2001

Telemedicine

Report to Congress

2001

Telemedicine

Report to Congress

U.S. Department of Health and Human Services

Health Resources and Services Administration • Office for the Advancement of Telehealth

2001

Telemedicine

Report to Congress

2001

Telemedicine

Report to Congress

i

January 2001

U.S. Department of Health and Human Services • Health Resources and Services Administration • Office for the Advancement of Telehealth
ii

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EDITORIAL STAFF

Dena S. Puskin, Sc.D.

Director

Office for the Advancement of Telehealth

Health Resources and Services Administration

U.S. Department of Health and Human Services

Joanne K. Kumekawa, MBA

Director of Policy

Office for the Advancement of Telehealth

Health Resources and Services Administration

U.S. Department of Health and Human Services

CONTRIBUTORS

Joanne Kumekawa

Principal Writer

Director of Policy

Office for the Advancement of Telehealth,

HRSA, DHHS

Mel Blackwell, Vice President

Rural Health Care Division

Universal Service Administrative Company

Everette T. Beers, PhD.

Center for Devices and Radiological Health

Food and Drug Administration, DHHS

Craig Dobyski

Health Insurance Specialist

Center for Health Plans and Providers

Health Care Financing Administration, DHHS

William England, PhD., J.D.

Operations Director

Rural Health Care Division

Universal Service Administrative Company

Melvyn Greberman, M.D., M.P.H.

Center for Devices and Radiological Health

Food and Drug Administration, DHHS

Eric S. Marks, M.D., Associate Dean

Medical Jurisprudence

Uniformed Services

University of Health Services, DOD

ACKNOWLEDGEMENTS

We would like to acknowledge the input and

reviews by Carolyn Hutcherson, RN, MN, Nancy

Sharp, MSN, RN, FAAN, John Fanning, LLB, Mary

Jo Deering, PhD,David G. Brown, PhD, Tom

McGinnis, Daisy DeWitt, Cathy Wasem, RN, MN,

Amy Barkin, MSW, MPH, CEAP, ACSW, BCD,

Robert Waters, JD, Donald M.Witters, and

Samantha Wallack.

We owe special thanks to KJ Dickerson for the

cover and report design.

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Executive Summary

• Current Trends 1

• Key Issues 1

Table 1: HCFA Telemedicine Reimbursement Requirements 2

Table 2: Telemedicine Standards and Guidelines 5

• Research and Evaluation 8

• Emerging Trends and Policy Issues 8

• Next Steps 9

Introduction

• Overview 13

• Current Trends 13

• Structure of the Report 14

Payment Issues

• Overview 17

• Medicare Reimbursement and the First Two Years 17

Table 1: HCFA Telemedicine Reimbursement Requirements 18

• Legislation 19

• Other Payment Coverage 19

• Next Steps 20

Legal Issues

• Overview 21

• State Medical Licensure and Licensure Models 21

Table 2: Generic Licensure Models 21

Table 2: Generic Licensure Models (cont.) 22

Table 3: Specific Licensure Models 23

• Physician and Nurse State Licensure

for Telemedicine Practice 21

• Legal Issues Relating to the Internet 24

• Other Related Issues 25

• Next Steps 26

Safety and Standards

• Overview 27

• FDA Regulatory Role 28

• FTC, Consumers and the Internet 29

• Medical Errors 30

• Next Steps 31

Privacy, Security and Confidentiality

• Overview 33

• Health Insurance Portability and Accountability Act 33

• Consumer Privacy and the Internet 34

• Industry Self Regulation 35

Contents Contents

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• Legislation and Regulation 36

• The Federal Trade Commission’s Regulatory Role 36

• Next Steps 37

Telecommunications Infrastructure

• Overview 39

• Next Steps 39

Evaluation and Research

• Overview 41

• Patient and Physician Satisfaction with Telemedicine 41

Table 4: Patient/Provider Satisfaction with Telemedicine 42

• Telemedicine Cost Savings 44

• Next Steps 45

Emerging Trends and Related Policy Issues

• Overview 47

• Technology Changes 47

• Related Technology Policy Issues 48

• Aging Demographics, Home Health Care

and Urban Telemedicine 49

Conclusion 51

APPENDICES

 1: The Medicare, Medicaid, and SCHIP Benefits Improvements and Beneficiary Protection Act

of 2000, Sections 223 and 504. Comparison of Legislative Bills Relating to Telemedicine

Reimbursement. – pg. 53

 2: Telemedicine Related State Licensure Laws – pg. 64

 3: Letter from Association of Pediatric Nurses Association, Association of Women’s Health

Obstetric and Neonatal Nurses – pg. 67

 4: Joint Working Group on Telemedicine Draft Paper on Credentialing – pg. 71

 5: Federal Drug Administration’s Regulatory Role in Telemedicine – pg. 74

 6: FCC Rural Health Care Program: A Short History – pg. 91

 7: U.S. Department of Health and Human Services Fact Sheet on Final HIPAA Privacy Rules – pg.96

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The Healthcare Research and Quality Act of

1999, Section 6, requires the Secretary of Health

and Human Services (DHHS) to submit a Report to

Congress on Telemedicine by 2001. Congress

requested that the Report describe barriers to

telemedicine, determine the extent of patient and

physician satisfaction with this mode of health

delivery and assess patient benefits from

telemedicine services.

What exactly is meant by telemedicine and

telehealth? In the Department of Commerce’s

1997 Report to Congress, “telemedicine” referred

to “the use of electronic communication and

information technologies to provide or support

clinical care at a distance.” 1Telehealth is a

broader concept. For the purposes of this Report,

telehealth is defined as the use of electronic

information and telecommunications technologies

to support long-distance clinical health care,

patient and professional health-related education,

public health and health administration.

CURRENT TRENDS

One of the most important trends to emerge

over the past four years is the remarkable growth

and development of the Internet. While much of

this report focuses on telehealth providers and the

barriers they face in expanding the delivery of

telehealth, this is only one part of the story. The

Internet is dramatically changing the way

consumers access health information, receive

diagnostics and purchase pharmaceuticals.

According to the Federal Trade Commission (FTC),

consumer searching for online health information

is increasing dramatically; it is predicted that 30

million Americans will seek health information

online by 2001.2

The Internet will most likely play a key role in

expanding the reach of telehealth and telemedicine

to the average consumer. However, this potential

also brings other concerns about state jurisdiction

and enforcement, physician and other health

provider cross-state licensure, privacy and safety

issues, as discussed throughout the Report to

Congress.

KEY ISSUES

Key issues affecting the telemedicine and

telehealth industry have remained the same over

the past five years but their relative importance

has changed with the advent of dramatic

technology changes such as the wide spread

adoption of the Internet. These issues are:

• Lack of Reimbursement;

• Legal Issues;

• Safety and Standards;

• Privacy, Security and Confidentiality;

• Telecommunications Infrastructure.

Lack of Reimbursement remains a critical

barrier to the expansion of telemedicine. Even

though technology has made it easier to deliver

health care services using advanced communications and computers, historically few public or private

payers have covered them. The Balanced Budget Act

of 1997 (BBA) expanded coverage options for

telemedicine but also included several requirements

that preclude telemedicine’s use under conditions

where it is commonly being used outside of

Medicare. The BBA required the Health Care

Financing Administration (HCFA), DHHS to

pay for telemedicine consultation services as of

January 1, 1999. Some current reimbursement

eligibility requirements are outlined in Table 1.

In the first two years, many telemedicine

practitioners found the requirements under the

BBA mandate too narrow for most practical

purposes. Between January 1, 1999 and

September 30, 2000, HCFA had reimbursed 301

1 1997, Telemedicine Report to Congress, U.S. Department of

Commerce, P.1.

2 Federal Trade Commission, Protecting Consumers Online: A Federal

Trade Commission Report on the First Five Years of Its Internet Law

Enforcement Program, December 1999.

Executive Summary Executive Summary

1
2

SCOPE ELIGIBILITY REQUIREMENTS SCOPE ELIGIBILITY REQUIREMENTS

GEOGRAPHIC SCOPE Only patients located in Rural Health Profesional Shortage Areas (HPSAs),

counties in Non-MSAs and in approved Federal demonstration projects are

eligible for telemedicine reimbursement. A list of HPSA shortage areas

can be found at http://www.access.gpo.gov.

ELIGIBLE SERVICES/ Eligible Current Procedural Terminology (CPT) codes include profesCPT CODES sional consultations, office visits, and office psychiatry services (codes

99241-99275; 99201-99215; 90804-90809; and 90862) and any

additional services specified by the Secretary.

ELIGIBLE PRESENTING The new law eliminates the requirement to have a telehealth presenter

PRACTITIONER present a patient at a consultation unless it is medically necessary (as

determined by the physician or practitioner at the distant site).

FEE-SHARING The new law eliminates the fee sharing requirement between a consultant

and referring physician.

ELIGIBLE TECHNOLOGY1 The new Act provides for reimbursement for store and forward technology

in demonstration projects in Alaska and Hawaii but no other setting.

HCFA’s payment policy was developed to replicate a standard consultation

as closely as possible. Under Medicare, a separate payment for a consultation requires a face to face examination of the patient. This requirement

is consistent with the American Medical Association’s description of a

consultation. To that end, Medicare’s teleconsultation rule requires a

certain level of interaction between the patient and consulting practitioner

because it offers the best substitute for a “face to face” consultation.

Regardless of the technology, the patient must be present during the

consultation.

HOME HEALTH CARE The new Act clarifies that home health agencies “may adopt telehealth

technology that it believes promotes efficiencies or improves quality of

care, however, these technologies will not be specifically recognized or

reimbursed under the home health benefit. Telehealth encounters do not

meet the definition of a Medicare covered home health visit. But this does

not preclude a home health agency from spending prospective payment

dollars to furnish services outside of the Medicare home health benefit

(i.e. for telehealth services to home health beneficiaries). If a physician

intends that telehealth services be furnished while a patient is under a

home health program of care, this should be recorded in addition to the

Medicare covered home health services to be furnished.”

3 Medicare has historically reimbursed some telemedicine services that did not traditionally require face-to-face contact between a patient and

practitioner. For example, Medicare covered EKG or EEG interpretation, teleradiology, and telephathology in most areas of the nation, in accordance

with individual Medicare carrier policies.

(Under the Medicare, Medicaid & SCHIP Benefits & Improvement Protection Act of 2000)

Table 1: TELEMEDICINE REIMBURSEMENT REQUIREMENTS
those commonly used by telemedicine

practitioners.

During its last two sessions, Congress

introduced over nine bills that addressed some of

these limitations. On December 20, 2000, Congress passed the Medicare, Medicaid and

SCHIP Benefits Improvement and Protection

Act (“the Act”). Among other things, this Act

eliminates the fee-split and telepresenter

requirements and expands the types of

presenters, current procedural terminology

codes and geographic area limits that are

eligible for reimbursement. (See Table 1)

Appendix 1 presents a comparison of bills

and a summary of the Act.

Historically, telemedicine reimbursement expansion has been prevented by a

lack of data on which to judge changes in

government expenditure. The Office for the

Advancement of Telehealth (OAT) worked

with the Center for Telemedicine Law (CTL)

and OAT’s grantees to develop a series of

cost models that show the impact of

expanding telemedicine coverage on any

third party payer’s expenditures. These

“scoring” models have the advantage of

being based on actual telemedicine experience in

the field. Preliminary results suggest that many of

the modest telemedicine reimbursement expansions introduced in the 106th Congress would

have a minimal impact on Medicare expenditures.

(For example, CTL/OAT estimates of the

budgetary impact of Senate Bill 2505 range from

$50 to $100 million over five years, as compared

to the estimate of over a billion dollars for

Telemedicine legislation in earlier years.)

Aside from Medicare reimbursement, 20 state

Medicaid programs now reimburse for telemedicine

3

-

claims for a total of $20,000. Several factors may

account for this small number. In particular, four

requirements greatly limited the number of

consultations eligible for reimbursement:

• Health Professional Shortage

Area (HPSA) Requirement: Medicare paid for telemedicine services only in areas that lack adequate primary care services,

even though many rural communities have little or no access to

specialists, such as cardiologists or psychiatrists. Often the

need for specialty services drives

the demand for telemedicine

services.

• Fee sharing requirement: HCFA

mandated fee sharing, requiring

specialists to provide services at a

75% fee that HFCA then reports as

a 100% fee to the IRS. Other

problems include accounting and

fee tracking. Most rural practitioners are not equipped to track

split fees. Finally, the eligible

presenter must either be the

referring physician or an employee of

the referring physician. In many cases, the

presenter is an employee of the local

hospital or clinic.

• Eligible Presenters: Although registered

nurses, licensed practical nurses and

other similar types of health care professionals are the most common presenters

in a telemedicine setting, they were

not eligible for reimbursement.

• Eligible Current Procedural Terminology Codes: The allowable codes greatly

restricted what services were reimbursable under the BBA and did not include

BOX 1

MEDICAID STATE

COVERAGE

Arkansas, California, Georgia,

Iowa, Illinois,

Indiana, Kansas,

Kentucky,

Louisians, Montana, Nebraska,

North Carolina,

North Dakota,

South Dakota,

Oklahoma, Texas,

Utah, Virginia,

and West Virginia.

In addition,

Connecticut,

Maine and

Minnesota are

piloting

telemedicine

programs.*

*Sources: CTL “Medicaid Telemedicine and Telehealth Update”,

July 2000, Health Care Finance Administration, DHHS
interstate telemedicine practice, 12 states have

adopted the Interstate Nurses Licensure Compact

as shown in Box 2. The compact is a licensure model

based on mutual recognition. Under it, the head of

the nursing licensing board will administer the

Compact for his/her state.

Safety and Standards have taken on

greater importance in the past few years, not

only in the world of telemedicine but also in

the world at large. Without widely adopted

standards and guidelines, interoperability

and interconnection are not possible and the

great potential of telemedicine will be

difficult to achieve. Older equipment often

will not interconnect with newer versions of

the same machine. Different brands of the

same equipment will not operate with one

another, making networking across projects

and sometimes within a project expensive

and frustrating.

In addition to technical standards, there is a

need for clinical protocols and guidelines. Examples

of clinical protocols for telemedicine practice

include preliminary scheduling procedures, actual

consult procedures and telemedicine equipment

operation procedures (such as telecommunications

transmission specifications). The clinical technical

standard for image quality in a video transmission

would specify the technical standards needed by a

specialist, such as a dermatologist, to achieve the

high levels of image clarity and color required to

correctly diagnose a patient. Only a few professional

associations have adopted either clinical practice

protocols or technical standards and guidelines, as

shown in Table 2. Additionally, some government

agencies have worked to develop technical

guidelines for telemedicine interoperability.

