Telemedicine in the United States

Introduction

In the United States, the legal framework surrounding telemedicine gives rise to four

general categories of issues: licensure, malpractice liability and standard of care,

reimbursement, and confidentiality and privacy.

1. Licensure

The most significant legal hurdle for telemedicine providers in the United States is

the problem of state licensure, as physicians are required to be licensed in every state in

which they provide telemedical services.1 Telemedicine increases the likelihood of

prosecution of out-of-state unlicensed physicians, who are otherwise rarely prosecuted.

The use of telecommunication for distribution of medical information services does not

trigger state licensing law prosecutions; rather, the use must fall under the particular

state’s statutory definition of “practice of medicine,” including prescriptions, diagnoses,

etc.2

a. Multistate licensing

The process of obtaining licenses in different states is prohibitively time-consuming

and burdensome, as it can include, depending on the state, providing high school,

college, medical school, and residency transcripts, taking oral examinations (sometimes

regularly in order to renew licenses on the cusp of expiry), and meeting varying

requirements for time spent in post-graduate training.3 The two most viable options for

telemedicine providers under this framework are a national service large enough to

absorb—at great cost—the burdens of the multistate licensing process or a small,

exclusively intrastate service. Absent reform, regional and multistate services face

significant hurdles. However, even a national service that accounts for individual state

licensing laws would be problematic; any state could change its laws at anytime,

meaning the provider would also have to be prepared to cease its telemedical services at

any time, leading to lower quality and more unreliable care.4 Absent reform, only

intrastate telemedicine providers are immune from the problems posed by state

licensing requirements.

b. Consultation exceptions

Some states have sought to overcome these obstacles by: allowing limited scope,

telemedicine-only licensing across state borders, allowing part-time medical practice

1 Telemedicine and the Law, AHLA-PAPERS P06049729

2 Stacey Swatek Huie, Facilitating Telemedicine: Reconciling National Access with State Licensing

Laws, 18 Hastings Comm. & Ent L.J. 377, 383 (1996) 3 Telemedicine and the Law, AHLA-PAPERS P06049729

4 Stacey Swatek Huie, Facilitating Telemedicine: Reconciling National Access with State Licensing

Laws, 18 Hastings Comm. & Ent L.J. 377, 383 (1996)

registration across state borders5, reciprocity

6 and endorsements

7 between individual

states, and carving out exceptions to the state’s license requirement for emergencies,

educational purposes, and consultations.8 9

The consultation exception, however, has its own limitations of which telemedicine

providers must be wary. Applied narrowly, statutes granting such exceptions could be

interpreted as requiring the physical presence of the consulted physician in the state—a

requirement that is more manageable for regional providers but less so for national

networks. Furthermore, this exception only permits a consultation between an in-state

licensed physician and an out-of-state unlicensed physician, not between a patient and

out-of-state unlicensed physician. It additionally exposes consulted physicians to

prosecution for unlicensed practice should the consulting physician turn out not to be

licensed, as it can difficult to determine the consulting physicians’ credentials remotely.

A solution to the pitfalls of consultation exceptions to state licensing requirements is

statutes that explicitly permit such exceptions in the case of telemedicine.10

c. Potential reforms

Proposed national-level changes to resolve the state licensing problem include

instituting a national licensing system and creating a special-purpose national license for

telemedicine, the latter having been proposed by the Federation of State Medical

Boards.11

Another proposal that has been offered is for a dual licensing system—a

hybrid national and state-level program incorporating a superseding national license for

telemedicine available only to those physicians who already possess a state-level

license, states controlling all face-to-face physician-patient interactions.12

2. Liability

Another hurdle faced by telemedicine practitioners is their subjection to varying

forms of liability, including malpractice and breach of contract13

, and varying standards

of care.

a. Malpractice

5 Such a system exempts an out-of-state physician from a state’s licensure requirements in exchange for

the physician’s recognition of the state’s legal authority and jurisdiction. Shannon S. Venable, A Call to

Action: Georgia Must Adopt New Standard of Care, Licensure, Reimbursement, and Privacy Laws for

Telemedicine, 54 Emory L.J. 1183, 1185 (2005) 6 The physician’s state and the patient’s state enter into an agreement to recognize each other’s licensure

requirements. Id. 7 The process of recognizing medical licenses granted by states with comparable standards. Id.

8 Sometimes with such limitations as only those consultations that are unpaid and/or infrequent. Id.

9 Telemedicine and the Law, AHLA-PAPERS P06049729

10 Stacey Swatek Huie, Facilitating Telemedicine: Reconciling National Access with State Licensing

Laws, 18 Hastings Comm. & Ent L.J. 377, 383 (1996) 11

Legal Considerations of Telemedicine, 64 Tex. B.J. 20, 22 (2001) 12

Shannon S. Venable, A Call to Action: Georgia Must Adopt New Standard of Care, Licensure,

Reimbursement, and Privacy Laws for Telemedicine, 54 Emory L.J. 1183, 1185 (2005)

13

For physicians. Manufacturers of faulty equipment used to telemedical services can also be held liable

for negligence.

