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The New Frontier: Telemedicine & Legal Issues, Kentuckydoc, Fall 2014, Volume 6, Issue 3


Practice Areas

Kentuckydoc, Fall 2014, Volume 6, Issue 3

Authored by Lisa English Hinkle

Telemedicine is poised to become the healthcare industry's most important new tool for increasing access to physician services, managing chronic diseases and addressing the critical shortage of physicians. Technological advancements, the Affordable Care Act's expansion of coverage, the increasing emphasis on quality of care, and the proliferation of new medical applications are pushing telemedicine into the mainstream of medicine. Despite its incredible potential to revolutionize health care and the seemingly limitless possibilities, telemedicine presents many risks both practical and legal that must be navigated with care as health care providers begin to integrate telemedicine into the everyday practice. Caution is required, as regulatory frameworks are being developed by state medical licensing boards and state and federal governments. Numerous barriers to providing telemedicine still exist including concerns about patient privacy and safety, patchwork public and private reimbursement policies.

Defining Telemedicine

Simply defining telemedicine can be tricky, as there is no single definition. The U.S. Department of Health and Human Services and its Centers for Medicare & Medicaid Services ("CMS") defines "telemedicine" as the "provision of clinical services to patients by practitioners from a distance via electronic communications."[1] The American Telemedicine Association, a nonprofit organization dedicated to integrating telemedicine into health care systems, defines it as "the use of medical information exchanged from one site to another via electronic communications to improve a patient's clinical health status."[2]

In April, the Federation of State Medical Boards ("FSMB") adopted a model telemedicine policy and defined "telemedicine" as "the practice of medicine using electronic communications, information technology or other means between a licensee in one location, and a patient in another location with or without an intervening healthcare provider."[3] On the heels of the FSMB policy, the American Medical Association ("AMA") approved "guiding principles" regarding telemedicine in June, but offered no single definition. The AMA report instead addresses telemedicine within three broad categories of telemedicine technologies: store-and-forward telemedicine, remote monitoring telemedicine, and real-time interactive telemedicine services.[4]

At the state level, Kentucky's Medical Practice Act[5] defines telehealth as "the use of interactive audio, video, or other electronic media to deliver health care. It includes the use of electronic media for diagnosis, consultation, treatment, transfer of medical data and medical education." Telehealth is often used as a synonym for telemedicine, but precise definitions, as evident from above, may differ.[6]

It is also important to note what telemedicine may not be. According to CMS, telemedicine does not include phone calls, emails, images transmitted via fax, and text messages without the visualization of the patient.[7] On the other hand, the American Telemedicine Association ("ATA") has interpreted telemedicine to include transmission of an evaluative or therapeutic act through any means, method, device, or instrumentality, including emails and phone calls.

A Few of the Risks Reimbursement

Medicare has certainly struggled with how to address and reimbursement telehealth services, while it has embraced e-prescribing. Currently, to qualify for Medicare reimbursement of telehealth services, a beneficiary must be located in an area outside a metropolitan statistical area or in rural health professional shortage area ("HPSA"). In addition, Medicare " will only pay for a face to face, interactive consultation service where the patient is present in an approved healthcare facility (hospitals, rural health clinics, skilled nursing facilities, physician offices and community mental health centers), known as an "originating site." As a condition of payment, an interactive audio and video telecommunications system must be used that permits real-time communication between the provider, at the distant site, and the beneficiary, at the originating site.

Professionals who may administer telehealth services and receive payment for covered Medicare services include physicians, physician assistants, nurse practitioners, nurse-midwives, clinical nurse specialists, clinical psychologists and clinical social workers, and dieticians or nutrition professionals. In July of 2014, CMS released its CY 2015 Physician Fee Schedule which will expands Medicare-reimbursable telehealth services to include remote medical services, psychological testing, psychotherapy, prolonged office visits, annual wellness check-ups and non-face-to-face chronic care management as well as psychiatric and behavioral health services. These are welcome changes and cover key areas that have, to date, not been reimbursable. Under the proposed rule, CMS added codes for psychoanalysis and family psychotherapy as well as codes that will allow mental health providers to report sessions that require more than the one hour visit.

In July of 2013, Kentucky Medicaid issued final rules expanding the coverage of telemedicine services for Medicaid beneficiaries. Although providers are still limited to using only interactive video-conferencing to qualify for reimbursement under Kentucky's new rules, Medicaid beneficiaries now have access to a broader list of providers and telemedicine services.

Providers have reason to be hopeful about future policy changes that will expand Medicare and Medicaid payment incentives for the use of telemedicine, but also must be sure to stay apprised of any restrictions that may affect their billing practices and understand what the requirements are for reimbursement.


