a medical
examination of the patient but would allow only a review of a prior
examination, test, or diagnostic procedure, which would be outside the
scope of this proposed rule. By requiring an interactive communications
system, however, we are not mandating full motion video, but are
requiring interactive real time audio-video communication. We recognize
that full motion video requires large bandwidth that may be physically
and/or financially unavailable to many health care entities in rural
areas. This rule would not prohibit the use of lower end interactive
video technology in which less than full motion video is sufficient for
the consulting practitioner to control an examination of the patient.
As such, we would encourage the use of the simplest and least expensive
equipment that meets the real time requirement proposed under this
rule.
The [Physicians'] Current Procedural Terminology (CPT) is a
systematic listing of descriptive terms and identifying codes for
reporting medical services and procedures performed by physicians and
other medical practitioners. We propose to cover as teleconsultation
services the following categories of services listed as consultant
services in the 1998 CPT:
Office or Other Outpatient Consultations--CPT codes 99241 through
99245;
Initial Inpatient Consultations--CPT codes 99251 through 99255;
Follow-up Inpatient Consultations--CPT codes 99261 through 99263;
and
Confirmatory Consultations--CPT codes 99271 through 99275.
Proposed Regulatory Provisions
Based on the above, we would specify, in paragraph (a) of proposed
Sec. 410.75 (Consultations via telecommunication systems), that
Medicare Part B pays for professional consultations furnished by means
of interactive telecommunications systems if the following conditions,
and others discussed later in this preamble, are met:
The medical examination of the beneficiary is under the
control of the consultant practitioner.
The consultation involves the participation of the
referring practitioner, as appropriate to the medical needs of the
patient and as needed to provide information to and at the direction of
the consultant.
The consultation results in a written report that is
furnished to the referring practitioner.
In addition, at paragraph (b) of Sec. 410.75, we would define
``interactive telecommunications systems'' as multimedia communications
equipment that includes, at a minimum, audio-video equipment permitting
two-way, real time consultation among the patient, consulting
practitioner, and referring practitioner as appropriate to the medical
needs of the patient and as needed to provide information to and at the
direction of the consulting practitioner. We would also specify that
telephones, facsimile machines, and electronic mail systems do not meet
the definition of interactive telecommunications systems.
B. Coverage and Eligibility Provisions
In addition to limiting telemedicine coverage to consultation
services, section 4206 of the BBA limits coverage of teleconsultations
to services furnished to Medicare beneficiaries residing in a ``county
in a rural area * * * that is designated as a health professional
shortage area under section 332(a)(1)(A) of the Public Health Service
Act * * *.'' Section 332 of the Public Health Service Act authorizes
the Secretary to designate health professional shortage areas (HPSAs)
based on criteria established by regulation. HPSAs are defined in
section 332 to include geographic areas, population groups, and
facilities with shortages of health professionals. Section 332(a)(1)(A)
speaks to geographic HPSAs.
We found the language ``a county in a rural area * * * that is
designated as a health professional shortage area'' to be somewhat
ambiguous. We considered that the Congress may have intended that the
benefit apply only to county-wide HPSAs (an entire county that is
designated as an HPSA), but have rejected that construction of the law.
First, it would seem illogical to restrict coverage of
teleconsultations to county-wide HPSAs. The purpose of this provision
is to provide access to health care for beneficiaries who now may face
barriers to that care because they reside in rural areas where there is
a shortage of medical professionals. We do not believe the Congress
intended that only beneficiaries in the largest HPSAs be entitled to
the telemedicine benefit. We note that an existing statutory provision
related to HPSAs, that is, the 10 percent incentive payment for
physician services furnished in HPSAs, does not make a distinction
between county-wide HPSAs and other HPSAs. Second, we found that, by
limiting coverage of teleconsultations to county-wide HPSAs, we would
perpetuate barriers to care because many HPSAs would be excluded. From
a random review of HPSA listings, we found that beneficiaries in at
least one eastern State would not be entitled to telemedicine coverage
because there are no county-wide HPSAs in that State. In several
western States, we found that between 50 percent and 95 percent of
rural HPSAs would be excluded as sites for the telehealth benefit.