Just as the wide adoption of telemedicine

standards and protocols plays an important role in

protecting public safety, the Food and Drug

services and three other states are conducting

pilot programs to assess telemedicine efficacy as

shown in Box 1.

Some private insurers also provide limited

telemedicine coverage in certain states. For

example, California Blue Cross is currently

funding the build-out of a statewide

telemedicine network. Blue Cross - Blue

Shield in Montana and North Dakota also

provides some telemedicine coverage.

Legal Issues, particularly those relating

to cross-state licensure, were thought to be

among the most critical to the expansion of

telemedicine five years ago. Today, traditional licensure issues remain important, but

telemedicine practitioners have found that

they can provide many in-state services.

Moreover, consumer use of the Internet

(which knows no borders) for health related

information, purchase of prescription drugs and

online consultations may create new legal and

licensure issues, overshadowing the more

traditional issues. For example, a consumer,

located in state A, sues a health practitioner in state

B, who has provided consultations to the consumer

via a Web site. Who has jurisdiction in this case?

How easily can state A enforce its state health

licensure laws if the health practitioner is not

licensed in state A?

Currently, about 26 states have laws regulating

out-of-state telemedicine practitioners. Twenty-one

require full licensure for an out-of state physician,

providing telemedicine services to a patient located

in that state. The other five states approach

licensure in a variety of ways, such as California’s

registration requirement or Hawaii’s permit for an

out-of-state physician to provide consultation to an

in-state licensed physician. A list of states’

licensure laws is shown in Appendix 2.

While many more states restrict physicians’

BOX 2

STATES THAT

ADOPTED THE

COMPACT

Arkansas, Delaware, Iowa,

Maine, Maryland,

Mississippi,

Nebraska, North

Carolina, South

Dakota, Texas,

Utah and

Wisconsin

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Administration (FDA) and the Federal Trade

Commission (FTC) play a critical regulatory role.

The FDA ensures the safety and effectiveness of

telemedicine medical devices and software, with

the Center for Devices and Radiological Health

(CDRH) as the lead agency. In oversight of

telemammography, regulating standards, personnel, practice and procedures, the FDA plays an

even more critical role.

A number of federal and state regulatory

agencies are working together to address healthrelated consumer problems on the Internet. They

include state health authorities, FDA, the Justice

Department and FTC. FTC plays a key oversight

and enforcement role in Internet Commerce as

illustrated in its December 1999 Report:

5

ORGANIZATION STANDARDS AND GUIDELINES

Table 2: TELEMEDICINE STANDARDS AND GUIDELINES

ORGANIZATION STANDARDS AND GUIDELINES

AMERICAN TELEMEDICINE Telehomecare Clinical Guidelines:

ASSOCIATION (ATA) http:www.atmeda.org/news/guidelines.html. ATA has also posted a May

1999 working draft of its Clinical Guidelines for Telepathology.

AMERICAN Clinical Telepsychology guidelines posted on its Web site at

PSYCHOLOGICAL http://www.apa.org/ethics/stmnt01.html

ASSOCIATION (APA)

AMERICAN DERMATOLOGY The American Dermatology Association has drafted proposals for clinical

ASSOCIATION protocols for teledermatology.

AMERICAN NURSES Clinical Core Principles on Telehealth, March 1998

ASSOCIATION Competencies on Telehealth Technologies in Nursing, March 1999

AMERICAN COLLEGE OF Digital Imaging and Communication in Medicine (DICOM)

RADIOLOGY/NATIONAL Standards a uniform set of communication standards.

ELECTRONIC

MANUFACTURERS

ASSOCIATION

HEALTH LEVEL SEVEN HL7 Standard for data exchange

KENNEDY KASSEBAUM Under the Administrative Simplification provision of HIPAA, the Act

HEALTH INSURANCE mandates the development and adoption of national electronic health

PORTABILITY ACT, 1996 transaction standards.

OFFICE FOR THE Practical technical guidelines based on OAT Grantee experiences at

ADVANCEMENT OF http://telehealth.hrsa.gov/ These guidelines are a work in progress.

TELEHEALTH Currently include specifications for teledermatology, teleopthamology,

emergency medical, telecardiology, telerehab. OAT has also funded a grant

to develop a technical assessment center.
Protecting Consumers Online: A Federal Trade

Commission Report on the First Five Years of Its

Internet Law Enforcement Program. In this report

the Commission discusses its activities to

combat general consumer fraud and deception on

the Internet. Since 1994, it has focused on the

largest and “most egregious” fraud and deception

examples, taking action against companies in

more than 100 cases.

Privacy, Security and Confidentiality

concerns are not unique to telemedicine. The U.S.

Congress and individual state legislatures are all

but certain to consider a wide range of privacyrelated Internet legislation that could affect many

industries next year. However, the unique privacy

problems associated with personal patient

information, such as HIV status, cancer or mental

health, raise many important questions about

personally identifiable information and its

protection.

An important national privacy measure that

may affect the telemedicine industry is the Health

Insurance Portability and Accountability Act of

1996 (HIPAA). Under the Administrative Simplification provision of HIPAA, the Act mandates the

development and adoption of a number of

national electronic health transaction standards,

including stan-dards for electronic data exchange

of health information; standards for the privacy of

individually identifiable health information; a

national provider identifier; an employer identifier

and secure electronic signatures, among others.

According to the Act, the Secretary of HHS

must develop final regulations relating to privacy

standards by February 2000, if Congress has not

acted by August 1999. In 1997, the Secretary

together with the National Committee on Vital and

Health Statistics (NCVHS), sent preliminary

recommendations to Congress. In the absence of

Congressional action by the mandated deadline,

HHS published a notice of proposed rulemaking in

November 1999. Final HIPAA privacy rules were

published December 28, 2000 and an HHS Fact

sheet on these rules can be found in Appendix 7.

The complete text can be found at: http://

aspe.hhs.gov/admnsimp.

The general principles, for the use and

disclosure of personally identifiable health

information, are applicable regardless of the form

the information is kept in, the methods of

transmission, the time sequence of its creation

and use, or the way it is communicated.

HIPAA rules cover health plans (e.g., insurers,

managed care organizations, federal health

programs), clearinghouses (which unify data in

standardized formats) and health care providers,

who engage, directly or through contractual

arrangements, in HIPAA standard electronic

transactions.

Potentially the most challenging issue for

telemedicine practitioners will be HHS’ proposal

for federal privacy law to preempt state law only

when states are less stringent. Thus, if state

requirements are in conflict with federal ones, the

rules providing more stringent privacy protections

would prevail. Telemedicine practitioners could

be faced with a patchwork of state privacy

standards.

State laws governing health information exhibit

wide discrepancies in protection, complexity and

coverage as illustrated by a 50-state survey4 of

health privacy statutes that can be found at the

Health Privacy Project Web site at: http://

www.healthprivacy.org/resources/statereports/

exsum.html.

OAT and the Assistant Secretary’s Office of

Planning and Evaluation have recently funded a

study and a conference entitled Privacy, HIPAA

6

4Health Privacy Project of the Institute for Health Care Research

and Policy at Georgetown University.
and Telemedicine that will be completed in Spring

2001. The purpose of the study is to identify

privacy issues unique to telemedicine and to

determine how HIPAA privacy rules may affect

telemedicine practitioners and patients.

Although a detailed discussion of consumer

privacy and the Internet is beyond the scope of

this Report, it is of growing concern to the public.

To address this problem, industry has promoted

self-regulatory mechanisms such as standards for

Web sites. The Health on the Net Foundation

(HON) (http://www.hon.ch) and TRUSTe (http://

www.TRUSTe.org) have developed some of the

most widely accepted standards and “privacy

seals.” “Ethical principles” or “Ecodes” are

another alternative. Two new industry coalitions

called the Internet Healthcare Coalition

(ihealthcoalition.org/ethics/ecode.html) and the

Health Internet Ethics Coalition have promoted

this type of self-regulation.

Despite industry’s efforts to self regulate,

agencies, such as the FTC, have found that

industry self-regulation is not sufficient to protect

consumer privacy on the Internet. In its report

entitled, Privacy Online: Fair Information Practices

in the Electronic Marketplace, May 2000, (http://

www.ftc.gov/os/2000/05/index.htm#22) the FTC

offers legislative recommendations to Congress

that would set a basic level of privacy protection

for all visitors to consumer-oriented commercial

Web sites. The legislation would “require all

consumer oriented commercial Web sites to the

extent already covered by the Children’s Online

Privacy Protection Act of 1998 (COPPA), to

implement the four widely-accepted fair information practice principles.”5 These principles are

outlined below.

• Notice: Provide consumers clear and

conspicuous notice of information

practices;

• Choice: Offer consumers choices as to

how their personal identifying information is used;

• Access: Offer consumers reasonable

access to the information the Web site

has collected about them;

• Security: Take reasonable steps to

protect the security of the information

collected from consumers.

Telecommunications Infrastructure costs

continue to represent a large percentage of overall

costs in a telemedicine project’s monthly budget.

To alleviate some of this burden, the

Telecommunications Act of 1996 charged the FCC

to administer the Universal Service program,

which would provide rural health care providers

with a discount on their telecommunication

transmission charges equaling the difference

between urban and rural transmission rates.

In 1997, the FCC established the Universal

Service Administrative Company (USAC), a

separate, not for profit entity, to oversee both the ERate discount for Schools and Libraries and the

Rural Health Care Program (RHCD). USAC’s Rural

Health Care Program issued its first funding

commitments on June 25, 1999, five days before

the end of the first 18-month program year. In total,

483 rural Health Care Providers received $3.4

million out of a possible $400 million, which

equaled the total requested support for completed

applications received by USAC that year (January 1,

1998 through June 30, 1999). In the first year, few

providers completed applications for the discount,

because most found they could not benefit from it

under the original program.

Since the first year, the FCC has adopted a

number of reforms to the program, which

streamlines the discount application process,

7

5 FTC: Privacy Online: Fair Information Practices in the Electronic

Marketplace, A Report to Congress, May 2000, p. 38.
6 “Future Trends in Medical Device Technology: Results of an

Expert Survey,” FDA, April 1998 and Workshop on Home Care

Technologies for the 21st Century, Catholic University, April 1999.

and addresses practical concerns voiced by

practitioners and others. (See Appendix 5 for a

detailed history of RHCD and OAT’s FCC filing on

Universal Service or at http://telehealth.hrsa.gov/

pubs.htm). Funding in the second year of the

program, after reforms were implemented,

increased to $6.1 million. Moreover the FCC and

USAC expect that third year funding will increase

to nearly $10 million, once all reforms have been

in place for a full year.

RESEARCH AND EVALUATION

Few statistically significant studies of patient/

physician satisfaction or telemedicine cost savings

have been conducted. This dearth of research may

be due to the relatively small number of telemedicine consultations in any one specialty and/or

to the lack of a standard evaluation methodology to

study either efficacy or patient/physician satisfaction across small groups of specialties and projects.

Despite the lack of statistical significance in

most of the studies, all showed high patient

satisfaction with telemedicine. Provider satisfaction was more variable, but generally moderate to

high. Moreover, although one cannot generalize

to all telemedicine applications, studies of

specific services, such as tele-homecare and

teledermatology, suggest that at least for these

services, there may be real cost savings to be

realized.

EMERGING TRENDS & POLICY ISSUES

Two important trends that may greatly affect

the telehealth industry and raise key policy issues

are rapid technology changes and America’s aging

population. Shown on the next page are technology trends that already exist and will most

likely be common in the near future.

In addition to technological trends, demographic trends will have an important impact on

the health and telehealth industry. The aging of

the Baby Boomer generation combined with a

longer life expectancy, will most likely mean a

large population of “fragile” and chronically ill

elderly, many of those requiring rehabilitation

after hospitalization. Given this demographic

trend, alone with the strong movement toward

home health care, telehomecare will be an

important associated trend. According to recent

studies and workshops6, home care medical

devices were the fastest growing segment of the

medical device industry throughout the 1990s.

Providing tele-home care to the elderly or

disabled populations, using telemedicine, raises

important policy questions about health care

access and the reimbursement of telemedicine

services for both rural and urban patients. It can

be argued that urban patients who are very elderly,

chronically ill, poor or disabled may be as isolated

and have as much difficulty getting access to

needed health services as those living in rural

areas. Most of these urban patients cannot drive

to local clinics and many require assistance

getting from point A to point B. Traveling a mile for

such an urban patient may be as onerous as a

rural patient’s two hundred-mile drive to see a

specialist.

Reimbursement for both rural and urban

patients may be a cost effective policy decision.

Studies show tele-homecare can save money by

decreasing unnecessary hospital and emergency

room admissions. Around the clock monitoring

and nurse availability via videoconferencing has

helped patients better self-diagnose and maintain

drug therapies on schedule.

This policy issue may be resolved at the third

party payer level, if cost savings are sufficiently

great enough to attract the attention of this group.

8
 NEXT STEPS

Outlined below are some proposed “next

steps” for the Office for the Advancement of

Telehealth (OAT) and the Joint Working Group on

Telemedicine (JWGT).

PAYMENT

• OAT will collaborate with HCFA, state Medicaid programs, private third party payers

and other relevant organizations to create

a forum in which the telemedicine experiences of third party payers can be shared.

• OAT will continue to refine its telemedicine

scoring models for a broad range of telemedicine applications.

LEGAL ISSUES

• The JWGT will work with various state

governmental and professional groups to

assess the feasibility of developing common licensure application forms, similar

to the common college application form

accepted at a number of universities.

Common applications will reduce time and

costs associated with completing numerous different applications that vary in

state requirements and paperwork.States,

in turn, can more easily develop a comprehensive database of practitioners and

track them across state borders.

SAFETY AND STANDARDS

• The OAT will work with its grantees, the

American Telemedicine Association (ATA)

and other groups to expand its clinical and

technical guidelines. (See http://

telehealth.hrsa.gov/pubs.

htm for currently completed telemedicine

application guidelines).

• OAT will continue to support the work of the

Advanced Technology Institute, which is

developing a Telehealth Deployment Re9

search Testbed. This work is being conducted in conjunction with the Medical

University of South Carolina, West Virginia

University Concurrent Engineering Research

Center, Arthur D. Little, Oak Ridge National

Laboratory, the Low country Healthcare

Network and the CPRI-HOST consortium.

The testbed will evaluate the effectiveness

and practical utility of telehealth technologies by providing both laboratory and “realworld” evaluations.

