U.S. GOVERNMENT PRINTING OFFICE

67–112CC WASHINGTON : 2000

TELEHEALTH: A CUTTING EDGE MEDICAL TOOL

FOR THE 21ST CENTURY

HEARING

BEFORE THE

SUBCOMMITTEE ON

HEALTH AND ENVIRONMENT

OF THE

COMMITTEE ON COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

SEPTEMBER 7, 2000

Serial No. 106–144

Printed for the use of the Committee on Commerce

(

COMMITTEE ON COMMERCE

TOM BLILEY, Virginia, Chairman

W.J. ‘‘BILLY’’ TAUZIN, Louisiana

MICHAEL G. OXLEY, Ohio

MICHAEL BILIRAKIS, Florida

JOE BARTON, Texas

FRED UPTON, Michigan

CLIFF STEARNS, Florida

PAUL E. GILLMOR, Ohio

Vice Chairman

JAMES C. GREENWOOD, Pennsylvania

CHRISTOPHER COX, California

NATHAN DEAL, Georgia

STEVE LARGENT, Oklahoma

RICHARD BURR, North Carolina

BRIAN P. BILBRAY, California

ED WHITFIELD, Kentucky

GREG GANSKE, Iowa

CHARLIE NORWOOD, Georgia

TOM A. COBURN, Oklahoma

RICK LAZIO, New York

BARBARA CUBIN, Wyoming

JAMES E. ROGAN, California

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSSELLA, New York

ROY BLUNT, Missouri

ED BRYANT, Tennessee

ROBERT L. EHRLICH, Jr., Maryland

JOHN D. DINGELL, Michigan

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RALPH M. HALL, Texas

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, Jr., New Jersey

SHERROD BROWN, Ohio

BART GORDON, Tennessee

PETER DEUTSCH, Florida

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

RON KLINK, Pennsylvania

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

TOM SAWYER, Ohio

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

KAREN MCCARTHY, Missouri

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

THOMAS M. BARRETT, Wisconsin

BILL LUTHER, Minnesota

LOIS CAPPS, California

JAMES E. DERDERIAN, Chief of Staff

JAMES D. BARNETTE, General Counsel

REID P.F. STUNTZ, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON HEALTH AND ENVIRONMENT

MICHAEL BILIRAKIS, Florida, Chairman

FRED UPTON, Michigan

CLIFF STEARNS, Florida

JAMES C. GREENWOOD, Pennsylvania

NATHAN DEAL, Georgia

RICHARD BURR, North Carolina

BRIAN P. BILBRAY, California

ED WHITFIELD, Kentucky

GREG GANSKE, Iowa

CHARLIE NORWOOD, Georgia

TOM A. COBURN, Oklahoma

Vice Chairman

RICK LAZIO, New York

BARBARA CUBIN, Wyoming

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

ED BRYANT, Tennessee

TOM BLILEY, Virginia,

(Ex Officio)

SHERROD BROWN, Ohio

HENRY A. WAXMAN, California

FRANK PALLONE, Jr., New Jersey

PETER DEUTSCH, Florida

BART STUPAK, Michigan

GENE GREEN, Texas

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

THOMAS M. BARRETT, Wisconsin

LOIS CAPPS, California

RALPH M. HALL, Texas

EDOLPHUS TOWNS, New York

ANNA G. ESHOO, California

JOHN D. DINGELL, Michigan,

(Ex Officio)

(II)

C O N T E N T S

Page

Testimony of:

Berenson, Robert A., Director, Center for Health Plans and Providers,

Health Care Financing Administration ...................................................... 6

Burgiss, Sam, Project Director, Telemedicine, UTN Medical Center at

Knoxville ........................................................................................................ 50

Davis, Sally, Program Director, Telehealth and Management Development, Marquette General Health System ................................................... 38

Grigsby, Jim, Study Manager, Center for Health Services and Policy

Research, University of Colorado Health Sciences Center ........................ 70

Patrick, Mary R., Director of Quality Improvement, Blue Cross and Blue

Shield of Montana ......................................................................................... 60

Reid, James, Director of Telemedicine and Network Services, West Rural

Telemedicine Consortium, Mercy Hospital Foundation, on behalf of

Center for Telemedicine Law ....................................................................... 46

Rheuban, Karen, Medical Director, Office of Telemedicine, Professor of

Pediatrics, University of Virginia Health System, accompanied by Lisa

Hubbard and Alexandra Bartley ................................................................. 27

Ross-Lee, Barbara, Dean, Ohio University College of Osteopathic Medicine ................................................................................................................. 53

Tracy, Joseph, Director of Telehealth, University of Missouri Health

Sciences Center ............................................................................................. 43

Material submitted for the record by:

Children’s National Medical Center, prepared statement of ........................ 85

Thune, Hon. John R., a Representative in Congress from the State of

South Dakota, prepared statement of ......................................................... 84

(III)

(1)

TELEHEALTH: A CUTTING EDGE MEDICAL

TOOL FOR THE 21ST CENTURY

THURSDAY, SEPTEMBER 7, 2000

HOUSE OF REPRESENTATIVES, COMMITTEE ON COMMERCE, SUBCOMMITTEE ON HEALTH AND ENVIRONMENT, Washington, DC.

The subcommittee met, pursuant to notice, at 10:05 a.m., in room

2322, Rayburn House Office Building, Hon. Michael Bilirakis

(chairman) presiding.

Members present: Representatives Bilirakis, Burr, Bilbray, Bryant, Brown, Stupak, Green, Strickland, Barrett, and Capps.

Staff present: Marc Wheat, majority counsel; Patrick Morrisey,

majority counsel; Kristi Gillis, legislative clerk; Amy Droskoski, minority professional staff; and Bridgett Taylor, minority professional

staff.

Mr. BILIRAKIS. This hearing will come to order.

My thanks to all of the witnesses who have taken the time to testify at this hearing on telemedicine and the role of technology in

improving the quality of health care, and I also would like to particularly welcome little Alexandra Bartley, whose story will be

shared with us today.

We live in a time where every aspect of our life is being transformed and improved by the convergence of technologies. Today’s

hearing will focus on the union of medicine, microelectronics and

communications which promises to improve the health of many

Americans, especially patients in geographically remote and medically underserved areas.

With more than a quarter of our Nation’s elderly living in medically underserved areas, telemedicine could improve access to

health care for many Medicare patients. This technology has significantly matured since 1997 when the first telemedicine Medicare

reimbursement policies were signed into law, and I would like to

add that Ron Wyden, who is now over in the Senate, formerly in

the House, who had quite an interest in this subject. He and I

spent many hours discussing telemedicine and, of course, some of

the problems associated with it, which I guess we will get into here

today.

So now it is time for Congress to re-examine current policies that

may unfairly frustrate the development of this promising health

care delivery method. Significant barriers to reimbursement of

these services currently exist. For example, only limited reimbursement is available in areas which face a shortage of primary care

physicians. While telemedicine is perhaps more commonly recogVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 E:\HEARINGS\67112 pfrm03 PsN: 67112
2

nized as a tool to increase access to specialty treatment, it can also

play an important role in expanding access to primary care.

I hope that this hearing will illuminate some of the shortcomings

of current Medicare reimbursement policies, and again I want to

thank all of our witnesses who have taken the time to share their

expertise with us today.

I apologize to my ranking member for starting without him, but

Mr. Stupak was here, and I now yield to the gentleman from Ohio.

Mr. BROWN. Thank you, Mr. Chairman. I apologize for being a

bit late.

I would like to thank Dr. Berenson and our other distinguished

witnesses and especially Dr. Ross-Lee from Ohio. It is nice to see

you again. Thank you.