Therefore, for purposes of this section, we would specify that
teleconsultations are covered only in rural HPSAs as defined in the
Public Health Service Act.
[[Page 33885]]
We had a number of concerns about the statutory language that ties
coverage of teleconsultations to services furnished to a beneficiary
``residing in a county in a rural area * * *.'' [emphasis supplied].
Medicare claims processing systems are not geared to making such
eligibility determinations. Therefore, such a provision would add
another ``gatekeeping'' responsibility to the presenting practitioner
by requiring him or her to screen the beneficiary's address for
eligibility for the teleconsultation benefit. To do this, the
practitioner would need to develop and maintain a list of HPSAs for all
areas covering the entire population base from which he or she would
potentially draw patients. Moreover, the centralized beneficiary file,
which contains the beneficiary's address and is maintained by us, would
also have to contain a list of HPSAs nationwide against which the
beneficiary's address would be compared. We note that, if an
eligibility error were made, it would not be detected until a claim is
submitted, which occurs only after the service has been furnished. At
that point, Medicare payment on the claim would be denied, and the
beneficiary would be liable for the full charges for the
teleconsultation service. We believe that the Congress did not intend
to expose Medicare beneficiaries to this financial risk. Therefore, we
propose to use the location of the presenting practitioner at the time
of the service, that is, where the beneficiary is receiving care, as
proxy for the beneficiary's residence. If the location of the
presenting practitioner is in a rural HPSA (as defined above), we
believe it can be reasonably presumed that the beneficiary resides in a
rural HPSA. However, if a beneficiary can demonstrate that he or she
lives in a rural HPSA, we would allow payment for the teleconsultation
without regard to the location of the originating facility (site of
presentation).
Section 4206(a) of the BBA specifically requires that Medicare make
payments for professional consultation via telecommunications systems
with a physician or ``a practitioner (described in section
1842(b)(18)(C) of the Act.'' Nonphysician practitioners who may provide
a teleconsultation include physician assistants, nurse practitioners,
clinical nurse specialists, certified registered nurse anesthetists or
anesthesiologists' assistants, certified nurse midwives, clinical
social workers, and clinical psychologists. However, for consultation
services delivered via traditional face-to-face ``hands on'' methods,
current Medicare policy does not permit certified registered nurse
anesthetists, anesthesiologist's assistants, clinical social workers,
or clinical psychologists to bill for these services. We note that,
although section 4206 of the BBA provides for coverage of
teleconsultations furnished by certain health practitioners other than
physicians, this provision does not change current Medicare coverage
policy for consultation services delivered in person.
Proposed Regulatory Provisions
Based on the above, we would provide at Sec. 410.75 that, as a
condition for Medicare Part B payment for the teleconsultation--
The referring and consultant practitioner must be any of
the following:
+ A physician as described in existing Sec. 410.20.
+ A physician assistant as defined in existing Sec. 491.2.
+ A nurse practitioner as defined in existing Sec. 491.2.
+ A clinical nurse specialist as described in existing
Sec. 424.11(e)(6).
+ A certified registered nurse anesthetist or anesthesiologist's
assistant as defined in existing Sec. 410.69.
+ A certified nurse-midwife as defined in existing Sec. 405.2401.
+ A clinical social worker as defined in existing Sec. 410.73(a).
+ A clinical psychologist as described in existing Sec. 410.71(d).
The services must be furnished to a beneficiary residing
in a rural area as defined in section 1886(d)(2)(D) of the Act that is
designated as an HPSA under section 332(a)(1)(A) of the Public Health
Service Act. We would further specify that for purposes of this
requirement, the beneficiary is deemed to be residing in such an area
if the teleconsultation presentation takes place in such an area.
