CMS Publishes Proposed Rule Regarding Privileging of Telemedicine Professionals

03 June 2010 Publication
Authors: C. Frederick Geilfuss II

Legal News Alert: Health Care

On May 26, 2010, CMS published a proposed rule, 75 Federal Register, pages 29479 – 29487 (Proposed Rule), to revise the Medicare Conditions of Participation (CoPs) affecting credentialing and privileging of telemedicine physicians and practitioners (Telemedicine Professionals) for hospitals and critical access hospitals (CAHs). The Proposed Rule would allow hospitals and CAHs more flexibility in credentialing and privileging Telemedicine Professionals by relying, in certain instances, on the review of the Telemedicine Professional performed by another Medicare-participating hospital. Hospitals and CAHs should become familiar with the proposed regulations and be prepared to implement or revise telemedicine privileging policies and service agreements as necessary, once the Proposed Rule is finalized.

In order to participate in and receive reimbursement from the Medicare or Medicaid programs, a hospital must be certified as complying with the CoPs. This certification may be based on a survey conducted by a state agency on behalf of CMS. Alternatively, CMS may grant “deeming authority” to an accrediting organization such as The Joint Commission (TJC). Hospitals accredited by organizations with deeming authority have “deemed status” and are not required to undergo a separate state-conducted Medicare survey and certification process.

In the past, TJC-accredited hospitals were deemed to have met the Medicare CoPs under TJC’s statutory deeming authority. However, Section 125 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) revoked TJC’s statutory deeming status for its hospital program, mandating a reapplication process before TJC’s term of approval expires July 15, 2010. Effective July 15, 2010, TJC needs CMS approval of its accreditation standards and must ensure that its standards meet or exceed CoP requirements.

CMS has identified TJC privileging by proxy standards (TJC standard MS.13.01.01) as being in conflict with current CoPs. Under MS.13.01.01, an accredited hospital may employ an alternate “credentialing and privileging by proxy” process for physicians or practitioners who are not on-site at the hospital and only provide services through a telemedicine link. This process permits a TJC-accredited originating site (the site where the patient is located) to accept the credentialing and privileging decisions of a TJC-accredited distant site (the site where the practitioner is located) if the distant site is a TJC-accredited hospital or ambulatory care organization and if certain other conditions are met. According to the TJC, the privileging by proxy process reduces the administrative burdens for the originating site, recognizes that the distant site may have access to more relevant information on which to base privileging decisions, and acknowledges that the originating site may lack the expertise to make privileging decisions for certain specialties.

However, the TJC-approved privileging by proxy process is inconsistent with current hospital and CAH CoP requirements for the credentialing and privileging of medical staff members. Accordingly, CMS has required Medicare- and Medicaid-certified entities utilizing the TJC-approved process to revise their privileging policies so that they are in compliance with the CoPs. Under current CoP requirements for hospitals, a hospital’s medical staff must thoroughly examine and verify the credentials of each physician and practitioner applying for privileges and utilize specific criteria to make a privilege recommendation to the governing body, regardless of whether the physician or practitioner intends to provide services on-site or through a telemedicine link. The governing body must then approve or reject each individual physician’s or practitioner’s request for privileges based upon the recommendations of the hospital’s medical staff. (See 42 CFR §§ 482.12(a)(2) and 482.22(a)(2).)

CAHs that are part of a rural health network (see 42 CFR § 485.603) may rely on the credentialing and privileging recommendations of another hospital that is part of the network, of a Quality Improvement Organization under the Medicare Program, or of another appropriate and qualified entity in the state’s rural health care plan, if the CAH has an agreement with such entity. (See 42 CFR § 485.616(b).) However, as with other hospitals, the governing body or the CAH’s responsible individual remains accountable for all privileging decisions.

Proposed Changes to the Hospital and CoPs
In the Proposed Rule, CMS recognizes the advantages telemedicine provides, acknowledges that the current CoPs mandate a process that is duplicative and administratively burdensome, and seeks to reduce the burdens on hospitals and CAHs with regard to the credentialing and privileging of Telemedicine Professionals. For hospitals, CMS proposes revising the provisions contained in two separate hospital CoPs: 42 CFR § 482.12 regarding the governing body and 42 CFR § 482.22 regarding the medical staff. For CAHs, the Proposed Rule would amend the CAH CoPs found at 42 CFR § 485.616, ‘‘Agreements,’’ and 42 CFR § 485.641, ‘‘Periodic evaluation and quality assurance review.’’ CMS proposes adding a new CAH standard at 42 CFR § 485.616(c) entitled, ‘‘Agreements for credentialing and privileging of telemedicine physicians and practitioners.’’ The proposed CAH CoP requirements closely mirror the proposed hospital CoPs, but include additional language describing the responsibilities of the distant site’s governing body with regard to the medical staff privileging process.

