Medicare begins telemedicine coverage

Payers expected to expand coverage, too

Telemedicine is the 21st century’s answer to the old-fashioned house call. New technology gives patients access to consultations with specialists, home monitoring, and a wide range of potentially cost-effective medical services. But until now, most telemedicine programs were small-scale pilot projects due to lack of coverage by large payers.

Those days are coming to an end. Secretary of Health and Human Services Donna E. Shalala announced that beginning no later than January 1, 1999, Medicare Part B will cover telemedicine consultations, especially for beneficiaries in rural areas designated as health professional shortage areas.

The payments will be shared between the referring physician or clinician and the consulting physician or practitioner, but they will not include reimbursement for any equipment or utility fees. At the same time, the Shalala will fund a demonstration project to study the impact of telemedicine networks on Medicare beneficiaries with diabetes.

Telemedicine companies say the new Medicare benefits will encourage other payers to reimburse for telemedicine services. "Medicare and Medicaid reimbursement for telemedicine services is an essential step to the expansion of the telemedicine industry," says Raymond Schlachta, director of information technology services for Strategic Monitored Services, a telemedicine company in New York City. (For more on telemedicine, see Case Management Advisor, July 1997, pp. 118-119, 125.) For more on the new telemedicine benefits, or the diabetes demonstration project, access the Health and Human Services Web site at: http://