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The Telemedicine Yo-Yo: CMS Proposal Would Allow Hospitals to Privilege Telemedicine Providers by Proxy

Health Law Update Sarah E. Coyne, Kevin J. Eldridge

On May 26, 2010, the Centers for Medicare and Medicaid Services ("CMS") proposed a change to the hospital (including critical access hospitals) Conditions of Participation that would allow hospitals to privilege telemedicine providers "by proxy." The CMS proposal removes the mandate that medical staffs of hospitals and CAHs using telemedicine practitioners individually appraise and examine the credentials of physicians and other practitioners providing services to geographically distant patients by means of telecommunications, i.e., telemedicine. CMS allows the credentialing body of the originating hospital medical staff to adopt the privileging decision of the distant-site hospital. The credentialing body would make a recommendation to that hospital's governing body based on the remote privileging process.


Under existing CMS standards, originating hospitals may use credentialing information from distant-site hospitals in its own review of a practitioner's qualifications but may not simply adopt a distant-site hospital's privileging decisions without an independent review.

The CMS proposal to allow privileging by proxy contradicts recent guidance from CMS. In November 2009, CMS approved The Joint Commission ("TJC") for continued deeming authority for hospitals. In doing so, CMS required TJC to revise accreditation standards that allowed originating hospitals to privilege by proxy because the standards were inconsistent with CMS Conditions of Participation.

However, following the decision regarding TJC standards, and undoubtedly under much pressure from various interested parties, CMS changed its mind (Does CMS have a mind? Discuss amongst yourselves.) and "came to the conclusion that [its] present requirement is a duplicative and burdensome process for physicians, practitioners and the hospitals involved in the process, particularly small hospitals." This reversal by CMS was likely due to pressure from individual members of Congress. CMS states that it became aware of the need for privileging by proxy through, in part, "Congressional representatives whose various constituencies are made up of telemedicine practitioners as well as the patients receiving telemedicine services."

The Proposed CMS Telemedicine Standards

Under the CMS proposal, the medical staff at an originating hospital may, but is not required to individually examine a telemedicine practitioner's credentials in the privileging process. Hospitals will have the much less burdensome option, if the rule becomes final, of relying on the distant-site credentialing results.

Of course, there are some strings attached:

  • Distant Hospital's Board Oversight: Under the telemedicine agreement between the originating and distant-site hospitals, the board of directors of the distant-site hospital must be required to perform several medical staff oversight functions in relation to telemedicine providers that are already required under the hospital Conditions of Participation, and which will be required under the CAH Conditions of Participation. Among these functions are approving medical staff bylaws and rules and regulations; ensuring the criteria for granting privileges are individual character, competence, training, experience and judgment; and granting clinical privileges.
  • Distant Hospital Must Be A Hospital: The distant site must be a Medicare-participating hospital, as opposed to an ambulatory care facility or other non-hospital facility.
  • Distant Hospital Must Provide Documentation: The telemedicine practitioner must be privileged at the distant-site hospital, and the distant-site hospital must provide a list of the practitioner's privileges to the originating hospital.
  • Provider Must Be Licensed In State Where Patient Sits: The telemedicine practitioner must hold a license issued or recognized by the state of the originating hospital. This requirement is likely to pose an obstacle at times, especially for unscheduled or emergent care.

Flow of Information Back To Distant Hospital For Credentialing: The originating hospital must provide the distant-site hospital evidence of an internal review of the telemedicine practitioner's performance for the distant-site hospital's use when renewing privileges. This information must include:

  • All adverse events at the originating hospital that resulted from telemedicine services provided by the telemedicine practitioner.
  • All complaints the originating hospital has received about the telemedicine practitioner.

A Few Words of Caution

It is not yet clear when the CMS proposal would become effective and hospitals could start privileging by proxy. CMS is accepting comments on the proposed rule until July 26, so the rule is unlikely to be finalized any time before September.

Also, hospitals further should consider whether state law would permit credentialing and privileging by proxy. State agencies may interpret state statutes or regulations to prohibit the practice, even if the language of a statute or regulation does not provide a clear prohibition.

Finally, the CMS proposal applies only to distant-site hospitals. This is the principal limitation on the CMS proposal - CMS would still prohibit originating hospitals from relying on the privileging decisions of ambulatory care organizations that provide radiology or other services by telemedicine, even if those organizations are TJC-accredited.

Preparing for Privileging by Proxy

Although the CMS proposal will not be final until at least later this year, hospitals may start preparing now. We recommend review of medical staff bylaws and credentialing and privileging policies, and making any revisions necessary to allow for privileging by proxy. Originating hospitals may also work with distant-site hospitals to prepare an amendment to telemedicine agreements.

If you have any questions about the new CMS Telemedicine Proposed Rule or any other health law issue, please contact Sarah Coyne at (608) 283-2435 / [email protected], Kevin Eldridge at (608) 283-2452 / [email protected], or your Quarles & Brady attorney.

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