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Telemedicine legalities for physicians in PA

By Nancy W. Miller, Esq.

The use of telemedicine has expanded dramatically in the past several years. While teleradiology perhaps represents the most extensive use of telemedicine, it is also used by specialists in the fields of pathology, radiology and mental health in applications ranging from high resolution still images, such as x-rays, to sophisticated interactive teleconferencing systems.

Telemedicine holds great potential for expanding access to specialty expertise, rapid availability of patient records and reducing the costs of patient care. However, a number of issues related to its further development, including licensure, reimbursement, liability and patient confidentiality, will undoubtedly impact the manner and extent to which physicians utilize it.


The increased use of telemedicine across state lines results in licensure issues. For example, should a Pittsburgh surgeon who teleconsults with an Cleveland physician and his patient be licensed in Ohio?

Currently, each state has a licensing statute which requires a physician to be licensed in the state in which the physician “practices medicine.” However, licensure becomes an issue when a patient is located in a state different from the state in which the physician is located or the state in which the physician is licensed, or when a telemedicine session involves a consultation with an out-of-state physician.

In the past, many states allowed physicians to practice medicine out-of-state without acquiring a license in that state by creating a “consultation exception” to the licensure statute. Thus, an out-of-state physician could provide an instate patient with a teleconsultation if the out-of-state physician was consulting with an instate physician. In recent years, the trend has been shifting to require licensure. At the present time, ten of the eleven states which have passed telemedicine laws have required an out-of-state physician to obtain a license to practice medicine before consulting directly with patients in that state.

Pennsylvania has not enacted a telemedicine law; however, the State Medical Board has interpreted the licensing statute to require full licensure for telemedicine consults by out-of-state physicians.


Another important question that needs to be answered is what right to reimbursement the consulting physician has when he or she is not licensed to practice in the state.

In general, the Medicare program does not provide reimbursements for patient/physician teleconsultation services because consultations must occur “face-to-face” to be reimbursable. Thus, current reimbursement of telemedicine is limited to teleradiology and interpretation of electrocardiograms and electroencephalograms as these services would not require a face-to-face contact under general practices.

However, in January 1999, Medicare began reimbursing physicians for telemedicine services delivered to patients in rural, underserved “health professional shortage areas.” To be eligible for reimbursement, there must be a “consultation via telecommunications systems between a Medicare beneficiary’s physician and a consulting physician.”

At the present time, the Medical Assistance program in Pennsylvania does not cover any telemedicine services.

The interest in telemedicine by the private sector managed care plans primarily stems from the fact that this technology may be the most effective way for plans to penetrate, expand or hold their market share in rural, under-populated areas. The availability of telemedicine may be a tool by itself to facilitate the marketing of plans. Telemedicine also has the potential to decrease costs associated with health care professional travel, patient transfers between hospitals, duplication of records and overhead costs such as excess paper and film.

While most private insurance companies have yet to develop a comprehensive telemedicine reimbursement policy, most cover teleradiology and similar imaging services. In part, private payors have not embraced telemedicine because of a concern that physicians might obtain less information in a teleconsultation than they would in a face-to-face examination despite the existence of high resolution video, fiber-optic cables, and other advanced imaging technology.

A significant reimbursement issue which discourages private payors is whether transmission costs should be factored into the reimbursement rate. According to a government report, the average equipment purchase, excluding switches and new lines, ranged from $134,000 for “spoke” sites (the patient’s location) to $287,000 for “hub” sites (the specialist’s location). Transmission costs were also high, ranging from an average of $18,000 for spoke sites and $80,000 for hub sites. Per-visit costs averaged $476 for spokes and $1,181 for hubs, excluding any reimbursement for physicians.


A physician’s use of telemedicine also poses a variety of new risks and questions of liability which do not occur in traditional medicine. A few of these issues include the following:

Has a physician-patient relationship been established through telecommunications? A prerequisite for a malpractice suit is the existence of a physician-patient relationship. The trend emerging from recent cases indicates that courts will find a physician has created a patient-physician relationship with a patient with whom she has had only brief telephone contact and even though the physician has never met the patient.

If a lawsuit is filed, which state’s law will apply: the state where the physician is licensed, the state where the alleged patient injury occurred, or both? The answer to this question is unclear at this time. Based on established legal principles, it is likely that an action could be brought in the physician’s home state. However, when these issues are finally resolved, it seems likely that physicians practicing telemedicine could also be subject to the jurisdiction of the patient’s home state.

Will the malpractice insurance companies cover physicians’ telemedicine activities? Most malpractice policies exclude coverage for unlicensed activities. Thus, if a physician provides telemedicine services in a state in which he or she is unlicensed and that state requires full licensure, the company could deny coverage. Physicians should contact their insurance agents to clarify this issue and obtain coverage if necessary.

Is the physician, the manufacturer, or both liable for the failure of the technology equipment? For example, much of the information transmitted in telemedicine is “compressed” before it is sent, and “decompressed” at the receiving end. Compression is a widely used and accepted mathematical process used in computer transmissions which saves time and money. However, some experts believe that compression can distort data, particularly images, and result in a misdiagnosis based on data that has been distorted in transmission.


New technology has provided the health care industry the opportunity to electronically record, store, transfer and share medical data. At the same time, serious questions of privacy and confidentially stem from the misuse, interception and unauthorized use of data after it is received. Lack of privacy and security standards are of particular concern in the use of telemedicine technologies for treating mental illness, substance abuse and other conditions that carry a social stigma.

While the computerization of medical records has many advantages, electronic records are also susceptible to risks inherent in the use of computer technology, such as viruses, programming errors, electrical spikes and inaccessibility during computer malfunctions. In addition, the “human element” also impacts the security of electronic records. For example, confidential information could be destroyed or disseminated for personal gain. Another concern is that computer “hackers” can gain unauthorized access and may be able to recover records which have been presumed to be deleted.

Technology and telemedicine are here to stay. Physicians will be impacted by the benefits brought to medical practice, including a means to curb the increasing costs of medical services and to provide medical care to remote areas. Before these benefits can be fully realized, however, numerous issues related to licensure, reimbursement, liability and records confidentiality must be resolved. These hurdles are formidable and the solutions are slow in coming, but the efforts result in the reward of a better health care system for our country.

Nancy W. Miller, Esq., is with the law firm of Houston Harbaugh in Pittsburgh, Pa.

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