Health Industry Washington Watch : Washington DC Healthcare Industry Law Firm : Reed Smith : Health Industry Washington Watch : Regulations, Medicare/Medicaid, Governmental Organizations

On May 5, 2011, CMS published a final rule revising the hospital conditions of participation (COP) related to the credentialing and privileging of physicians who provide telemedicine services. CMS includes both teleradiology (non-simultaneous) services and telehealth (simultaneous) services within the definition of telemedicine. In short, the final rule allows the governing body of a hospital or critical access hospital (CAH) to rely upon the credentialing and privileging decisions made by a distant-site hospital or telemedicine entity when making its own decisions on privileges for the individual distant-site physicians and practitioners providing such services. Certain conditions must be met under this rule, including a written agreement with the distant-site hospital or telemedicine entity to ensure that the distant-site entity, acting as a contractor of services, furnishes its services in a manner that enables the hospital or CAH to comply with all applicable COPs and standards for the contracted services, including the credentialing and privileging requirements regarding its physicians and practitioners providing telemedicine services. The rule is effective July 5, 2011.

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CMS has issued guidance to state Medicaid directors on Section 6505 of the ACA, under which a state may not make payments for items or services provided under the state Medicaid plan or under a waiver to any financial institution or entity located outside of the United States. The provision is effective January 1, 2011, unless the Secretary determines that implementation requires state legislation other than funding legislation) to comply with this provision. According to the CMS guidance, certain tasks that support the administration of the Medicaid state plan (e.g., outsourcing enrollment or claims adjudication call centers) that may require payments to financial institutions or entities located outside of the U.S. are not prohibited by the statute. However, CMS states that payments for items or services provided under the state plan to financial institutions or entities (e.g., provider bank accounts or business agents) located outside of the U.S., Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa are prohibited. CMS also asserts that the ACA provision prohibits payments to telemedicine providers and pharmacies located outside of the U.S. or its territories. The impact on US-based telemedicine suppliers who employ or contract with physicians who provide services from outside the US via electronic means is unclear. 

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On May 26, 2010, CMS published a proposed rule to revise the conditions of participation for both hospitals and critical access hospitals to allow for a new credentialing and privileging process for physicians and practitioners providing telemedicine services. According to CMS, the intention of the rule is to eliminate "regulatory impediments and allow for the advancement of telemedicine nationwide while still protecting the health and safety of patients."  CMS noted that the Joint Commission had agreed to drop standards approving of "proxy" credentialing of telemedicine practitioners effective July 15, 2010. The proposed rule is intended to allow a hospital reviewing the application of a physician who will provide services via telemedicine to rely on the credentialing done by a distant-site hospital providing the telemedicine services. CMS will accept comments on the proposed rule until July 26, 2010.

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