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Telepsychiatry's Untapped Potential: When Will It Pay to Deliver?

William Kanapaux
January 1, 2005

The program also serves as a teaching tool for the faculty at Columbia University. "We have a library of teaching tapes unlike basically anything in the world of usual and unusual psychopathology," he said.

But the OMH project is a high-end system that would not be easy to replicate. It has access to a large faculty at Columbia University who are willing to provide consultations for free. And the program is not a direct-service model, which allows it to avoid some of the complications with follow-up that can occur when providing services directly to the patient.

Cost Issues

"The biggest hurdle is who's going to pay for this," Hyler said. Current procedural terminology (CPT) codes for telepsychiatry exist, "but I don't believe that anyone is paying for this yet."

The Center for Medicare & Medicaid Services (CMS) currently allows for reimbursement of telemedicine under Medicare for rural areas that meet the agency's stringent criteria. Any increasing willingness on the part of Medicare to reimburse telemedicine services would likely result in a growing acceptance of such services by third-party payors.

In the meantime, telepsychiatry programs must show that they are cost-effective in order to survive, Hyler and Dinu P. Gangure, M.D., wrote in "A Review of the Costs of Telepsychiatry," which appeared in the July 2003 issue of Psychiatric Services (54[7]:976-980). The decreasing cost of the technology will help make this happen, as will the sharing of telehealth systems among different medical disciplines.

Out of 12 studies published between 1995 and 2002 dealing specifically with the costs of telepsychiatry, seven demonstrated that telepsychiatry was worth the cost, Hyler and Gangure wrote. However, the studies used weak methodologies and lacked comparable data.

The authors for most of the studies also had a vested interest in the success of the programs they wrote about. And one study concluded that a lack of business plans made it difficult to determine whether any telepsychiatry program is cost-effective.

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