Telemedicine has revolutionized healthcare, offering patients better access to care and providers new income streams. During the early days of COVID, telehealth usage skyrocketed 78 times higher than it was two months before, highlighting the rapid shift in healthcare delivery.

However, this digital transformation brings its own set of accounting challenges. Accurate reporting is crucial for compliance, maximizing reimbursement, and keeping virtual healthcare practices financially healthy. Let's dive into the key accounting hurdles in telehealth and explore practical solutions.

Revenue Management in Telemedicine

Effective revenue management is the backbone of financial integrity in telemedicine. As virtual practices grow, it's vital to implement robust strategies for charge capture, revenue recognition, and denials management.

Charge Capture

Charge capture in telemedicine presents unique challenges due to the remote nature of services. Practices should implement real-time documentation systems that allow providers to record services immediately after patient encounters. This reduces the risk of missed charges and improves overall accuracy. Additionally, integrating automated coding assistance can help ensure proper code selection and minimize errors, which is particularly crucial given the complex and evolving nature of telemedicine billing codes. Key strategies for effective charge capture include:

• Use real-time documentation systems for immediate service recording
• Integrate automated coding assistance to minimize errors
• Connect charge capture tools with existing EHR systems
• Adopt mobile-friendly solutions for provider convenience
• Regularly audit to address inefficiencies

Revenue Recognition

Practices must identify distinct performance obligations in contracts, which often include multiple components like initial consultations, follow-ups, and ongoing monitoring. Each element may have different recognition points, and timing can vary between point-in-time and over-time recognition. Key considerations include:

• Identify distinct performance obligations in contracts
• Decide when to recognize revenue (at a point or over time)
• Account for variable pricing
• Establish procedures for contract modifications

Denials Management

Denials management is another critical aspect of revenue management. Addressing denied claims promptly can significantly improve revenue recovery. This process should involve thorough root cause analysis to identify patterns and underlying causes of denials. Leveraging predictive analytics can help practices anticipate potential denials before they occur, allowing for proactive problem-solving. Effective denial management strategies include:

• Conducting root cause analysis of denied claims
• Utilizing predictive analytics to prevent potential denials
• Implementing automated denial workflows
• Providing regular staff training on payer policies and coding guidelines
• Optimizing the appeals process with standardized procedures
• Establishing and monitoring key performance indicators for the denials management process

Regulatory Compliance in Telemedicine

The regulatory landscape for telemedicine is complex and rapidly evolving. Staying compliant is crucial for maintaining your practice's financial health and avoiding potential legal issues. Here are the key areas to focus on:

Licensing and Credentialing

Ensure all providers are properly licensed in every state where they practice telemedicine. Be aware of interstate licensing compacts, such as the Interstate Medical Licensure Compact, which can streamline multi-state licensing. Maintain up-to-date credentials with all relevant payers for telemedicine services.

Reimbursement Policies

Stay informed about which services are reimbursable via telemedicine for different payers, including Medicare, Medicaid, and private insurers. Be aware of any geographic restrictions on telemedicine reimbursement and understand the use of telemedicine-specific modifiers and place of service codes for billing.

HIPAA

Ensure your telemedicine platform is HIPAA-compliant, including end-to-end encryption for video consultations. Implement Business Associate Agreements (BAAs) with all vendors who may have access to protected health information (PHI).

Prescribing Laws

Familiarize yourself with federal and state laws regarding prescribing medications via telemedicine, especially for controlled substances. Be aware of any requirements for establishing a physician-patient relationship before prescribing.

Fraud and Abuse Laws

Ensure compliance with the Anti-Kickback Statute and the Stark Law in your telemedicine practices. Be cautious of any arrangements that could be seen as inducements for referrals or self-referrals.

Consent and Disclosure Requirements

Obtain and document patient consent for telemedicine services, including any state-specific requirements. Clearly disclose to patients any limitations of telemedicine services and their rights.

Documentation Standards

Maintain thorough documentation of telemedicine encounters, including the technology used, duration of service, and clinical findings. Ensure documentation meets or exceeds the standards for in-person visits.

Other

• Designate a Compliance Officer
• Implement a comprehensive compliance program
• Conduct ongoing staff training
• Stay updated on regulations
• Perform regular internal audits
• Consult with healthcare attorneys specializing in telemedicine

Patient Privacy and Cybersecurity

In the digital world of telemedicine, patient privacy and cybersecurity are paramount. A healthcare data breach can cost over $10 million to mitigate, so protecting patient information is crucial.

Team up with IT professionals to ensure your telemedicine platforms are secure and HIPAA-compliant. Develop strong privacy and cybersecurity policies, train employees on data security, and establish clear protocols for potential data breaches. Regular security audits can help uncover and address vulnerabilities.

Leveraging Lutz's Expertise

Addressing the financial reporting challenges in telemedicine requires a strategic approach and specialized expertise. At Lutz, we understand these complexities and can provide comprehensive accounting solutions. Contact us with questions or to learn more.