Other states are ahead of the curve. New legislation passed in Texas will greatly expand the scope of telemedicine applications in that state by lifting state-imposed Medicaid reimbursement restrictions on who can provide services and how services are provided; prohibiting third-party payors from excluding a telemedicine service solely because the service is not provided through a face-to-face consultation; extending grant opportunities for purchasing telemedicine technology to physicians and health care facilities; and establishing border health and technology pilot projects.

Although no such legislation action is on the General Assembly’s radar screen in Pa., a series of new developments may jumpstart the use of telemedicine in this state. Medicare has opened a door by recently agreeing to reimburse physicians and health care practitioners for a list of health care services delivered via telecommunications channels. Researchers at the UPMC Health System have begun to implement communications technologies to circumvent the need for an expensive telemedicine infrastructure in the state, and the health system is collaborating with the U.S. Air Force on a new telemedicine project receiving defense funding. Geisinger Health System is looking to expand the telemedicine links between its two tertiary hospitals and its affiliated clinics, hoping to recoup technology and transmission costs through care efficiencies and procedure volume. In eastern Pa., a private company has contracted with a network of physicians and is marketing directly to employers the ability to provide employees with primary care teleconsultations without leaving the workplace.

Expansion Obstacles

The HealthNet telemedicine pilot project, introduced under Gov. Casey in 1993, had provided telemedicine equipment and transmission free of charge to eight rural sites in northern Pa., linking them to three medical schools: University of Pittsburgh, Penn State Milton S. Hershey and Temple University, according to Barbara Barnes, M.D., who coordinated the program for Pitt and is now associate dean for continuing medical education at the University of Pittsburgh School of Medicine.

Pitt’s faculty and staff gave a total of 25 to 30 teleconsultations under the program, including neurologic, orthopedic, pediatric, dermatologic and other types, says Barnes, but interest in the program waned because most of the benefit was to the patients and not to physicians. Many physicians, Barnes notes, felt that the system did not use physicians’ time efficiently and that it was easier to refer a patient to a specialist than to have to schedule a teleconference and leave the office to travel to the teleconference site.

Rural physicians, she adds, may have felt threatened by the program, as their normal referral networks did not coincide with the program’s referral channels. The rural sites had more of an interest in education than consultation, adds Barnes, and Pitt currently uses the program’s equipment to transmit grand rounds.

Both Penn State and Temple said they not using telemedicine at this time.

One common setting for telemedicine is correctional care in prisons, with 15 to 20 states now using it extensively for general health care, cardiology and mental health, according to John Linkous, executive director of the American Telemedicine Association. The service in that setting is cost-effective, given the expense required to move prisoners, and is wholly paid for under a negotiated health services contract between the correctional facilities and the medical institution providing the services, Linkous adds.

UPMC did nearly 1,000 teleconsultations for a prison in central Pa. from 1998 to 1999, but the program was too costly to maintain, given the professional fees and transmission costs, while the high volume of utilization eventually justified on-site physicians, says Barnes.

The high cost of the technology infrastructure is a big obstacle to telemedicine’s expansion, especially given the inherently low utilization of the technology for specialty and sub-specialty consultations, and reimbursement restrictions would need to be removed to recoup those costs, notes Barnes.

Reimbursement obstacles remain. Although Medicaid has allowed for reimbursement for telemedicine services since 1998, states must satisfy federal requirements of efficiency, economy and quality, and many states have not yet chosen to do so. According to Pa. Department of Public Welfare spokesperson Jay Pagni, telemedicine is not reimbursable through Medicaid in Pa. and has not been discussed as a future add.

The outlook does not look brighter with private insurers. Aetna does not pay directly for a telemedicine service in its fee-for-service products, according to Aetna spokesperson Walt Cherniak, who notes that the health industry still needs to work out a number of operational issues, such as what clinical situations would be appropriate and not appropriate for telemedicine and how to monitor and document specific services provided by telemedicine. For its capitated products, he notes, Aetna regards a telemedicine consultation as analogous to a primary care physician using the telephone in lieu of a patient office visit.