The Proposed Rule would permit the originating site’s governing body to grant privileges to Telemedicine Professionals based upon the recommendations of the originating site’s medical staff, even if such recommendations are based on the credentialing and privileging decisions of a distant-site hospital, as long as the following requirements are met:

  • The distant-site hospital is a Medicare-participating hospital.
  • The individual Telemedicine Professional is privileged at the distant-site hospital, and the originating hospital obtains a list of such privileges.
  • The individual Telemedicine Professional holds a license issued or recognized by the state in which the originating hospital is located.
  • The originating hospital has evidence of the originating hospital’s internal review of the Telemedicine Professional’s performance of his/her telemedicine privileges and sends such information and all adverse events or complaints related to the Telemedicine Professional’s provision of telemedicine services at the originating hospital to the distant-site hospital for use in the distant-site hospital’s appraisal of the Telemedicine Professional.
  • For hospitals (other than CAHs): The originating site’s governing body ensures that telemedicine services are provided pursuant to a written agreement between the originating site and the distant site, and that such agreement specifies that the governing body of the distant site is responsible for ensuring that the telemedicine services provided by its Telemedicine Professionals meet the existing CoP requirements set forth under 42 CFR §§ 482.12(a)(1) through (a)(7).
  • For CAHs: The originating site’s governing body ensures that telemedicine services are provided pursuant to a written agreement between the originating site and the distant site, and that such agreement specifies that the governing body of the distant site is responsible for ensuring that the telemedicine services provided by its Telemedicine Professionals meet the requirements set forth under 42 CFR §§ 485.616(c)(1)(i) through (c)(1)(vii).

In addition, CMS proposes a minor change to the CAH CoP at 42 CFR § 485.641(b)(4)(iv) to add a new requirement permitting the distant-site hospital to evaluate the quality and appropriateness of the diagnosis and treatment furnished by the distant site’s Telemedicine Professionals to the CAH.

Notably, the Proposed Rule does not prohibit a hospital from continuing to use its traditional credentialing and privileging process; it merely provides the option of an alternate methodology. In addition, the Proposed Rule only permits the use of a privileging by proxy process when the distant-site Telemedicine Professional is affiliated with and has been credentialed and privileged by a distant-site Medicare-participating hospital. As currently proposed, if the Telemedicine Professional is credentialed and privileged by an entity other than a Medicare-participating hospital, the originating site may utilize information obtained from the distant-site entity, but must complete the credentialing and privileging process that it traditionally applies to on-site providers, including the examination of credentials and individual appraisal required by 42 CFR §§ 482.22(a)(1) and (a)(2).

The text of the Proposed Rule is available at

Next Steps
We anticipate that CMS will act quickly to finalize the Proposed Rule. The 60-day comment period for the Proposed Rule ends July 26, 2010, and there has been mention of fast-tracking final approval. We also anticipate that TJC will revise its current privileging by proxy standards to ensure such standards are at least as stringent as the revised CoPs. Hospitals and CAHs contemplating substantive revisions to medical staff bylaws and policies in order to ensure compliance with the recent changes to TJC requirements regarding medical staff governance and documents (MS.01.01.01) should anticipate making additional changes to implement or revise Telemedicine Professional privileging policies. Also, hospitals and CAHs should be prepared to review and amend existing telemedicine service agreements to ensure compliance with the new CoP requirements.

State Laws
Even if CMS finalizes the Proposed Rule, certain states may have laws or regulations that preclude the use of an alternate privileging process for Telemedicine Professionals. Hospitals and CAHs considering adopting an alternate privileging process should carefully examine applicable state laws and regulations.

Comment Process and Timing
The Proposed Rule was published with an opportunity for public comment. Comments must be received by CMS no later than 5:00 p.m. Eastern on July 26, 2010 to be considered. Comments may be submitted in any of four ways:

  • Electronically to (follow instructions to “More Search Options” tab)
  • By regular mail to: Centers for Medicare and Medicaid Services, Department of Health and Human Services, Attn: CMS-3227-P, P.O. Box 8010, Baltimore, MD 21244-1850 (allow sufficient time for receipt on or prior to July 26, 2010)
  • By express or overnight mail: Centers for Medicare and Medicaid Services, Department of Health and Human Services, Attention: CMS-3227-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850
  • By hand or courier:
    • In Washington, D.C.: Centers for Medicare and Medicaid Services, Department of Health and Human Services, Room 445-6, Herbert H. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 20201
    • In Baltimore, Maryland: Centers for Medicare and Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850

Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our health care clients and colleagues. If you have any questions about this alert or would like to discuss this topic further, please contact your Foley attorney or any of the following members of our Health Care Industry Team:

C. Frederick Geilfuss II
Milwaukee, Wisconsin

Rachelle (Shelly) Hart
Milwaukee, Wisconsin

Maureen Kwiecinski
Milwaukee, Wisconsin

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