On May 5, 2011, the Centers for Medicare and Medicaid Services (CMS) published a final rule that revises the Medicare Conditions of Participation (CoPs) for hospitals and critical access hospitals (CAHs) regarding the credentialing and privileging of telemedicine providers.1 Under the final rule, effective July 5, 2011, hospitals and CAHs are now permitted to credential telemedicine providers based on the review of those providers performed by another hospital or entity, provided that certain conditions are met. This “privileging by proxy” standard brings CMS regulations more closely in line with accreditation standards created by The Joint Commission and reduces the administrative burden on hospitals that seek to take advantage of the benefits of telemedicine.  

Summary of Final Rule

The final rule allows the governing body of a hospital or CAH whose patients are receiving telemedicine services to grant privileges in reliance on the credentialing and privileging decisions made by the distant-site hospital. In a significant expansion of the proposed rule published on May 26, 2010, the final rule also permits hospitals and CAHs to rely on credentialing and privileging decisions made by “distant-site telemedicine entities,” such as teleradiology groups and ambulatory surgery centers.

In order to take advantage of this standard, hospitals and CAHs must enter into a written agreement with the distant-site provider. If the agreement is with a distant-site hospital, it must specify that it is the responsibility of the governing body of the distant-site hospital to ensure that the credentialing and privileging process for the telemedicine physicians and practitioners it provides meets the requirements of the Medicare CoPs. If the agreement is with a distant-site telemedicine entity, it must specify that the distant-site telemedicine entity is a contractor of services to the hospital or CAH and, as such, furnishes the contracted services in a manner that permits the hospital or CAH to comply with all applicable CoPs, including those pertaining to credentialing and privileging. In addition, the parties must ensure through the telemedicine services agreement that all of the following provisions are met:

  1. The distant-site provider is either a Medicare-participating hospital or an entity with a credentialing and privileging process that at least meets the standards of the CoPs;
  2. The individual physician or practitioner providing the telemedicine services is privileged at the distant-site provider, which furnishes a current list of all of the physician’s or practitioner’s privileges;
  3. The individual physician or practitioner holds a license issued or recognized by the state in which the hospital where telemedicine services are to be received is located; and
  4. The hospital where services are received must conduct internal review of the distant-site physician’s or practitioner’s performance and send such information to the distant-site provider for use in its periodic appraisal of the physician or practitioner (such information must include, at a minimum, all adverse events resulting from the telemedicine services and all complaints received by the hospital about the physician or practitioner).

It should be noted that the final rule does not require hospitals and CAHs to use this proxy privileging process; rather, the practice is merely permitted.

Practical Considerations

The final rule affords hospitals and CAHs substantially more flexibility in credentialing and privileging telemedicine providers than did prior CMS regulations. In order to take advantage of this flexibility, hospitals and telemedicine providers should evaluate their service agreements and ensure that they meet the requirements of the final rule. In addition, hospitals and CAHs should review and revise their medical staff bylaws as needed in order to take advantage of the streamlined credentialing process.  

Hospitals and telemedicine providers should also be mindful of the requirements of state law, both with respect to licensure requirements for telemedicine services and, in light of the information exchange requirements of the final rule, peer review protection. The final rule does not affect state law requirements, which should be considered carefully in evaluating any telemedicine services arrangement.