Reimbursement is commonly cited as a major barrier for telemedicine. About 90 million people are in managed care systems, yet there is not much evidence about managed care organizations using telemedicine to control costs. Additionally, Medicare does not reimburse very much in the fee-for-service system, and that reimbursement is largely limited to nonmetropolitan areas, to certain institutions, and to certain current procedural terminology (CPT) codes. Many of these restrictions result from fears that telemedicine either will allow providers to abuse the health care system or will lead to overutilization and drive up costs. A lot of technology companies that are not fully informed about the health care market are getting involved in telemedicine because they see large financial opportunities. As a result, many technologies are being produced by people who are attracted to the potential market of health care without really understanding the applicability of telemedicine.


Licensing was a minor issue when the ATA was formed, because most telemedicine systems operated within a single state. Today there are multistate systems with multistate practices. As most of the major health care providers move into a national system, licensure is becoming a bigger barrier. Practice regulations may be an even larger barrier than licensure, as many state medical boards require an in-person consultation before initiation of any telemedicine services. In fact, the American Medical Association recently proposed a resolution to the same effect, and federal legislation has also been proposed. Telemedicine also often encounters barriers with traditional regulatory agencies (e.g., the Food and Drug Administration [FDA], the FCC). Finally, another major barrier to the use of telemedicine is Section 1834(m) of the Social Security Act,1 which limits the use of telemedicine to certain providers.


We are victims of our own hype. We tend to talk about studies and all the wonderful things that telemedicine can do, but a lot of studies show that some applications of telemedicine do not work or cost too much. To move telemedicine forward, we have to be realistic about what works and what does not.


1 Social Security Act, § 1834(m).

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