C. Payment Provisions
General Payment
Section 4206 of the BBA provides that payment for a
teleconsultation may not exceed the amount in the current fee schedule
for the consulting practitioner. Medicare payment for physicians
services is made, under section 1848 of the Act, on the resource-based
fee schedule. Payment to the other health care practitioners listed
earlier, authorized under section 1833 of the Act, is based on a
percentage of the physician fee schedule. Therefore, we would pay for
teleconsultation services furnished by physicians at 80 percent of the
lower of the actual charge or the fee schedule amount for physicians
services, and those furnished by other practitioners at 80 percent of
the lower of the actual charge or that practitioner's respective
percentage of the physician fee schedule (that is, the fee schedule for
clinical psychologists would be 100 percent of the physician fee
schedule; for clinical social workers, the fee schedule would be 75
percent of the clinical psychologist fee schedule; and for all other
eligible health care practitioners, the fee schedule would be 85
percent of the physician fee schedule).
Site of Service
We recognize that the consulting and presenting practitioners will
likely be located a significant distance apart, raising the issue of
where the service is being furnished. The site of service determines
the pricing locality to be used for Medicare payment. In our view, the
use of telecommunications to furnish a medical service effectively
transports the patient to the consultant (a concept analogous to the
traditional delivery of health care, in which the patient travels to
the consultant's office). Therefore, we believe that the site of
service for a teleconsultation is the location of the practitioner
providing the consultation. We thus would designate the location of the
consultant at the time of the service as the applicable pricing
locality for teleconsultation claims. As a result, the fee schedule for
the consultation will reflect the geographic adjustment factor
applicable to the consulting practitioner.
We considered designating the location of the beneficiary as the
site of service (and pricing locality) but rejected this option because
this alternative would likely result in lower payment levels than the
consultant would have otherwise received if the beneficiary had
traveled to his or her office for a consultation. This would probably
occur because the consulting practitioner, who is a medical specialist,
is usually affiliated with a ``hub'' facility, which is typically a
major medical center located in an urban or metropolitan area. The
referring practitioner is located at the ``spoke'' facility, which is
typically a primary care facility and, under the provisions of section
4206 of the BBA, is in a rural HPSA area. In the majority of cases, we
would expect that the different geographic adjustment factors used to
adjust the relative value units (RVUs) under the physician fee schedule
are somewhat higher for urban areas than for rural areas because the
cost of operating a medical practice in an urban area is generally
higher.
We also considered using a neutral site of service, which would be
neither
[[Page 33886]]
practitioner's respective location. This option was based on the
proposition that the service is furnished in ``cyber space'' rather
than at a fixed location. Under this approach, payment would have been
based on the RVUs for the service, with no geographic adjustment factor
applied. As a result, payment would be the same nationwide, regardless
of the practitioners' geographic locations. We rejected this option
because the use of unadjusted national RVUs could result in a payment
amount that exceeds the amount the consulting practitioner would have
otherwise received, thereby exceeding the payment ceiling imposed by
section 4206 of the BBA. Conversely, use of unadjusted national RVUs
could result in a lower payment amount than the consulting practitioner
would have otherwise received, thereby creating a disincentive for
specialists to furnish teleconsultations.
Payment Allocation
Section 4206 further provides that payment be shared between the
referring and consulting practitioners. We propose to allocate the
payment in the following manner: the consulting practitioner will
receive 75 percent of the applicable amount, and the presenting
practitioner will receive the remaining 25 percent of the applicable
amount. Using a hypothetical consultation payment of $100, this would
result in a payment of $75 to the consultant and $25 to the presenting
practitioner.
We arrived at these percentages by developing a mean
teleconsultation RVU to simulate the level of intensity for both a
consulting practitioner and a presenting practitioner. In determining
the mean RVUs for the consulting practitioner, we used fiscal year (FY)
1997 RVUs applicable to the proposed covered consultation services
(that is, CPT codes 99241-99245, 99251-99255, 99261-99263, and 99271-
99275). In determining the mean RVUs for the presenting practitioner,
we used FY 1997 RVUs applicable to office/inpatient visit services for
established patients (that is, CPT codes 99211-99215, 99221-99223, and
99231-99233). We decided to use established visit codes to represent
the presenting practitioner's role in the teleconsultation to reflect
the fact that a primary care practitioner has already seen the patient
to have determined that a consultation is necessary. RVUs were weighted
by the frequency of 1997 national allowed services attributed to each
CPT code. The weighted mean RVUs for both consulting and presenting
practitioner were calculated as a percentage of the total simulated
weighted mean teleconsultation RVUs. A summary of this process is shown
in the following table.