I don’t want to minimize the importance of this hearing. It clearly is appropriate and valuable for this subcommittee to become

more educated about and to promote beneficial uses of telemedicine

in the Medicare program. But we are taking up this issue in the

context of further changes to the 1997 Balanced Budget Act. The

fate of BBA changes likely will be determined over the next few

years.

Our jurisdiction over Medicare and Medicaid, particularly, Mr.

Chairman, our sole jurisdiction over Medicaid, demands that we

play a direct and active role in that process. This subcommittee has

held hearings on the BBA, the Plus Choice program, Medicare prescription drug coverage. The value of those hearings, like the value

of our discussion today, depends on what we do in response.

I hope this hearing signals our commitment to participate fully

and on a bipartisan basis in Medicare and Medicaid decisionmaking that will be critical to the providers and beneficiaries we

represent; and in keeping with the beneficiary-oriented goals of

this hearing, I hope this committee perceives this year’s legislation

not only as an opportunity to address inadequate reimbursement

but as an opportunity to directly improve access and coverage for

Medicare and Medicaid beneficiaries.

Promoting telehealth in Medicare is just one of those issues, but

it is important for several reasons. Not only can telehealth serve

the best interests of Medicare beneficiaries, but Medicare coverage

policy sets a precedent for private coverage.

In his written testimony, Mr. Joseph Tracy from the University

of Missouri makes a key observation. He said that telemedicine has

not proven to be a vehicle for overutilization as some skeptics assumed it would be. Rather, it is serving as a vehicle for adequate

utilization in medically underserved areas. He goes on to say that

people living in these areas have as much right to Medicare benefits, obviously, as every other American. So Tracy has touched on

a fundamental value in the Medicare program and the most compelling reason to support Medicare coverage for telehealth services,

that Medicare is grounded in universality.

The fundamental objective is to provide the same level of quality

care to all beneficiaries, regardless of location, regardless of income, regardless of health status. In some areas of the country,

meeting that objective is especially problematic. There are areas of

Ohio, which has some of the top health care in the country, where

residents are literally hours away from the kind of basic health

3

care resources we take for granted, something that Dr. Ross-Lee

knows a lot about in the part of State in which she is located.

All 50 States have areas where the number and diversity of

health care providers is limited by geography or poverty or both.

That is where telehealth comes in. The blending of health care and

telecommunications technology has enabled health care providers

to deliver care in new ways to new populations in the United

States and internationally.

As we look at Medicare and telehealth, as we evaluate the impact of expanding coverage to include more providers and more

services in more areas of the country and as we discuss other proposals like fees to help cover fixed costs, the fact that telehealth

promotes access in a targeted population has bearing in two ways.

The goal of equitable treatment for all Medicare beneficiaries

should heighten our interest in promoting telehealth. The same

goal should heighten our determination to know exactly what we

are getting into when we change telehealth payment rules.

When we expand access to underserved populations we should be

careful to ensure that it is the proper care. Otherwise, we are simply creating a new inequity. Equity for Medicare beneficiaries must

also be factored into the equation when we weigh the pros and cons

of establishing a fee to cover the fixed costs associated with telehealth.

I look forward, Mr. Chairman, to hearing from our witnesses on

the opportunities, the risks and the variables that we should consider as we look to expanding Medicare coverage for telehealth.

Mr. BILIRAKIS. I thank the gentleman.

Mr. Stupak for an opening statement.

Mr. STUPAK. Thank you, Mr. Chairman, and thank you very

much for holding this hearing and thank you for inviting Sally

Davis from Marquette, Michigan, to testify on the second panel.

Sally has been the director of telemedicine at Marquette General

Hospital since the programs inception. Their program is the national leader and has really been a benefit to the Upper Peninsula

by increasing the ability of people to receive quality health care

from Mackinaw Island all the way up to the Keweenaw Peninsula.

In areas like the Upper Peninsula, people are expected to travel

hours and hours to find specialty care. If they need highly specialized care, that requires usually a trip to Marquette General hospital. But if they can’t provide it then they must go to Detroit, Milwaukee, Minneapolis, St. Paul or the Mayo Clinic. It requires at

least one overnight stay and hours of traveling.

Telemedicine allows people in remote rural areas the ability to

obtain first-rate health care without having traveled hours or days

in a motel. Telemedicine allows people in Manistique, Michigan, to

receive care from an expert, for example, in Mayo Clinic without

ever leaving their community.

I am convinced that telemedicine is the future of health care in

rural areas. I want to hear the witnesses explain their programs

in ways we can improve telemedicine. However, I would like to

make two quick comments to my colleagues and to Dr. Berenson.

First, Federal grant funding for the development of telemedicine

networks is critical. Without this funding, many of the projects that

we will hear about today would never have been started.

4

Second, HCFA needs to update its method for reimbursing on

telemedicine. As Sally will point out, the current rules require a

physician to present the patients case to a specialist before the

visit is reimbursed. Clearly, HCFA does not require the primary

care physician to walk you into the office of a specialist before the

specialist visit is reimbursed. Likewise, a visit between a patient

in Michigan and a specialist in Minnesota does not require a physician to be present in Michigan. A telemedicine transaction should

be reimbursed just the same as a face-to-face visit.

Mr. Chairman, thank you again for holding this hearing. I look

forward to the witnesses. Special welcome to Sally Davis, and I

look forward to addressing the critical health care needs of rural

America.

I yield back the balance of my time.

Mr. BILIRAKIS. I thank the gentleman for that; and I know that

he particularly, more so than most of us, is interested in this subject principally because of the demographics of his district.

Ms. Capps for an opening statement.

Mrs. CAPPS. Yes. Good morning, Mr. Chairman, and I want to

thank you also for holding this very important hearing this morning on an issue of great significance, I believe, to patients and providers across the country, telehealth. I also, along with my colleague Bart Stupak, represent a district that is predominantly

rural; and, therefore, I am especially interested in the ways that

this new technology can be utilized.

Telehealth is an exciting new way to deliver health services to

people in underserved areas. Patients are able to receive specialty

care that is not found in their own community. Providers can now

instantly share information that previously would have taken

hours or even days to access.

In my own district, Cottage Hospital in Santa Barbara has been

home to a teleradiology facility for about 2 years now. So I went

to them and found out exactly how this works.

Teleradiology is a method of distributing digital diagnostic images such as X-rays, ultrasonography, magnetic resonance and

radio isotopes through local area or wide area networks between

remotely located facilities. A well-planned teleradiology system can

be a cost-effective and time- efficient method that allows users to

capture, transmit, store and review patient studies.

In my own district a physician at a rural hospital such as Santa

Ynez can now quickly and easily share images with Cottage Hospital in Santa Barbara, which is about 40 or 50 miles away, thus

cutting down on travel time for patients and hastening their treatment regimen. In addition, providers can now sit at a computer

screen and share images with patients, showing them a clear progression by easily clicking on present imaging and contrasting

them with previously taken X-rays.

Only 5 percent of hospitals in the country offer such teleradiology

services right now, and I believe it is our responsibility here in

Congress to work to expand this and other telehealth capabilities

across the Nation. That is interesting to me that we look to the

military as being one area that brought this technology forward to

us, and now we can, I believe, in this legislative body work to make

that information and technology available across the country.

5

I understand that there are reimbursement issues surrounding

telehealth, and I look forward to a discussion of how we can help

to fund such groundbreaking technologies. And here, again, I believe it is our responsibility and those of the Federal agencies that

we oversee to streamline our permitting processes and our funding

processes to stay up to date with modern technology and not let

that be the deterrent for really improved patient care, patient

health and, in many instances, the difference between life and

death.

As a nurse I am always interested in new and innovative technology as the bottom line which will ultimately benefit patient

care. I commend the Chairman for holding this hearing and look

forward to an informative discussion. Thank you very much.

Mr. BILIRAKIS. I thank the gentlewoman.

