Inspector general's report finds mistaken payments for Medicare telehealth

Psychologists providing telehealth services should be aware of program requirements.

A report from the Office of the Inspector General of the Department of Health and Human Services (HHS OIG) found over 30 percent of claims for telehealth services provided in 2014-15 should not have been paid. This cost the Medicare program over $3.6 million, the April 13, 2018, report stated.

Looking at just a small sample of claims, the OIG found that 31 out of 100 claims did not meet Medicare’s telehealth requirements. The largest number, 24, failed to pass because the beneficiary was in a nonrural originating site. Seven claims were billed by ineligible practitioners and three claims were for services where the beneficiary was in a place that is not considered an originating site (such as the beneficiary’s residence).

Psychologists who provide telehealth services are advised to check carefully whether the locations of the beneficiaries they treat are considered eligible originating sites, even if they have simultaneous two-way communication. If the beneficiary is not at an eligible originating site, then the service will not meet Medicare’s telehealth requirements.

Examples of eligible originating sites include a practitioner’s office, hospital, critical access hospital, rural health clinic, federally qualified health clinic, hospital-based renal dialysis center, skilled nursing facility or community mental health center. A patient’s residence (Medicare refers to a patient as beneficiary) is not an originating site unless the patient is part of a demonstration project that is exempt from the current telehealth rules.

Medicare’s telehealth program requirements

Telehealth in Medicare is designed to address access challenges faced by beneficiaries in rural areas. Telehealth has several requirements, the most common being that the service must involve interactive audio and video telecommunication that provides real time communication between the practitioner and the beneficiary. Medicare also requires that the beneficiary be in an originating site defined as:

  • A county outside of a metropolitan statistical area (MSA).
  • A health professional shortage area (HPSA) that is either outside of an MSA or within a rural census tract.
  • An entity participating in a federal telemedicine demonstration project approved or funded by HHS as of Dec. 31, 2000.

In addition to paying the practitioner who is located at a distant site, Medicare also pays a fee to the facility at the originating site. A 2009 report by the Medicare Payment Advisory Committee found that claims seeking a fee for the practitioner but not the originating site were more likely to not meet Medicare’s telehealth requirements. Consequently, the OIG focused its review on telehealth claims billed by a distant site that did not include an originating site fee.

To address this problem of unallowable telehealth claims the OIG is recommending that the Centers for Medicare & Medicaid Services:

  • Conduct periodic postpayment reviews.
  • Work with the Medicare Administrative Contractors to implement all telehealth claim edits.
  • Educate practitioners about Medicare’s telehealth requirements.

The Health Resources and Services Administration offers a website tool known as the Medicare Telehealth Payment Eligibility Analyzer to help practitioners determine if a beneficiary is in an originating site eligible for telehealth under Medicare’s rules. Just enter a specific address and the analyzer tool determines if it is in a county outside an MSA, a HPSA or rural census tract. The analyzer tool cannot determine if the address is associated with a demonstration project that would exempt it from the rural requirement.