Practitioner Allocation Summary Table
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Model #1 w/50% work expense reduction
to presentation component Model #2 w/full RVUs
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Intensity Simulation: *
Mean Consultation RVU........ 3.21.................................. 3.21
Mean Established Office/ 0.91.................................. 1.35
Inpatient Visit RVU.
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Total RVU................ 4.12.................................. 4.56
Percentage Allocation: **
Consulting Practitioner...... 80%................................... 70%
(3.21 + 4.12 = 77.91%)................ (3.21 4.56 = 70.39%)
Rounded to 80%........................ Rounded to 70%
Presenting Practitioner...... 20%................................... 30%
(0.91 + 4.12 = 22.09%)................ (1.35 4.56 = 29.60%)
Rounded to 20%........................ Rounded to 30%
Mid Point of Rounded Allocations:
Consultant 75%; Presenter
25%.
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*FY 1997 National mean RVU weighted by FY 1997 national allowed services.
Consultation component includes CPT codes: 99241-99245; 99251-99255; 99261-99263; 99271-99275.
Presentation component includes CPT codes 99211-99215; 99221-99223; 99231-99233.
**Allocations rounded to nearest 5 percent.
The table illustrates two models. In the first model, the work RVUs
for outpatient/inpatient evaluation and management (E&M) services were
reduced by 50 percent to account for the fact that the presenting
practitioner is performing no ``new'' work. This reduction factor is
used under the current Medicare telemedicine demonstration project.
Under the demonstration, the work expense for the primary care
practitioner is reduced by 50 percent to reflect the fact that the
practitioner would have already billed for an initial E&M service prior
to initiating the teleconsultation. This model results in a payment
allocation in which the consulting practitioner would receive 80
percent of the payment and the presenting practitioner would receive 20
percent of the payment.
In the second model, we did not use a 50 percent reduction in
developing the allocation methodology, on the theory that there may be
instances in which the medical needs of the patient require a greater
amount of work on the part of the presenting practitioner. This model
resulted in an allocation in which the consulting practitioner would
receive 70 percent and the presenting practitioner would receive 30
percent of the total payment. Because of our lack of information about
likely teleconsultation scenarios, we believe that it is reasonable to
set the allocations at the midpoint of the values resulting from the
two models, that is, a 75 percent allocation for the consulting
practitioner and a 25 percent allocation for the presenting
practitioner.
We considered reducing the presenting practitioner's share in cases
in which the presenting practitioner is a nonphysician practitioner.
Thus, if a patient had been presented to a physician by a physician
assistant (PA), for example, we considered applying the PA payment rule
to the PA's allocation; that is, we would have used 85 percent of the
proposed 25 percent allocation as the payment basis for the presenting
practitioner. Using a hypothetical physician fee schedule amount of
$100, this would result in the following allocation for the consulting
[[Page 33887]]
practitioner and presenting practitioner (physician assistant):
Physician fee schedule for teleconsultation.................. $100.00
Less 75 percent consultant allocation........................ -75.00
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Balance...................................................... $25.00
PA percent of physician fee schedule......................... x .85
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PA allocation................................................ $21.25
We rejected this option because we believe that only one service is
being furnished and that service is a consultation; there is no
``presentation'' payable under the Medicare physician fee schedule. In
teleconsultation, the resenting practitioner is acting as directed by
the consultant. Therefore, in our view, he or she is acting as a
surrogate for the consultant rather than as a nonphysician
practitioner, and we decided that the payment rule for practitioners
should not apply. Thus, the following payment allocation would apply
for the consulting physician and a nonphysician presentation
practitioner (using the hypothetical fee schedule amount of $100):
Physician fee schedule for teleconsultation.................. $100.00
75 percent consultant allocation............................. 75.00
25 percent presentation allocation........................... 25.00
However, when a consultation service is furnished by a nonphysician
practitioner, rather than a physician, the amount of payment will be
made according to the appropriate percentage of the physician fee
schedule, which for most nonphysician practitioners is 85 percent.
