I 

108TH CONGRESS 

1ST SESSION H. R. 1940

To improve the provision of telehealth services under the Medicare Program, 

to provide grants for the development of telehealth networks, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 1, 2003

Mr. OSE (for himself, Mr. THOMPSON of California, and Mr. OTTER) introduced the following bill; which was referred to the Committee on Energy 

and Commerce, and in addition to the Committee on Ways and Means, 

for a period to be subsequently determined by the Speaker, in each case 

for consideration of such provisions as fall within the jurisdiction of the 

committee concerned 

A BILL

To improve the provision of telehealth services under the 

Medicare Program, to provide grants for the development 

of telehealth networks, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Medicare Telehealth 

5 Validation Act of 2003’’. 
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1 SEC. 2. EXPANSION AND IMPROVEMENT OF TELEHEALTH 

2 SERVICES. 

3 (a) EXPANDING ACCESS TO TELEHEALTH SERVICES

4 TO ALL AREAS.—

5 (1) IN GENERAL.—Section 1834(m) of the So6 cial Security Act (42 U.S.C. 1395m(m)) is amended 

7 in paragraph (4)(C)(i) by striking ‘‘and only if such 

8 site is located’’ and all that follows and inserting 

9 ‘‘without regard to the geographic area where the 

10 site is located, and includes an entity that partici11 pates in a Federal telemedicine demonstration 

12 project that has been approved by (or receives fund13 ing from) the Secretary of Health and Human Serv14 ices as of December 31, 2000.’’. 

15 (2) STORE AND FORWARD TECHNOLOGY.—Such 

16 section is further amended in paragraph (1) by 

17 striking ‘‘in the case of any Federal telemedicine 

18 demonstration program conducted in Alaska or Ha19 waii,’’. 

20 (b) INCREASING TYPES OF ORIGINATING SITES.—

21 Paragraph (4)(C)(ii) of such section 1834(m) is amended 

22 by adding at the end the following new subclauses: 

23 ‘‘(VI) A skilled nursing facility 

24 (as defined in section 1819(a)). 

25 ‘‘(VII) An assisted living facility. 

26 ‘‘(VIII) A board and care facility. 
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1 ‘‘(IX) A school. 

2 ‘‘(X) A county mental health 

3 clinic or other publicly funded mental 

4 health facility. 

5 ‘‘(XI) The residence of an indi6 vidual enrolled under this part. 

7 (c) FACILITATING THE PROVISION OF TELEHEALTH

8 SERVICES ACROSS STATE LINES.—

9 (1) IN GENERAL.—For purposes of expediting 

10 the provision of telehealth services, for which pay11 ment is made under the Medicare Program, across 

12 State lines, the Secretary of Health and Human 

13 Services shall, in consultation with representatives of 

14 States, physicians, health care practitioners, and pa15 tient advocates, encourage and facilitate the adop16 tion of provisions allowing for multistate practitioner 

17 licensure across State lines. 

18 (2) DEFINITIONS.—In paragraph (1): 

19 (A) TELEHEALTH SERVICE.—The term 

20 ‘‘telehealth service’’ has the meaning given that 

21 term in subparagraph (F) of section 

22 1834(m)(4) of the Social Security Act (42 

23 U.S.C. 1395m(m)(4)). 

24 (B) PHYSICIAN, PRACTITIONER.—The 

25 terms ‘‘physician’’ and ‘‘practitioner’’ has the 
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1 meaning given those terms in subparagraphs 

2 (D) and (E), respectively, of such section. 

3 (C) MEDICARE PROGRAM.—The term 

4 ‘‘medicare program’’ means the program of 

5 health insurance administered by the Secretary 

6 of Health and Human Services under title 

7 XVIII of the Social Security Act (42 U.S.C. 

8 1395 et seq.). 

9 SEC. 3. GRANT PROGRAM FOR THE DEVELOPMENT OF 

10 TELEHEALTH NETWORKS. 

11 (a) IN GENERAL.—The Secretary of Health and 

12 Human Services (in this section referred to as the ‘‘Sec13 retary’’), acting through the Director of the Office for the 

14 Advancement of Telehealth (of the Health Resources and 

15 Services Administration), shall make grants to eligible re16 cipients (as described in subsection (b)(1)) for the purpose 

17 of expanding access to health care services for individuals 

18 in rural areas, frontier areas, and medically underserved 

19 areas through the use of telehealth. 

20 (b) ELIGIBLE RECIPIENTS.—

21 (1) APPLICATION.—To be eligible to receive a 

22 grant under this section, an eligible entity described 

23 in paragraph (2) shall, in consultation with the 

24 State office of rural health or other appropriate 

25 State entity, prepare and submit to the Secretary an 
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1 application, at such time, in such manner, and con2 taining such information as the Secretary may re3 quire, including the following: 

4 (A) A description of the anticipated need 

5 for the grant. 