Mr. Green.

Mr. GREEN. Thank you, Mr. Chairman.

I have no prepared remarks, but during our break I had the opportunity to be at the University of Texas medical branch in Galveston, Texas, which is about 50 miles from Houston and watched

their telemedicine effort and the growth that they have; and it is

a great example. A year ago I was at M.D. Anderson, a cancer center in Houston, and actually watched the telemedicine conference

between M.D. Anderson in Houston and their facility in Orlando,

Florida, and watched the doctors consult. The success we have,

Texas Childrens Hospital and Texas Medical Center has the same

capability.

Also, during the break, Congressman Nick Lampson—actually,

we used the telemedicine facilities to have a press conference or

really a town hall meeting from the University of Texas in Houston

Health Science Center with Galveston, with Beaumont, Texas, and

also with Washington with a representative from HCFA.

So the technology is there, and we just need to make sure that

the reimbursement rates are there where you can, even though the

doctors not physically there—and I know that is a problem across

State lines and I would hope some of our witnesses today would

recognize that and address that.

Mr. Chairman, I don’t know if she is here, but I would also like

to welcome Dr. Barbara Ross-Lee, the Dean of Ohio University College of Osteopathic Medicine. Now, you are going to wonder why

a Texan is doing that. I happened to be there for the graduation

ceremony this last spring for my son-in-law, who by the way is

practicing his internship in Texas, but a great university that is

there in Ted Stricklands district.

Thank you, Mr. Chairman.

Mr. BILIRAKIS. I thank the gentleman.

[Additional statement submitted for the record follows:]

PREPARED STATEMENT OF HON. TOM BLILEY, CHAIRMAN, COMMITTEE ON COMMERCE

Thank you, Mr. Chairman.

I am pleased that the Health and Environment Subcommittee is holding this

hearing today. Given our Committee’s strong interest in both information technology

and the delivery of high-quality health care to seniors, it is critical for us to examine

the potential of telemedicine—a promising tool for the 21st Century.

It is a sad fact that many of our seniors today lack adequate access to first rate

medical facilities. Approximately 25% of seniors currently live in areas that are

6

medically underserved. This country offers the best medical technology in the world,

yet many seniors in rural and inner city areas don’t have enough access to services.

Today, we are examining one innovative delivery mechanism which may help.

Telemedicine may not be a panacea to all of the access problems, but it could be

an important first step.

During this hearing, our Committee will look at barriers impeding the use of telemedicine in the Medicare Program. It is my goal to use this hearing to help refine

legislation which may be advanced by this Committee during the final weeks of this

session of Congress.

Folks seeking access to the use of telemedicine face many barriers. However, I

would like to focus on eight measures that I believe would immediately increase access to telemedicine services. I would appreciate it if our witnesses can focus their

testimony on these issues as well as any other legislative barriers which hamper

the development of telemedicine. These measures are as follows:

—Eliminating the provider ‘‘fee sharing requirement;

—Eliminating the requirement for a ‘‘telepresenter’’;

—Allowing limited reimbursement for referring clinics to recover the cost of their

services;

—Expanding telemedicine services to non-metropolitan service areas;

—Making all providers eligible for HCFA reimbursement for services delivered via

telemedicine;

—Creating a federal demonstration project that permits telemedicine reimbursement for ‘‘store and forward’’ consultations; and

—Permitting tele-home-care technologies to be used in prospective payment system.

Mr. Chairman, I believe that these changes would have an extremely positive impact on the delivery of health care to seniors, especially in rural and underserved

areas. Without these barriers, rural patients may be able to travel shorter distances

to ‘‘see’’ their specialists. Additionally, services provided to patients in home health

care settings may prove more cost-effective to provide if performed through a telecommunications system.

Mr. Chairman, the potential for linking information technology to the delivery of

health care services holds great promise for our nation’s seniors. This fall, our Committee can do a great deal to make that a reality.

I look forward to hearing our witnesses speak on this important subject. Furthermore, I would like to welcome Karen Rheuban, the director of telemedicine at the

University of Virginia. She has been a strong advocate for this new service in my

home state and I would like to thank her for her work.

Mr. BILIRAKIS. Dr. Robert Berenson is our first panelist. He is

the Director of the Center for Health Plans and Providers with

HCFA. Dr. Berenson, welcome to our committee again. It is always

good to see you, sir. Please proceed and take all the time you might

feel you need, but hopefully not exceeding 10 minutes. Please proceed, sir.

STATEMENT OF ROBERT A. BERENSON, DIRECTOR, CENTER

FOR HEALTH PLANS AND PROVIDERS, HEALTH CARE FINANCING ADMINISTRATION

Mr. BERENSON. Thank you, Mr. Chairman. And Congressman

Brown, distinguished subcommittee members, thank you for inviting me here to discuss Medicare coverage of telemedicine which, as

you pointed out, is an important issue and one that is a cuttingedge issue in terms of how we provide medical care to senior citizens and others in this country.

I have provided written comments, and I just want to briefly

summarize some of the high points.

HCFA believes that telemedicine holds great promise for extending access to care in rural and other medically underserved areas.

We understand that rural beneficiaries face unique challenges in

accessing the medical care they need, particularly access to specialists. Helping them is a high priority for us, and we share the SecVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00010 Fmt 6633 Sfmt 6602 E:\HEARINGS\67112 pfrm03 PsN: 67112
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retary’s personal commitment to promoting telemedicine where it

is appropriate.

We worked together with Congress in the Balanced Budget Act

to move forward and expand coverage, but we did so cautiously.

Strict limits were placed on what could be covered, where it could

be provided and who could provide it. The caution was well intended because there was and even now remains very little published peer-reviewed scientific data available on when telemedicine

or telehealth is medically appropriate. It is difficult to project potential cost implications, and there are potential program integrity

issues that should be addressed proactively.

But the result is that today telemedicine usage in Medicare has

been limited, too limited. The field is moving very fast, and we are

moving very slowly. And I actually read the testimony of all of the

witnesses but in particular would point to testimony from Dr.

Grigsby who points out that the technology that we basically tested

and thought was going to be the basis for telemedicine, the interactive video consultation, is already somewhat outdated and the

technology has moved much faster than we have been able to keep

up. Our demos were based on a certain technology, and nobody

came to the party, in essence.

So we will have to figure out how to make policy judgments to

some extent in the absence of bona fide scientific findings from

good, peer-reviewed studies and at the same time remain cautious

in this area because of quality as well as program integrity concerns that we will talk about.

And we are continuing to conduct research, will modify our research given the constraints that your experts will talk about in

the form of several demonstration projects that we now have ongoing.

We want to determine which health care providers are clinically

appropriate for telemedicine presentations. We want to explore the

potential uses and abuses of ‘‘store-and-forward’’ technology in

which there is no real-time interaction between patient and provider, and we want to understand rural physicians’ perceived barriers to utilizing telemedicine. This research is essential as we

work to reach firm conclusions and make responsible recommendations.

However, preliminary indications from our ongoing work suggest

there may well be additional clinical circumstances beyond those

paid under current Medicaid law where telemedicine is appropriate. There also may well be additional health care personnel, especially nurses, who are perfectly capable to make telemedicine

presentations.

Facility fees and fee splitting may warrant reconsideration, and

we may want to reconsider new demonstration projects looking at

telemedicine in underserved urban settings as well. And right now

we have a unique opportunity to look at the use of telemedicine for

home health services, especially in relationship to our anticipated

for October 1 implementation of prospective payment for home

health services.

We will soon be compiling our findings in a report that will make

firm recommendations, and we are absolutely eager to work with

Congress as we proceed.

8

I thank you for again holding this hearing, and I will now be

happy to respond to questions. Thank you very much.