Using the same hypothetical physician fee schedule amount as above, the
payment amounts for a nonphysician consulting practitioner and
referring practitioner are as follows (when the nonphysician consulting
practitioner's fee schedule is 85 percent of the physician fee
schedule):
Physician fee schedule for consultation...................... $100.00
Nonphysician payment rule.................................... x .85
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Nonphysician fee schedule amount............................. $85.00
75 percent consultant allocation............................. -63.75
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Presenting practitioner allocation........................... $21.25
Bundled Payment
We propose to use a bundled payment approach for teleconsultation
services; that is, a single Medicare payment for the total amount due
for the service will be made to the consulting practitioner. Under this
approach, a claim for a teleconsultation service will be submitted by
the consulting practitioner to his or her Medicare carrier. The carrier
will make the full payment to the consultant who, in turn, will remit
25 percent of the total to the presenting practitioner. The consultant
will be responsible for billing the beneficiary for coinsurance and
deductible amounts and also remitting 25 percent of the total to the
presenting practitioner. This proposal is consistent with our view that
only one service--a teleconsultation--is being provided. As stated
earlier, we believe that the presenting practitioner is not providing a
distinct service, but acting as a surrogate for the consultant. We
believe, moreover, that this approach is better for Medicare
beneficiaries because they would receive only one bill for the
coinsurance and deductible amount.
Note that the method of payment we have chosen for
teleconsultations raises some issues under the physician self-referral
law in section 1877 of the Act. Under this provision, a physician is
prohibited from referring a Medicare patient to an entity (which can
include another physician or a nonphysician practitioner) for the
furnishing of certain designated health services if the physician or a
member of the physician's immediate family has a financial relationship
with that entity. Section 1877 defines ``financial relationship'' as an
ownership or investment interest in the entity or a compensation
arrangement with the entity. It is the compensation aspect of the self-
referral law that could have a negative impact on teleconsultation
payments.
We believe that a presenting physician who refers a case to a
consulting practitioner has made a referral under the self-referral
law. Under section 1877(h)(5)(A), a physician's referral is defined, in
the case of an item or service covered under Part B, as the request by
a physician for the item or service, including the request for a
consultation with another physician (and any test or procedure ordered
by, or to be performed by (or under the supervision of) that other
physician. These referrals could potentially be prohibited if the
physician and the providing entity have a financial relationship, such
as a compensation arrangement. A compensation arrangement is defined in
the law broadly to include any arrangement involving any remuneration
between a physician and an entity (other than certain very narrowly
defined exclusions). ``Remuneration,'' in turn, is defined to include
any remuneration, paid directly or indirectly, overtly or covertly, in
cash or in kind. We have further defined the concept of
``remuneration'' in our regulations covering self-referrals for
clinical laboratory services in 42 CFR 411.351 to include any payment,
discount, forgiveness of debt, or other benefit made directly or
indirectly, overtly or covertly, in cash or in kind, by an entity to a
referring physician.
Our payment policy could place a presenting physician in the
position of violating section 1877 if the presenting physician receives
payments from the practitioner to whom he or she has referred and the
services at issue are designated health services. In order to avoid
such a result, we propose to interpret the payments that the consulting
practitioner will forward to the presenting physician as falling
outside of the definition of ``remuneration.'' That is, we will not
regard the consulting practitioner as actually making a payment to the
presenting physician, but as simply serving as a ``conduit'' to pass a
portion of the Medicare payment on to the presenting physician,
strictly as an administrative convenience to us. We do not believe this
interpretation violates the purpose of the self-referral law, which was
specifically designed to prevent entities that furnish certain health
services from purchasing referrals from physicians.
