The Centers for Medicare and Medicaid Services (“CMS”) published a final rule on May 5, 2011, that implements a new credentialing and privileging process for physicians and other practitioners providing telemedicine services. The final rule modifies the Medicare conditions of participation to permit hospitals to rely on the credentialing and privileging determinations of another hospital or telemedicine entity, rather than make an individualized decision based on the practitioner’s credentials and record.

The goal is to remove “unnecessary barriers” to the use of telemedicine and “enable patients to receive medically necessary interventions in a more timely manner.”

The hospital that is providing telemedicine services to its patients must have an agreement with the distant site hospital or distant site telemedicine entity and require that the distant site meet the existing Medicare conditions of participation for credentialing and privileging decisions. The hospital must ensure that:

• The distant site entity is either a Medicare participating hospital, or its credentialing and privileging process and standards meet those in the Medicare conditions of participation;
• The physician or practitioner is privileged at the distant site;
• The physician or practitioner holds a license issued or recognized by the state in which the hospital’s patients are receiving the telemedicine services; and
• It reviews the exercise of telemedicine privileges at the hospital and provides this quality assurance/performance improvement information to the distant site for use in its periodic appraisal of the physician or practitioner.

CMS will need assistance from state regulators to meet the goal of improving access to telemedicine services. Under New York law, a hospital is required to conduct certain due diligence before it grants privileges to a physician. For example, the hospital must collect information regarding the physician’s malpractice history and the exercise of privileges at other hospitals.

Thus, a New York hospital wishing to grant telemedicine privileges to a physician must ensure that it has the required information in its credentialing file. This could be an issue when relying on a distant site’s credentialing process. If the distant site is outside New York, the file may not contain all the required information. If the distant site is located in New York, the information in the file must be updated before it can be relied on by the hospital wishing to grant telemedicine privileges. To meet these requirements, either the credentialing hospital or the distant site hospital must update the credentialing information.

If New York regulators want to improve access to telemedicine services in underserved areas of New York by adopting the same approach as CMS, they will need to convince the New York Sate legislature to amend existing statutes to permit reliance on the past credentialing decisions of the distant site. The New York State legislature is likely to agree to this approach only if the hospital is located in New York and subject to New York regulation and oversight.