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Practical Implications of Telemedicine Credentialing

By Lucia Francesca Bruno, J.D., LL.M., M.B.A.

For the past century, information technology has reinvented the familiar and revolutionized the art of medicine.  As health care professionals struggle to keep pace with an ever-changing and consolidating industry, traditional forms of health care have succumbed to modern technology and fiscal constraints.  No longer are patients and providers afforded the luxury of being in the same place at the same time.  Recent developments in patient-service delivery systems have transformed the doctor/patient relationship; paving the way for advances in telemedicine and the credentialing and privileging of telemedicine practitioners. 

Inside Look into Telemedicine

The Centers for Medicare and Medicaid (“CMS”) defines telemedicine as “the provision of clinical services to patients from a distance via electronic communications.”[1] Although telemedicine is not considered a medical specialty, products and services unique to this practice of medicine often require a costly investment in information technology and the delivery of clinical care by health care providers. Telemedicine seeks to improve a patient’s health by permitting two-way, interactive, communication between the patient and the physician, at a distant-site, for purposes of assessment, diagnosis, and intervention.  Examples of telemedicine include, but are not limited, to the following:  videoconferencing; transmission of still images, and remote monitoring of vital signs.

A Past Marred by Obstacles

Historically, smaller hospitals and Critical Access Hospitals (“CAHs”) desiring to take advantage of this cost-effective form of clinical care were hampered by duplicative and burdensome Conditions of Participation (“CoPs”) and redundant regulations.   In particular, the credentialing process of obtaining and reviewing practitioner data such as licensure, training, certifications, insurance, and National Practitioner Data Bank queries created a financial burden many hospitals simply could not afford.   Furthermore, many lacked the clinical expertise within their medical staff to evaluate and grant privileges to physicians providing telemedicine services.

In a notorious policy brief issued by the National Rural Health Association (“NRHA”) in 2010, providers maintained that “the current telehealth credentialing process was more than an annoyance; it was a deterrent for providers and hospitals, and a barrier to expanding health care access.”[2]  NRHA urged CMS to “adopt a policy that allowed telemedicine providers to receive deemed status (as having met Medicare/Medicaid certification requirements) and permit health care facilities receiving telehealth services to perform credentialing by proxy (delegated credentialing).”[3]  NRHA surmised that “if a provider was already credentialed at a Medicare-participating facility, that credential would be sufficient to provide telemedicine services at another facility; while, the privileging process would remain the responsibility of the originating health care facility.”[4]

A Future Swayed by Reason

Acknowledging the need for transformational change, on May 5, 2011, CMS introduced the final rule which superseded prior Joint Commission privileging recommendations, and considerably streamlined the credentialing and privileging process for physicians providing telemedicine services. [5]

The final rule, effective July 5, 2011, made Federal requirements more flexible and encouraged innovative approaches to the delivery of patient-services; thereby, allowing patients to receive medically necessary interventions in a timelier manner.[6]   In addition to taking a more lenient approach to CoPs, CMS expanded the platform of telemedicine by defining key terms and requiring a written agreement between the “patient-site” and the “distant-site.”   The written agreement, subject to disclosure to CMS, must include specific elements and evidence the telemedicine practitioner’s privileges at the “distant-site.”

Key Terms Defined by CMS

“Telemedicine” is defined as “the provision of clinical services to hospital or CAH patients by practitioners from a distance via electronic communications, either simultaneously or non-simultaneously.”[7]

“Simultaneous” telemedicine services are performed in real-time, similar to the actions of an on-site practitioner when called in by an attending physician to see a patient, e.g., teleICU services. [8]

“Non-simultaneous” services are clinical services provided to the patient upon a formal request from the patient’s attending physician or practitioner; such services may involve after-the-fact interpretation of diagnostic tests and do not necessarily require the telemedicine practitioner to directly assess the patient in real-time, e.g., teleradiology services.[9]