Highmark Blue Cross Blue Shield generally does not cover telemedicine services for its commercial products or its Medicare HMO, according to spokesperson Denise Grabner, who notes that access to health care services is not an issue in Highmark’s service area because of the size of its physician network. Access may be more of an issue in a large state like Texas, she says, where its legislature recently passed legislation that prohibits insurers from denying coverage solely because a medical service is not delivered face-to-face. Grabner says that Highmark encourages face-to-face interactions between physicians and their patients, and has seen no physician demand for coverage of telemedicine services.

Independence Blue Cross also does not cover telemedicine services, according to spokesperson Chris Rathke.

State regulations also impede the expansion of telemedicine. Although Pa. has no regulations specific to telemedicine, Pa.’s Medical Practice Act does not allow physicians in other states to manage the care of, or make treatment decisions for, a patient in the Commonwealth unless they are licensed to practice medicine in Pa., according to Gerald Smith, Esq., senior counsel at the Pa. Department of State. The Act does allows consultation by non-Pa.-licensed physicians at the request of a Pa. physician who is managing the care of a patient in Pa., he adds.

Smith says that the Act protects Pa.’s residents from "Viagra mills" that may try to prescribe drugs over the Internet, or from low-bidding physicians from other states having Pa. patients funneled to them without the involvement of their family physician.

As for regulation of telemedicine practices within Pa.’s borders, Smith believes that the professional and vocational standards of medical practice contained in Title 49 of Pennsylvania Code are adequate to cover those practices, just as they cover supervisory requirements of physician assistants at satellite offices or prescribing of controlled substances by non-physicians.

Medicare’s Reimbursement Expansion

Effective Oct. 1, 2001, Medicare has agreed to reimburse physicians and health practitioners for certain telehealth services, as required by the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA). The Act defined Medicare telehealth services as professional consultations (CPT codes 99241 through 99275), office or other outpatient visits (codes 99201 through 99215), individual psychotherapy (codes 90804 through 90809) and pharmacologic management (code 90862).

The reimbursement applies only for patients who are in a county that is not included in a metropolitan statistical area, or who is in an area designated as a rural health professional shortage area, and is for the full amount that the physician or practitioner would have been paid under Medicare had the service been furnished without the use of a telecommunications system, plus a $20 facility fee for the originating site, to be increased in future years by the percentage increase in the Medicare Economic Index.

The services must be delivered using, at a minimum, an audio-video telecommunications system permitting two-way, real-time interactive communication between the patient and physician or practitioner at the distant site. Telephones, fax machines and e-mail systems are specifically ruled out of the definition of an eligible telecommunications system.

A referring practitioner, or "telepresenter" is not required at the originating site, unless one is deemed medically necessary by the physician or practitioner at the distant site, and payments made to the distant site are not to be shared with a referring practitioner in order to avoid violation of the anti-kickback statute. A referring practitioner could, however, bill and receive payment for non-telehealth services that he or she would otherwise be allowed to provide under the Medicare statute, including a medically necessary office visit, outpatient or inpatient visit preceding or subsequent to a telehealth service, or other medically necessary services requested by the physician or practitioner at the distant site. Medicare beneficiaries are still responsible for any deductible amount and Medicare coinsurance.

While Medicare’s reimbursement expansion may spark fresh interest by health facilities to establish telemedicine channels, such interest still faces constraints. The expansion has not been raised by CEOs at Pa.’s rural hospitals, who are still focused on the state’s medical malpractice crisis, according to Cheri Rinehart, vice president of integrated delivery systems for the Hospital & Healthsystem Association of Pennsylvania. Rural sites still need to be furnished with the teleconferencing equipment, she notes. In addition, she says, all state licensing requirements for health practitioners remain in place, effectively banning out-of-state physicians from using telemedicine in Pa. unless they are licensed in Pa. to treat patients in Pa., contribute to Pa.’s CAT Fund and have medical liability coverage for Pa.

Geisinger Health System, whose service area includes 57 sites in 31 Pa. counties, does not feel that there are large enough geographic gaps in Pa.’s health care access to sustain the model of telemedicine embodied by the BIPA reimbursement expansion, according to James Walker, M.D., Geisinger Health System’s Chief Medical Information Officer. Many of Geisinger’s clinics have secondary care available, he says, and no patient is more than one hour from its hospitals, while scheduling physicians for teleconsultations remains costly and difficult.

