On November 27, 2013, the US Centers for Medicare & Medicaid Services (“CMS”) finalized a significant expansion of telehealth services (originally proposed in the July 19, 2013 issue of the Federal Register).  The finalized rule with comment was published on December 10, 2013 in CMS' annual update entitled "Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule ("PFS"), Clinical Laboratory Fee Schedule & Other Revisions to Part B for CY 2014." The final rule can be found at the Federal Register.

Change in the Definition of "Rural"

Specifically, CMS finalized its proposal to expand the definition of “rural” to include areas within Metropolitan Statistical Areas ("MSAs") that are classified by the Office of Rural Health Policy (“ORHP”) as “rural” and that are designated with a sufficiently high “Rural Urban Commuting Area” (“RUCA”) score.  After the change, with an effective date of January 1, 2014, telehealth services will be covered and reimbursable by Medicare when provided to beneficiaries by practitioners at a site that (1) is located outside a MSA, or (2) is located inside a MSA and designated as “rural” by the ORHP.  CMS is working with the Health Resources and Services Administration to develop an online tool to aid sites in determining their eligibility as an originating site for telehealth services.

Designation of Rural on Calendar Year

CMS also finalized a proposal to add stability to the coverage of telehealth services by designating an originating site as “rural” on December 31 of each calendar year and to maintain the designation for the following calendar year. CMS provided that this change would prevent originating sites from changing classifications mid-year due to changes in the site’s RUCA score or MSA classification.

Request Regarding Additionally Covered Telehealth Services

Finally, CMS requested updates and additions to the types of covered telehealth services, noting that such updates and additions should be classified in two categories: services that are similar to currently covered telehealth services and services that are not similar to currently covered telehealth services. In evaluating potential additions that are not similar to currently covered services, CMS will seek specific information indicating that the provision of the proposed telehealth services will be beneficial to beneficiaries.

All requests for inclusion of similar or new telehealth services must be submitted by December 31, 2013 to be considered for inclusion for the CY 2015 PFS.