Telemedicine Report Cards Issued, Three States Flunked the Test

The American Telemedicine Association (ATA) released two reports that highlight gaps in coverage, reimbursement, physician practice standards, and licensure. The reports represent a novel approach to analyzing new content by identifying and comparing state policies. The reports included report cards where states are rated with grades ranging from A to F. The reports are designed to present the information in a simple and easy to use format. Jonathan Linkous, CEO of ATA, said in an ATA press release that the hope for the reports is “to showcase the states that are doing an excellent job when it comes to telemedicine, and to serve as a wake-up call to those who are failing to extend quality and affordable care to the residents of their state.”

Coverage and Reimbursement

The first report of the two focuses on how states succeed in their approaches to coverage and reimbursement for telemedicine. The report seeks to understand the success of states by analyzing state achievements with 13 indicators. The indicators include comparisons between telemedicine and in-person care, Medicaid’s use of telemedicine in the state, eligible telemedicine technologies available in the state, geographical restrictions, eligible providers, restrictions on telemedicine physician services, eligibility of mental and behavioral health services, and the eligibility of home health services.

For each indicator, states were assigned a grade of A through F as well as a composite grade for overall performance. Maryland, Maine, Mississippi, New Hampshire, New Mexico, Tennessee, and Virginia all received the highest composite scores, while Connecticut, Iowa, and Rhode Island received the lowest.

Physician Standards and Licensure

The second report details the differences between professional licensure portability and practice standards for telemedicine among states. It highlights the fact that differing state standards for physicians is one of the biggest challenges that telemedicine faces.The report analyzed state standards and policies that inhibit the use of telemedicine and assigned states a grade that is representative of the success of its current policies when compared to other states. State policies were analyzed against four indicators: physician-patient encounters, requirements to have a health care provider present during telemedicine encounters, informed consent requirements, and licensure.

As was the case with the first report, the standards and licensure report assigned individual grades for each indicator and a composite grade for each state. Twenty-three states and the District of Columbia were awarded the highest composite grade, indicating a landscape that is supportive of telemedicine. Twenty-seven states fell into the middle category which suggests those states have room to improve. One state, Alabama, received the lowest composite score.

Highlight on Kansas: Medicaid Privatization Dims the ‘Shining Star’ of Fraud Prevention

The privatization of Medicaid in Kansas is complicating the state’s ability to detect fraud and abuse in its $3 billion KanCare Medicaid program. According to a report from the Kansas Health Institute, when Kansas moved to a privatized Medicaid program in 2013, where Medicaid is offered through three private managed care companies, the state’s Medicaid fraud control unit was handed additional burdens that have obstructed the unit’s ability to effectively combat health care fraud. The Kansas attorney general’s Medicaid Fraud and Abuse Division 2014 Report sets out the cause of the inadequate fraud detection and points its finger at the three managed care companies who are reportedly not providing the state with adequate information to investigate abuse claims.


KanCare was devised as a cost saving mechanism in Kansas. The Medicaid program serves consumers through three managed care organizations that offer Medicaid plans. The KanCare health plans are Amerigroup of Kansas, Inc. (Amerigroup), Sunflower State Health Plan (Sunflower), and UnitedHealthcare Community Plan of Kansas (United). The two organizations in charge with oversight and administration of the program are the Kansas Department of Health and Environment (KDHE) and the Kansas Department for Aging and Disability Services (KDADS).


According to the report, the three managed care organizations are not submitting sufficient data to the state. Specifically, the attorney general reported that the managed care plans are providing incomplete and obscured claims data. The lack of adequate data is worsened by the fact that fraud investigators now have to navigate three separate organizations and three separate sets of rules and procedures when investigating claims of fraud. One example of failures in communication offered by the report was an instance where the Medicaid Fraud and Abuse Division was investigating a claim of fraud without awareness that all three of the managed care organizations either had or were in the process of their own investigation of the provider at issue.


Although KDHE, KDADS, and the state attorney general are aware of the problem, opinions differ as to how it should be corrected. According to the Kansas Health Institute, Kansas state Senator Jeff King said that a legislative reaction to the problem was a “last resort” despite the fact that he characterized the state’s Medicaid fraud unit as having historical been one of the “shining stars” of the state’s attorney general’s office. The Kansas Health Institute also reported that A.J. Kotich, a Democrat who is running against Kansas Attorney General Derek Schmidt’s in the state’s upcoming election, said that if he were elected he would “use the full authority of the office” to address the problem.

Bigger than Kansas

There are some suggestions that Kansas is not alone with its fraud control problems. A May, 2014, GAO report was devoted specifically to the fact that gaps are often developing in the tracking of Medicaid funds that are transferred through private organizations. A 2013 Medicaid Fraud Control Unit report from the HSS Office of Inspector General (OIG) highlighted similar concerns. Whatever the true cause of the inefficiencies, the problems plaguing federal and state healthcare programs are diverse and widespread. The states facing such issues need to act to correct what appear to be simple communication errors before they lead to more fundamental failures in the administration of Medicaid.


Kusserow’s Corner: Medicare Trust Fund Estimated to Survive through 2030

It is widely known that the aging of the population is creating a “time bomb” for Medicare Part A. The question for decades has been when will the bomb explode, that is, when will the Fund bankrupt and not have enough money to pay for Medicare Beneficiary services. The Trust Fund is supported by the Federal Insurance Contribution (FICA) tax of 7.65 percent that is automatically withheld from every employee’s check with another 7.65 percent being paid by the employer on behalf of the employee. This is to pay into both the Social Security and Health Insurance (HI) Trust Funds. Of the 7.65 percent FICA, exactly 1.45 percent of the salary goes into the HI trust.