• Medical Error reduction: OAT will develop a

series of measures to be included in GPRA

data elements to be collected by all OAT

grantees.

PRIVACY, SECURITY AND CONFIDENTIALITY

• OAT together with the Office for the

Assistant Secretary of Policy and Evaluation have funded a research paper on

“Privacy, HIPAA and Telemedicine” as well

as a conference on the same subject.

OAT and OASPE anticipate that the final

paper and conference will be completed by

summer 2001 and the results made

available to the public both in print and on

OAT’s Web site, shortly thereafter.

TELECOMMUNICATIONS INFRASTRUCTURE

• OAT recently filed comments with the FCC

on the question of “possible impediments

to deployment and subscribership in

unserved and underserved areas of the

nation.” (See OAT’s FCC filing on Pacific

Basin at http:// telehealth.hrsa.gov/

pubs.htm) Follow-up with the FCC on this

issue continues.

• OAT also filed comments on the FCC’s

proposal to set aside spectrum for the

use of Wireless Medical Telemetry

(See http://telehealth.hrsa.gov/pubs.

htm). OAT’s comments also reflected
tegy that uses cross-project evaluation

methodologies to obtain more generalizable findings.

• Future evaluations should examine provider satisfaction, quality and cost implications of telemedicine for specific applications such as telehome-care, teledermatology and mental health.

TECH TRENDS TELEHEALTH APPLICATIONS RELATED POLICY ISSUES

Internet Most telehealth transactions may be done • Retrofitting HIPAA and other

over the next generation Internet in video, privacy concerns

voice, text, still images etc.: on-line • Blurring of borders and scope of

consultations, presecription purchases and practice

administrative transactions. • Security issues

Digitization Smart cares, digital medical libraries, • Interoperability

compressed video and images, imbedded • Information interexchange

chips. • Technical standards

Wireless Technology Hand held computers, mobile videophones, • Electromagnetic Interference

and satellite based mobile hand held devices • Future spectrum bandwidth

with global access. needs

Emergency medical applications such as • Interoperability across equipment

two-way video consultations. • Interconnection problems

Wireless monitoring in the home. Other • Security issues

home wireless equipment with two way

video and peripherals for blood pressure,

heart rate, etc. Biosensors, data feedback

loop.

concern about adequate spectrum for

future telemedicine applications, which

may require more bandwidth than currently allocated for telemetry. This issue

will most likely remain an issue in the near

future.

RESEARCH AND EVALUATION

• OAT will collaborate with other Agencies

within HHS as well as work with JWGT

members to develop an evaluation stra10
11
12
OVERVIEW

The beginning of the new millennium is a time to

look back from where we have come and to dream

of where we wish to go. For those in health care, the

scientific triumphs of the past, such as the

eradication of polio and small pox or the

development of immunization, point to a future,

when closing the health gap between the “haves and

have nots” in this country and throughout the world,

is possible.

Imagine a world, where no matter who you are or

where you are you get the health care you need,

when you need it. Such a dream could already be a

reality. Technologies such as interactive

videoconferencing, the Internet, store-and-forward

imaging, streaming media, satellite and other

wireless communications networks already exist

and can deliver health services or education over

vast distances. However, these are not yet part of

the landscape for our nation’s rural and urban

underserved peoples.

Although these technologies are available,

several barriers, such as the lack of significant

reimbursement, cross-state licensure problems,

privacy issues, lack of universal standards and high

transmission costs, have inhibited the telemedicine

and telehealth industry from reaching its full

potential in the United States.

In addition to these traditional barriers, the

dramatic growth and use of the Internet by health

consumers poses new challenges. Despite its great

benefits, such as a wealth of health information or

fingertip access to prescription drugs, the Internet

has created serious threats to industry expansion.

These include new legal, safety, privacy and

confidentiality concerns for the telemedicine

industry.

The Healthcare Research and Quality Act of 1999,

Section 6, requires the Secretary of Health and

Human Services (HHS) to submit this Report to

Congress on Telemedicine, no later than January

10, 2001. Congress requested that the Report

describe barriers to telemedicine, determine the

extent of patient and physician satisfaction with this

mode of health delivery and evaluate the extent to

which patients have benefitted from telemedicine

services.

What exactly is meant by telemedicine and

telehealth? In the Department of Commerce’s

1997 Report to Congress, “telemedicine” referred

to “the use of electronic communication and

information technologies to provide or support

clinical care at a distance.”1 Telehealth is a broader

concept than telemedicine. For the purposes of this

Report, it is defined as the use of electronic

information and telecommunications technologies

to support long-distance clinical health care, patient

and professional health-related education, public

health and health administration.

CURRENT TRENDS

One of the most important trends to emerge over

the past five years is the remarkable growth and

development of the Internet. While much of this

report focuses on telehealth providers and the

barriers they face in expanding the delivery of

telehealth, that is only part of the story. The Internet

is dramatically changing the way consumers access

health information, receive diagnostics and

purchase pharmaceuticals. It is also conceivable

that soon health providers will move much of their

administrative transmissions onto the Internet.

Hence, the Internet may greatly affect different

aspects of telemedicine and telehealth.

According to the Federal Trade Commission

(FTC), consumer online searches for health

information are increasing dramatically. Thirty

million Americans are expected to seek health

1 1997, Telemedicine Report to Congress, U.S. Department of

Commerce, P.1.

Introduction Introduction

13
information online by 2001.2

To establish a viable presence on the Internet,

the banking, credit card and retail industry, among

others, have found it critical to reassure their

consumers about the protection of personally

identifiable information. Although online shopping,

banking and auction bidding are ubiquitous, what

consumer does not worry about the random stealing

of information by computer hackers? More insidious

is the possibility that entire identities can be stolen

after a person’s social security and other personal

information has been made public on the Internet.

Just as other industries have found the Internet

to be both a market boon and privacy bane, so the

health industry may find that consumers of health

information, prescriptions or other health services

on the Internet, may be vulnerable. As the

Georgetown University Health Privacy Project notes:

“Although health Web sites now provide a

wide range of clinical and diagnostic information; opportunities to purchase products

and services; interactions among consumers, patients, and health care professionals; and the capability to build a

personalized health record, they have not

matured enough to guarantee the quality of

the information, protect consumers from

product fraud or inappropriate prescribing, or

guarantee the privacy of individuals’

information.”

STRUCTURE OF THE REPORT

The structure of the Telemedicine Report to

Congress, 2001 is similar to that of the 1997

Report. Chapter III describes the current Medicare

reimbursement rules for telemedicine, as well as the

preliminary outcomes for the first year of this

program. Chapter IV discusses legal issues affecting

the proliferation of telemedicine and telehealth,

including state licensure and electronic health

information issues as well as other related issues,

such as credentials. Chapter V outlines safety and

standards issues, limited to specific telehealth

concerns. Chapter VI highlights HHS privacy rules for

personally identifiable health related information

that is electronically stored or transferred. This

chapter also discusses how these proposed rules

may affect telehealth practitioners. Chapter VII

examines the Federal Communications

Commission’s (FCC) Universal Service Administrative

Company’s (USAC) Rural Health Care Program. This

Chapter also highlights recent FCC reforms that

address some telehealth practitioner concerns

that were major barriers to applying to the

program. Chapter VIII draws upon previous

research to summarize the current status of

patient and physician satisfaction with

telemedicine and anecdotal examples of

telemedicine efficacy. The final Chapter IX looks

at issues that may emerge over the next few

years. Specifically Congress requests that HHS

report the following:

• The extent to which patients receiving

telemedicine services have benefitted from

them and are satisfied with the treatment

received pursuant to the services;

• The extent to which medical outcomes for

such patients would have differed if telemedicine services had not been available to

them;

• The extent to which physicians involved with

telemedicine services have been satisfied

with the medical aspects of the services;

and

• The extent to which primary care physicians

are enhancing their medical knowledge and

experience through the interaction with

specialists provided by telemedicine

consultations.

2 Federal Trade Commission, Protecting Consumers Online: A Federal

Trade Commission Report on the First Five Years of Its Internet Law

Enforcement Program, December 1999.

14
15
16
Payment Issues Payment Issues

17

OVERVIEW

One of the greatest stumbling blocks to the

expansion of the telehealth industry has been lack

of reimbursement for telemedicine and telehealth

services. Advances in telemedicine technology

have made it easy to deliver health care services

over a distance but few public or private payers will

pay telemedicine costs. Until recently, Medicare

has not had an explicit policy to pay for telemedicine

services. Historically, Medicare reimbursed some

services that did not traditionally require face-to-face

contact between a patient and practitioner. For

example, it covered EKG or EEG interpretation,

teleradiology and telepathology in most of the

nation, depending on individual Medicare carrier

policies.

However, the Balanced Budget Act of 1997

(BBA) brought about a significant change in

Medicare telemedicine reimbursement policy. As of

January 1, 1999, Congress required the Health Care

Financing Administration (HCFA), DHHS to pay for

telemedicine consultation services under the BBA.

Some current reimbursement eligibility requirements are outlined in Table 1.

MEDICARE REIMBURSEMENT–

THE FIRST TWO YEARS

Over the first two years of the Medicare

telemedicine reimbursement rule, many telehealth

practitioners have found both the BBA mandates

and HCFA’s interpretation of the BBA too narrow

for most practical purposes. On September 30,

2000, after almost two years of telemedicine

reimbursement, Medicare has reimbursed a total

of $20,000 for 301 teleconsultation claims.

Four major issues may have greatly limited the

number of reimbursable telemedicine

consultations:

• Health Professional Shortage Area

Limitations. Only patients in Health

Professional Shortage Areas (HPSAs)

were eligible for reimbursement under the

BBA. This restriction greatly narrows the

number of people, who might benefit from

telemedicine, and disregards the needs of

many rural patients, who may have access

to a nurse or general practitioner, but not

to specialists such as cardiologists, psychologists, dermatologists, etc.

• Fee-sharing requirement. Consulting

physicians found fee-sharing problematic

because they received only 75 percent of

normal pay for their services. Moreover,

HFCA reports consultant payment to the

IRS at 100 percent. Other problems with

fee-sharing included accounting and fee

tracking. Most rural practitioners are not

equipped to track split fees. Finally,

perhaps the most important ramification

of the fee- sharing requirement is that, to

be paid, the eligible presenter must either

be the referring physician or an employee

of the referring physician. In many cases,

the presenter is an employee of the local

hospital or clinic.

• Eligible presenters. In many (if not most)

places rural clinics are staffed only by registered nurses (RNs), licensed practical

nurses (LPNs) or by health technicians, who

were all ineligible presenters under the BBA.

In a survey of 20 telehealth networks representing 4,761 telehealth encounters between Jan. 1, 1999 and June 30, 1999, the

University of Missouri found that:

– LPNs and RNs make up the majority of

patient presenters in almost all telehealth networks, but they are not eligible

presenters.

– 171 or 3.6% of all encounters involved a

patient interaction with either an occupational, physical, speech therapist or
18

SCOPE ELIGIBILITY REQUIREMENTS SCOPE ELIGIBILITY REQUIREMENTS

GEOGRAPHIC SCOPE Only patients located in Rural Health Profesional Shortage Areas (HPSAs),

counties in Non-MSAs and in approved Federal demonstration projects are

eligible for telemedicine reimbursement. A list of HPSA shortage areas

can be found at http://www.access.gpo.gov.

ELIGIBLE SERVICES/ Eligible Current Procedural Terminology (CPT) codes include profesCPT CODES sional consultations, office visits, and office psychiatry services (codes

99241-99275; 99201-99215; 90804-90809; and 90862) and any

additional services specified by the Secretary.

ELIGIBLE PRESENTING The new law eliminates the requirement to have a telehealth presenter

PRACTITIONER present a patient at a consultation unless it is medically necessary (as

determined by the physician or practitioner at the distant site).

FEE-SHARING The new law eliminates the fee sharing requirement between a consultant

and referring physician.

ELIGIBLE TECHNOLOGY1 The new Act provides for reimbursement for store and forward technology

in demonstration projects in Alaska and Hawaii but no other setting.

HCFA’s payment policy was developed to replicate a standard consultation

as closely as possible. Under Medicare, a separate payment for a consultation requires a face to face examination of the patient. This requirement

is consistent with the American Medical Association’s description of a

consultation. To that end, Medicare’s teleconsultation rule requires a

certain level of interaction between the patient and consulting practitioner

because it offers the best substitute for a “face to face” consultation.

Regardless of the technology, the patient must be present during the

consultation.

HOME HEALTH CARE The new Act clarifies that home health agencies “may adopt telehealth

technology that it believes promotes efficiencies or improves quality of

care, however, these technologies will not be specifically recognized or

reimbursed under the home health benefit. Telehealth encounters do not

meet the definition of a Medicare covered home health visit. But this does

not preclude a home health agency from spending prospective payment

dollars to furnish services outside of the Medicare home health benefit

(i.e. for telehealth services to home health beneficiaries). If a physician

intends that telehealth services be furnished while a patient is under a

home health program of care, this should be recorded in addition to the

Medicare covered home health services to be furnished.”

3 Medicare has historically reimbursed some telemedicine services that did not traditionally require face-to-face contact between a patient and

practitioner. For example, Medicare covered EKG or EEG interpretation, teleradiology, and telephathology in most areas of the nation, in accordance

with individual Medicare carrier policies.

(Under the Medicare, Medicaid & SCHIP Benefits & Improvement Protection Act of 2000)

Table 1: TELEMEDICINE REIMBURSEMENT REQUIREMENTS
19

clinical psychologist.

– Only 7% of referring of the referring practitioner acted as patient presenters in

consultations. This suggests that if all of

the reported 4,761 telehealth activities

were Medicare, less than 7 percent of all cases would meet

HCFA’s eligible presenter

criteria.

• Eligible Current Procedural

Terminology Codes: Only a

few codes were eligible for HCFA

telemedicine reimbursement. This

limitation greatly restricted the

types of services for which practitioners could be reimbursed. Many

services that telemedicine providers

already offer were not included in

these codes.