[The prepared statement of Robert A. Berenson follows:]

PREPARED STATEMENT OF ROBERT A. BERENSON, DIRECTOR, CENTER FOR HEALTH

PLANS & PROVIDERS, HEALTH CARE FINANCING ADMINISTRATION

Chairman Bilirakis, Congressman Brown, distinguished Subcommittee members,

thank you for inviting me to discuss Medicare coverage of telemedicine. Telemedicine, with its ability to provide medical services via telecommunications systems,

holds great promise for extending access to care in rural and other medically underserved areas. We understand that rural beneficiaries face unique challenges in accessing the medical care they need, particularly access to specialists. Helping them

is a high priority for us. And we share the Secretary’s commitment to promoting

telemedicine where appropriate.

To date, telemedicine usage in Medicare has been limited. The Balanced Budget

Act (BBA) of 1997 expanded coverage options, but also included several restrictions

that preclude telemedicine’s use under conditions where it is commonly being used

outside of Medicare. We are concerned that this is limiting the potential of telemedicine in Medicare. However, we also have a number of concerns regarding broader

implementation of telemedicine. There is very little published, peer-reviewed scientific data available on when telemedicine use is medically appropriate. It is difficult to project potential cost implications. And there are potential program integrity issues that should be addressed proactively.

To help address these concerns, we are conducting extensive research and several

demonstration projects. We are particularly interested in learning more about:

• specific clinical circumstances when telemedicine is medically appropriate;

• which health care providers are clinically appropriate for telemedicine presentations; and,

• the potential uses and abuses of ‘‘store-and-forward’’ technology, in which there

is no real-time interaction between patient and provider.

We are conducting demonstration projects specifically examining:

• the feasibility, acceptability, cost, and quality of teleconsultation services;

• the potential role of telemedicine in diabetes management; and,

• rural physicians’ perceived barriers to utilizing telemedicine.

We also are consulting with academic and military experts who are using telemedicine in situations beyond those now allowed under the Medicare statute. We

are working with other Department of Health and Human Services agencies, including the Health Resources and Services Administration’s Office of Rural Health Policy and Office for the Advancement of Telehealth, as well as the Agency for

Healthcare Research and Quality. In addition, the Department’s Assistant Secretary

for Planning and Evaluation has commissioned a study on assessing approaches to

evaluating telemedicine, which should further enlighten our work.

These efforts are ongoing, and we are not yet able to reach firm conclusions or

make responsible recommendations. As mentioned above, there is very little published, peer-reviewed scientific data in this field, which makes our current research

efforts all the more critical for determining how telemedicine coverage should be expanded. However, preliminary indications from our ongoing work suggest there may

well be additional clinical circumstances, beyond those paid under current Medicare

law, where telemedicine is appropriate. There also may well be additional health

care personnel able, but not allowed under current law, to make telemedicine presentations. We will continue our telemedicine research efforts and compile findings

in a report that will make firm recommendations on how the benefit should be expanded and what program integrity protections may be needed. We want to work

with Congress as we proceed to develop the data necessary for responsible decisions

about how to expand the use of telemedicine in Medicare.

To further help us in all our efforts to better serve rural beneficiaries and providers, including the use of telemedicine services, we have established a Rural

Health Initiative within our agency. This Initiative includes senior agency leaders

and a direct rural contact staffer in each of our Regional Offices to increase and coordinate attention to rural issues and closely monitor how laws and regulations governing our programs affect rural beneficiaries and providers.

Background

The BBA significantly expanded Medicare’s authority to cover telemedicine. Previously, telemedicine coverage in Medicare was limited to situations in which no

face-to-face contact between patient and provider is generally necessary; for examVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00012 Fmt 6633 Sfmt 6621 E:\HEARINGS\67112 pfrm03 PsN: 67112
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ple, in radiologic interpretation of x-rays. However, the BBA expansion continued

to place strict limits on telemedicine coverage. For example:

• Telemedicine services may only be provided to a beneficiary in a rural health professional shortage area (HPSA); • Telemedicine services are limited to ‘‘consultations’’ for which payment currently

may be made under Medicare. This is a key limitation, as the American Medical

Association Physicians’ Current Procedure Terminology (CPT) defines consultation as a ‘‘face-to-face’’ physician and patient encounter, meaning that the patient must be present at the time of the consultation. Therefore, a Medicare

‘‘teleconsultation,’’ is a medical examination under the control of the consulting

practitioner, in lieu of an actual face-to-face encounter, that must take place via

an interactive audio-video telecommunications system; • Only physicians or practitioners described in section 1842(b)(18)(C) of the Social

Security Act may provide teleconsultations. This also is a key limitation, as registered nurses and other medical professionals not recognized as practitioners

under this section of the Medicare statute may not receive payment for a teleconsultation, even though they commonly serve as telepresenter outside of

Medicare. Additional health care professionals, such as clinical psychologists,

clinical social workers, and physical, occupational, or speech therapists who are

able to receive Medicare payment in limited circumstances, but are not specifically listed in the statute as Medicare providers, also are precluded from receiving payment for teleconsultation; and, • The law specifically prohibits payment for line charges or for facility fees, and

mandates that consulting and referring practitioners share payments.

On November 2, 1998, we published a final rule in the Federal Register implementing the telemedicine provisions of the BBA. The rule explains the geographic

limits for reimbursement, the practitioners that are eligible to present patients and

act as consultants, the teleconsultive services and technologies that are covered, and

how payment will be made.

Regarding the mandate that consulting and referring practitioners must share

payments, the rule stipulates that 75 percent of the fee go to the consultant and

the remaining 25 percent go to the referring practitioners. This split is based on the

relative work for practitioners at both ends of the consultation and an inherent recognition that different consultations call for different levels of effort. As a result, the

fee split reflects the projected level of new work done by each practitioner over the

course of various teleconsultations.

The rule also specifies that the eligible CPT codes for consultations that can be

covered under the statute can be used for a number of medical specialties, such as

cardiology, dermatology, gastroenterology, neurology, pulmonary, and psychiatry.

We will cover additional consultations for the same or a new problem if the attending physician or practitioner requests the consultation, and if it is documented in

the medical records of the beneficiary.

Telemedicine in Other Settings

Outside of Medicare, telemedicine is being used in many circumstances not allowed under current Medicare law. Again, there is a paucity of published, peer-reviewed literature on the appropriateness of many of these uses. However, telemedicine is being used for much more than interactive consultations. These include evaluation and management services that are common in physician office visits, psychotherapy, pharmacologic management, sleep studies, physical and occupational therapy evaluation, and speech therapy.

‘‘Store-and-forward’’ technology also is being used in which there is no real-time

interaction between patient and provider. Instead, a referring provider will examine

a patient and then send a video clip or a photographic scan, along with the patient’s

medical record, to a distant consulting practitioner. The consulting practitioner will

then review the file and make a diagnosis. Military and academic health care providers, in particular, are having apparent success with ‘‘store-and-forward’’ for diagnosing dermatology cases. And it is being used for several other specialties, such as

opthalmology, cardiology, nuclear medicine, and sleep.

Also, outside of Medicare, telemedicine presentations are commonly made by

health care professionals, especially registered nurses and licensed practical nurses,

who are not allowed to make such presentations under current Medicare law. Some

telemedicine programs use nurses for virtually all telepresentations, with generally

high satisfaction ratings from both patients and physicians. And we are examining

this through one of our demonstration projects where we are allowing registered

nurses to make telemedicine presentations.

