OIG identifies $3.7M in improper Medicare telehealth payments, which could lead to more scrutiny for providers

Providers can expect more scrutiny after a report that highlighted improper telehealth payments. (shironosov/Getty)

Medicare paid out $3.7 million in improper payments for telehealth services during a two-year period, according to the Office of Inspector General.

Nearly one-third of the claims reviewed by the OIG failed to meet requirements for Medicare reimbursement, according to a report (PDF) released on Friday. Providers that submit telehealth claims through Medicare Part B must meet certain conditions. Among them, the originating site must be a practitioner's office or a medical facility, not a patient’s home, and the beneficiary must be located in a qualifying rural area.

The watchdog agency reviewed more than 190,000 distant site claims between 2014 and 2015 totaling $13.8 million. More than 30 claims in a random sampling of 100 failed to meet requirements, including 24 that were improper because the beneficiaries received services at a nonrural originating site.

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In one instance, a patient’s originating site was located in Lynchburg, Virginia, which is considered a metropolitan area. In a small number of claims, the patient was at his or her home when receiving services.

RELATED: OIG to review Medicaid telehealth payments amid an increase in claims

Extrapolating that sample, the OIG estimated the Centers for Medicare & Medicaid Services (CMS) would have saved $3.7 million in unnecessary costs.

Providers can expect more scrutiny of telehealth claims moving forward, says Nathaniel Lacktman, a partner at Foley & Lardner LLP in Tampa, Florida, who chairs the firm’s telemedicine industry team. The OIG recommended CMS conduct periodic postpayment reviews and work with Medicare contractors to implement telehealth claims edits. CMS agreed with both recommendations.

That will be particularly important as Medicare reimbursement expands under the recently passed Bipartisan Budget Act. 

RELATED: Health IT proponents pleased with new spending bill, see momentum for telehealth

“The big takeaway is to spend more attention to billing compliance,” Lacktman says. “The telehealth arrangements 5-10 years ago were built on a self-pay cash model. Now they are expanding and that’s really going to change the game for a lot of providers.”

He said the easiest way to ensure an originating site provider is eligible for reimbursement is to use the Medicare Telehealth Payment Eligibility Analyzer, a government-run website that determines payment eligibility based on location.

“It’s a phenomenal service,” he said. “You type in the address; if it pops up green, you’re golden. If it’s red, you can’t bill. It seems like that’s just something these distant site providers failed to do.”

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