LEGISLATION

The House and Senate introduced nine

bills with telehealth provisions in the 106th

Session to address the BBA’s telemedicine

reimbursement limitations and to allow

more Medicare coverage for telemedicine

services. At the end of December 2000,

Congress passed the Medicare, Medicaid

and SCHIP Benefits Improvement and

Protection Act of 2000 (“the Act”), which becomes

effective October 1, 2001. (See Table 1)

Among other things, Section 223 of the Act,

eliminates the presenter and fee-sharing

requirements, expands eligible locations to

include HPSAs and counties not included in a

Metropolitan Statistical Area, expands the

number of CPT codes that are eligible for Medicare

reimbursement and provides full reimbursement

to a specialist for services rendered in a

teleconsultation. Section 503 addresses the use

of telehealth in the delivery of home health

services. (See Appendix 1 for language of the Act

and a comparison of the bills)

Historically, one of the key challenges to the

passage of any expansion of telemedicine

reimbursement has been the lack of data upon

which to judge its impact on government

expenditures. The Office for the

Advancement of Telehealth (OAT) has

worked with the Center for Telemedicine

Law (CTL) and OAT’s grantees to develop a

series of cost models that would provide a

more accurate estimate of the impact of

expanded coverage on third party payers.

These “scoring” models have the advantage

of being able to use actual telemedicine

experience from the field. Preliminary results

suggest that many of the modest

telemedicine reimbursement expansions

introduced in the 106th Congress would have

minimal impact on Medicare expenditures.

(For example, CTL/OAT estimates of Senate

Bill 2505 budgetary impact range from $50

to $100 million over five years as compared

to an estimate of over a billion dollars scored

for legislation in earlier years.)

OTHER PAYMENT COVERAGE

In addition to Medicare payments for

telemedicine, 20 state Medicaid programs

as shown in Box 1 and several state Blue Cross/

Blue Shield plans, as well as some other private

insurers, pay for select telemedicine services.

Several states have recently passed laws that

prohibit insurers from discriminating between

regular medical and telemedicine services’

reimbursement. These states include California,

Texas and Louisiana.

Some private insurers also provide limited

telemedicine coverage in certain states. For

BOX 1

MEDICAID

STATE

COVERAGE

Arkansas, California, Georgia, Iowa,

Illinois, Indiana,

Kansas, Kentucky,

Louisians, Montana, Nebraska,

North Carolina,

North Dakota,

South Dakota,

Oklahoma, Texas,

Utah, Virginia, and

West Virginia. In

addition, Connecticut, Maine and

Minnesota are

piloting

telemedicine

programs.*

Sources: CTL “Medicaid

Telemedicine and Telehealth

Update”, July 2000, Health

Care Finance Administration

http://www.hcfa.gov/

medicaid/telemed.htm

*Sources: CTL “Medicaid Telemedicine and Telehealth Update”,

July 2000, Health Care Finance Administration, DHHS
20

example, Blue Cross-Blue Shield in Montana and

North Dakota provide some telemedicine

coverage and Blue Cross of California is going a

step further by developing a statewide telemedicine

network. In July 1999, the Managed Risk Medical

Insurance Board awarded $1.8 million to Blue

Cross California to expand telemedicine

capabilities throughout California. Blue Cross

planned to use the funds to expand services at 17

existing clinics to serve medically underserved

populations and to provide equipment and

support to 22 new telemedicine sites in 18

counties.

NEXT STEPS

• OAT will collaborate with HCFA, state

Medicaid programs, private third party

payers and other relevant organizations

to create a forum in which the experiences

of third party payers with telemedicine can

be shared.

• OAT will continue to refine its telemedicine

scoring models for a broad range of

telemedicine applications.
CONSULTING EXCEPTIONS With a consulting exception, a physician who is unlicensed in a particular state

can practice medicine in that state at the request of and in consultation with a

referring physician. The scope of these exceptions varies from state to state.

Most consultation exceptions prohibit the out-of-state physician from opening an

office or receiving calls in the state. In most states, these exceptions were

enacted before the advent of telemedicine and were not meant to apply to ongoing regular telemedicine links. However, some states permit a specific number

of consulting exceptions per year. Hawaii, Colorado and California allow significant consulting exceptions.

ENDORSEMENT State boards can grant licenses to health professionals in other states with

equivalent standards. Health professionals must apply for a license by endorsement from each state in which they seek to practice. States may require additional qualifications or documentation before endorsing a license issued by

another state. Endorsement allows states to retain their traditional power to set

and enforce standards that best meet the needs of the local population. However,

complying with diverse state requirements and standards can be time consuming

and expensive for a multi-state practitioner.

Table 2: GENERIC LICENSURE MODELS

Legal Issues Legal Issues

21

OVERVIEW

Five years ago, interstate licensure issues

were thought to be among the most critical

barriers to telemedicine. Today, the problem has

been compounded by the growth and consumer

use of the Internet. The Internet has also raised

new legal issues that may grow to overshadow

interstate licensure.

Since the Department of Commerce’s 1997

Report to Congress on Telemedicine was published, the problem of multiple state licensure

requirements for telemedicine providers has not

improved and in some ways has worsened. Since

then, more states have adopted restrictive laws

requiring out-of-state telemedicine practitioners

to obtain local state medical licenses.

STATE MEDICAL LICENSURE

AND LICENSURE MODELS

Historically, states have had the authority to

regulate activities affecting the health, safety and

welfare of their citizens. Hence, health professionals

in the United States are licensed at the state level.

States define the process and procedures for

granting a health professional license, renewing a

license and regulating medical practice within the

state. The Federal government does have the authority to establish national regulations such as those

under Medicare that set specific eligibility requirements for reimbursement. However, there is a

strong legal presumption against federal preemption

of state licensure laws. Therefore, unless Congress

acts to regulate telemedicine licensure, the states

themselves must decide to harmonize their

standards and laws. Tables 1, 2 and 3 illustrate

generic and specific licensure models that could be

used for multiple state health licenses.

PHYSICIAN AND NURSE STATE LICENSURE

FOR TELEMEDICINE PRACTICE

In early 1997 only 11 states had telemedicine

licensure laws. Today, about 26 states have

introduced licensure laws pertaining specifically

to telemedicine that may make it more difficult for
Table 2: GENERAL LICENSURE MODELS cont.

RECIPROCITY A licensure system based on reciprocity would require the authorities of each

state to negotiate and enter agreements to recognize licenses issued by the

other state without a further review of individual credentials. These negotiations

could be bilateral or multilateral. A license valid in one state would give privileges

to practice in all other states with which the home state has agreements.

MUTUAL RECOGNITION Mutual recognition is a system in which the licensing authorities voluntarily enter

into an agreement to legally accept the policies and processes (licensure) of a

licensee’s home state. Licensure based on mutual recognition is comprised of

three components: a home state, a host state and a harmonization of standards

for licensure and professional conduct. The health professional secures a license

in his/her own home state and is not required to obtain additional licenses to

practice in other states. The nurse licensure compact is based on this model.

REGISTRATION Under a registration system, a health professional licensed in one state would

inform the authorities of other states that s/he wished to practice part-time

there. By registering, the health professional would agree to operate under the

legal authority and jurisdiction of the other state. Health professionals would not

be required to meet entrance requirements imposed upon those licensed in the

host state but they would be held accountable for breaches in professional

conduct in any state in which they are registered. California has the authority to

draft this type of model.

LIMITED LICENSURE Under a limited licensure system, a health professional would have to obtain a

license from each state in which s/he practiced but would have the option of

obtaining a limited license for the delivery of specific health services under

particular circumstances. Thus, the system would limit the scope rather that the

time period of practice. The health professional would be required to maintain a

full and unrestricted license in at least one state. The Federation of State Medical

Boards has proposed a variation of this model.

NATIONAL LICENSURE A national licensure system could be adopted on the state or national level. A

license would be issued based on a universal standard for the practice of health

care in the U.S.. If administered at the national level, questions might be raised

about state revenue loss, the legal authority of states and logistics about how

data would be collected and processed. If administered at the state level, these

questions might be alleviated. States would have to agree on a common set of

standards and criteria ranging from qualifications to discipline.

FEDERAL LICENSURE Under a Federal licensure system health professionals would be issued one

license, valid through the U.S., by the Federal government. Licensure would be

based on Federally established standards related to qualifications and discipline

and would preempt state licensure laws. Federal agencies would administer the

system. However, given the difficulties associated with central administration and

enforcement, the states migh play a role in implementation.

Source: U.S. Department of Commerce, “Report to Congress on Telemedicine,” 1997.

22
Table 3: SPECIFIC LICENSURE MODELS

AMERICAN COLLEGE OF In 1994, the ACR adopted a “Standard for Teleradiology” and developed a Model

RADIOLOGY (ACR) Act based on this standard that is similar to the general endorsement model

described above.

AMERICAN MEDICAL In 1994, the AMA adopted a policy that “states and their medical boards should

ASSOCIATION (AMA) require a full and unrestricted license for all physicians practicing telemedicine

within a state.”

CALIFORNIA STATE The State of California’s law is a specific example of a registration model. In

REGISTRATION 1997, California passed laws that permits the Board of Medicine to create a

registration program for telemedicine providers.

COLLEGE OF AMERICAN The CAP model is a variation of the endorsement model. This proposal requires

PATHOLOGISTS (CAP) physicians to have their licenses endorsed in each state from which they receive

patient specimens of information. The CAP suggests that an abbreviated licensure process would be preferable to a license for limited practice.

FEDERATION OF STATE The FSMB supports a special licensure for telemedicine, a variation on the

MEDICAL BOARDS (FSMB) general limited licensure model. In 1995, FSMB proposed an “Act to Regulate the

Practice of Medicine Across State Lines.” Under this Act, a physician would be

required to obtain a special license issued by the state medical board. Several

states have adopted variations on this model including Alabama, Tennessee and

Texas.

NATIONAL COUNCIL The National Council’s model is the most far reaching of any model and is based

OF STATE BOARDS OF on the general mutual recognition model. In November 1998, the National Council

NURSING (NCSBN) adopted language for an Interstate Nurse Licensure Compact. This compact

creates a unified standard for nurses’ licenses. Nurses will be able practice

telemedicine in whichever states adopt the compact. Licenses will be fully recognized by the host and home state by mutual recognition. To date, Arkansas,

Delaware, Iowa, Maine, Maryland, Mississippi, Nebrasks, North Carolina, South

Dakota, Texas, Utah and Wisconsin have passed this compact into law.

Source: U.S.Department of Commerce, “Report to Congress on Telemedicine,” 1997.

23
physicians to practice telemedicine

across state lines. Appendix 2 lists

these states. Making it easier for

nurses to practice across state lines,

the National Council of State Boards

of Nursing (NCSBN) developed a

licensure model based on mutual

recognition called the Interstate

Nurse Licensure Compact. As

described in Box 2, NCSBN promotes

the introduction of legislation and the

adoption of state laws to allow nurses

to practice across state borders

without being licensed outside their

home states. Currently, 12 states

have adopted the Nurse Licensure

Compact as listed in Box 3. Other

organizations, such as the National

Association of Pediatric Nurse

Associates, and Practitioners, and

the Association of Women’s Health,

Obstetric and Neonatal Nurses,

believe that alternative models like

the national licensure model, as

described in Table 2, and in their

letter in Appendix 3 may be a better

solution.

LEGAL ISSUES RELATING

TO THE INTERNET

Consumers with access to the World Wide Web

can peruse volumes of health

information, join chat groups, purchase

pharmaceuticals in privacy and

consult a health care practitioner for a

fee. But together with these benefits,

the Internet has added new twists to

old licensure problems and has

raised other legal issues. For

example, given the nature of the Web,

it may be difficult for a consumer or

state government to determine

whether or not particular Web sites

comply with states’ laws pertaining to

a physician’s or other health

practitioner’s interstate practice.

Theoretically, on-line health

practitioners, who do not provide

specific medical advice or diagnosis,

would probably not be seen as

practicing medicine across state

lines. Realistically however, these

consultations can fall into large gray

areas.

Perhaps the larger legal issue for

many states may be their ability to

enforce their own state health laws.

For example, if a consumer, located

in state A, sues an on-line practitioner,

based in state B, who has jurisdiction

in this case? Does the jurisdiction

change if the interactive consultation

was accomplished via the Web, over

the telephone, via email or a two-way

teleconferencing unit? What happens

if the Web site was created and

staffed outside the United States?

What recourse would the consumer

have if the Web site was immediately

taken down but reconfigured under a different

address the next day?

These legal questions apply not

only to Web based companies but

also to companies that provide health

care consultations using any type of

technology across state boarders.

For example, many health insurance

companies now give their clients the

option to consult with a nurse over

the telephone before seeking face-toface medical consultation. Large

BOX 2

INTERSTATE NURSES

LICENSURE COMPACT

Under this compact, the

head of the nursing licensing

board will administer the

Compact for his/her state.

Among other things, this

compact states that:

“License to practice registered nursing issued by a

home state to a resident in

that state will be

drecognized by each party

state as authorizing a multistate licensure privilege to

practice as a registered

nurse in such party state.”

This compact also applies to

a license to practice licensed

practical/vocational nursing.

To coordinate these multistate licenses, all party

states:

“shall participate in a

cooperative effort to create a

coordinated data base of all

licensed nurses and licensed

practical/vocational nurses.”

Including information on a

nurse’s licensure and disciplinary history.

BOX 3

STATE THAT ADOPTED

THE COMPACT

Arkansas, Delaware, Iowa,

Maine, Maryland, Mississippi, Nebraska, North

Carolina, South Dakota,

Texas, Utah and Wisconsin

24
health insurance companies with a national base

will often subcontract to a company with a central

office staffed with nurses, who field incoming

nationwide calls. Do these nurses need to be

licensed in every state in order to answer these

calls?

A recent HHS report: Wired for Health and WellBeing, (http://www.scipich.org) states that “the

extent and nature of liability associated with IHC

(Interactive Health Communication) applications

are unclear. Providing medical advice through IHC

applications, including Web sites, increases

potential liability for developers. To what extent

the developers, sponsors, content providers, or

others involved in the design and implementation

of the application will be liable for damages is

unknown. In the absence of precedents in this

area, future legal action and case law may provide

some clarity on these issues.” (Wired for Health

and Well-Being, HHS, Office of Public Health and

Science, April 1999)

Finally, whether Web developers are state

certified or not, the issue of illegal drugs sold over

the Internet or legal drugs sold without an initial

patient examination by a physician has created a

growing safety and legal challenge for both state

and federal regulators, as discussed in the next

chapter.

OTHER RELATED ISSUES

Another dilemma that has not been resolved is

whether or not health care practitioners providing

telehealth services should be certified in this area.

Earlier this year, the Joint Working Group on

Telemedicine (JWGT) developed a draft discussion

paper (See Appendix 4), exploring the advantages

and disadvantages of certification. According to the

paper, there is confusion about the meaning of the

term. Credentialing, certification, privileging and

licensing are often used interchangeably to describe

the validation of practitioners’ competencies in

telehealth. National professional and provider

organizations and government agencies are

increasingly queried about whether there is a need

for additional and/or official validation of

practitioners’ competency to engage in telehealth.

