June 22, 2010

New Medicare Proposed Rule on Telemedicine and Practitioner Credentialing

Holland & Knight Alert
Michael R. Manthei

On May 26, 2010, the Centers for Medicare and Medicaid Services (CMS) proposed changes to ease the burdens of credentialing and privileging for hospitals and critical access hospitals (CAHs) that provide telemedicine services. The proposed rule essentially would allow hospitals to rely on information provided from another hospital on which to base its credentialing and privileging decisions regarding practitioners that will provide telemedicine at their facility. CMS recognized the urgent need to revise the Medicare conditions of participation (CoPs) so that access to vital telemedicine services would continue to be safe and beneficial for patients and credentialing of practitioners would be free of unnecessary, burdensome and duplicative regulatory impediments.

Hospital Governing Body Responsible for All Privileging Decisions

The current Medicare hospital CoPs, found at 42 C.F.R. 482.12(a)(2) and 482.22(a)(2) pertaining to credentialing and privileging of medical staff, require the governing body of a hospital to make all privileging decisions based upon the recommendations of its medical staff after the medical staff has thoroughly examined and verified the credentials of practitioners applying for privileges. Hospitals may use third-party credentialing verification organizations to relieve the time-consuming burden of compiling and verifying the credentials of practitioners applying for privileges. However, the hospital’s governing body is still ultimately responsible for all privileging decisions.

In the past, hospitals that were accredited by the Joint Commission (JC) were deemed to have met the Medicare CoPs, including the credentialing and privileging requirements, under the JC’s statutory deeming authority. Effective July 15, 2010, and pursuant to Section 125 of the Medicare Improvements for Patients and Providers Act of 2008 (Pub. L. 110-275, July 15, 2008), CMS’s statutory recognition of the JC’s “deeming authority” is terminated. This means that the JC’s practice of permitting “privileging by proxy,” whereby a JC-accredited facility could accept the privileging decisions of another JC-accredited facility, no longer will be permitted.

Proposed CoPs Will Allow Reliance on Distant-Site Hospital Credentialing

Absent some exception, beginning July 15, 2010, the JC will be required by statute to enforce Medicare CoP’s for physician credentialing at both the hospital receiving and the hospital providing telemedicine services. Recognizing that this change could impede significantly the expansion of telemedicine services, the Proposed Rule would add a CoP permitting the hospital receiving telemedicine services to rely on the credentialing of the practitioner performed by the hospital providing telemedicine services (the “Distant-Site Hospital”).

The new CoP also lays out that the telemedicine agreement between the Distant-Site Hospital and the hospital receiving telemedicine services must specify that it is the responsibility of the Distant-Site Hospital’s governing body to fulfill the credentialing CoPs for its practitioners. In order to ensure accountability in the process so that a receiving hospital can rely on the Distant-Site Hospital’s credentialing, the receiving hospital must also ensure the following four accountability standards are met:

1) that the Distant-Site Hospital is Medicare participating

2) that the Distant-Site Hospital’s practitioner is privileged in telemedicine services and the hospital must receive a list of the practitioner’s privileges

3) that the practitioner holds a license in the hospital’s state where its patients will receive telemedicine services

4) that periodic appraisal information, including information on adverse events of the practitioner at the hospital, be sent from the hospital to the Distant-Site Hospital

Proposed CoPs for CAHs to Mirror Hospital CoPs

For those hospitals defined as CAHs, the Proposed Rule includes almost mirror image requirements for relying on credentialing and privileging of a Distant-Site Hospital. One minor change in the Proposed Rule for CAH CoPs which is not included in the CoPs for hospitals is a provision that would allow the Distant-Site Hospital to evaluate the quality and appropriateness of the diagnosis and treatment furnished by its own staff when providing telemedicine services to a CAH.

Time and Money Are the Motivating Factors

CMS realizes that small hospitals and CAHs lack time and money to fully carry out the traditional credentialing and privileging process for all of the practitioners that may be available to provide telemedicine services. CMS believes that the proposed rule revisions would preserve and strengthen the core values of the credentialing and privileging process, accountability to patients and assurance that medical staff are privileged to provide services in the hospital based on evaluation of the practitioner’s medical competency. CMS expects the cost to hospitals and CAHs for implementation of the proposed rule to be minimal. The full proposed rule can be found at Federal Register, Vol. 75, No. 101, FR 29479.

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