6 (B) A description of the activities which 

7 the entity intends to carry out using amounts 

8 provided under the grant. 

9 (C) A plan for continuing the project after 

10 Federal support under this section is ended. 

11 (D) A description of the manner in which 

12 the activities funded under the grant will meet 

13 health care needs of underserved rural popu14 lations within the State. 

15 (E) A description of how the local commu16 nity or region to be served by the network or 

17 proposed network will be involved in the devel18 opment and ongoing operations of the network. 

19 (F) The source and amount of non-Federal 

20 funds the entity would pledge for the project.

21 (G) A showing of the long-term viability of 

22 the project and evidence of health care provider 

23 commitment to the network. 

24 The application should demonstrate the manner in 

25 which the project will promote the integration of
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1 telehealth in the community so as to avoid redun2 dancy of technology and achieve economies of scale. 

3 (2) ELIGIBLE ENTITIES.—An eligible entity de4 scribed in this paragraph is a hospital or other 

5 health care provider in a health care network of 

6 community-based health care providers that includes 

7 at least two of the organizations described in sub8 paragraph (A) and one of the institutions and enti9 ties described in subparagraph (B) if the institution 

10 or entity is able to demonstrate use of the network 

11 for purposes of education or economic development 

12 (as required by the Secretary). 

13 (A) The organizations described in this 

14 subparagraph are the following: 

15 (i) Community or migrant health cen16 ters. 

17 (ii) Local health departments. 

18 (iii) Nonprofit hospitals. 

19 (iv) Private practice health profes20 sionals, including community and rural 

21 health clinics. 

22 (v) Other publicly funded health or so23 cial services agencies. 

24 (vi) Skilled nursing facilities. 
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1 (vii) County mental health and other 

2 publicly funded mental health facilities. 

3 (viii) Providers of home health serv4 ices. 

5 (B) The institutions and entities described 

6 in this subparagraph are the following: 

7 (i) A public school. 

8 (ii) A public library. 

9 (iii) A university or college. 

10 (iv) A local government entity. 

11 (v) A local health or nonhealth-related 

12 business entity. 

13 An eligible entity may include for-profit entities so 

14 long as the recipient of the grant is a not-for-profit 

15 entity. 

16 (d) PREFERENCE.—The Secretary shall establish 

17 procedures to prioritize financial assistance under this sec18 tion based upon the following considerations: 

19 (1) The applicant is a health care provider in 

20 a health care network or a health care provider that 

21 proposes to form such a network that furnishes or 

22 proposes to furnish services in a medically under23 served area, health professional shortage area, or 

24 mental health professional shortage area. 
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1 (2) The applicant is able to demonstrate broad 

2 geographic coverage in the rural or medically under3 served areas of the State, or States in which the ap4 plicant is located. 

5 (3) The applicant proposes to use Federal 

6 funds to develop plans for, or to establish, telehealth 

7 systems that will link rural hospitals and rural 

8 health care providers to other hospitals, health care 

9 providers, and patients. 

10 (4) The applicant will use the amounts provided 

11 for a range of health care applications and to pro12 mote greater efficiency in the use of health care re13 sources. 

14 (5) The applicant is able to demonstrate the 

15 long-term viability of projects through cost participa16 tion (cash or in-kind). 

17 (6) The applicant is able to demonstrate finan18 cial, institutional, and community support for the 

19 long-term viability of the network. 

20 (7) The applicant is able to provide a detailed 

21 plan for coordinating system use by eligible entities 

22 so that health care services are given a priority over 

23 non-clinical uses. 

24 (e) MAXIMUM AMOUNT OF ASSISTANCE TO INDI25 VIDUAL RECIPIENTS.—The Secretary shall establish, by 
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1 regulation, the terms and conditions of the grant and the 

2 maximum amount of a grant award to be made available 

3 to an individual recipient for each fiscal year under this 

4 section. The Secretary shall cause to have published in the 

5 Federal Register or the ‘‘HRSA Preview’’ notice of the 

6 terms and conditions of a grant under this section and 

7 the maximum amount of such a grant for a fiscal year. 

8 (f) USE OF AMOUNTS.—The recipient of a grant 

9 under this section may use sums received under such 

10 grant for the acquisition of telehealth equipment and 

11 modifications or improvements of telecommunications fa12 cilities including the following: 

13 (1) The development and acquisition through 

14 lease or purchase of computer hardware and soft15 ware, audio and video equipment, computer network 

16 equipment, interactive equipment, data terminal 

17 equipment, and other facilities and equipment that 

18 would further the purposes of this section. 

19 (2) The provision of technical assistance and in20 struction for the development and use of such pro21 gramming equipment or facilities. 

22 (3) The development and acquisition of instruc23 tional programming. 