And it is unclear whether the questions about

validation relate either solely to the equipment used

or to the clinical care delivered. Additional

complexity surrounds the relationship of the

validation of individuals versus organizations.

The JWGT hopes to compile comments about the

draft paper from interested parties and provide a

summary of its findings.

Although little has been resolved about individual

accreditation, there has been change at the

institutional level. In the fall of 2000, the Joint

Commission on Accreditation of Healthcare

Organizations (JCAHO), an independent, not-forprofit organization, adopted new credentialing

standards for hospitals using telemedicine. The full

text of these new standards, which become

effective January 1, 2001, can be found at

http://www.jcaho.org/standardmedical

staff_rev.html#Telemedicine. JCAHO evaluates and

accredits nearly 20,000 health care organizations

and programs in the United States. Its

accreditation is recognized nationwide as a

symbol of quality that indicates that an

organization meets certain performance standards.

To earn and maintain accreditation, an organization must undergo an on site survey by a JCAHO

survey team at least every three years.4 The new

standards amend medical staff standards within

the accreditation manual for hospitals. According

to the manual:

“If a telemedicine practitioner prescribes or

renders a diagnosis, or otherwise provides clinical

treatment to a patient, the telemedicine

25

4 Information about JACHO was taken from their

website at http://www.jcaho.org
26

practitioner is credentialed and privileged by the

organization receiving the telemedicine service.

An organization may use credentialing information

from another Joint Commission accredited facility,

so long as the decision to delineate privileges is

made at the facility that is receiving the

telemedicine service.”

 NEXT STEPS

• The Joint Working Group on Telemedicine

will work with various state governmental

and professional groups to assess the

feasibility of developing common licensure

application forms, similar to the common

college application form, accepted at a

number of universities. Common applications will reduce time and costs associated with completing numerous different

applications that vary in state requirements

and paperwork. States, in turn, can more

easily develop a comprehensive database

on practitioners and track them across

state borders.
 OVERVIEW

Thanks to advances in technology, telemedicine

practitioners have shifted easily from the phone to

the personal computer to the Internet to wireless

handheld devices. Yet, the full potential of these

advances cannot be reached without clinical and

technical standards and guidelines.

In the past few years, the need for standards

has taken on greater importance, not only in the

world of telemedicine, but also in the world at

large. Without widely adopted standards and

guidelines, interoperability and interconnection

are not possible and the great potential of

telemedicine will be difficult to achieve. Older

equipment often will not connect with newer

versions of the same machine; different brands

do not operate with one another, making

networking across projects and sometimes within

a project expensive and frustrating.

In addition to technical standards, clinical

protocols and guidelines are needed. Clinical

protocols for telemedicine practice include preliminary scheduling procedures, actual consult

procedures and telemedicine equipment operation

procedures (such as telecommunications transmission specifications). The clinical technical

standard for image quality in a video transmission

would specify the technical standards needed by a

specialist such as a dermatologist to achieve the

high levels of image clarity and color required to

correctly diagnose a patient.

Unlike most clinical health professional

groups, U.S. telemedicine practitioners have not

formally developed and adopted many clinical

protocols or technical standards for telehealth

applications. However, a few professional associations have adopted some clinical practice

protocols.

• The American Telemedicine Association

recently adopted Telehomecare Clinical

Guidelines, posted on their Web site at

http://www.atmeda.org/news/

guidelines.html. Additionally, the Association has posted a May 1999 working

draft of its Clinical Guidelines for Telepathology.

• The American Psychological Association

has posted clinical guidelines on its Web

site to guide in the practice of telepsychiatry

• The American Dermatology Association

has drafted proposals for clinical protocols

for teledermatology.

• The American Nurses Association, assisted by the Interdisciplinary Telehealth

Standards Working Group, developed the

“Core Principles on Telehealth” in March

1998 and “Competencies in Telehealth

Technologies in Nursing in March 1999.

The following is a short list of technical

standards and guidelines that have been adopted

or have been proposed that relate directly or

indirectly to telemedicine and telehealth.

• The American College of Radiology and

the National Electronic Manufacturers

Association created a uniform set of

communication standards called DICOM

(Digital Imaging and Communications in

Medicine).

• HL 7:5 standard for data exchange. The

most widely used HL7 specification is

the Application Protocol for Electronic

Data Exchange in Healthcare Environments. This is a messaging standard that

enables disparate healthcare applications

to exchange data.

• Kennedy-Kassebaum Health Insurance

27

Safety and Standards Safety and Standards

5Health Level Seven is one of several ANSI-accredited Standards

Developing Organizations (SDOs) operating in the healthcare arena.

Health Level Seven’s domain is clinical and administrative data.
Portability and Accountability Act of 1996

(HIPAA) mandated the development and

adoption of standards for electronic exchange of health information for administrative purposes. As of December 2000

DHHS released its final rules on privacy

practices for eligible entities such as

health plans, clearing house and providers

who engage in electronic transactions.

• OAT and the JWGT organized a workshop in

September 1999 to address the need for

guidelines in the area of technical standards

for telemedicine practice. Several guidelines

have already been completed for telecardiology, teledermatology, telerehabilitation,

teleopthamology and telepsychiatry.

(See: http:/telehealth.hrsa.gov/pubs.htm)

Additionally, OAT has funded a grant to the

Advanced Technology Institute to develop a

technical assessment center. This Telehealth

Deployment Research Test bed will establish a national distributed test bed that will

evaluate the effectiveness and practical

utility of telehealth technologies by providing

laboratory and “real world” evaluations.

FDA REGULATORY ROLE

Widely adopted standards and guidelines not

only serve as a foundation for interoperability and

interconnection but also to protect public health.

The US Federal Food and Drug Administration (FDA)

plays a critical regulatory role in ensuring the safety

and effectiveness of telemedicine medical devices

and software with the Center for Devices and

Radiological Health (CDRH) acting as lead agency.

This role was discussed at length in the Department

of Commerce’s 1997 Report to Congress on

Telemedicine (See Appendix 5).

Over the past five years, the FDA has continued

its oversight of medical devices and software

associated with telemedicine. It has developed

guidelines and provided assistance to industry and

other regulators through the work of several

telemedicine related working groups. For example,

the Telemetry Working Group worked with the FCC to

provide new spectrum for wireless medical service

after digital TV signals interfered with wireless

medical telemetry equipment in 1999. The Software Working Group has developed guidelines for

software contained in Medical Devices and the

Telemedicine Working Group has developed

guidelines on Medical Image Management Devices,

on Digital Mammography and Picture Archiving and

Communications Systems and Related Devices.

Given the growing importance of the home health

industry, the FDA and the National Science Foundation cosponsored the “Workshop on Home Care

Technologies for the 21st Century.” The FDA also

recently approved Tele-homecare equipment for

market. Current telemedicine related FDA guidelines can be found at the following sites:

• Guidance for the Submission of Premarket

Notification for Medical Image Management

Devices,(7/27/2000) http://www.fda.gov/

cdrh/ode/guidance/416.pdf.

• Guidance for Industry: Wireless Medical

Telemetry Risks and Recommendations

(9/27/2000) http://www.fda.gov/cdrh/

comp/guidance/1173.html

• FDA Talk Paper: FDA approves first digital

mammography system. (1/31/2000)

http://www.fda.gov/bbs/topics/

ANSWERS/ANS01000.html

• ODE: Guidance for the Content of

Premarket Submissions for Software

Contained in Medical Devices.(5/27/98)

http://www.fda.gov/cdrh/ode/software.pdf

or http://www.fda.gov/cdrh/ode/57.html

• MQSA Regulations relevant to new mammographic modalities are in 21CFR900:

Quality Mammography Standards (as

28
amended): http://www.fda.gov/cdrh/

mammography/frmamcom2.html#12

Another notable change in FDA’s role in

telehealth is its growing involvement in the

oversight of relevant Internet activities. Over the

past few years, some Web sites have

offered illegal drugs or prescription drugs

based on questionnaires rather than a

face-to-face examination by a licensed

sites offer prescription drugs with any

prescription. The FDA is working with the

National Association of Boards of Pharmacy

(NABP), which created a program in 1999

called Verified Internet Pharmacy Practice

Sites or VIPPS. The program gives

consumers a single place to check out an

online pharmacy to ensure that it meets

current standards. To become certified by

VIPPS, an online pharmacy must meet the

licensing and inspection requirements in

the state where it is located and in each

state to which it dispenses

pharmaceuticals. The FDA has also worked with

the Federation of State Medical Boards on

prescribing issues. The FDA’s role in this area

compliments that of the Federal Trade Commission, a key player in enforcement (see below).

Moreover, states remain primarily responsible for

regulating and licensing of health care providers

and pharmacies. About 13 states have recently

passed laws that require a physical examination

before prescribing medication either over the

phone or over the Internet as shown in Box 4.

THE FTC, CONSUMERS &

THE INTERNET

A number of federal and state regulatory

agencies are working together to address healthrelated consumer problems on the Internet. They

include state health authorities, the Federal Food

and Drug Administration, the Justice Department,

29

BOX 4

STATES

ENACTING

LEGISLATION

REQUIRING

PHYSICAL

EXAMINATION

BEFORE

PRESCRIBING

MEDICATION

Alabama, Arizona,

California, Florida,

Iowa, Idaho,

Kansas, Maine,

Mississippi,

Nebraska, New

York, Ohio,

Virginia

and the Federal Trade Commission. The Federal

Trade Commission plays a key oversight and

enforcement role in Internet Commerce as

illustrated in its December 1999 Report:

Protecting Consumers Online: A Federal Trade

Commission Report on the First Five Years of Its

Internet Law Enforcement Program. In this

report the Commission discusses its

activities to combat general consumner

fraud and deception on the Internet. Since

1994, it has focused on the largest and

“most egregious” fraud and deception

examples, taking action against companies

in more than 100 cases. As shown in Box

5, the Commission has made false or

unsubstantiated health claims online a law

enforcement priority.

Despite the actions of regulators,

consumers must bear the major burden of

determining the safety and privacy of health

related Web sites that they use. Several US

Government-sponsored Web sites for

consumer health information are reviewed

and links are carefully selected, with the selection

criteria described on each site. Several years

ago, DHHS introduced its Web based “Health

Finder” - an Internet Website (http://www

.healthfinder.gov) that provides search capabilities

on health information. Healthfinder includes links

to other important government health sources

such as Medlineplus (http://medlineplus.gov/),

created by the National Library of Health. Other

links to the Center for Disease Control, the FDA

and the National Cancer Institute name just a few

of the myriad Federal government health

information sources. While the Federal government

has made credible health information more

accessible to consumers on the Web, private and

non-profit company Web sites have also

proliferated. These health-oriented Web sites

range widely from those providing general health
30

information to those selling pharmaceuticals to those that provide a

medical opinion for a fee.

For any such Web site, consumers

may find it difficult to determine the

“quality” of the site. Consequently, the

DHHS’ national Healthy People 2010

initiative includes the goal of increasing

the number of health related Web sites

that disclose quality standards

information. “Quality” here is defined

as more than just the quality of

information at the site, including among

other things, elements that relate to

reliability, value and user protections.

Outlined below is the information DHHS

recommends be disclosed to users on

health related Web sites:

• Identity of Web site developers

• Site Owner’s/Developer’s contact information

• Potential conflicts of interest/

bias

• Purpose of the site

• Original sources of content

• Privacy and confidentiality protection of personal information

• Site evaluation methodology

• Content updates

A recent article 6Proposed

Frameworks to Improve the Quality of

Health Web Sites reviews and

compares this DHHS framework to

three other frameworks for the Quality

of HealthSites.(http:www.medscape.

Medscape/GeneralMedicine/journal/

2000/v02.n05)

6 Proposed Frameworks to Improve the Quality of

Health Web Sites: Review C. Baur, PhD, M.J.

Deering, PhD, MedGenMed, Sept. 26, 2000.

7 Institute of Medicine, To Err is Human: Building a

Safer Health System, 2000

MEDICAL ERRORS

The Institute of Medicine’s report

To Err is Human: Building a Safer

Health System brought to public

attention data known in the medical

community for some time7. Extrapolating results from a number of

studies, the report concluded that

44,000 to 98,000 Americans die

each year as a result of medical error.

National costs range between $17

billion and $29 billion. Of note, is

that these data deal almost exclusively

with hospitalized patients. The

consensus opinion of experts on

human error is that many medical

errors are the result of systemic

problems rather than specific actions

by individuals. Complexity of systems

has been repeatedly shown to

increase the likelihood that errors will

occur.

This relationship between

complexity and error may have

implications for telemedicine practice.

As noted in the Institute of Medicine

Report, “Telemedicine: A Guide to

Assessing Telecommunications in

Health Care” published in 1996.

“Telemedicine is not a single

technology or a discrete set of related

technologies; it is rather, a large and

very heterogeneous collection of

clinical practices, technologies and

organizational arrangements. In

addition, widespread adoption of

BOX 5

EXCERPTS FROM FTC

REPORT:

Protecting Consumers online: A

Federal Trade Commission Report

on the First Five Years of Its

Internet Law Enforcement Program

Operation Cure-All:

The Commission brought four

cases against the marketers of

products such as magnetic

therapy devices, shark cartilage

and CMO. (cetymyristoleate) for

their claims that these products

could cure a host of serious

diseases, including cancer, HIV/

AIDS, multiple sclerosis and

arthritis. All the companies,

which used Web sites to market

the products and recruit distributors, entered into settlements

with the Commission.

FTC v.Slim America, Inc.:

The defendants were charged

with falsely advertising that

their weight loss product would

produce dramatic weight loss

results. After a trial, the Court

ordered the defendants to pay

$8.3 million in consumer redress and ordered the individual

defendants to post multi-million

dollar bonds before engaging in

the marketing of weight loss or

other products and services.

FTC v. American Urological

Clinic:

The defendants touted “Vaegra”,

a sham “Viagra” and other impotence treatment products,

claiming that the products had

been developed by legitimate

medical enterprises and proven

effective. The Commission obtained an $18.5 million judgment that requires the defendants to post a $6 million bond

before they promote any impotence treatment in the marketing of impotence treatment or

other products and services.
31

effective telemedicine applications depends on a

complex, broadly distributed human infrastructure

that is only partly in place and is being profoundly

affected by rapid changes in health care,

information and communications systems.”

This statement clearly identifies and articulates

the rationale for a careful, robust and proactive

approach to the identification, reporting and

analysis of medical errors encountered in the

practice of Telemedicine activities.