Expanding Uses of Telemedicine

Despite telemedicine reimbursement limitations by third-party payors and an apparently cool reception by Pa. providers to Medicare’s telemedicine reimbursement expansion, there appear to be some growth sectors for telemedicine in Pa.

The most widely used setting for telemedicine today is teleradiology, in which digitized images are exchanged between parts of a hospital, off-site clinical radiology labs and physicians’ homes, according to Linkous. Other types of telemedicine currently used, he adds, include cardiac event monitoring, in which a patient with congestive heart failure wears a device that sends data to a remote cardiologist; mental health consultations; pathology; dermatology and ophthalmology.

UPMC physicians are currently serving hospitals in Palermo, Italy through its transplant pathology telemedicine program, says John Gilbertson, M.D., director of research and development for UPMC’s Center for Pathology and Oncology Informatics. Digitized images are transmitted from a camera on a microscope in Italy to UPMC physicians at their homes, who use a computer’s chat feature to consult with physicians in Italy. A "whole slide" technique is being prototyped at UPMC, says Gilbertson, which uses a robotic system of cameras capable of imaging an entire slide and assembling it on a website, allowing pathologists at a remote site to zoom and pan, allowing access to the entire case.

Gilbertson notes that the ability to share slides, enjoyed by pathologists at most academic medical centers, allows for case-specific consultation by experts in several fields, e.g., prostate or colon cancer, at one medical center. He notes that pathologists and radiologists routinely bill for such services, since professional interpretation in those specialties does not depend on face-to-face interaction with patients.

Another telemedicine innovation has gone in the opposite direction, attempting to increase its reach and frequency of use by circumventing need for an expensive telemedicine infrastructure, says Paul Chang, M.D., director of radiology informatics at UPMC and Pitt Medical School’s Radiology Department. Whereas a digital-based radiology capability typically requires a multi-thousand dollar workstation, archive and high-speed transmission lines, says Chang, Pitt and UPMC have developed a "dynamic transfer syntax" to deliver streaming radiological images using web browsers with only DSL or cable modem connections, which most web-based PCs have. The system can deliver full-fidelity images—accompanied by expert interpretation—in seconds to the desktops of physicians at any of UPMC’s hospitals and is used by 100 sites nationally, adds Chang.

UPMC physicians don’t use the system unless invited for interpretation by physicians in settings without subspecialty expertise, Chang explains, because the professional interpretation fee goes to the academic medical center instead of the local physician. Used cooperatively between larger and smaller institutions, he says, the system can reduce the number of unnecessary patient exams and transfers to tertiary facilities.

The system can also be used to exploit physicians, Chang warns, in a scenario where a for-profit teleradiology company provides subspecialty expertise to rural hospitals for a fee and "cherrypicks" the lucrative CT reimbursement, leaving local radiologists to do the more time-consuming but lower-reimbursed upper GIs and mammograms. Chang says he has seen companies in the south and midwest who operate in that fashion, causing local radiologists to feel threatened by this entrepreneurial model of telemedicine.

UPMC Health System and the U.S. Air Force Medical Service are collaborating on a telemedicine project funded by $8.5 million in the defense spending bill for 2002. UPMC physicians will consult in three specialties—dermatology, pathology and radiology—transmitting images from biopsies and CT scans taken in the field to local doctors, who then would give real-time opinions to physicians overseas through satellite hook-ups. UPMC officials said the project is being driven largely by a drop in private and military doctors, with the military expected to lose 50 percent of its radiologists over the next three years because of a nationwide shortage.

To compensate for an acute shortage of radiologists, Geisinger Medical Center in Montour County has recently begun to provide around-the-clock teleradiology coverage—including CT scans, ultrasound and nuclear medicine scans—for Shamokin Area Community Hospital in Northumberland County, and is looking to expand the service to after-hours ER coverage at Correy Memorial Hospital, says Dominick M. Conca, M.D., director of system radiology at Geisinger Health System. The health system uses the comparatively expensive, wide bandwidth T1 lines, as well as high-speed backup connections, to transmit the digitized images, which it hopes will be able to support other modalities, such as chest x-rays, in the future.