We considered requiring both the consulting and presenting
practitioners to submit separate claims. This alternative was rejected
because (1) two services are not being furnished; (2) the beneficiary
would receive two cost sharing bills; and (3) the claims processing
system would need to link claims from both practitioners to ensure that
the total payment does not exceed the payment ceiling provided under
section 4206 of the BBA. It would be difficult and costly to implement
claims processing systems modifications that would be capable of
identifying and linking related teleconsultation claims to prevent
overpayments from occurring. Such an effort would become even more
complex if two carriers were involved because the practitioners'
locations fell within separate carrier jurisdictions. Moreover, total
payment might exceed what the consultant would have otherwise received
if the presenting practitioner were to submit a claim for a
consultation at a higher intensity level than the consultant. For
example, the consulting practitioner might bill for a consultation
requiring only a detailed examination and low complexity medical
decisionmaking, whereas the presenting practitioner might bill for a
consultation with a
[[Page 33888]]
comprehensive examination and moderately complex decisionmaking. There
is a 40 percent difference in the Medicare RVU values between these two
services. Another overpayment could occur in those rare cases where the
factor for the pricing locality for the presenting practitioner is
higher than for the consulting practitioner.
Because of the difficulty in linking claims, we considered another
approach that would have involved separate claims, but without linking.
We considered establishing a new code for the presenting practitioner's
role and pricing it at 25 percent of the average consultation amount.
Under this option, the consultant's fee would be based on the
appropriate fee schedule and adjusted by the geographic practice cost
index, but would be reduced by the flat, national value paid to the
presenting practitioner. However, this alternative achieves anomalous
results; in several cases, the presenting practitioner would receive
more than the consulting practitioner. Therefore, we rejected this
option.
Coding: For teleconsultation coding purposes, we would develop
modifiers to use in conjunction with existing CPT codes for
consultation services. The purpose of the modifier is to identify the
service as a consultation furnished via telecommunications systems.
This approach conforms with our view that a teleconsultation is simply
a new way of delivering a consultation, rather than a new service.
We considered developing a new coding structure for
teleconsultations. We rejected this option, however, because it is
administratively cumbersome for both the medical community and the
Medicare program. First, the practitioner community is already familiar
with the current codes for consultation. We believe it will be easier
for practitioners to use a single modifier than an entirely new set of
codes. Second, separate teleconsultation codes would unnecessarily
double the number of current codes used for consultation services.
Proposed Regulatory Provisions
To reflect the above proposals and the payment provisions of
section 4206 of the BBA, we would add a new Sec. 414.62 (Payment for
consultations via interactive telecommunication systems) to our
regulations. We would specify, in paragraph (a), that Medicare total
payments for a professional consultation conducted via interactive
telecommunications systems may not exceed the current fee schedule
amount for the service when furnished by the consulting practitioner.
We would further specify that the payment (1) may not include any
reimbursement for any telephone line charges or any facility fees, and
(2) is subject to the coinsurance and deductible requirements of
section 1833(a)(1) and (b) of the Act. We would also specify that the
payment differential of section 1848(a)(3) of the Act applies to
services furnished by nonparticipating physicians.
In paragraph (b), we would specify that the beneficiary may not be
billed for any telephone line charges or any facility fees. In
paragraph (c), we would provide that payment to nonphysician
practitioners is made only on an assignment-related basis. Paragraph
(d) would provide that only the consultant practitioner may bill for
the consultation, and paragraph (e) would require the consultant
practitioner to provide the referring practitioner 25 percent of any
payments, including any applicable deductible or coinsurance amounts,
he or she received for the consultation.
Paragraph (f) would specify that a practitioner may be subject to
the sanctions provided for in 42 CFR chapter V, parts 1001, 1002, and
1103 if he or she (1) knowingly and willfully bills or collects for
services in violation of the limitations of Sec. 414.62 on a repeated
basis, or (2) fails to timely correct excess charges by reducing the
actual charge billed for the service to an amount that does not exceed
the limiting charge or fails to timely refund excess collections.
III. Response to Comments
Because of the large number of items of correspondence we normally
receive on Federal Register documents published for comment, we are not
able to acknowledge or respond to them individually. We will consider
all comments we receive by the date and time specified in the DATES
section of this preamble, and, if we proceed with a subsequent
document, we will respond to the comments in the preamble to that
document.