 NEXT STEPS

• OAT will work with its grantees, the American Telemedicine Association (ATA) and

other groups to expand its clinical and

technical guidelines.(See http://

telehealth.hrsa.gov/pubs.htm for current

guidelines.)

• OAT will continue to support the work of

the Advanced Technology Institute, in

developing a Telehealth Deployment

Research Testbed. This work is being conducted in conjunction with the Medical

University of South Carolina,

West Virginia University Concurrent

Engineering Research Center, Arthur D.

Little, Oak Ridge National Laboratory, the

Low country Healthcare Network and the

CPRI-HOST consortium. The testbed will

evaluate the effectiveness and practical

utility of telehealth technologies by providing both laboratory and “real-world”

evaluations.

• OAT will develop a series of measures

to be included in its performance measurement data collection system with

common data elements to be collected by

all OAT grantees. These measures should

help document the contribution of telemedicine technologies in reducing the

incidence of medical errors.
32
OVERVIEW

Privacy, security and confidentiality concerns

are not unique to telemedicine. Industries such

as banking, credit card and health care are

particularly concerned about personally identifiable information and the possible consequences

that could arise should sensitive information be

made public. Advances in technology have

brought great benefits as well as drawbacks in

this area. Many view loss of privacy as part of

living in the 21st Century. As Scott McNealy,

Chairman and CEO of Sun Microsystems has

succinctly put it: “You have no privacy – so get

over it!” Fortunately, Congress, a number of state

governments and privacy advocates provide a

balance to this point of view.

A non-official “working definition”8 of these

concepts is that Privacy is an individual’s claim

to control the use and disclosure of personal

information. This claim is backed by the societal

value representing that claim. Confidentiality is

a status accorded to information that indicates it

is sensitive for stated reasons and therefore must

be protected and access to it controlled.

Security are the safeguards (administrative,

technical, or physical) in an information system

that protect it and its contents against

unauthorized disclosure, and limit access to

authorized users in accordance with an

established policy.

HEALTH INSURANCE PORTABILITY

AND ACCOUNTABILITY ACT OF 1996

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) not only affects

employees’ health insurance portability but under

the Administrative Simplification (AS) provisions

also mandates the development of far reaching

national standards for electronic health transactions. These standards include electronic transaction standards for electronic exchange of health

information for administrative purposes; standards for the privacy of individually identifiable

health information; a national provider identifier;

an employer identifier; and secure electronic

signatures, among others.

According to the Act, the Secretary of DHHS

must develop final regulations relating to privacy

standards by February 2000, if Congress has not

acted by August 1999. In 1997, the Secretary

together with the National Committee on Vital and

Health Statistics (NCVHS), which serves as the

statutory public advisory body to the Secretary,

sent preliminary recommendations to Congress.

In the absence of Congressional action by the

mandated deadline, DHHS published a notice of

proposed rulemaking in November 1999. Final

HIPAA privacy rules were published December 28,

2000 and an DHHS Fact sheet on these rules can

be found in Appendix 7. The complete text and the

summary can be found at: http://aspe.hhs.gov/

admnsimp.

HIPAA privacy rules cover health plans (e.g.,

insurers, managed care organizations, federal

health programs), health clearinghouses (which

unify data in standardized formats) and health

care providers, who engage, directly or through

contractual arrangements, in HIPAA standard

electronic transactions.

Eligible individually identifiable health information can be in electronic, paper or oral format.

Thus, the general principles for the use and

disclosure of personally identifiable health

information are applicable regardless of the form

the information is kept in, the methods of

transmission, the time sequence of its creation

and use, or the way it is communicated.

8 Willis Ware, Lessons for the Future: Dimensions of Medical Record

Keeping, in Health Records: Social Needs and Personal Privacy 43

(Task Force on Privacy, U.S. Department of Health and Human

Services (1993)).

Privacy, Security & Confidentiality Privacy, Security & Confidentiality

33
Consequently, the proposed standards for the

privacy of individually identifiable health information may greatly affect how the healthcare industry

as a whole and the telemedicine industry in

particular protects privacy in the future.

Potentially one of the most challenging issues

for telemedicine practitioners will be HHS’

proposal for federal law to preempt state law only

when state privacy law is less stringent. If state

law is in conflict with federal regulatory

requirements, the rules providing more stringent

privacy protections should prevail. If many states

have more stringent privacy laws, they would all

predominate and telemedicine practitioners could

be faced with a patchwork of state privacy

standards. For example, should telemedicine

specialists at a hospital in state A, who confer

with patients in states B, C, D and E, determine

which state law of the five states is the most

stringent for privacy and comply with that state

law?

All states have laws governing the use and

disclosure of health information; however, there

are wide discrepancies in protection, complexity

and coverage among them. Moreover, there is

typically no one statute governing health data

within a state. The Health Privacy Project of the

Institute for Health Care Research and Policy at

George-town University has compiled a

comprehensive 50-state survey of health privacy

statutes. A summary of findings is found at the

Health Privacy Project Web site at: http://www.

healthprivacy.org/resources/statereports/

exsum.html. At this time, it is too early to

predict the impact HIPAA privacy requirements

will have on the telehealth industry. On one hand,

ensuring and maintaining patient privacy and

security measures are good business practice.

These practices could provide greater reassurance

to those reluctant to participate in telemedicine

for privacy or other reasons. On the other hand,

specific requirements that do not reflect

telemedicine common practices may create

problems. Whether HIPAA requirements prove to

be too burdensome for telemedicine practitioners

or whether HIPAA will create a “chilling” effect on

the industry remains to be seen.

OAT and the Assistant Secretary’s Office of

Planning and Evaluation have recently funded a

study and a conference entitled Privacy, HIPAA

and Telemedicine that will be completed in Spring

2001. The purpose of the study is to identify

privacy issues unique to telemedicine and to

determine how HIPAA may affect telemedicine

practitioners and patients. The study will draw

upon the experience of OAT’s grantees, who

include over 60 telemedicine networks and over

400 sites.

As we discuss in the Chapter on Emerging

Trends and Policy Issues, technology changes in

the industry may call for retrofitting HIPAA rules.

HIPAA rules do not necessarily cover all consumeroriented Internet Web sites that collect, store and

maintain personally identifiable consumer

information. Thus, this privacy measure does not

cover an important telemedicine and consumer

arena. A further discussion of this subject is

highlighted below.

CONSUMER PRIVACY AND THE INTERNET

While a detailed discussion about consumer

health privacy online is not within the scope of this

report, it is important to note some recent

findings. Over the past few years, consumer

concerns about privacy on the Internet have

escalated. According to a new Gallup poll

commissioned by the Medic-Alert Foundation,

“almost 90% of participants said that, in general,

the confidentiality of their personal health

information was important, and almost 85% said

they were “concerned” that this information could

34
be given to others without their consent.”9 The

public’s concern about privacy online may be

justified, according to several recent reports and

surveys.

For example, Georgetown University recently

released a report, called the Health

Privacy Project (http:ehealth.chcf.

org/), about the practice of privacy

protocols on health related web sites.

The five major findings are:

• Consumers are using health

Web sites to better manage

their health, but their personal

information may not be adequately protected.

• Visitors to health Web sites

are not anonymous, even if

they think they are.

• Health Web sites recognize

consumers’ concern about

the privacy of their personal

health information and have

made efforts to establish

privacy policies; however, the

policies fall short of truly

safeguarding consumers.

• There is inconsistency

between the privacy policies and the

actual practices of health Web sites.

• Health Web sites with privacy policies,that

disclaim liability for the actions of third

parties on the site, negate those very

policies.

Other notable reports that discuss consumer

privacy and the Internet include those released by

the FTC (see below) and a series of publications,

included in a special edition of Health Affairs, Vol.

19, No. 6. According to one, entitled Virtually

Exposed: Privacy and E-Health, “a recent study of

21 leading health related Web sites found that the

polices and practices of many fell short of

consumers’ expectations for privacy.” The publication also pointed out news stories, highlighting

the lax security for information shared and maintained online, as shown in Box 7.

Consumers are using health Web

sites to better manage their health,

but their personal information may

not be adequately protected.

INDUSTRY SELF REGULATION

To address these types of

problems and concerns, industry has

promoted self-regulation by developing

standards for Web sites. The Health

on the Net Foundation (HON) (http://

www.hon.ch) and TRUSTe (http://

www.TRUSTe.org) promote some of

the most widely accepted standards

and “privacy seals”. Another industry

approach is the promotion of “ethical

principles.” Two new industry coalitions called the Internet Healthcare

Coalition (ihealthcoalition.org/ethics/

ecode.html) and the Health Internet

Ethics Coalition (http://www.

hiethics.org/Principles/index/index.asp) have

proposed the adoption of “ethical principles” or

“Ehealth codes” of conduct. Some of the

principles recommended by the Internet Healthcare

Coalition are candor, honesty, quality and

informed consent. Principles adopted by the

Health Internet Ethics Coalition include a

commitment to adopt a privacy policy, enhanced

privacy protection for health related personal

information, safeguarding consumer privacy in

relationships with third parties, and disclosing

ownership and sponsorship information.

BOX 7

HEALTH RELATED ONLINE

SECURITY CONCERNS

Global-Healthrax, which sells

health products online, inadvertently revealed names, home

phone numbers, bank account

and credit care information of

thousands of customers on its

Web site.

Kaiser Permanente mistakenly

sent responses to members’

email to the wrong recipients.

The email messages, some of

which contained sensitive

information, affected 858

members who use Kaiser’s online services.

Finally, thousands of patient

records were accidentally made

available to the public on the

University of Michigan Medical

center’s Web

9Source: California Healthcare Foundation, Online News

(http://ehealth.chef.org)

35
of the Federal Trade Commission Act and the

Children’s Online Privacy Protection Act. However,

the FTC still lacks authority to require Web

companies to adopt standard information practices

such as its Privacy Principles. These four widely

accepted information privacy principles are outlined

below:

• Notice: Provide consumers clear and

conspicuous notice of information

practices;

• Choice: Offer consumers choices as to

how their personal identifying information

is used;

• Access: Give consumers reasonable

access to the information the Web site

has collected about them;

• Security: Take reasonable steps to

protect the security of the information

collected from consumers.

While the FTC continues to strongly encourage

industry self-regulation, its 2000 Report Survey

demonstrates that self-regulation alone has not

been sufficient. According to the Report, only 20% of

the busiest Web sites comply with FTC Information

Privacy Principles and only about 41% of all Web

sites comply with at least two principles.

In the past, the FTC has been reluctant to

recommend legislative remedies but in the 2000

Report, the FTC offers legislative recommendations

to Congress that would set a basic level of privacy

protection for all visitors to consumer-oriented

commercial Web sites. The legislation would

“require all consumer oriented commercial Web

sites to the extent already covered by the Children’s

Online Privacy Protection Act of 1998 (COPPA), to

implement the four widely-accepted fair information

practice principles, in accordance with more specific

regulations to follow.”10

LEGISLATION AND REGULATION

Both the states and Congress have also

responded to consumer privacy concerns by

introducing a large number of bills that attempt to

protect the privacy of personal information collected

from the Internet. For example, Congress introduced and passed the Children’s Online Privacy

Protection Act of 1998. This law requires the FTC to

develop regulations, protecting the privacy of personal information collected from and about children

on the Internet and to provide greater parental

control over the collection and use of that information. Recently, Congress introduced the Health

Information Privacy Act (H.R.1941); the Medical

Information Protection and Research Enhancement

Act of 1999 (H.R.2470); the Consumer Privacy

Protection Act (SB 2606 IS); the Consumer Internet

Privacy Protection Act of 1999, (H.R.313 IH); and

the Consumer Internet Privacy Enhancement Act,

among other bills that seek to protect the privacy of

consumers who use the Internet.

THE FEDERAL TRADE COMMISSION’S

REGULATORY ROLE

As noted in the previous Chapter, the FDA,

Department of Justice and state governments all

have roles in online regulation and enforcement but

the FTC has emerged as a key online consumer

protection regulator, overseeing privacy protection

and deceptive trade practices on commercial Web

sites. The FTC has published a number of reports on

online consumer protection, including Protecting

Consumers Online: A Federal Trade Commission

Report on the First Five Years of Its Internet Law

Enforcement Program, 1999. It also recently submitted a Report to Congress, entitled, Privacy

Online: Fair Information Practices in the Electronic

Marketplace, May 2000 (http://www.ftc.gov/os/

2000/05/index.htm#22). Among other things, this

Report establishes the FTC’s authority to regulate

personal data collected online, based on Section 5

36

10 FTC: Privacy Online: Fair Information Practices in the Electronic

Marketplace, A Report to Congress, May 2000, p.38.
 NEXT STEPS

• OAT together with the Office for the

Assistant Secretary of Planning and

Evaluation have funded a research

paper, Privacy, HIPAA and Telemedicine,

as well as a conference on the same

subject. OAT and OASPE anticipate

that the final paper and conference will

be completed by summer 2001 and

the results made available to the

public both in print and on OAT’s Web

site, shortly thereafter.

37
38
Telecommunications Infrastructure Telecommunications Infrastructure

OVERVIEW

High transmission cost continues to deter

telemedicine, particularly in rural areas of the

United States. While it may be only a few years

away, competition in telecommunications service

has not yet reached much of rural America and

transmission cost is still a significant part of a

rural telemedicine project’s overall budget.

Five years ago Congress passed the landmark

Telecommunications Act of 1996 (the Act),

providing a blueprint for major changes in the

telecommunications industry, such as opening up

competition between long distance carriers and

the Regional Bell Operating Companies. The Act

also stated that rural health care providers (HCPs)

should have access to advanced telecommunications services at reduced rates.

In the Act, Congress charged the Federal

Communications Commission (FCC) with

administering the Universal Service program that

would provide rural health care providers with a

discount on their telecommunication transmission

charges equaling the difference between urban

and rural transmission rates. In 1997, the FCC

established the Universal Service Administrative

Company, (USAC) a separate, not for profit entity,

which oversees both the E-Rate discount for

Schools and Libraries and the Rural Health Care

Program (RHCD). After a number of false starts,

the Rural Health Care Program issued its first

funding commitments on June 25, 1999, five

days before the end of the first 18-month program

year. In total, 483 rural health care providers

received $3.4 million out of a possible $400

million, which equaled the total requested

support for completed appli-cations received by

USAC that year (January 1, 1998 through June 30,

1999).

Since then, the FCC has adopted a number of

reforms to the program, as outlined below, which

streamline the discount application process, and

address practical concerns voiced by practitioners

and others. Specifically, the FCC:

• Expanded the list of telecommunication

carriers eligible to participate in the

program to include non-ETC (long distance) carriers;

• Streamlined the application process;

• Changed the discount calculation to

distance based charges paid by rural

healthcare providers rather than a comparison of urban and rural published

tariffs; and Eliminated bandwidth and

quantity limits so that any bandwidth and

any number of services could be

supported.