In Medicaid, at least 17 States (Arkansas, California, Georgia, Iowa, Illinois, Kansas, Louisiana, Montana, Nebraska, North Carolina, North Dakota, Oklahoma,

10

South Dakota, Texas, Utah, Virginia, and West Virginia) are covering telemedicine,

often under circumstances not now allowed under Medicare law. States must satisfy

Federal requirements of efficiency, economy, and quality in telemedicine coverage,

but generally are encouraged to use the flexibility inherent in Federal law to create

innovative payment methodologies for telemedicine. For example, States are not required to split fees as in Medicare, and may make separate reimbursements to both

the referring physician for an office visit and to the consulting physician for a consultation. States also can cover network line charges, facility fees, technical support,

depreciation on equipment, and other costs not allowed under Medicare law, as long

as the payment is consistent with the requirements of efficiency, economy, and quality of care.

Current Research

We recognize the potential benefits these additional telemedicine uses may offer

in Medicare. But we feel compelled to proceed with due caution because of the paucity of published, peer-reviewed scientific literature on when and where these other

uses are clinically appropriate. We also are concerned about the effect of telemedicine on quality or care, the potential for abuse, and the difficulty in establishing program integrity parameters without the kinds of solid, scientific, evidence we generally rely on in determining when a given service is medically appropriate.

To address these outstanding concerns, we are conducting extensive research and

demonstration projects, and developing a report that will include specific recommendations on how to expand the Medicare telemedicine benefit. To collect data

on these issues, we have worked with telehealth projects receiving grant funding

through the Office for the Advancement of Telehealth at the Health Resources and

Services Administration. We also received data from the telemedicine directorate at

the Walter Reed Army Medical Center and the Telemedicine Center at Ohio State

University Medical Center.

Also, in conjunction with the Agency for Healthcare Research and Quality, we

have contracted with the Oregon Health Sciences University to evaluate several

issues pertaining to Medicare coverage policy. These efforts have helped us understand how telemedicine is being used outside Medicare. This study involved an assessment of the clinical and scientific literature dealing with the cost-effectiveness

of telemedicine, specifically looking into the areas of ‘‘store-and-forward’’ technology,

patient self-testing and monitoring, and potential telemedicine applications for nonsurgical medical services.

Within Medicare, we are conducting research demonstration projects to help us

better understand telemedicine. We are working through Columbia University to

conduct the Informatics, Telemedicine, and Education Demonstration Project, as required by the BBA. This randomized, controlled study will explore whether the use

of advanced telemedicine technology improves clinical outcomes for diabetics in New

York City and rural, upstate New York.

Another demonstration to assess the feasibility, acceptability, cost, and quality of

teleconsultation services involves 110 Medicare-certified facilities in North Carolina,

Iowa, West Virginia, and Georgia. It also includes a bundled payment rate that is

negotiated to cover both the facility and physician fees for telemedicine services.

Utilization of telemedicine in the project so far has been limited. And we are now

considering whether to remove the bundled payment feature, which may be contributing to the low utilization levels, from the project. To better understand usage patterns, we also are examining rural providers’ perceived barriers to telemedicine.

We also are examining whether it is appropriate to provide payments for teleconsultation to beneficiaries in homebound settings. And we also are working with the

Center for Health Policy Research at the University of Colorado to evaluate the impact of telemedicine coverage on access to, and quality of, care, and to analyze rural

physicians’ perceived barriers to telemedicine.

A key concern for us as we work with Congress in exploring possible expansions

is how to ensure that telemedicine is used appropriately. There is significant potential for over-utilization that would be difficult to monitor and prevent, since we have

so little data to guide us in determining when telemedicine is, in fact, medically appropriate. ‘‘Store-and-forward’’ technology, in particular, has the potential to substantially increase the number of consultations billed to Medicare without regard to

medical necessity.

Another key concern is the difficulty in projecting costs for telemedicine expansions. There are, as yet, no good data on the extent to which expanded coverage for

telemedicine would increase claims. There are no reliable data on the extent to

which additional claims would represent appropriate care that should be, but is not

now, being delivered. And there are no reliable data on the extent to which expanded coverage would invite inappropriate claims or other abuse. The lack of data,

11

as well as program and payment experience, in these areas warrants a careful,

measured approach as we proceed. Issues such as scope of coverage and expansion

of eligible areas need to be carefully studied and considered. And we need reliable

evidence to determine when telemedicine is an appropriate substitute for services

that traditionally require the physical presence of a patient.

Rural Initiative

Telemedicine is only one part of our efforts to improve access and services for

rural beneficiaries. We are redoubling our efforts to more clearly understand, and

actively address, the special circumstances of rural providers and beneficiaries. Last

year we launched a new Rural Health Initiative and are meeting with rural providers, visiting rural facilities, reviewing the impact of our regulations on rural

health care providers, and conducting more research on rural health care issues. We

are participating in regularly scheduled meetings with the Health Resources and

Services Administration’s Office of Rural Health Policy to make sure that we stay

abreast of emerging rural issues. And we are working directly with the National

Rural Health Association to evaluate rural access to care and the impact of recent

policy changes.

Our goal is to engage in more dialogue with rural providers and ensure that we

are considering all possible ways of making sure rural beneficiaries get the care

they need, including use of telemedicine. We are looking at best practices and areas

where research and demonstration projects are warranted. We want to hear from

those who are providing services to rural beneficiaries about what steps we can take

to ensure they get the care they need.

We have put together a team for this rural initiative that includes senior staff

in our Central and Regional Offices and dedicated personnel around the country.

The work group is co-chaired by Linda Ruiz in our Seattle regional office and Tom

Hoyer in our central office headquarters in Baltimore. Each of our ten regional offices now has a rural issues point person that you and your rural provider constituents can call directly to raise and discuss issues, ideas, and concerns. A list of these

contacts and their respective States is attached to my testimony.

Conclusion

Telemedicine holds great promise for improving access to care, particularly for

beneficiaries in rural and other underserved areas. Our ongoing research efforts

should help address the lack of scientific data on its appropriate uses. That will help

us understand whether and how current restrictions on Medicare coverage for telemedicine should be changed.

We are very grateful for this opportunity to discuss our efforts to help rural providers and beneficiaries, and to explore further actions we might take to address

their concerns in a prompt and fiscally prudent manner. I thank you again for holding this hearing, and I am happy to answer your questions.

Mr. BILIRAKIS. Thank you, Doctor.

Dr. Berenson, you have referred to them, virtually every opening

statement has, the barriers to the use of telemedicine, particularly

those involving Medicare but let us say barriers in general. You

have worked with it, and I am sure you are familiar with many of

those barriers. Can you share with us what some of those barriers

may be, how they might be eliminated? Can some of them be eliminated administratively by HCFA? Will it take legislation to do

that?

This, I think we all agree, has the potential of being a tremendous health care delivery vehicle, particularly in the rural areas,

Mr. Stupak’s area and some others. So I think it is significant that

we concentrate and focus on this area in addition to all the other

things that we do, but we need some help from HCFA, too. We

need some recommendations from HCFA in terms of certain areas

where you might need us to act legislatively and what areas you

can cover. Proceed.

Mr. BERENSON. I would defer to some of your other experts on

some of the sort of culture of medicine barriers about the sort of

willingness of physicians and other professionals to participate.

But, clearly, there are some reimbursement issues that HCFA has

12

or Medicare, the Medicare statute precludes or influences in a profound way, which deserve attention; and, as I indicated, we are

about to issue recommendations on some of those changes.

But, preliminarily, we would think that there could be an expansion beyond the BBA definition of a teleconsultation which has a

fairly narrow meaning. It basically—and I think that meaning at

the time made some sense or the intent, but the consultation, as

defined in the AMA CPT manual, which we follow for our policy,

makes it clear that a consultant doesn’t have overall responsibility

for the management of a patient. A consultant provides advice to

the physician, and it makes some sense when you are dealing with

somebody many miles away. At least initially it made sense to restrict to a consultation, because there would be a physician on the

ground who ultimately was accountable.

