TeleMedicine Behind the Scenes

Updated on April 22, 2019

By Paul Murphy

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TeleMedicine is receiving increasing amounts of focus and attention. While the initial phase of a telemedicine practice often focuses on technology, the back-office items often go unnoticed. Despite this, the back-office items should receive as much, if not more, attention than the technology.  

The Back-office of TeleMedicine


This includes the (a) initial and (b) renewal contracts with (1) technology vendors, (2) providers, and (3) healthcare entities. Technology vendors include any hardware or software company. Providers include any employed or independent practitioners who provide telemedicine services. Contracts between healthcare entities include hospital-to-hospital, provider-to-clinic, and provider-to-known and provider-to-unknown patients.  

Telemedicine providers and payment

How much money can the provider be paid for providing telemedicine services? There are numerous factors involved in determining provider compensation. In some scenarios a “Fair Market Valuation”, or FMV, is performed to determine the provider payment. A key goal of the FMV process is to support appropriate provider compensation for the telemedicine services being offered.

Compensation models vary. A monthly per-diem includes a monthly payment to the provider group for their availability and professional fee.  In a per-consult model the provider is paid only when services are used.

“How much does the technology cost?” 

The telemedicine device market is replete with technology and pricing options. For some devices, such as a cart or tablet, a leasing option may be preferable to purchase option as the “modern” today may be outdated in a couple of years.  

“Free” technology

If your telemedicine program provides technology at no charge (e.g.  for “free”), you should research if the free technology applies to all telemedicine service lines or only select service lines. While it may be great for a hospital to receive technology at no cost for service line “A”, a technology fee for service line “B” may be required.

What fee to charge? 

This is the fee that the patient, clinic, or hospital will pay for receiving telemedicine services. There are different billing models and examples include per-click, monthly per-diem, as well as prescription/membership based.  

Accounting and telemedicine are (and should be) closely aligned. 

Accounting ensures that payments are processed correctly. This includes that providers are paid and that consumers (e.g. hospital or patients) are billed for and pay for services provided. Without accounting, the healthcare entity that is providing the services is at risk for a variety of regulatory and financial issues.  

Insurance. Reimbursement. Telemedicine

Reimbursement for services provided via telemedicine varies. Factors include the payor, the state where services are being provided, the clinical service being offered, and where (e.g. direct-to-consumer, home, clinic, hospital) the services are being provided. It will be important to review this with your payor billing team to ensure that correct claims are submitted to the payor(s).

Interstate Medical Licensure Compact, or IMLC.  

The IMLC allows a physician to be licensed in multiple states in an expedited manner. This has supported the speed-to-market of certain telemedicine models. However, in some telemedicine models, physician credentialing (e.g. facility specific privileges) is required to be in place prior to the physician providing clinical services via telemedicine. Provider state licensure and credentialing can take several weeks, potentially slowing the overall telemedicine deployment. 

TeleMedicine: It’s just technology…right?

The following are examples of back-office related items that extend beyond the 

technology buzz.

Contract breech

A breach occurs when one of the parties deviates from the terms of the contract. Examples include: a hospital not paying their coverage fee or a provider group gaining access to technology without having the correct contract in place. A contract breach can result in a cascade events, including legal and financial penalties.


A new telemedicine provider has been hired and provides telemedicine services. During a routine audit of the provider’s credential files it is learned that the provider’s clinical credentialing has not been completed and that the provider should not be providing services via telemedicine. The provider has conducted more than 40 telemedicine consults of which half involved prescribing medications.


Telemedicine promotes access to quality healthcare and can be cost-effective. Gone are the days of focusing on the technology. Back office items must receive the same, if not more, attention. 

Paul Murphy has been involved in healthcare for more than 15 years, including clinical and administrative roles. He has written numerous articles and textbook chapters on a variety of topics ranging from clinical to leadership to technology, including telemedicine. 

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