One of the most important barriers to providing telemedicine services are state licensing requirements. Physicians as well as other health care providers must be aware of any specific or heightened licensure requirements for each jurisdiction where their services may reach out of state patients. Even when seeking to provide telemedicine services only within the licensed state, providers may have to abide by special licensure requirements when they are in a different location than the patient.

According to FSMB, as of June 2013, eleven state medical boards issue a special purpose license, telemedicine license, or license to practice medicine across state lines to allow for the practice of telemedicine. Most states, however, still require physicians engaging in telemedicine to be licensed in the state where the patient is located, with limited exception for consultations.[8] The Kentucky Board of Medical Licensure has stated that for telemedicine purposes, physicians located outside Kentucky but actively practicing medicine for Kentucky patients within must holds the same license as a physician practicing in Kentucky. In other words, a Kentucky medical license is required for out of state physicians to practice telemedicine in Kentucky.[9]

The FSMB adopted a Model Policy that outlines parameters for the appropriate use of telemedicine. The purpose of the policy is to provide guidance to state medical boards for regulating the use of telemedicine technologies in the practice of medicine. The FSMB, however, maintains Kentucky's requirement of licensure for each physician providing telemedicine on the patients located within the state. As the use of telemedicine becomes more common, licensure portability will no doubt increasingly become a hot topic, as state boards, associations, and federal and state entities look for ways to expand access to care while also ensuring patient safety and medical quality.

Privacy & Security of Patient Records & Information

Relying on telemedicine technology can present serious issues concerning patients' protected health information. Providers using technology must ensure that they maintain the same HIPAA compliant standards of written policies and procedures as they do for face-to-face encounters. Further, providers must ensure that secure channels exist before engaging in physician-patient interactions and understand how and what patient information is collected, stored, or transferred. Kentucky's Telehealth Network is instrumental in approving telehealth systems for use in the state.

Keep in mind that some jurisdictions, including Kentucky, require specific informed consent of a patient before telehealth services may be provided, which must of course be documented in a patient's medical record.[10]

Fraud & Abuse

Providers who offer telemedicine services must be aware of fraud and abuse issues unique to telemedicine. Telemedicine generally necessitates business arrangements between health care entities and involves the use of infrastructure, equipment and support. Arrangements must be structured in compliance with the Anti-Kickback Statute, the Stark Law and state prohibitions against fee splitting. Business arrangements may often be structured to comply with the Anti-Kickback Statute's safe harbors, which require written lease agreements that do not vary based upon patient utilization. Arrangements that involve, for example, free telemedicine equipment, "per-click" payments, or advertisements on physician websites present risks that should be carefully analyzed to assure compliance. Likewise the exceptions to the Stark Law, which prohibits self-referrals for designated health services, may apply to individual arrangements.


Widespread adoption and use of telemedicine is inevitable; so, too, is the potential for noncompliance and a minefield of problems. The above risks are just a few of the issues that providers must keep in mind as they establish innovative and exciting telehealth services. Telehealth services are the way of the future and will ultimately increase the efficiency and quality of health services.

Lisa English Hinkle is a Member of McBrayer law. Ms. Hinkle concentrates her practice area in healthcare law and is located in the firm's Lexington office. She can be reached at lhinkle@mcbrayerfirm.com or at (859) 231-8780, ext. 1256.

This article is intended as a summary of federal and state law and does not constitute legal advice.

[1] 76 Fed. Reg. 25553 (May 5, 2011).

[2] ATA, What Is Telemedicine?, available at www.americantelemed.org/learn/what-is-telemedicine.

[3] Federation of State Med. Bds., "Model Policy for the Appropriate Use of Telemedicine Technologies in the Practice of Medicine (2014)," available at http://www.fsmb.org/pdf/FSMB_Telemedicine_Policy.pdf.

[4] AMA, Report of the Council on Medical Service, Coverage of and Payment for Telemedicine, June 2014.

[5] KRS 311.550(17).

[6] See The Joint Commission, Hospital Accreditation Standards, Glossary (Oakbrook Terrace, IL 2013).

[7] 42 C.F.R. 410.78(a)(1),(3).

[8] Fed'n State Med. Bds., Telemedicine Overview, Board-by-Baod Approach (Jun. 2013), available at www.fsmb.org/pdf/GRPOL_Telemedicine_Licensure.pdf.

[9] Kentucky Board of Medical Licensure, Board Opinion Regarding Use of Telemedicine Technologies in the Practice of Medicine (June 19, 2014).

[10] Id.

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