Telemedicine uniquely exposes physicians to a greater risk of malpractice litigation.

One such risk is the information disadvantage at which telecommunications

technology—no matter how sophisticated—places physicians in comparison to face-to-

face examination of a patient. A second is that information could be corrupted, lost, or

disbursed in breach of patient privacy. A third is that the lack of personal interaction

between physician and patient simply makes patients more litigiously inclined.

Furthermore, the use of telecommunications for consulting purposes can expose a

referring physician to malpractice liability for a consulted physician’s conduct through

the principles of vicarious liability, and in some cases, medical institutions have been

held similarly liable.

b. Breach of contract

The question of breach of contract is largely one about the nature of the physician-

patient relationship. Courts have generally held that the relationship between patient and

telemedicine practitioner is a contractual one, thus creating a contractual duty of care

regardless of the use of telecommunications technology. Instead, the four factors used to

determine the existence of a contractual relationship are 1) whether the physician has

met or knows the name of the patient, 2) whether the physician has examined the

patient’s records, 3) whether the physician has examined the patient, and 4) whether the

physician has been paid a fee for his services. In the case of telemedicine, the

determination is usually positive.

c. Standard of care

Because telemedicine can involve the practice of medicine across state lines,

jurisdiction becomes an inevitable concern for states, as the uncertainty over which

state’s standard of care ought to be applied can encourage venue shopping. The

recommendation for telemedicine practitioners, therefore, is to operate under the highest

standard of care and broadest definition of “practice of medicine” among the states in

which they operate, as case law and medical board decisions offer little guidance for

determining jurisdiction. Telemedicine practitioners should also generally be prepared

to be held liable in jurisdictions outside their home state. Not only can both frequent

contact with a single patient and infrequent contact with many patients from the same

state satisfy the personal jurisdiction requirement of continuous and systematic contact,

but conflict of laws principles also establish the jurisdiction of the state in which the

injury occurred or to which the injury has the greatest connections. A telemedicine

practitioner’s preparation should extend to ensuring that their malpractice insurance

covers practice in multiple states.14

3. Reimbursement

The issue of reimbursement for telemedical services is one that has changed

significantly as both telemedicine and healthcare policy have evolved in the United

14

Legal Considerations of Telemedicine, 64 Tex. B.J. 20, 22 (2001)

States in recent years. Furthermore, government requirements for reimbursement for

these services vary by payment provider, be it Medicare, Medicaid, or private payment.

a. Medicare

Initially, Medicare only provided reimbursement for services delivered face-to-face

without the use of telecommunications and services delivered electronically that did not

require face-to-face contact, such as teleradiology and telepathology. Electronically-

provided services delivered in place of traditionally face-to-face encounters, such as

teleconsultations, could not be reimbursed.15

Today, however, Medicare generally does

cover the spectrum of telemedical services that can substitute for face-to-face physician-

patient interactions, including consultations, office visits, and individual psychotherapy

and pharmacologic management.16

b. Medicaid

Medicaid is by design a joint federal-state program administered largely at the

state level, and thus reimbursement policies for telemedicine vary from state to state.

The overwhelming majority of states (42 out of 50), however, do offer Medicaid

coverage for telemedicine.17

c. Private payment

While recent reforms under the 2010 Patient Protection and Affordable Care Act

(ACA) promote the use of telemedicine, there is no federal-level requirement for private

entities to provide reimbursement for telemedicine. Numerous states, however, do have

such requirements.18

As such, private reimbursement for telemedicine can vary by state

and by private entity.

4. Privacy

Given the potential risks introduced by the use of telecommunications to share and

record confidential health care information—particularly in light of the ACA’s various

measures to encourage the use of electronic medical records—a host of federal and

state-level safeguards exist to protect patient privacy. At the federal level, preeminent

among these safeguards is the 1996 Health Insurance Portability and Accountability Act

(HIPAA). HIPAA mandates that health care providers take reasonable precautions to

safeguard the confidentiality, to anticipate electronic threats to, and prevent

unauthorized use of digital information. At the state level, statutory and case law

varying from state to state provide their own set of safeguards—of varying scope—for

the confidentiality of electronic health information.19

15

Telemedicine and the Law, AHLA-PAPERS P06049729 16

http://www.americantelemed.org/docs/default-source/policy/medicare-payment-of-telemedicine-and-

telehealth-services.pdf 17

https://www.nachc.com/client//Telemedicine%20%20SPR482.pdf 18

Legal Considerations of Telemedicine, 64 Tex. B.J. 20, 22 (2001) 19

Telemedicine and the Law, AHLA-PAPERS P06049729