It turns out that many of the grantees who HRSA has funded to

do telemedicine finds applications for telemedicine that go beyond

just consultations, and we have not had a lot of billings for consultations. Some other kinds of evaluation are management services. Other specific kinds of services that are akin, for example, to

radiology or EKG readings which have been done for a while perhaps in the area of pulmonary testing or sleep studies. I mean,

there are some specific areas in the field that some of the people

in the field might be ready for expansion in this area.

We are limited again by the lack of either scientific peer-reviewed studies or even consensus standards by the profession

themselves, and I think some of the witnesses will point out that

you have to get down into the details as to which kinds of services

are fully amenable to this telemedicine where you don’t need the

patient and the practitioner in the same room and which ones

would raise concerns.

But, in any case, expanding the definition of consultation is one

area that we think should be considered and clearly the area of

presenter. The BBA contemplated pretty explicitly that there would

be a physician presenting to another physician, and many of the

grantees who use this, the Walter Reed Medical Center and others,

Ohio State, who have active telemedicine programs find that RNs

and LPNs in some situations are fully capable to make presentations, and the way——

Mr. BILIRAKIS. Are they able to under the current law?

Mr. BERENSON. They are not able to under the current requirements, and the organization of health care in rural areas doesn’t

permit—another example is we have said that, and the law contemplated, that employees of physicians should be presenting, either the physician or employees. Well, it may well be that the RNs

are at the hospital, that may be where the equipment is, and the

personal physician may be somewhere else. We need to look for

more flexibility in this area of presentation.

Mr. BILIRAKIS. If you have a physician in point A presenting to

a physician in point B, 2 or 3,000 miles away, are both physicians

reimbursed by Medicare?

Mr. BERENSON. Right now, again, the law actually called for fee

splitting, and I know there have been some concerns by some physicians about whether this might run afoul of Stark. When it is legVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00016 Fmt 6633 Sfmt 6602 E:\HEARINGS\67112 pfrm03 PsN: 67112
13

islatively prescribed it really doesn’t, but I think there is a perception problem. There is still an issue.

Our systems were such that we said that the receiving physician

would receive the fee and would have to somehow compensate the

presenting physician. That is administratively cumbersome, doesn’t

happen very well, and I think we need to revisit this issue of the

fee splitting. Both for conceptual and as well as practical reasons,

it doesn’t work very well, and I don’t think it is really necessary,

but especially if we expand——

Mr. BILIRAKIS. Is that something that can be revisited by HCFA

administratively?

Mr. BERENSON. Yes—no. As I understand it, the requirement for

the fee to be shared is legislative. What we did administratively

was not split the fee ourself and send the apportionment to each

one. We asked the consultant physician to basically be responsible

for sharing the fee with the presenting physician and that we do

have authority over. But we want to look more broadly at whether

we even need to do the fee splitting at all, although it is in the

statute, especially if we move to expanding who the presenters are.

Again, I think it is fair to say that we all moved cautiously, perhaps too cautiously, in the BBA, starting with a concept of a consultation with a physician in one room, a physician in a room

somewhere far off, and it all made sense in that construct. As we

expand services and recognize that there are other presenters who

are fully capable of presenting I think we can change some of these

rules that are barriers to the use of telemedicine.

Mr. BILIRAKIS. Thank you, Doctor.

My time has long expired. Mr. Brown.

Mr. BROWN. Thank you, Mr. Chairman.

Dr. Berenson, as you said, there isn’t much clinical evidence

about the safety and effectiveness of telehealth services. Run

through, if you would, so at least I better understand, I think other

members of the subcommittee, the process—run through the process by which HCFA would gather evidence to expand services that

only Medicare would pay for. If you would sort of run through that,

how you gather the evidence, what evidence you will gather, how

you make those final decisions based on congressional direction on

what you will cover.

Mr. BERENSON. Yes. Well, we have a number of studies ongoing.

In fact, it is the Office of the Advancement of Telehealth at HRSA

that have a number of grantees, and we are systematically collecting information from them about their experiences. In fact, it

is somewhat based on those experiences, as well, I should add, the

Telemedicine Center at Walter Reed, the Telemedicine Center at

Ohio State, and then working with researchers at Oregon State

Medical Center. We are trying to compile what the findings are. So,

for example, it turns out that most of the grantees do use telemedicine beyond just consultation for a couple of very specific visits,

such as other medical visits and such as evaluation/management

visits. But very few of them have expanded into some other areas

that have been recommended by some.

So we would sort of look at that experience, collect some consensus around those experiences, try to get some outcome studies,

although that is very difficult. And, again, some of the experts you

14

will hear are more familiar with the methodological barriers in

doing those studies.

We would also look to specialty societies themselves to begin to

develop some standards and tell us what they are based on. Ultimately, coverage decisions might require us to submit the evidence

to the new coverage process that HCFA does have with a panel of

experts who do look at the evidence and do make judgments about

coverage. I think it is fair to say that we are relatively early in this

process of actually having good evidence to assure us that broad expansion is warranted.

We are just putting again, as I said, the final touches on a report

on some of these issues. For example, in the area of dermatology,

which is one of the very promising areas where it makes sense that

you need images, where experts in a place can look at an image

and help make a diagnosis, well, it turns out for discrete lesions

it seems to work pretty well. For diffuse lesions it is very difficult

for a consultant somewhere else to look at even 6 or 8 images that

have been provided and make an accurate diagnosis.

So that is the kind of detail one needs to get into. It is hard to

say it is going to be covered for dermatology or not, when in fact

the clinical information is that for certain situations it is perfectly

reasonable and for certain situations it is not. Mostly in medicine

we rely on the profession itself to develop standards and to provide

that kind of guidance.

To date, you know, that is in its beginning stages. So at this moment we do have—again, I think we should be proceeding somewhat cautiously—so we want to expand these demonstrations, and

I think it is reasonable, if we are focused on health manpower

shortage areas in rural areas, to do those expansions that we had

talked about and then look to see how that is playing out. I don’t

have a neat road map. All of that is sort of in play at the moment.

Mr. BILIRAKIS. If the gentleman would yield maybe for a quick

follow-up to that.

Elections take place every 4 years. We don’t know what is going

to happen in November. If there is a change in administrations, for

instance, or maybe even in the sense the same party controlling,

God forbid, but—I had to say that. Forgive me, I had to say that.

But my point is you have these studies taking place. Are they just

interrupted right smack in the middle of the studies? I mean, do

they continue—what happens from a practical standpoint? They

are important studies.

Mr. BROWN. One reason not to change.

Mr. BERENSON. Clearly certain high-level policy calls can be put

on hold when there is a change in administrations, but these studies are ongoing. They are committed. We are making some corrections, some improvements in some of these demos because we are

not getting enough volume in the original construction of them.

This is an opportunity to say one other thing. I actually was—

I am sure you are aware that the President’s proposal on Medicare

reform included a modernization piece, and I actually had the

privilege of chairing an activity this spring within HCFA to look at

where we need to modernize. We talked centers of excellence and

PPOs and other things like that. One thing that became very clear

was that modern medicine wants to use new technology. When I

15

was an internist practicing, I used the telephone; that is what was

available, but actually, that is a form of telemedicine which I

wasn’t adequately reimbursed for.

Right now I know that some physicians spend a third of their

time on the Internet, and we need to figure out not only for rural

underserved areas but for the basic functioning of the program how

to incorporate some of these new technologies to improve efficiency,

communication, quality, but it is very difficult in a fee-for-service

construct. I mean, one of the reasons I am sure HCFA didn’t reimburse me for telephone calls was that the cost of billing would be

more than the reimbursement for a 2-minute phone call.

So we in that process were looking at other funding mechanisms,

other reimbursement mechanisms. Actually, these two activities

need to come together, the specific focus on rural underserved populations and modernizing the program, and certainly my recommendation to the new administrator will be to give very high

priority to both and see them related.

