Telehealth in NY: Compliance Requirements Create Reimbursement Challenges

June 13, 2018 | Jeffrey P. Rust | Compliance, Investigations & White Collar | Health Services

The utilization of telehealth services has increased significantly over the last decade. The advent of new technologies and the development of far reaching and readily available wireless and cellular networks have made instantaneous communication with medical professionals possible. Considering the demand for healthcare in remote locations, the growth of the geriatric population, and the need to contain the rising cost of healthcare, it is not surprising to see the use of telehealth services becoming prominent within the health care industry.  However, as is expected with rapid technology advancement in healthcare, compliance and reimbursement challenges can create obstacles and confusion for both providers and patients.  A report recently published by the U.S. Department of Health and Human Services Office of the Inspector General (OIG) found that of 100 sampled telehealth claims reviewed, over one-third did not satisfy the Medicare requirements for reimbursement for telehealth services resulting in an estimated $3.7 Million in ineligible claims.[1] While the OIG Report analyzed Medicare claims, similar challenges exist for New York-based providers seeking reimbursement for telehealth services from Medicaid and commercial health plans.

Telehealth in New York

On January 1, 2016, New York State amended the New York Public Health, Social Services and Insurance Laws to require commercial insurers and the Medicaid program to provide coverage for telehealth services to the same extent those services would have been covered had they been rendered in person.[2] Yet, while the legislation requires New York health insurers to provide coverage for such telehealth services, it does not require insurers to reimburse providers for telehealth services at the same rate for the same services rendered in person and, moreover, places strict requirements on when and where telehealth services may be rendered to qualify for reimbursement.[3]

Reimbursement Requirements

Under the New York Public Health law (the NYPHL), “Telehealth” means

the use of electronic information and communication technologies by telehealth providers to deliver health care services…includ[ing] the assessment, diagnosis, consultation, treatment, education, care management and/or self-management of a patient. Telehealth [does] not include delivery of health care services by means of audio-only telephone communication, facsimile machines, or electronic messaging alone…telehealth [is] limited to telemedicine, store and forward technology, and remote patient monitoring.[4]

The law therefore only permits reimbursement when a telehealth provider uses telehealth technologies to perform the telemedicine services, or if the physician utilizes remote patient monitoring or store and forward technology. Further limitations on telehealth services exist within the definitions of the various telehealth services.

The NYPHL defines “Telemedicine” as

the use of synchronous, two-way electronic audio visual communications to deliver clinical health care services…includ[ing] the assessment, diagnosis, and treatment of a patient, while such patient is at the originating site and a telehealth provider is at a distant site.[5]

Similar to Medicare reimbursement requirements, under New York law, telehealth providers may only receive reimbursement for telemedicine services when diagnosing and treating a patient using two-way electronic audio visual communications, and only if the patient is located at a qualifying “originating site” within New York State. Qualifying “originating sites” include hospitals, hospices, mental health facilities, physician’s or dentist’s offices located within the state of New York, licensed adult care facilities and elementary and secondary schools. [6] This means a qualified telehealth provider may only receive reimbursement for telemedicine services when the patient is located at one of the specifically enumerated originating sites. However, while the number of sites where New Yorkers may receive reimbursable telemedicine services is limited, the same restrictions do not limit where telehealth providers may render the telemedicine services.[7]

In addition to telemedicine, telehealth services also include care rendered through remote patient monitoring and store and forward technology. Remote patient monitoring is

the use of synchronous or asynchronous electronic information and communication technologies to collect personal health information and medical data from a patient at an originating site that is transmitted to a telehealth provider at a distant site for use in the treatment and management of medical conditions that require frequent monitoring.[8]

Unlike telemedicine, which requires the patient to be located at a specifically enumerated originating site, those same restrictions do not apply when the telehealth provider is rendering services via remote patient monitoring. Under the NYPHL, a telehealth provider can be reimbursed for remote patient monitoring while the patient is anywhere in the world. [9] As a result, telehealth providers can receive reimbursement for monitoring a patient’s cardiac rhythm being tracked by a cardiac monitor implanted in the patient’s chest while the patient is at home in New York or traveling on vacation.

Store and forward technology is defined as

the asynchronous, electronic transmission of a patient’s health information in the form of patient specific digital images and/or pre-recorded videos from a provider at an originating site to a telehealth provider at a distant site.[10]

Unlike remote patient monitoring, New York has placed strict restrictions on when and where store and forward technology services can be rendered. Under the NYPHL, for a telehealth provider to receive reimbursement for store and forward technology services, the patient must be located at an originating site.[11] An example of store and forward technology would be a hospital sending x-rays of a patient’s broken arm to the patient’s orthopedic surgeon for review and interpretation while the surgeon is out of state.

Challenges to Overcome

These advances in telehealth coverage have allowed many New Yorkers to access care which might not otherwise be available. However, barriers still exist. Two significant challenges to the use of telehealth in New York are (1) confusion surrounding telehealth requirements and (2) the level of reimbursement telehealth providers will receive for their services. As evidenced by OIG’s Report, many providers are often not aware of when and how they may render telehealth services to receive reimbursement for those services. This issue is only compounded by the second challenge. Though legislation has been proposed to require public and private insurers to reimburse telehealth services at the same rate as if the services were rendered in-person[12], currently, the reimbursement rates are being set by the insurers may be less than the reimbursement rates for in-person services. This lack of parity in payment rates creates a disincentive to providers’ use of telehealth. These challenges when taken together may inhibit the use and advancement of telehealth in New York.

Reprinted with permission from the Nassau County Bar Association.

This article was co-authored by Jonathan Salm.


[1] See U.S. Dep’t of Health and Hum. Resources, Office of Inspector General, CMS Paid Practitioners for Telehealth Services That Did Not Meet Medicare Requirements, A-05-16-00058 (Apr. 2018).
[2] See generally Pub. Health Law § 2999-dd, N.Y. Soc. Serv. Law § 367-u, and Ins. Law § 4306-g.
[3] See generally 2015 Bill Text NY A.B. 2552 (there is no language within the legislation requiring insurers to reimburse telehealth providers at the same rate as if those services had been rendered in person).
[4] Pub. Health Law § 2999-cc(4) (Consol. 2018).
[5] Pub. Health Law  § 2999-cc(5) (Consol. 2018).
[6] Id.
[7] Pub. Health Law § 2999-cc(1) (A Distant Site is defined as “a site at which a telehealth provider is located while delivering health care services by means of telehealth.”).
[8] Pub. Health Law § 2999-cc(7) (Remote patient monitoring may be ordered by a licensed physician, nurse practitioner, or midwife with which the patient has a substantial and ongoing relationship.).
[9] See id.; Pub. Health Law § 2999-cc(1) (“when a patient is receiving health care services by means of remote patient monitoring, the patient’s place of residence [must be] located within the state of New York or other temporary location located within or outside the state of New York.”).
[10] Pub. Health Law § 2999-cc(6).
[11] Id.
[12] See 2017 Bill Text NY A.B. 1421 (proposing language amending the New York Public Health and Insurance laws to require insurers to reimburse telehealth providers for telehealth services at the same rate as the same services would be reimbursed when not delivered via telehealth).

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