Geisinger Medical Center has wired two of its 57 clinics, one near State College and one in Lock Haven, with the lines and hardware to be able to transmit ultrasound imaging, and expects the volume of cases to justify the cost of establishing the $1 million equipment and maintaining the transmission lines—a criterion that Geisinger is using to evaluate when and how many other of its hospitals and clinics it may add to the list, says Conca.

Over the next five years, Geisinger is also looking to establish three or four freestanding imaging facilities, possibly associated with outpatient surgery centers, Conca adds, noting that Geisinger hopes to form ventures with local hospitals and physician practices to operate the facilities, which he believes would augment their existing referral patterns.

Geisinger is also working on other future telemedicine applications. Its minimally invasive surgery group is budgeted and contracted to develop a video system for use in the operating room allowing real-time consultations between surgeons at Geisinger’s Danville and Wyoming Valley tertiary care hospitals, says Walker.

The health system is investigating the feasibility of a telemedicine ICU system between the two hospitals, and possibly expanded to other hospitals in the system, that would centralize intensivist physicians and nurses in a single control center. Walker says the system has been successfully implemented in Virginia and could actually reduce patient mortality, complication rate and length-of-stay, freeing up ICU beds for other patients. The system could ameliorate the difficulty in recruiting intensivists to staff ICUs in rural settings, while gained efficiencies could amortize the system’s cost, Walker believes.

Private companies in Pa. are also developing a mode of telemedicine to market directly to employers and patients. One such company, Rapid Remedy, contracts with physicians to provide primary care consultations via live videoconference over the Internet to patients at their workplace, with the company directly reimbursing the physicians a fixed amount for each consultation, according to David Schlager, president of Facts Corp., a management service organization that developed Rapid Remedy.

The company has already contracted with 12 family physicians in York, Lancaster and Paoli and is currently marketing the service to small- and medium-size companies in eastern Pa., which purchase it and offer it as a health services benefit to their employees. An employee with a common ailment or illness (which is not related to a workplace injury that should be processed through worker’s compensation) can go to a Rapid Remedy conference room in the workplace that is equipped with a desktop PC, webcam and headset, log in with a password and choose from a list of participating physicians that appear on the screen, Schlager explains.

The consultation typically takes no more than 15 minutes and the physician can offer medical advice, fax a prescription to the patient’s pharmacy, or refer the patient to his or her local health care provider for further care, he adds. A digital copy of the teleconference is filed by Rapid Remedy and a list of a specific patient’s prescription history is displayed to the physician (either the same physician or a different one) the next time the patient uses the service.

Schlager explains that the service is not meant to treat chronic ailments or provide continuity of care to a patient, with each use being treated as a "first visit." He adds that companies and employees whose time is valuable benefit from the service because it offers an alternative to a three-hour absence from the workplace to schedule a primary care office visit. None of the participating companies charge their employees extra to use the service, although that option exists, Schlager adds.

The company investigated regulatory and insurance issues and found there to be no additional licensure requirements for participating family physicians in Pa. to consult with patients in Pa. using the system; that such practice was covered by current medical liability carriers, who don’t make a distinction between traditional and telemedicine; and that the Pa. Insurance Department does not require paper medical records to be kept because the company is not an insurance company, says Schlager.

Ten workplace conference facilities are currently operational and the company plans to open kiosks in lobbies of commercial office complexes and in retail drugstore chains, in which the patient pays the full videoconference fee by credit card, says Schlager.

A receipt of CPT codes involved in the conference can be emailed or faxed to the patient, who can then decide whether they want to send it as a claim to their insurance company, Schlager says, although Rapid Remedy has been careful not to promote the product as something that insurance companies will cover because it maintains that the service is a bargain, given the time it saves. After asking a sample of employees currently using Rapid Remedy to send receipts of the conference to their insurers—which included Highmark, Aetna, HealthAmerica and Keystone Health Plan Central—insurers processed the claim as an out-of-network service 80 percent of the time, says Schlager, noting that the CPT codes don’t reveal the encounter as one mediated by teleconferencing.