The reason for the time bomb concern is that, demographically, we have long known that the ratio of working employees that contribute to the trust funds is declining against the growing number of elderly individuals who are drawing against the funds as Social Security recipients and Medicare beneficiaries. The simple reality is that Americans are living longer. There are only a few options open for staving off the explosion for the Medicare Trust Fund: raise FICA taxes, reduce the rates of escalation of health care costs, and/or cut benefits.

During my tenure as HHS Inspector General, we worked diligently to reduce the rate of health care costs due to waste, abuse, and fraud. The Office of Inspector General (OIG) continues in this effort. No matter the amount of effort, this cannot but slightly slow down the rate of the explosion. Other measures to reduce the rate of increase in health care costs relate to cutting back expenditures for health services, not an attractive alternative. The daily press speaks about changes in reimbursement initiatives by Medicare and how that invokes a great deal of outcry from the provider community. The most controversial method to staving off bankruptcy of the HI is to cut on the benefit side of the equation. So far, the only step in that direction is moving towards means-tested programs whereby those with larger incomes may receive fewer benefits.

So, the question comes down to the estimated date of the explosion or bankruptcy of HI. This year, the Office of the Actuary in CMS issued its most recent report on the state of the Medicare Trust Fund to the Trustees who are mandated to report annually to Congress on the financial operations and actuarial status of the program. There is one combined report, discussing both the HI program (Medicare Part A) and the Supplementary Medical Insurance (SMI) program (Medicare Part B and Prescription Drug Coverage). It is the second-largest social insurance program in the U.S. after Social Security, with 52.3 million beneficiaries and total expenditures of $583 billion in 2013. The Trustees Report details a substantial amount of information on the past and estimated future financial operations of the Trust Funds. The report projects that the Medicare HI Trust Fund will face depletion by 2030.

The Trustees project that total Medicare costs (including both HI and SMI expenditures) will grow from approximately 3.5 percent of GDP in 2013 to 5.3 percent of GDP by 2035, and will increase gradually thereafter to about 6.9 percent of GDP by 2088. The Trustees noted that projected long-term actuarial imbalance is smaller than that of the Social Security trust funds under the assumptions employed in this report.

It is important to note that Part B of SMI, which pays doctors’ bills and other outpatient expenses, and Part D of SMI, which provides access to prescription drug coverage, is outside the Trust Fund. Under current law, it is funded by the Treasury of the United States and is part of the federal budget. As such, the federal government automatically provides financing each year to meet the next year’s expected costs. General revenues finance roughly three-quarters of these costs, and premiums paid by beneficiaries finance almost all of the remaining quarter. SMI receives a small amount of financing from special payments by states and from fees on manufacturers and importers of brand-name prescription drugs.

However, the aging population and rising health care costs cause SMI projected costs to grow steadily from 1.9 percent of the Gross Domestic Product (GDP) in 2013 to approximately 3.3 percent of GDP in 2035, and then more slowly to 4.5 percent of GDP by 2088. What this means is that it could bankrupt the federal government. As such, we can expect that health care will remain a top policy issue for the federal government for years to come as they seek solutions to a problem that is growing daily. What providers can expect is increased scrutiny and action by enforcement agencies to find any and all waste, abuse, and fraud that is contributing to the problem.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow’s Corner Newsletter

Copyright © 2014 Strategic Management Services, LLC. Published with permission.

Attorney General Holder Acts to ‘Take-Back’ Unnecessary Prescription Drugs

Attorney General Eric Holder announced a new Drug Enforcement Administration (DEA) regulation that represents new take-back efforts to dispose of unused and unnecessary prescription drugs so that the growing problems of prescription drug misuse and addiction can be mitigated. The Attorney General announced the new regulation through a video message posted on the Justice Department’s website. According to the Attorney General’s message, “prescription drug misuse is an urgent and growing threat.”


The video message highlights the fact that the scope of the problem is expansive. For example, according to the video, “in 2011 alone, more than half of the 41,300 unintentional drug overdose deaths in the United States involved prescription drugs, and hazardous opioid pain relievers led to about 17,000 of those deaths.” According to a DOJ press release, the danger is particularly prominent for young people. Despite the risk, many instances of misuse appear to have simple solutions. For example, The Attorney General commented that almost four in ten teens who have misused prescription drugs obtained them from their parents’ medicine cabinets.

New Regulation

The new DEA regulation will allow pharmacies, hospitals, clinics, and other authorized collectors to function as drop-off sites where unused prescription drugs can be disposed. The new policy will also allow long-term care facilities to collect controlled substances turned in by residents of those facilities. Additionally, the DEA regulation will allow any user of prescription drugs to mail their unused prescription drugs to authorized collectors. The hope, according to the Attorney General’s video, is that the new regulation will save lives and protect families from the dangers of prescription drug abuse.

Other Efforts

The DEA has been engaged in continuing efforts to reduce the misuse of prescription drugs. One example is the National Prescription Drug Take-Back Day initiative that promotes awareness and provides resources to allow individuals to get rid of unnecessary drugs. During the DEA’s last take-back event, the DEA coordinated the safe return of 390 tons of prescription drugs at nearly 6,100 sites. The next take-back event will be September 27, 2014.