Funding in the second year of program, after

reforms were implemented, increased to

approximately $6.1 million. Moreover the FCC

and USAC expect that third year funding figures

will increase to nearly $10 million, once all

reforms have been in place for a full year. (For a

detailed history of the Rural Health Care Division

see Appendix 6 and OAT’s FCC filing on Universal

Service at http://telehealth.hrsa.gov/pubs.htm.

 NEXT STEPS

• OAT recently filed comments with the FCC

on the question of “possible impediments

to deployment and subscribership in

unserved and underserved areas of the

nation.” (See OAT’s FCC filing on Pacific

Basin at http:/telehealth.hrsa.gov/

pubs.htm) Follow-up with the FCC on this

issue continues.

• OAT also filed comments on the FCC’s

proposal to set aside spectrum for the

use of Wireless Medical Telemetry.

(See http://telehealth.hrsa.gov/

pubs.htm) OAT’s comments also

39
reflected concern about adequate

spectrum for future telemedicine

applications, which may require more

bandwidth than currently allocated for

telemetry.

40
and the strengths and weaknesses of the reports.

They include:

• Telemedicine for the Medicare Population by the University of Oregon, funded

by the Agency for Healthcare Research

and Quality for HHS;

• Patient Satisfaction with Telemedicine

by the East Carolina University Medical

School Telemedicine Center;

• A DRAFT Assessment of Approaches to

Evaluating Telemedicine by the Lewin

Group, Inc, funded by the Office of the

Assistant Secretary for Planning and

Evaluation; and

• The 1999 Annual Report of the Association of Telehealth Service Providers.

UNIVERSITY OF OREGON/DHHS REPORT

In 1999, the DHHS’ Agency for Healthcare

Research and Quality funded the University of

Oregon to study Telemedicine for the Medicare

Population. The Report assesses telemedicine

technologies that substitute for face-to-face

medical diagnosis and treatment, focusing on

three technologies -- store and forward, selfmonitoring/testing and non-surgical services.

Although the main thrust of the University of

Oregon’s report is telemedicine technologies and

not patient/physician satisfaction with

telemedicine, the authors devoted a chapter to

their findings on satisfaction.

This chapter drew upon an extensive literature

search of both ongoing telemedicine programs

around the world and peer reviewed studies

assessing the efficacy and cost of telemedicine.

The survey of telemedicine literature and projects

was extensive and about 30 studies fit the

authors’ criteria for inclusion in the patient/

physician satisfaction chapter. The authors

selected 18 studies that examined patient

OVERVIEW

Despite telemedicine’s relatively long history,

few statistically significant studies of efficacy,

patient/physician satisfaction, or effectiveness

have been conducted. This dearth of research and

data may be due in part to the relatively small

number of telemedicine consultations within a

given specialty or across specialties within

individual telemedicine projects, and to the lack of

a standard methodology to study efficacy,

patient/physician satisfaction, or effectiveness

across projects.

Despite the lack of statistical significance in

most of the studies examined by this Report, all

showed high patient satisfaction with telemedicine

as shown in Table 4. Provider satisfaction was

more variable, but generally moderate to high.

Moreover, although one cannot generalize to all

telemedicine applications, studies of specific

services, such as tele-homecare and teledermatology, suggest that at least for these

services, there may be real cost savings to be

realized from telemedicine.

Recent research on evaluation methodologies,

such as the Lewin Group Inc.’s draft study on the

Assessment of Approaches to Evaluating

Telemedicine, funded by the Office of the

Assistant Secretary for Planning and Evaluation,

the Department of Health and Human Services

(DHHS), may offer hope for more statistically

robust studies in the near future.

PATIENT AND PHYSICIAN

SATISFACTION WITH TELEMEDICINE

To develop a better sense of patient and

physician satisfaction, this Report to Congress

examined four recent reviews of studies on

patient and/or provider satisfaction with

telemedicine. These reports offer sufficient

breadth or depth in their data to warrant a closer

look. Table 4 below highlights the general findings

Evaluation and Research Evaluation and Research

41
satisfaction with telemedicine and 10 studies

that looked at physician satisfaction. Most of

these focused on one clinical specialty such as

oncology, psychiatry or dermatology, or on a

particular setting such as a prison or emergency

room.

The majority of the Report’s selected studies

show patients satisfied with their telemedicine

treatment. Out of 18 studies examined, only one

study showed that most patients preferred faceto-face assessment in lieu of teleconsults. The

rest of the studies reveal high levels of

satisfaction.

Similarly, the Report found that, overall,

physicians’ satisfaction ranges from “satisfied”

with telemedicine technical quality to high levels

of satisfaction. However, one study out of the ten

showed that while the participating psychiatrists

were satisfied, given a choice, they preferred faceto-face assessments.

Despite these positive outcomes, the

University of Oregon does not draw any

conclusions about patient or physician satisTable 4: STUDIES OF PATIENT/PHYSICIAN SATISFACTION WITH TELEMEDICINE

NUMBER OF PATIENT PROVIDER

NAME OF REPORT STUDIES REVIEWED SATISFACTION SATISFACTION STRENGTHS/WEAKNESS

HHS/University of 30 studies Highly Satisfied Highly Satisfied Large survey of studies/

Oregon (2000) small data samples in

each study. Studies only

look at one application

such as teledermatology.

East Carolina 12 studies plus Highly Satisfied N/A Large data sample in ECU

University (2000) ECU study of 495 98.3% rating for study with different appliteleconsults ECU Study cations and different

settings/small survey of

12 other studies with

small data samples.

Association of Study based on 132 N/A Moderate to Large survey of users/

Telehealth Service network responses Highly Satisfied only looks at technology

and users

faction because the authors felt that the studies

were not statistically significant. However, the

authors do acknowledge that further study or

more statistically significant study may not

provide any different conclusions than those

already offered by these.

As shown in Table 5, most of the studies were

based on relatively small data sample sizes

ranging from one to about 100 patients. Two of

the 18 patient studies were based on larger

sample sizes. One was based on a prison inmate

population of 576 inmates; the other was based

on a sample of 294 dermatological patients. Most

of the studies concentrated on only one specialty

such as mental health or dermatology. A few

studies did assess satisfaction across a few

specialties but these were the exception.

TELEMEDICINE CENTER OF THE EAST CAROLINA

UNIVERSITY SCHOOL OF MEDICINE

The University of East Carolina (ECU) School of

Medicine recently published a report entitled

Patient Satisfaction with Telemedicine, in the

Telemedicine Journal (Vol.5, Num.1). In this

42
report, the authors review other non-telemedicine

studies that look at patient satisfaction as well as

12 studies of patient satisfaction in telemedicine

applications. They also report their own findings

about patient satisfaction based on data collected

and evaluated from 495 real-time interactive

telemedicine clinical consultations associated with their Telemedicine Center at the

School of Medicine. ECU’s Telemedicine

Center is the hub to eight spoke sites,

including six hospitals, one rural health clinic

and one maximum-security prison.

ECU’s review of 12 telemedicine studies

showed patient satisfaction ranging between

71% to 100%. And similar to the University of

Oregon’s review of 18 telemedicine studies,

above, ECU found that the 12 telemedicine

studies they reviewed tended to have small

sample sizes, ranging from 21 to 292

patients. Also similar to the DHHS studies

was the focus on one clinical specialty or a particular

setting, such as a prison.

In contrast to the reviewed studies, the ECU

study has a much larger data sample size (495

responses) and looks at patient satisfaction across

telemedicine specialties. ECU studied a wide variety

of clinical specialists including dermatology

(33.5%), allergy (21%), cardiology (17%), psychiatry

(5.1%), endocrinology (4.2%) and rehabilitation

medicine (4.0%).

Patient satisfaction was examined in relation

to patient age, gender, race, income and

insurance. Overall patient satisfaction with

telemedicine applications was found to be a high

98.3%. Patients were highly satisfied with

consultations through telemedicine and reported

that care was easier to obtain.

ECU suggests several reasons for the high

patient satisfaction rate. For example, travel time

can be a factor in patient satisfaction. Travel

distances for patients seen over the telemedicine

link were on average 81 percent shorter, when

compared to the distance to the School of Medicine

clinics. The overwhelming majority of patients

indicated that telemedicine had made it easier for

them to obtain medical care. For example,

scheduling a time to see a telemedicine

specialist was easier than trying to

schedule an appointment with a traditional

specialist at ECU’s clinics. The amount of

time the teleme-dicine specialist spent on

a patient’s interview, physical examination

and discussion of treatment options was

greater and more satisfying to the patient.

Part of the reason was that the

telemedicine physician received patient

information several days prior to the

consultation and spent less time gathering

information about medical history and

more time on the problem at hand.

According to the ECU study, although the

telemedicine consult usually takes longer than a

traditional exam, “it is plausible that these factors

make the patient feel more involved in the

consultation and increase(s) satisfaction in the

process.”

ASSOCIATION OF TELEHEALTH

SERVICE PROVIDERS

The Association of Telehealth Service

Providers’ (ATSP) annual report provides findings

from a nation wide survey of active telehealth

networks. The purpose of the 1999 Report on US

Telemedicine Activity, was to assess the state of

telemedicine from the clinical provider’s

organizational perspective; describe and

characterize telemedicine/telehealth activity for

1998 and the first quarter of 1999; and provide

reference material. The report does not include

patient or physician satisfaction with telemedicine

per se but does survey clinical providers’

BOX 8

ECU STUDY

RESULTS

Overall patient satisfaction with telemedicine applications was found to

be a high 98.3%.

Patients were

highly satisfied

with consultations

through telemedicine, and reported

that care was

easier to obtain.

43
satisfaction with specific types of telemedicine

technology. ATSP’s 1999 report is based on

responses from 132 telehealth networks.

In this report, ATSP’s findings on provider

satisfaction of telemedicine technology could be

viewed as a proxy for health provider satisfaction

with telemedicine. The report shows clinical

providers’ satisfaction with several types of

telemedicine technology with data from about 4 to

69 users. Overall the majority (94%) of those

interviewed indicated moderate to high levels of

satisfaction with the different types of equipment

used for telemedicine such as teleradiology,

telepathology, videoconferencing, laptops, set

tops, home health systems.

Overall, each of these reports and the studies

they review or the programs they survey show that

patient satisfaction with telemedicine is high and

that physician satisfaction is moderate to high.

Despite the lack of statis-tically significant data

underpinning most of the studies, it is notable that

they all show positive satisfaction.

THE OFFICE OF THE ASSISTANT SECRETARY FOR

PLANNING AND EVALUATION/LEWIN GROUP, INC.

REPORT

The Office of the Assistant Secretary for

Planning and Evaluation (OASPE) of the DHHS

funded Lewin Group Inc. has drafted a report

titled Assessment of Approaches to Evaluating

Telemedicine. This draft highlights some of the

difficulties of evaluating an industry driven by

rapidly changing technology and, given these

difficulties, reviews the frameworks needed to

appropriately evalutate telemedicine projects. For

the report, Lewin conducted a literature search on

a number of telemedicine studies and visited five

telemedicine sites, first hand. Additionally, 15

telemedicine experts were extensively interviewed.

Although the main purpose of the report was

assessing telemedicine evaluation and not

patient satisfaction with telemedicine, it does

address what subjects should be appraised in the

future and what subjects, such as patient

satisfaction, may be sufficiently evaluated.

As the Lewin Group Inc.’s Draft Report points out

“patient satisfaction with telemedicine has

consistently been demonstrated to be high. As

such, resources for future evaluations may be

better allocated to areas of higher priority.”

TELEMEDICINE COST SAVINGS

Just as there has been an absence of statically

significant studies about patient/ provider

satisfaction, at present, few telemedicine or other

health care projects track the number of patients,

who would have been denied access to health

care, died or suffered grave consequences in the

absence of telemedicine services. As for other

tangible benefits related to telemedicine services,

they too have not been systematically studied

across telemedicine applications on a large scale.

This report briefly looks at several studies that

examine telemedicine cost savings for a specific

telemedicine application.

Kaiser Permanente Medical Center of

Sacramento, California conducted an in-depth study

on tele-homecare11 between 1996 to 1997. (See

http://www.archfammed.com). In the cost control

study home-care patients were assigned to two

different groups: a telemedicine intervention group

and a control group. The telemedicine intervention

group included 102 patients, who had access to a

remote video system that allowed nurses and

patients to interact in real time; the control group

included 110 home health patients, who were

visited by nurses. The study showed that remote

video technology in the home care setting was

effective and well received by patients. Moreover,

the quality of care provided by this technology

44

11 “Outcomes of the Kaiser Permanente Tele-home Health Research

Project Archives of Family Medicine”, Volume 9, January 2000.
yielded similar outcomes to those of the control

group. Finally, the study found that tele-homecare

had the potential for cost savings, which was mostly

attributable to hospitalization cost reduction as

shown in Box 9.

The University of Tennessee Medical

School (UT) also published a study on telehomecare, conducted between April 1998

and June 1999. UT’s A Case Study of

Benefits & Potential Savings in Rural Home

Telemedicine”12 evaluated 444 tele-home

health visits to 14 patients using the Home

Touch* system. The Home Touch system

included a 13-inch monitor, a speaker

phone, a camera and ViaTV converter

equipment to provide a real-time home

health consultation with UT Home Health

nurses in both Knoxville and Jefferson City.

The cost of the system was about $1,500.

UT conducted in-depth interviews and

monthly surveys with nine of the 14 patients,

as well as their caregivers. The results from

the Case Study show that:

• 98% of the patients were

satisfied with telemedicine;

• 100% said the equipment was

easy to use;

• Use of the Home Touch program

saved more than 27,000 nurse

travel miles between April ’98 and

June ’99, representing potential savings

of $7,091.76 @ $0.26/mile;

• For the 14 patients seen by telemedicine, the mileage reimbursement

and drive time potential savings were

$49.33 per visit.

The Walter Reed Army Medical Center’s

(WRAMC) Army Telemedicine Directorate recently

evaluated the use of teledermatology for several

military sites. Although actual travel and

dermatology contract costs for the different military

locations were not available, the study found that

teledermatology’s current benefits are “reduced

travel and contract dermatologist costs, increased

Primary Care Manager (PCM) education,

increased access to dermatologists and

increased patient/provider satisfaction”13.