Mr. BILIRAKIS. But you would anticipate, though, this continuing

on?

Mr. BERENSON. These studies will absolutely continue, and I

think part of the function of hearings like this is to give more vigor

and light on some of these studies, and I think you have gotten

some of our attention.

Mr. BILIRAKIS. Thank you, Dr. Berenson.

I appreciate the gentleman yielding the balance his time.

Mr. Stupak.

Mr. STUPAK. Thank you, Mr. Chairman, a good segue into my

questions.

Doctor, would HCFA support congressional language supporting

reimbursement in telemedicine in the same way that person-to-person transaction? I indicated before that you don’t reimburse now

unless your general doctor or your family doctor does the introduction. That is really a hindrance on telemedicine. Why do we need

this introduction if we are trying to save costs and everything else?

Would you support changes like that so it could be doctor to patient

or I should say patient to specialist without an intervening doctor

needing to be there?

Mr. BERENSON. I guess we will have recommendations in this report that is due soon, but it looks like many of the successful programs use RNs. I think we would be a little reluctant, at this point,

to having the patients present themselves without any intermediary do the presentation, but I don’t believe it needs to be a

physician. So I think we are looking at an expansion for RNs and

perhaps LPNs, in some circumstances, but that kind of modification we would look favorably upon.

Mr. STUPAK. What we are concerned about is there almost has

to be a hand-off like to a specialist for every transaction. Couldn’t

there just be the recommendation from your physician to do it?

And if you live three blocks away from Marquette General Hospital, it seems like you should be able to go there, get in

telecommunication——

Mr. BERENSON. We would like to know if that works. I would be

concerned about coordination of care in that kind of situation. In

general, I mean if, in fact, there is a system where the consultant—

16

the specialist knows exactly who the responsible physician is and

provides a report as consultations tend to happen, I think we could

be going in that direction. I think the first step would be to make

sure it is safe and effective with nonphysicians, and we would look

toward that other approach down the road.

Mr. STUPAK. I mean, I am sure you would agree that I just can’t

walk into Marquette General and boot up the telemedicine and

start talking to guys in Mayo Clinic. It is just not going to work

that way. I am going to have some kind of referral, some kind of

code, access to get in. They are using their equipment all the time.

I am sure they are just not going to let anyone do it. There would

almost have to be that referral already established.

What we are hearing is every time you want to do it, it can’t be

billed, this specialist time can’t be billed. So we are going through

this shell game just to get the money there, which seems like a lot

of duplication——

Mr. BERENSON. There is no question that under the current system, we have very few claims for these services. It is not working

right now so we would be looking to expand it. I would defer to

some of the other witnesses about exactly how that could work.

Mr. STUPAK. Okay. Let me ask you this question and I know the

Chairman started along these lines, and let me ask you this if I

can. As I understand it, current Medicare policy does not allow certain practitioners, you mentioned nurses, to participate in provision

of telehealth services. A number of witnesses on the next panel will

mention how this limitation is hindering the spread of telemedicine

in Medicare. What is the policy rationale for the limitation?

Mr. BERENSON. Again, I think it was an initial caution that—

encaptured in the language of BBA that teleconsultations would be

the initial focus of this activity. The fact that it explicitly talked

about a fee-splitting arrangement suggests that the BBA contemplated that there would be two physicians involved, and I think

it just was an initial caution in a new area where we appropriately

should be concerned about patient safety. But I think the experience is such that we now probably can move off of that caution, but

that caution is really captured in the BBA language.

Mr. STUPAK. And I think you said it well in your opening statement. The technology is moving so quickly, the cautions we have

that probably make them sort of outdated. In order to have a remedy there, would you need a legislative fix or would rules and regulations within HCFA probably take care of it?

Mr. BERENSON. I believe we need a legislative fix for that; and,

again, we would work with the committee on that.

Mr. STUPAK. And you certainly—and I am sure from your testimony you have sort of indicated RNs would be a logical place

where we would start to allow them to participate in telehealth

programs.

Mr. BERENSON. I think that is right.

Mr. STUPAK. Thank you, Mr. Chairman.

Mr. BILIRAKIS. I thank the gentleman.

So the recommendation from HCFA is that possibly LPNs, et

cetera, ought to be—RNs, should be reimbursed and that there

should be changes made to the bill?

17

Mr. BERENSON. Well, reimbursement is a separate issue. I think

we are—and, again, it is a little awkward because we don’t have

our final report done, but at least the preliminary findings and

where we are likely to come out—it hasn’t been through the Department yet—is that our current restriction to physicians is too

restrictive, and we should expand that. It is a different question

about reimbursement to the presenter from a restriction as to who

can present; that is a separate issue.

Mr. BILIRAKIS. Ms. Capps to inquire.

Mrs. CAPPS. Thank you for your testimony, Dr. Berenson. I am

going to ask you to talk to us and give some discussion to the need

for national standards in the provision of telehealth. We have

standards in hospitals and nursing homes, but I can’t resist beginning with some of the comments—responding to some of the comments you have made already in that you said that we are in a

timeframe now where the progress and technology is so astronomical that by the time HCFA rules or Medicare makes—the rules are

changed that it is already obsolete. And underlying a lot of my concern about where we are in health care now is this huge gap between the science advances and the regulating agencies that have

always been conservative or have always been cautious and concerned about quality and program integrity but that the paradigms, the framework is so dramatically different.

Before, you talked about a discrepancy in telephone use. We are

talking about I think rather revolutionary changes in medicine and

the gap, the lag results in almost a disconnect and that creates a

climate in the practice where practitioners know the level of response to patients’ needs that could be made and yet they are constrained by really an archaic—what is becoming an archaic system,

and I wish—I mean, when you said that you are looking to specialists for coming with standards and they are not as forthcoming as

you want, where are the incentives that can be given to practitioners to help to address this rather than seeing the whole process

from Medicare’s side as dampening and delaying and onerous, if

you will, where they almost want to get out of it because they can’t

do what they know they are equipped and capable of doing? And

I am talking not just about doctors but all kinds of practitioners.

And I am looking for how we can help in the legislative body, because we are not the experts, and I submit that the experts are out

in the field, and you are constrained—you as representing Medicare or HCFA—by the BBA. You talk about that.

So maybe that is where I will stop my diatribe and let you respond. You said in response to the previous question, perhaps there

is legislation required to give impetus for bridging some of this gap,

and if you would address also—perhaps do that in the framework

of how we can get standards there that can guide us.

Mr. BERENSON. That is a very sort of broad set of questions

there.

I guess what I am going to suggest is that medicine has always

assumed a personal interaction. If you look at the AMA CPT definition of an office visit, it has three components. They are the history, the physical examination and medical decisionmaking; and a

lot of doctors spend a lot of time valuing those various components.

The personal, hands-on as part of a medical interaction has been

18

considered necessary, but it may not always the case that that

physical hands-on is necessary.

There is also the potential for a surrogate doing the hands-on for

somebody at some distance. So, No. 1 is really understanding when

safety and quality can permit a nonface-to-face encounter.

Mrs. CAPPS. But haven’t we moved—isn’t it clear that we had

moved past that?

Mr. BERENSON. In some areas we have.

Mrs. CAPPS. I go to get a mammogram, and the person who gives

it to me doesn’t read it. I know that. I have to trust somebody else,

and this is not telemedicine.

Mr. BERENSON. For some specific technologies we have. And I

think one of the issues, and again I am not in the field, but I think

there is some controversy about mental health visits with a psychiatrist, whether you need an actual physical presence to establish

a relationship or whether it is just as effective to be doing it via

telemedicine. And I think there is a particularly compelling case for

underserved rural areas where the absence of the perfect may be

nothing. I wanted to raise the issue that there are serious quality

concerns, and I don’t think it has gotten yet enough attention. I

think the Congress, HCFA and organized medicine needs to tackle

this at a little higher level.