24 (4) Demonstration projects for teaching or 

25 training medical students, residents, and other 
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1 health profession students in rural or medically un2 derserved training sites about the application of tele3 health. 

4 (5) The provision of telenursing services de5 signed to enhance care coordination and promote pa6 tient self-management skills. 

7 (6) The provision of services designed to pro8 mote patient understanding and adherence to na9 tional guidelines for common chronic diseases, such 

10 as congestive heart failure or diabetes. 

11 (7) Transmission costs, maintenance of equip12 ment, and compensation of specialists and referring 

13 health care providers. 

14 (8) Development of projects to use telehealth to 

15 facilitate collaboration between health care providers. 

16 (9) Electronic archival of patient records.

17 (10) Collection and analysis of usage statistics 

18 and data that can be used to document the cost-ef19 fectiveness of the telehealth services. 

20 (11) Such other uses that are consistent with 

21 achieving the purposes of this section as approved by 

22 the Secretary. 

23 (g) PROHIBITED USES.—Sums received under a 

24 grant under this section may not be used for any of the 

25 following:
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1 (1) To acquire real property. 

2 (2) Expenditures to purchase or lease equip3 ment to the extent the expenditures would exceed 

4 more than 40 percent of the total grant funds. 

5 (3) To purchase or install transmission equip6 ment off the premises of the telehealth site and any 

7 transmission costs not directly related to the grant. 

8 (4) For construction, except that such funds 

9 may be expended for minor renovations relating to 

10 the installation of equipment. 

11 (5) Expenditures for indirect costs (as deter12 mined by the Secretary) to the extent the expendi13 tures would exceed more than 20 percent of the total 

14 grant. 

15 (h) ADMINISTRATION.—

16 (1) NONDUPLICATION.—The Secretary shall en17 sure that facilities constructed using grants provided 

18 under this section do not duplicate adequately estab19 lished telehealth networks. 

20 (2) COORDINATION WITH OTHER AGENCIES.—

21 The Secretary shall coordinate, to the extent prac22 ticable, with other Federal and State agencies and 

23 not-for-profit organizations, operating similar grant 

24 programs to pool resources for funding meritorious 

25 proposals. 
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1 (3) INFORMATIONAL EFFORTS.—The Secretary 

2 shall establish and implement procedures to carry 

3 out outreach activities to advise potential end users 

4 located in rural and medically underserved areas of 

5 each State about the program authorized by this 

6 section. 

7 (i) PROMPT IMPLEMENTATION.—The Secretary shall 

8 take such actions as are necessary to carry out the grant 

9 program as expeditiously as possible. 

10 (j) AUTHORIZATION OF APPROPRIATIONS.—There 

11 are authorized to be appropriated to carry out this section 

12 $40,000,000 for fiscal year 2004, and such sums as may 

13 be necessary for each of the fiscal years 2005 through 

14 2010. 

15 SEC. 4. JOINT WORKING GROUP ON TELEMEDICINE. 

16 (a) IN GENERAL.—

17 (1) REPRESENTATION OF RURAL AREAS.—The 

18 Joint Working Group on Telemedicine shall ensure 

19 that individuals that represent the interests of rural 

20 areas and medically underserved areas are members 

21 of the Group. 

22 (2) MISSION.—The mission of the Joint Work23 ing Group on Telemedicine is—
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1 (A) to identify, monitor, and coordinate 

2 Federal telehealth projects, data sets, and pro3 grams; 

4 (B) to analyze—

5 (i) how telehealth systems are expand6 ing access to health care services, edu7 cation, and information; 

8 (ii) the clinical, educational, or admin9 istrative efficacy and cost-effectiveness of 

10 telehealth applications; and 

11 (iii) the quality of the telehealth serv12 ices delivered; and 

13 (C) to make further recommendations for 

14 coordinating Federal and State efforts to in15 crease access to health services, education, and 

16 information in rural and medically underserved 

17 areas. 

18 (3) ANNUAL REPORTS.—Not later than two 

19 years after the date of enactment of this Act and 

20 each January 1 thereafter the Joint Working Group 

21 on Telemedicine shall submit to Congress a report 

22 on the status of the Group’s mission and the state 

23 of the telehealth field generally. 

24 (b) REPORT SPECIFICS.—The annual report required 

25 under subsection (a)(3) shall provide—
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1 (1) an analysis of—

2 (A) the matters described in subsection 

3 (a)(3)(B); 

4 (B) the Federal activities with respect to 

5 telehealth; and 

6 (C) the progress of the Joint Working 

7 Group on Telemedicine’s efforts to coordinate 

8 Federal telehealth programs; and 

9 (2) recommendations for a coordinated Federal 

10 strategy to increase health care access through tele11 health. 

12 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

13 are authorized to be appropriated such sums as are nec14 essary for the Joint Working Group on Telemedicine to 

15 carry out this section.

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