The Centers for Medicare & Medicaid Services (CMS) recently released its final Physician Fee Schedule for the 2014 calendar year (CY), which includes substantial changes supporting the expansion of telehealth, such as allowing for additional Health Professional Shortage Areas (HPSAs) to be eligible as originating sites and expanding Medicare coverage for additional telehealth services in the upcoming year.

Expansion of the Geographic Criteria for Originating Sites

In the final rule, CMS modified its regulations with respect to originating sites to allow for the inclusion of additional HPSAs as originating sites for telehealth services. Specifically, CMS modified the definition of “rural” under Section 332(a)(1)(A) of the Public Health Service Act (PHSA). Previously, CMS interpreted “rural” under Section 1834(m)(4)(C)(i)(I) of the PHSA to mean “an area that is not located within a metropolitan statistical area (MSA).” The final rule modified the definition of “rural” by defining it to include “geographic areas located in rural census tracts within MSAs.” CMS stated that expanding this definition would allow for the inclusion of additional HPSAs as areas for telehealth originating sites and will provide access to healthcare services for Medicare beneficiaries residing in rural areas.

Additionally, CMS also finalized its proposal to change the policy for determining geographic eligibility for an originating site to be established and maintained on an annual basis. In CY 2014, geographic eligibility for Medicare telehealth originating sites will be determined each calendar year based upon the status of the area as of December 31 of the prior calendar year.

Additions to List of Telehealth Services

In the final rule, CMS added CPT codes 99495 and 99496 for transitional care management (TCM) services to the list of telehealth services on a Category 1 basis. Both TCM CPT Codes will be covered in CY 2014 as Medicare telehealth services.

Update to the Telehealth Originating Site Facility Fee Payment Amount

For CY 2014, the payment amount for the telehealth originating site facility fee is 80% of the lesser of the actual charge or US$24.63 (which is a 0.8% increase from US$24.43 in CY 2013).

Squire Sanders lawyers have significant experience advising clients on telemedicine reimbursement issues and continue to monitor regulatory changes in this area. For more information regarding how we can assist you, please contact your principal Squire Sanders lawyer or one of the lawyers listed in this publication.