“Distant-site” the location at which the physician or other licensed practitioner delivering the service is located at the time the service is provided via telecommunications.  A “distant-site” is either a Medicare-participating hospital or telemedicine entity (non-Medicare participating hospital) that provides contracted telemedicine services in a manner that enables the hospital or CAH using telemedicine services to meet all applicable CoPs; particularly, those related to the credentialing and privileging of telemedicine practitioners. [10]

Written Agreement Required:  Distant-Site Hospital

When the distant-site is a Medicare-certified hospital, the final rule requires that the hospital or CAH have a written agreement that expressly states that it is the responsibility of the distant-site hospital to meet the credentialing requirements of 42 C.F.R. 482.12(a)(1)-(a)(7) for hospitals or 42 C.F.R. 485.616(c)(i)-(c)(vii) for CAHs.  In addition, the written agreement must contain the following: (i) the distant-site hospital is a Medicare-participating hospital; (ii) the distant-site practitioner is privileged at the distant-site hospital as evidenced by a current list of the practitioner’s privileges provided by the distant-site hospital; (iii) the practitioner holds a license issued and/or recognized by the state in which the hospital or CAH whose patients receive telemedicine services is located; and (iv) the hospital that credentials and privileges the distant-site practitioner disclose the practitioner’s performance information, e.g., adverse events, complaints, and internal reviews.

Written Agreement Required:  Distant-Site Telemedicine Entity

To rely on the credentialing and privileging decisions by a distant-site telemedicine entity, the distant-site must affirm, in writing, that the telemedicine entity is a contactor of services to the hospital and furnishes contracted services in a manner that permits the hospital to comply with all applicable CoPs, 42 C.F.R. 482.12(a)(1)-(a)(7) for hospitals or 42 C.F.R. 485.616(c)(i)-(c)(vii) for CAHs.  In addition, the written agreement must contain the following: (i) the distant site’s credentialing and privileging process at least meet the standards in 42 C.F.R. 482.12(a)(1)-(a)(7) and 42 C.F.R. 482.22(a)(1)-(a)(2) when the originating-site is a hospital or 42 C.F.R. 485.616(c)(1)(i)-(c)(1)(vii) when the originating-site is a CAH; (ii) the distant-site practitioner has the experience and expertise as represented by the distant-site telemedicine entity; (iii) the practitioner holds a license issued and/or recognized by the state in which the hospital or CAH is located; and (iv) the hospital or CAH has evidence of an internal review of the distant-site practitioner’s performance of privileges to be exercised at the hospital or CAH; conversely, the hospital or CAH  must send the distant-site entity performance information for use in the entity’s periodic appraisal of the distant-site practitioner.

Effect on State Licensure

Despite the sweeping reform brought about by the final rule, CMS cautioned that all state-based physician licensure requirements will remain unchanged. Recognizing the fact that “licensure laws and regulations have traditionally been, and continue to be, the provenance of individual States, the final rule does not pre-empt State authority.”[11]

Although states remain split on the issue of telemedicine, many states espouse that their existing laws adequately reflect their position on the licensure of telemedicine practitioners.  Other states, however, affirm that a full and unrestricted license is necessary to practice telemedicine, and have reinforced that stance in law or policy.[12]

In an effort to address growing concerns amongst medical professionals, the American Medical Association (“AMA”) reaffirmed its policy to support state-based licensure for physicians and oppose national licensure approaches to telemedicine. In its annual assessment of physician licensure, the AMA declared that “telemedicine in particular has crystallized the tension between the states’ role in protecting patients from incompetent physicians and protecting in-state physicians from out-of-state competition, and the desirability of ensuring patients’ access to the highest quality medical advice and treatment possible, wherever located.” [13]

Despite tension between the states’ power to regulate health care professionals and the prohibition against restraint on interstate commerce, the practice of telemedicine has yet to be addressed by the courts.  Only time will tell if the final rule is sufficient to spur litigation in this cutting-edge practice of medicine.

