New Medicare home health reimbursement legislation to bless and curse

Jacksonville 16 January 2001A combined budget bill, passed before the American Congress in late December 2000, will increase Medicare payments to health maintenance organisations over the next five years while equally expanding Medicare reimbursement for telemedicine in a variety of care settings. The legislation, sponsored by Senator John Kerry and Representative James McGovern, of Worcester, includes a measure that reimburses home health care agencies which use telecommunications to treat patients. The bill also provides a 10 percent increase in payments for the travel expenses for rural providers and requires federal government to study reimbursements for medical supplies.


Medical technology expert Robin Wiley from Wiley and Company, based in Alexandria, Virginia, notes that specific provisions of the legislation clarify the eligibility of tele-homecare technologies as an option for providing services under home health prospective payment. The telecommunications provision will require Medicare to reimburse the home health care agencies which purchase and use telehealth technology. The Internet-based software will allow nurses in one location to treat patients in their homes.

There are ongoing concerns, however, about what the complex language of the bill really means. The confusion arises from the stipulation that services provided via tele-homecare are not to be considered as in-person home care visits for purposes of Medicare reimbursement. For health care providers, conducting the minimum number of in-person visits specified for Medicare reimbursement, may limit the number of dollars that are left for delivering services via remote monitoring. This kind of uncertainty on reimbursement may be problematic for some developers of home care telemedicine systems.

Meanwhile, passage of the legislation demonstrates Congressional support for Medicare reimbursement of telemedicine, according to the people of the American Telemedicine Association (ATA) in Washington DC. Two significant improvements will eliminate the current fee-splitting requirements at patient and referring sites as well as expand eligible service areas, including all non-metropolitan counties and existing urban Medicare demonstration sites. The legislation was inspired by cuts in Medicare allocations on home health care. Spending has dropped nearly fifty percent in the last two fiscal years, from $17.5 billion in 1998 to $9.7 billion in 1999.

Discussions of this legislation appear in "Home Health Briefing", a report published in early October 2000 but now updated with the current changes in Medicare reimbursement policies. This report analyses market trends and revenues for home monitoring and telemedicine systems. Also included are clinical and operational perspectives, based on interviews with home health agency personnel and telemedicine programme administrators. The "Home Health Briefing" report is available for $195.00 by sending an e-mail to Mrs. Millie Narum.

Leslie Versweyveld

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