IV. Regulatory Impact Statement
We have examined the impact of this rule as required by Executive
Order 12866 and the Regulatory Flexibility Act (RFA) (Public Law 96-
354). Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, when regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis must be prepared for proposed rules with economically
significant effects (that is, a proposed rule that would have an annual
effect on the economy of $100 million or more or would adversely affect
in a material way the economy, a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or State,
local, or tribal governments or communities). The benefit changes in
this proposed rule resulting from the BBA will not result in additional
Medicare expenditures of $100 million or more for any single FY through
FY 2003. Therefore, this proposed rule is not considered economically
significant, and, thus, we have not prepared a regulatory impact
analysis.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, most hospitals, and most
other providers, physicians, and health care suppliers are small
entities, either by nonprofit status or by having revenues of $5
million or less annually.
Section 1102(b) of the Social Security Act requires us to prepare a
regulatory impact analysis for any proposed rule that may have a
significant impact on the operations of a substantial number of small
rural hospitals. This analysis must conform to the provisions of
section 603 of the RFA. For purposes of section 1102(b) of the Act, we
define a small rural hospital as a hospital that is located outside a
Metropolitan Statistical Area and has fewer than 50 beds.
We estimate that the cost of providing consultation services in
accordance with section 4206 of the BBA will be approximately $20
million in FY 1999 and approximately $90 million by FY 2003. Note that
the FY 1999 estimate reflects only a partial year estimate, given the
January 1, 1999 effective date for teleconsultation coverage. We
estimate that teleconsultation will cost approximately $270 million for
the first 5 years of coverage, as indicated below:
[[Page 33889]]
Medicare Costs
[In millions]
------------------------------------------------------------------------
FY 1999 FY 2000 FY 2001 FY 2002 FY 2003
------------------------------------------------------------------------
$19.......... $39 $54 $70 $88
------------------------------------------------------------------------
Additionally, this proposed rule would provide for payment
exclusively for professional consultation with a physician and certain
other practitioners via interactive telecommunication systems. Section
4206 of the BBA does not provide for payment for telephone line fees or
any facility fees associated with teleconsultation that may be incurred
by hospitals included in the telemedicine network.
Further, this rule does not mandate that entities provide
consultation services via telecommunications. Thus, this rule would not
require entities to purchase telemedicine equipment or to acquire the
telecommunications infrastructure necessary to deliver consultation
services via telecommunication systems. Therefore, this rule does not
impose costs associated with starting and operating a telemedicine
network.
For these reasons, we are not preparing analyses for either the RFA
or section 1102(b) of the Act because we have determined, and we
certify, that this proposed rule would not have a significant economic
impact on a substantial number of small entities or a significant
impact on the operations of a substantial number of small rural
hospitals.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 410
Health facilities, Health professions, Kidney diseases,
Laboratories, Medicare, Reporting and recordkeeping requirements, Rural
areas, X-rays.
42 CFR Part 414
Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases, Medicare, Reporting and recordkeeping
requirements, Rural areas, X-rays.
42 CFR chapter IV would be amended as follows:
A. Part 410.
PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS
1. The authority citation for part 410 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Sec. 410.1 [Amended]
2. Section 410.1, paragraph (a) is amended by adding a sentence at
the end of the paragraph to read ``Section 4206 of the Balanced Budget
Act of 1997 (42 U.S.C. 1395j) sets forth the conditions for payment for
professional consultations that take place by means of
telecommunications systems.''.
3. A new Sec. 410.75 is added to subpart B to read as follows:
Sec. 410.75 Consultations via telecommunications systems.
(a) General rule. Medicare Part B pays for professional
consultations furnished by means of interactive telecommunications
systems if the following conditions are met:
(1) Each of the referring and consultant practitioner is any of the
following:
(i) A physician as described in Sec. 410.20.
(ii) A physician assistant as defined in Sec. 491.2 of this
chapter.
(iii) A nurse practitioner as defined in Sec. 491.2 of this
chapter.
(iv) A clinical nurse specialist as described in Sec. 424.11(e)(6)
of this chapter.
(v) A certified registered nurse anesthetist or anesthesiologist's
assistant as defined in Sec. 410.69.
(vi) A nurse-midwife as defined in Sec. 405.2401 of this chapter.
