State Medicaid and private payer reimbursement for telemedicine: an overview

Individual states in the USA were given the option of paying for telemedicine services with Medicaid (i.e. federal health-care funds administered by the state) in 1998, when the Health Care Financing Administration (HCFA) published final rules for Medicare payment for teleconsultations in health professional shortage areas (HPSAs). It was left to telemedicine practitioners in each state to negotiate the scope of the services covered with the state Medicaid office. Three reports of data gathered by 2002-03 surveys on state reimbursement policies have been reviewed, with additional information from a brief informal 2005 survey conducted by the author. In the seven years since 1998, 34 states have added coverage of telemedicine services to their Medicaid programmes, although there are wide variations in service coverage, payment policies, and geographical and other restrictions. There is less published information on private payer reimbursement. One survey performed by AMD Telemedicine (AMD) and the American Telemedicine Association (ATA) showed that over half of the 72 telemedicine programmes in 25 states delivering billable services were being reimbursed by private payers. In 1999, 43% of responding telemedicine networks saw reimbursement as a barrier to long-term sustainability, while in 2004 only 22% did so. It appears that some progress has been made in Medicaid and private payer reimbursement for telemedicine.