Informed Consent Considerations

Despite comments to CMS encouraging patient informed consent be obtained before the use of telemedicine services by a hospital or CAH, CMS affirmed that under the final rule “there is no difference between distant-site practitioners and in-house or on-site practitioners with respect to informed consent.”[14]  CMS reiterated that “as long as the telemedicine practitioner is performing his or her duties within the privileges granted by the hospital or CAH, in accordance to a policy that requires informed consent, then consent must be obtained regardless of whether treatment is furnished by telemedicine or not.”[15]  For providers, this insightful decision alleviated one more instance of costly red tape. 

Medical Staff Bylaws and Standard Operating Procedures

In order to ensure full compliance and avoid unnecessary complications, providers are encouraged to amend medical staff bylaws and revise policies and procedures related to credentialing and privileging.  In particular, medical staff bylaws should contain current definitions relevant to telemedicine and an accurate description of the information-sharing process.  Medical staff bylaws should also reflect administrative changes to the provider’s Credentials Committee and Medical Executive Committee, especially as it pertains to clinical services provided by telemedicine.

Furthermore, medical staff policies and procedures should be amended to account for changes in clinical protocols, insurance coverage, billing and reimbursement, and HIPAA compliance.   As a precautionary measure, any medical staff policies that require the “physical presence” of a physician should be reevaluated to account for the delivery of patient services by electronic communications.

Finally, under the final rule, hospitals and CAHs that take advantage of privileging by proxy must disclose privileged peer review information to the distant-site.  Therefore, it is advisable that hospitals and CAHs carefully assess state-specific peer review guidelines and include language in the written agreement that ensures ongoing protection of peer review information.


There is no doubt that sweeping changes in the credentialing and privileging process has paved the way for greater advances in telemedicine services.   Dale Alverson, M.D., past president of the American Telemedicine Association surmised that “the final rule will truly help patients receive the care they need, no matter where they live or where their doctor is located.”[16] By eliminating the overly burdensome credentialing and privileging rules in Medicare, Dr. Alverson concluded that “CMS has shown growing support of telemedicine.” [17]

Despite the obvious benefits to patients, the long-term ramifications of the final rule on providers are yet, unknown.  Hospitals and CAHs using telemedicine services of distant-site practitioners are, therefore, encouraged to implement adequate policies and procedures to protect their interests and those of their patients.


Lucia Francesca Bruno, J.D., LL.M., M.B.A., is Principal Shareholder of Physicians’ Legal Group, LLC (www.physicianslegalgroup.com). She can be reached at Lbruno@physicianslegalgroup.com.


[1] Medicare and Medicaid Programs: Changes Affecting Hospitals and Critical Access Hospital Conditions of Participation: Telemedicine Credentialing and Privileging, 76 Fed. Reg. 25, 551 (May 5, 2011).

[2] Lewis, Pam, Mandy Bell, BA,  Deanna Larson, RN, BSN, and  Jay Weems, MBA:  “Telehealth Provider Credentialing” National Rural Health Association Policy Brief (2010): 1-4.

[3] Lewis, Bell, Larson, Weems, Telehealth Provider Credentialing, 1.

[4] Id. at 1

[5]  Medicare and Medicaid Programs: Changes Affecting Hospitals and Critical Access Hospital Conditions of Participation: Telemedicine   Credentialing and Privileging, 76 Fed. Reg. 25,550, 25,551 (May 5, 2011).

[6] 76 Fed. Reg.  25,551.

[7] Id. at 551.

[8] Id.

[9] Id.

[10] Section 1834(m)(4)(A) of the Social Security Act

[11] 76 Fed. Reg.  25,557.

[12] Office for the Advancement of Telemedicine, “Telemedicine Licensure Report” (2003).

[13] American Medical Association, “Physician Licensure: An Update of Trends” American Medical Association, 2012. Web. 15 January 2012 http://www.ama-assn.org/ama/pub/about-ama/our-people/member-groups-sections/young-physicians-section/advocacy-resources/physician-licensure-an-update-trends.page.

[14] 76 Fed. Reg.  25,555.

[15] Id. at 255.

[16] http://learntelehealth.org/blog/post/final-ruling-on-credentialing-privileging-of-telehealth-providers/

[17] Id.

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