(vii) A clinical social worker as defined in section 1861(hh)(1) of
the Act.
(viii) A clinical psychologist as described at Sec. 417.416(d)(2)
of this chapter.
(2) The services are furnished to a beneficiary residing in a rural
area as defined in section 1886(d)(2)(D) of the Act, and the area is
designated as a health professional shortage area (HPSA) under section
332(a)(1)(A) of the Public Health Service Act (42 U.S.C.
254e(a)(1)(A)). For purposes of this requirement, the beneficiary is
deemed to be residing in such an area if the teleconsultation
presentation takes place in such an area.
(3) The medical examination of the beneficiary is under the control
of the consultant practitioner.
(4) The consultation involves the participation of the referring
practitioner, as appropriate to the medical needs of the patient and as
needed to provide information to and at the direction of the
consultant.
(5) The consultation results in a written report that is furnished
to the referring practitioner.
(b) Definition. For purposes of this section, interactive
telecommunications systems means multimedia communications equipment
that includes, at a minimum, audio-video equipment permitting two-way,
real time consultation among the patient, consulting practitioner, and
referring practitioner as appropriate to the medical needs of the
patient and as needed to provide information to and at the direction of
the consulting practitioner. Telephones, facsimile machines, and
electronic mail systems do not meet the definition of interactive
telecommunications systems.
B. Part 414.
PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES
1. The authority citation for part 414 continues to read as
follows:
Authority: Secs. 1102, 1871, and 1881(b)(1) of the Social
Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(1)).
2. Section 414.1 is revised to read as follows:
Sec. 414.1 Basis and scope.
This part implements the following:
(a) The indicated provisions of the following sections of the Act:
1833--Rules for payment for most Part B services.
1834(a) and (h)--Amounts and frequency of payments for durable
medical equipment and for prosthetic devices and orthotics and
prosthetics.
1848--Fee schedule for physician services.
1881(b)--Rules for payment for services to ESRD beneficiaries.
1887--Payment of charges for physician services to patients in
providers.
[[Page 33890]]
(b) Sections 4206(a) and (b) of the Balanced Budget Act of 1997 (42
U.S.C. 1395j).
3. Section 414.62 is added to subpart A, to read as follows:
Sec. 414.62 Payment for consultations via interactive
telecommunications systems.
(a) Limitations on payment. Medicare payment for a professional
consultation conducted via interactive telecommunications systems is
subject to the following limitations:
(1) The payment may not exceed the current fee schedule amount of
the consulting practitioner for the health care services provided.
(2) The payment may not include any reimbursement for any telephone
line charges or any facility fees.
(3) The payment is subject to the coinsurance and deductible
requirements of section 1833(a)(1) and (b) of the Act.
(4) The payment differential of section 1848(a)(3) of the Act
applies to services furnished by nonparticipating physicians.
(b) Prohibited billing. The beneficiary may not be billed for any
telephone line charges or any facility fees.
(c) Assignment required for nonphysician practitioners. Payment to
nonphysician practitioners is made only on an assignment-related basis.
(d) Who may bill for the consultation. Only the consultant
practitioner may bill for the consultation.
(e) Sharing of payment. The consultant practitioner must provide to
the referring practitioner 25 percent of any payments, including any
applicable deductible or coinsurance amounts, he or she received for
the consultation.
(f) Sanctions. A practitioner may be subject to the applicable
sanctions provided for in chapter V, parts 1001, 1002, and 1003 of this
title if he or she--
(1) Knowingly and willfully bills or collects for services in
violation of the limitations of this section on a repeated basis; or
(2) Fails to timely correct excess charges by reducing the actual
charge billed for the service to an amount that does not exceed the
limiting charge for the service or fails to timely refund excess
collections.
(Catalog of Federal Domestic Assistance Program No. 93.774,
Medicare--Supplementary Medical Insurance Program)
Dated: February 8, 1998.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.
Dated: April 14, 1998.
Donna E. Shalala,
Secretary.
[FR Doc. 98-16278 Filed 6-19-98; 8:45 am]
BILLING CODE 4120-01-P
