CMS Issues Final Rule on Credentialing and Privileging for Telemedicine

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By Adrienne Dresevic, Esq. and Carey F. Kalmowitz, Esq.

June 2011–The Centers for Medicare and Medicaid Services (CMS) issued its final rule for telemedicine credentialing and privileging for hospitals and critical access hospitals (CAHs) on May 5, 2011. The Final Rule is effective July 5, 2011 and amends the conditions of participation (CoPs) for hospitals and CAHs, creating a more streamlined process for credentialing and privileging of telemedicine physicians.

Prior to the Final Rule, regulations had required hospitals and CAHs to apply the credentialing and privileging requirements as if all practitioners were onsite. CMS finally recognized this as a “limited approach,” which failed to “embrace new methods and technologies for service delivery that may improve patient access to high quality care.” Now, under the Final Rule, a hospital that provides telemedicine services to its patients via an agreement with a “distant-site” hospital would be allowed to rely upon information furnished by the distant-site hospital (often a larger medical center) in making credentialing and privileging decisions for the distant-site hospital’s physicians and practitioners providing telemedicine services. The rule will reduce the burden and duplicative nature of the traditional privileging process for Medicare-participating hospitals and CAHs engaged in telemedicine agreements, while still assuring accountability to the process.

Notably, in issuing the Final Rule, CMS recognized that including the medical staff of a distant-site telemedicine entity as part of the new optional and streamlined credentialing and privileging process would increase the overall effectiveness of the Final Rule. A distant-site telemedicine entity is defined as one that (1) provides telemedicine services; (2) is not a Medicare-participating hospital; and (3) provides contracted services in a manner that enables a hospital or CAH using its services to meet all applicable CoPs, particularly requirements related to the credentialing and privileging of practitioners providing telemedicine services to the patients of a hospital or CAH. The governing body of the hospital or CAH using telemedicine services is responsible for ensuring that the distant-site hospital or entity meets CMS credentialing and privileging standards. One way of ensuring this is the Final Rule’s clarification that an agreement for the provision of telemedicine services be in writing. These agreements must be provided, upon request, when a hospital or CAH is surveyed.

Thus, if a telemedicine agreement is entered into with a distant-site hospital, the governing body of the hospital or CAH must ensure, through its written agreement, that the following provisions are met in order to allow its medical staff to rely upon the credentialing and privileging decisions made by the distant-site hospital when recommending privileges for individual physicians and practitioners providing such services:

  1. The distant-site hospital is a Medicare-participating hospital;
  1. The individual distant-site physician/practitioner is privileged at the distant-site hospital providing the telemedicine services, and a current list of those privileges are provided;
  1. The individual holds a license issued or recognized by the State in which the hospital whose patients are receiving the telemedicine services is located;
  1. With respect to a distant-site physician/practitioner who holds current privileges at the hospital whose patients are receiving the telemedicine services, the hospital has evidence of an internal review of the distant-site physician/practitioner’s performance of these privileges and sends the distant-site hospital such performance information for use in the periodic appraisal of the distant-site physician/practitioner.

If a telemedicine agreement is entered into with a distant-site telemedicine entity (as opposed to a Medicare-participating hospital), the governing body of the hospital or CAH must ensure, through its written agreement, that the distant-site telemedicine entity, acting as a contractor of services, furnishes its services in a manner that enables the hospital or CAH to comply with all applicable CoPs and standards. The final three requirements are the same as with a Medicare-participating hospital.

Of particular significance under the written agreement is that hospitals or CAHs that rely on this new so-called proxy credentialing will need to share what is generally considered privileged peer review information with the distant-site hospital or distant site entity for those practitioners who exercise telemedicine privileges at the hospital or CAH. Thus, it is wise for the written agreements to include language that will assure ongoing protection of this peer review information.

The Final Rule does not require, but allows, the “providing” hospital to decide, in its own discretion, whether to rely on credentialing and privileging decisions of the distant-site telemedicine entity (or hospital) or follow its traditional procedures. Hospitals and CAHs that choose to use this new streamlined proxy credentialing approach should (1) takes steps to ensure that their medical staff bylaws permit credentialing for telemedicine privileges consistent with the Final Rule and (2) have written agreements in place.

Adrienne Dresevic, Esq. graduated Magna Cum Laude from Wayne State University Law School. Practicing healthcare law, she concentrates in Stark and fraud/abuse, representing various diagnostic imaging providers, eg, IDTFs, mobile leasing entities, and radiology and multi-specialty group practices.

Carey F. Kalmowitz, Esq. graduated from NYU Law School. Practicing healthcare law, he concentrates on corporate and financial aspects, eg, structuring physician group practice transactions; diagnostic imaging and ancillary services, IDTFs, provider acquisitions, CON, compliance, and Stark and fraud/abuse.

The authors are founding members of The Health Law Partners, P.C. and may be reached at (248) 996-8510 or (212) 734-0128, or at

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