This study was based upon findings from

WRAMC’s Web-Based Telemedicine Consult

Management System (TCMS) for

teledermatology which conducted 108

clinical consults between April 22, 1998 and

July 15 1998.

Finally, the OASPE/ Lewin Group Inc.’s

report findings suggest that “some of the

commonly recognized types of economic

impact of telemedicine applications are

costs associated with: patient time and

productivity; transportation; capital

(equipment, space, etc.); maintenance;

and communications; utilization of health

care services; and staffing levels and

productivity of health professionals.”

 NEXT STEPS

T• Future evaluations might use the

results of the OASPE/Lewin Group Inc.

Report to conduct research that yields

data with greater statistical significance, by using cross-project evaluation methodologies suggested in the

Report.

• Future evaluations should examine

BOX 9

KAISER

TELEHOMECARE

STUDY RESULTS

The study found no

difference in quality indicators, patient satisfaction

or use between a

control group and a

tele-homecare

group. Although the

average direct cost

for home health

services was

$1,830 in the telehome group and

$1,167 in the control group, the total

mean costs of care,

excluding home

health care costs,

were $1,948 in the

tele-home group

and $2,674 in the

control group.

12 A Case Study of Benefits & Potential Savings in Rural Home

Telemedicine, Home Healthcare Nurse, vol. 18, No.2, Feb. 2000,

p. 125.

* Home Touch is a registered trademark of the University of

Tennessee Medical Center at Knoxville. 13 Advanced Concept Technology Demonstrations Letter of Finding,

Telemedicine Directorate, Walter Reed Army Medical Center,

2000.

45
provider satisfaction, quality and cost

implications of telemedicine for specific

applications such as tele-homecare,

teledermatology and mental health.

46
OVERVIEW

Two important trends that may greatly affect

the telehealth industry and raise key policy issues

are rapid technology changes and the aging

population of America. However, predicting the

future of the telehealth industry and the technical

standards that will underpin “next generation”

technology is like predicting the lottery. At most,

we can describe some important emerging trends

in the telehealth industry over the short term and

suggest some related policy issues for the future.

TECHNOLOGY CHANGES

Over the past five years, significant changes in

the telehealth industry have been tied to rapid

technology advances and the convergence of the

communications, media and computer industries.

What has been even more dramatic is the

exponentially expanding global reach of the

Internet, which grew out of a community of U.S.

academic and military developers to reach a world

wide global audience in just a few years.

Technology trends that will likely influence the

near future of the telehealth industry and dictate

the need for technical standards and guidelines

are:

• Next generation Internet;

• The digitization of information; and

• The migration toward wireless

communications.

NEXT GENERATION INTERNET

As consumers and businesses find more ways

to use the Internet in their homes and

businesses, the next generation Internet will

enable these tasks to be accomplished faster,

more securely and reliably than on our present

system. Part of the anticipated next generation

Internet, Internet2 is a joint venture by academia,

the federal government and industry. This group

is using a new high-speed backbone network with

a core sub-network consisting of a 2.4 Gbps,

13,000-mile research network to test Internet

applications such as Internet Protocol (IP)

multicasting, differentiated service levels and

advanced security. It will also allow researchers to

test and resolve problems such as bandwidth

constraints, quality and security issues.

DIGITIZATION

Similar to the next generation Internet, the

digital revolution is already upon us. Digitized

data, voice, still images and motion-video can be

mixed, matched, melded and sent over myriad

types of conduits. Advances in digital and

compression technology enable vast amounts of

information to be stored onto smaller and smaller

chips. Applications of this technology include the

creation of digital medical libraries and medical

databases, as well as the potential to widely

adopt Electronic Medical Record Systems and

Smart Cards that can hold medical information on

a card the size of a credit card. Smart cards are

already in use to a limited degree here in the U.S.

and more widely overseas. Currently, however,

there are no technical standards that can help to

easily integrate telemedicine clinical data onto

these systems and cards.

WIRELESS TECHNOLOGY

The use of wireless telemetry in hospital

settings is already standard practice as

discussed in the Chapter on Safety and

Standards. (Examples of medical telemetry

equipment include heart, blood pressure and

respiration monitors.) In addition, Emergency

Medical Services companies are or will be

important users of telemetry and other wireless

technology. Companies already use wireless

telemetry or more advanced wireless technology

such as wireless interactive video on emergency

vehicles and to communicate with emergency

physicians. It enables a paramedic to confer with an

Emerging Trends & Issues Emerging Trends & Issues

47
emergency physician for an early assessment, well

before the patient’s arrival at the hospital.

Telemedicine equipment can be as simple as a

laptop computer with desktop video conferencing

capabilities that provide simultaneous two-way

video, two-way voice, vital signs, cardiac and other

data to a trauma center. Wireless technology is also

useful in an emergency care hospital because

emergency physicians, consulting a hand-held

wireless device, do not have to leave the patient’s

side while researching unfamiliar symptoms.

Other wireless technology applications in

telemedicine and telehealth will emerge as people

adopt wireless applications in their every day lives.

For example, the average consumer will be able to

carry a mobile library of health information and

diagnostics contained in a pocket-sized, handheld

wireless computer. With such a wireless palm

computer, the practitioner can send patient medical

information from the hand held device to another

wireless device next door or around the world or to a

main data center in the hospital for storage.

RELATED TECHNOLOGY POLICY ISSUES

POLICY LAGS TECHNOLOGY

Policy makers have not been able to anticipate

the changes brought about by the rapid

technological advances, revolutionizing the health

care industry. In just the past five years,

discoveries related to DNA sequencing, the

Human Genome Project, cloning and other scientific

breakthroughs have raised questions about ethics,

privacy and security. These types of discoveries

combined with the exponential growth and use of

the Internet have created a “policy lag” whereby

policy is developed and implemented many months

or even years after technology has changed lives,

businesses and health care delivery. In the past, the

deve-lopment of regulatory policy, technical

standards and protocols could be created over a

number of years but not now. Internet time relates

not only to businesses that must adjust to rapid

industry changes but also to industry regulators.

PRIVACY ISSUES

Federal health privacy laws such as the Health

Portability and Administrative Act (HIPAA) were

conceived a few years before anyone could

anticipate the dramatic growth and global reach of

the Internet or the convergence of cable, digital,

telephony and video technologies. HIPAA rules did

not anticipate health practitioners, who could send

multiple or a billion copies of a patient record in both

text and video clips over the Internet in the form of

email. Consequently, HIPAA policy and rules may

have to be retrofitted to the current technology

landscape and its future possibilities. For example,

HIPAA proposed rules do not cover many healthrelated Web sites. The Next Generation Internet will

raise other important privacy and security issues as

health care administration and services migrate

toward Internet and wireless technologies.

TECHNICAL STANDARDS AND GUIDELINES

With an increase in the use of advanced

wireless technologies, such as hand-held devices

with video Internet capabilities, there will be a

critical need for technical standards. Standards

will help to ensure interoperability, interconnection

reliability, quality and security of medical data,

images and video trans-mitted over the airwaves.

Telemedicine providers are already finding it

difficult to get their equipment to “talk” to one

another even if both perform the same function.

Older machines will not talk to newer versions of

themselves; different brands will not interconnect.

This is frustrating to the health practitioner, trying

to provide services, and it is very expensive.

SPECTRUM FREQUENCY ALLOCATION

As the health care industry adopts more

sophisticated technology, requiring more

48
bandwidth, the bandwidth size, location and

status of spectrum frequency that the Federal

Communications Commission allocates for medical purposes will likely become a key policy issue

for the telehealth industry.

For example, streaming video requires a much

larger bandwidth to convey natural movement than

bandwidth required for wireless monitoring of vital

statistics. An on-going dialogue about the “primary

or secondary use” of designated or shared

spectrum may be required between the Federal

Communications Commission and health related

organizations, particularly as the use of telemetry

and more advanced wireless telehealth applications

is more widely used and moves from institutions to

the home or to other health related venues.

Spectrum frequency allocation has also become

a growing safety issue. For example, in March

1999, incidences of digital TV interference with

wireless medical telemetry equipment occurred at

two hospitals in Dallas. (Examples of medical

telemetry equipment include heart, blood pressure

and respiration monitors.) When new digital TV

services were piloted, medical telemetry equipment

in these two hospitals did not work. Incidences like

these highlight the dangers of electromagnetic

interference with the operation of critical medical

equipment and underline the need for appropriate

spectrum allocation and designation.

In June 2000, the FCC allocated new spectrum

and established rules for a Wireless Medical

Telemetry Service (WMTS) that allows telemetry

equipment to operate on an interferenceprotected basis. The FCC based its decision on

formal comments from a number of organizations

including the Food and Drug Administration and

the American Hospital Association’s Medical

Telemetry Task Force, which provided specific

recommendations for spectrum allocation. OAT

also filed comments with the FCC, supporting the

AHA recommendations and submitted additional

comments concerning the possible future uses

and spectrum needs of telemedicine and

telehealth applications.

BORDER ISSUES

With the Internet, digitization and wireless

technologies, the concept of either domestic or

international borders will become blurred. As this

trend accelerates, cross-state jurisdiction and

enforcement issues will become harder to

disentangle. Blurring borders may also expand

the purview of general practitioners. For instance,

if a Physician Assistant or Nurse Practitioner

works with a primary care physician or specialist

on an ongoing basis and slowly assumes more of

the physician’s basic duties, then a gradual

change in practice will naturally occur over time.

How will states decide to license these

practitioners? Will they receive special

credentials?

AGING DEMOGRAPHICS, HOME HEALTH

CARE AND URBAN TELEMEDICINE

A discussion of how demographic trends will

affect the health industry is not within the scope of

this Report but it is hard to ignore the effect the

aging of the Baby Boomer generation will have on

the health care and telehealth industry. An aging

population with a longer life expectancy may mean

a larger population of “fragile” elderly, the

chronically ill and those requiring rehabilitation.

Given this demographic trend, recent studies

and workshops14 show that home care medical

devices were the fastest growing segment of the

medical device industry throughout the 1990s. A

report from the Workshop on Home Care

Technologies for the 21st Century suggests:

“Consumer demand for home health and home

health care is not new. When patients have a

49

14 “Future Trends in Medical Device Technology: Results of an Expert

Survey,” FDA, April 1998 and Workshop on Home Care

Technologies for the 21st Century, Catholic University, April 1999
choice, and if they have a reasonably stable and

caring home environment, they choose to go

home, almost without exception. If they have a

severe, chronic, difficult condition it is difficult to

permit them to go home, unless the home is fitted

with the appropriate technology and care giver.

We have the opportunity today to make this choice

possible by developing technology that is easy to

use, suitable for the patients’ particular needs

and allows access to trained, off-site professionals

who can work with the patient on educational/

problem areas of concern.”15 Given the movement

toward home health care, tele-homecare will most

likely play an increasingly larger and more

important role in the home health care industry.

Home care in the future may rely on new

applications for wireless technology. Telehomecare can be defined as providing monitoring

(telemetry) and home health care services at a

distance, using advanced telecommunications

and information technology. Aside from

videophones, wireless biosensors and feedback

loops data can be used to monitor patients who

can not get out of bed. OAT grantees have found

that tele-home health care has been largely

successful, and can allow greater access to care,

particularly in rural settings where a nurse may

have to travel 200 miles one-way to see a patient

at home face-to-face. With tele-homecare, a rural

nurse can “visit” six patients in one day, using

interactive video instead of traveling 200-300

miles to visit one patient face-to-face for 20

minutes.

Providing tele-home care to the elderly or

disabled populations, using telemedicine raises

important policy questions about health care

access and the reimbursement of telemedicine

services for both rural and urban patients.

It can be argued that urban patients who are

very elderly, chronically ill, poor or disabled may be

as isolated and have as much difficulty getting

access to needed health services as those

patients, living in rural areas. Most of these urban

patients can-not drive to their local clinics and

many require assistance getting from point A to

point B. Traveling a mile for such an urban patient

may be as difficult as the two hundred-mile or

more drive, that a mobile rural patient must make

to see a specialist.

Reimbursement for both urban and rural

patients may be a cost effective policy decision for

tele-homecare. Studies show tele-homecare can

save money by decreasing unnecessary hospital

and emergency room admittances. Around the

clock monitoring and nurse availability over

videoconferencing has helped patients better selfdiagnose and maintain drug therapies.

This policy issue may be resolved at the third

party payer level, if cost savings are sufficiently

great enough to attract the attention of this group.

15 Personal Status Monitoring in the Home, Report Topic B,

Workshop on Home Care Technologies for the 21st Century,

Catholic University, April 1999.

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51

Hence, the Internet provides benefits but also

creates concerns. On the one hand, a wealth of

health related information is available to

consumers at the touch of a fingertip. On the

other, use of the Internet for telemedicine raises

complex legal, jurisdictional, privacy/security and

quality issues. The explosive growth of Internet

use for business is bound to change health care

delivery and, in turn, to affect how each consumer

perceives his/her role in the health care arena. In

the future it may be consumers who drive the

demand for telemedicine and telehealth rather

than health professionals.

The Department of Health and Human Services

continues to address both the traditional

challenges to the development of telehealth, such

as reimbursement, and to monitor new trends in

the industry. Working with Congress, the

Department strives to increase health care

access for America’s most underserved

populations through telemedicine.

The turn of the century and the millennium is a

rare moment in time, a chance to reflect on the

past and dream about the possibilities of the

future. Just in the last few years there have been

medical advances on the scale of DNA

sequencing, the Human Genome project and the

successful cloning of Dolly the sheep. As the

human blueprint is better understood, so can the

future health needs of this nation be better

addressed. What will a schematic for this future

health care system look like? For starters it must

provide all Americans - rich or poor, urban or rural,

young or old - with access to health care.

Telemedicine can greatly increase access but

it also has the potential to act as a barrier. Much

has been written about the “digital divide”

separating those, who have access to computers

and the Internet, and those who do not. Will there

be a similar digital divide for those seeking health

care in the future? The argument goes that those

without access to the Internet will be left further

and further behind in terms of economic welfare

and jobs. Does the same logic apply to health

information, on-line pharmaceuticals and on-line

medical care?

Conclusion Conclusion
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53

Appendix 1

THE MEDICARE, MEDICAID

AND SCHIP BENEFITS

IMPROVEMENT AND BENEFICIARY

PROTECTION ACT OF 2000

SECTIONS 223 AND 504

AND A COMPARISION

OF LEGISLATION BILLS

RELATING TO

TELEMEDICINE

REIMBURSEMENT













































APED TR MENT OF HEALTH & HUMAN SERVICES • USA

U.S. Department of Health and Human Services

Health Resources and Services Administration

Office for the Advancement of Telehealth