OIG Report Highlights Telehealth Reimbursement Challenges

May 10, 2018 | Geoffrey R. Kaiser | Jonathan D. Salm | Compliance Investigations & White Collar | Health Services

The utilization of telehealth has flourished over the last decade as innovative technologies and new Medicare regulations have fueled telehealth’s growth. Between 2001 and 2015, Medicare telehealth spending increased by nearly 300% as a result of this boom. However, as the utilization of telehealth services has surged, so have the compliance issues associated with these services – underscoring the need for healthcare providers to scrutinize their telehealth claims prior to submitting them for reimbursement.

In fact, last month, the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) issued a report which revealed that Medicare paid nearly $3.7 Million for telehealth claims that did not meet the Medicare Part B reimbursement rules.

Generally, the rules require that telehealth services only be rendered through the use of two-way audio visual communications by an eligible distant site provider to a covered Medicare beneficiary when the beneficiary is located at a qualified originating site.

While there are a number of eligible distant-site providers, including physicians and nurse practitioners permitted under their respective state laws to render such services, the number of eligible originating sites is far smaller. Under the Medicare rules, originating sites must be “located in a health professional shortage area…that is either outside of a Metropolitan Statistical Area…or located in a county that is not included in a Metropolitan Statistical Area…or an entity participating in a Federal telemedicine project that has been approved by, or receive[d] funding from, the Secretary [of HHS] as of December 31, 2000, regardless of its geographic location.” (42 CFR § 410.78(b)(4)).

The exception to this rule is when telehealth services are rendered through the use of asynchronous store and forward technology, such as the emailing of x-rays from an eligible originating site to a distant-site provider for review. Yet, this exception only applies when the originating site is part of a Federal telemedicine project in Alaska or Hawaii, dramatically limiting the number of eligible providers who can utilize asynchronous store and forward technology.

The complicated reimbursement rules have created confusion among telehealth providers and Medicare Administrative Contractors (MACs) regarding when services can be billed and reimbursed. The OIG report found that of 100 sampled telehealth claims reviewed by OIG, over one-third did not satisfy the Medicare telehealth reimbursement rules. The OIG found that of the ineligible claims, 24 were the result of beneficiaries receiving services in non-rural settings. Of the remaining ineligible claims: seven were billed by ineligible institutional providers, three were billed as unauthorized originating sites, and the balance resulted from either a disallowed means of communication, a disallowed service, or a practitioner who was located outside the United States. OIG found that these errors were caused by the failure of certain MACs to implement edits which could have rejected certain ineligible claims and a lack of education among telehealth providers regarding the Medicare telehealth reimbursement rules.

These issues highlight the need for healthcare providers to be educated in the Medicare telehealth reimbursement rules and to diligently review Medicare telehealth claims before submission to ensure they are eligible to receive reimbursement for the rendered services. Contact your attorney if you believe you need support in understanding these complicated reimbursement requirements.

Related Publications


Legal updates and news delivered to your inbox