Medicaid Reimbursement
Title XIX of the Social Security Act is a Federal/State entitlement program that pays for medical assistance for certain individuals and families with low incomes and resources. In 1965, this program became known as Medicaid and became law as a joint operation funded by both the Federal and State governments. Following Federal guidelines, a state may (1) establish its own eligibility standards; (2) determine the type, amount, duration, and scope of services; (3) set the rate of payment for services; and (4) administer its own program.
However, some Federal requirements are mandatory if Federal matching funds are to be received. A state’s Medicaid program must provide specific basic services to the categorically needy populations. These services are: inpatient hospital services, outpatient hospital services, prenatal care, vaccines for children, physician services, nursing facility services for persons aged 21 or older, family planning services and supplies, rural health clinic services, home health care for persons eligible for skilled-nursing services, laboratory and x-ray services, pediatric and family nurse practitioner services, nurse-midwife services, federally qualified health-care services, ambulatory services of an FQHC that would be available otherwise, and early periodic screening, diagnostic, and treatment services for children under age 21.
A significant development in Medicaid is the growth in managed care as an alternative service delivery concept, different from the traditional fee-for-service system. Managed care programs seek to enhance access to quality care in a cost-effective manner. Waivers give states greater power and flexibility in their state Medicaid designs. Under sections 1915(b) and 1115 of the Social Security Act, these waivers allow states to develop innovative health care delivery or reimbursement systems and allow for statewide health care reform experimental systems without increasing costs.
CMS has not formally defined telemedicine for the Medicaid program, and Federal Medicaid law does not recognize telemedicine as a distinct service. But, reimbursement for Medicaid services is one of the options states have as a cost-effective alternative to the more traditional ways of providing medical care (face-to-face exams).
Telemedicine is an important component of the future of medicine, and it can be the answer to many problems that are faced today with health care. The practice of telemedicine utilizes technology for many reasons, including increased cost efficiency, reduced transportation expenses, improved patient access to specialists and mental health providers, improved quality of care and better communication among providers.
At least 27 states have acknowledged some reimbursement for services provided via telemedicine for several reasons, such as improved access to specialized health care in rural areas and reduced transportation costs. There are many factors states use to determine the scope of coverage for telemedicine applications, such as the quality of equipment, type of services to be provided, and location of providers (e.g., remote rural sites). Reimbursement for Medicaid-covered services, including those with telemedicine applications, must also satisfy federal requirements of efficiency, economy, and quality of care. With this in mind, states are encouraged to use the flexibility inherent in federal law to create innovative payment methodologies for services that incorporate telemedicine technology. For example, states covering medical services that utilize telemedicine may reimburse for both the provider at the hub site for the consultation and the provider at the spoke site for an office visit. States also have the flexibility to reimburse any additional cost (i.e., technical support, line-charges, depreciation on equipment, etc.) associated with the delivery of a covered service by electronic means as long as the payment is consistent with the requirements of efficiency, economy, and quality of care. These add-on costs can be incorporated into the fee-for-service rates or separately reimbursed as an administrative cost by the State. If they are separately billed and reimbursed, the costs must be linked to a covered Medicaid service. |