The other thing is serious concern about cost. One of the protections that we have for our cost problem is relying on is some cost

associated with that face-to-face encounter. People don’t frivolously

go to the doctor, at least most people, and hang around for an hour

or 2, and we rely to some extent in a fee-for-service environment

for the fact that a visit is a physical encounter. If we make it very

easy for communication back and forth, at any time, about any

problem, although that potentially is improving quality, it potentially is no limit on associated cost.

And so that is why, again, within capitated environments, within

bundled global payment environments, it makes perfect sense and

why I come back to home health as a perfect place to begin to understand it. In a fee-for-service environment, when you don’t require a face-to-face encounter, the potential for astronomical increases in utilization is there, and we really need to understand

and have some standards in place as to when it is appropriate and

when it is not appropriate.

Mrs. CAPPS. I grant you that. But just by your saying that the

standard for care is the face-to-face encounter between the provider

and the patient, I would submit that is almost nonexistent, even

in highly served areas, because of the complexity of health care;

and we need then to work together to figure out a different standard that will be embracing of what you—I know my colleague

wants to jump in—but we have got to get this at some point

because——

Mr. BERENSON. I think that is right, but at the same time one

of the complaints patients do have is that they don’t have enough

time to talk to their physician.

Mrs. CAPPS. That is another issue. That is another kind of issue.

And I think we have got to—if we are looking at if HCFA calls

face-to-face encounter the standard of care and how far are we

19

from that, then I submit to you that we need to reframe the whole

relationship.

Mr. BERENSON. HCFA is doing it, but it is the profession right

now. The standard that the AMA and others have established is

this face-to-face requirement. So we are doing this with other parties.

Mrs. CAPPS. Yes. And then the profession has to be allowed to

come up with different criteria.

Mr. STUPAK. And that is the point I was going to make. I think

we need the professionals in helping us out, as opposed to HCFA

and Congress trying to do it. I really think we need their input. Because I agree with some of the things you are saying, but, at the

same time, we are making rules that affect them but we are not

getting their input. And I know you practiced for a while. I am sure

you would have some input in it, but I think we also need professions in there.

Mrs. CAPPS. And we also need——

Mr. BILIRAKIS. We are well over.

Mrs. CAPPS. There has got to be——

Mr. BILIRAKIS. We have gone over with everybody. Why don’t you

sum up, Lois?

Mrs. CAPPS. All right.

Mr. BILIRAKIS. You want to sum up?

Mrs. CAPPS. I just want to say that delay also carries a price.

Mr. BILIRAKIS. Mr. Bilbray to inquire.

Mr. BILBRAY. Thank you, and I appreciate my colleague from

California pointing out, I guess the term is a lack of treatment

sometimes is the worst treatment or at least it can be as lethal as

the wrong type of action.

Doctor, we can hold these hearings and we can talk about use

of the technology and we can talk about all the opportunities out

there, but if our structure does not allow utilizing new technology,

if our bureaucratic barriers—if I may use a derogatory term—but

let us just say our regulatory safeguards are such that innovative

opportunities cannot be utilized, then all we are doing is sitting

here and playing a nice game of what if, how great it could be,

without actually providing the product to the consumer.

I want to get back to this issue. What barriers can be eliminated

by HCFA to be able to make not only the use of this approach possible but to encourage it when practical and when essential? And

is HCFA predisposed to be able to change its procedures or modify

its procedures or accommodate these new challenges and opportunities? I would like to know basically what barriers right now need

to be eliminated so these opportunities can be utilized.

Mr. BERENSON. I think the couple that we have talked about include the definition in the BBA of a teleconsultation limiting the

application to a fairly narrow set of services, and there can be an

expansion to other kinds of medical visits and perhaps to certain

other kinds of interactions that go beyond just consultations.

We have also talked about eliminating the requirement that a

physician have to be the presenter to another physician. I think we

want to revisit the requirement for the fee-splitting arrangement

and make it easier essentially for others to present and not have

the——

20

Mr. BILBRAY. Is that fee-splitting arrangement part of the BBA

agreement or is that part of your own HCFA internal——

Mr. BERENSON. Basically, the BBA required the fee splitting. We,

for systems reasons, required the receiving physician to actually

have to conduct the fee splitting, and that has created a barrier.

So we could revisit that, but I think the more significant thing

would be to relook at the requirement that there be the fee splitting in the first place.

Mr. BILBRAY. Doctor, my mother was an Australian tennis champion for years before World War II, and I grew up watching the

ball be knocked on the other side of net and requiring the other

guy to try to handle it. I have asked you what can HCFA specifically do, not what is Congress, and when I knock the ball back into

your court, what can HCFA do to be able to eliminate the barriers

to the utilization of this type of approach and what is HCFA willing to do?

Mr. BERENSON. I honestly have to say that we feel constrained

by the statutory language in these few areas and would be happy

to work to modify that. We need to change. I mean, obviously a lot

of our future recommendations as to expansions in this area will

be based on the results of our demonstrations and consultations

with experts in the field, and we have learned that we have not

been quick enough to modify some of the flaws in our demos.

As I mentioned earlier, we were using a technology—studying a

technology that made sense at the time in 1997, but we have not

adjusted quickly enough to the fact that the technology has left

that or is leaving that behind to look into new areas. And there are

specific recommendations that you will hear from Dr. Grigsby and

others about the kinds of demonstrations that we should be doing,

and we need to be doing that more quickly, but in terms right now

of the changes that could be made or should be made I think we

don’t have the authority in most areas to do that ourselves.

Mr. BILBRAY. Okay. Then let us call each others bluff and we will

try to see where your rulemaking could change internally, and if

you would specifically, specifically identify where the changes need

to be made to give you the flexibility to do what we are asking.

And when we talk about the experts, I certainly hope my colleagues and you recognize that the experts are not just the medical

providers and the people actually going to perform the services. As

you said, we are behind the curve in technology again and again.

Just about the time we think we are designing something for cutting edge, we realize that it is 2 years behind schedule even though

we only worked on it for 6 months. I would really encourage that

when we talk about professionals and experts that we talk about

techies, talk about what is going to be the technical capabilities at

the time we implement it so we are not always playing this catchup.

I would ask—go ahead, Mr. Chairman. I yield back.

Mr. BILIRAKIS. Mr. Green.

Mr. GREEN. Thank you, Mr. Chairman; and Dr. Berenson, I am

glad you are here.

I have a very urban district in Houston, and I have watched how

telemedicine can help. Because the problem I noticed is the quality

of care at our teaching hospitals, particularly in urban centers, is

21

so much better. So you will have people who will literally pass by

suburban hospitals because they want to go to the biggest medical

center in the country in some cases.

What I look at it for is telemedicine can also help us because not

everybody can go to the Texas Medical Center, but if we have telemedicine to the suburban hospitals or the closest, so—because I

have had experience of people who have not gotten the quality of

care at a hospital that is—even though it is within 25 miles of a

major medical center and they actually have to be transferred,

which has caused other problems. So if we have telemedicine not

just in the rural areas but in the urban areas and suburban areas,

we can make sure the quality of care is available 20 miles from the

M.D. Anderson or from a Texas Childrens Hospital. So we can utilize that, and so that is why it is just not applicable to rural areas.

Following up on my colleague, Mrs. Capps, my wife had an experience. She was here during the summer. She teaches school. And

former Governor Ann Richards mentioned to her you need to go get

a bone density test because you are at the age because Ann had

just had one and discovered she needed some medication. So my

wife called the doctor, never saw the doctor, went in for the bone

density test. Obviously, it showed she needed medication. The

medication was prescribed, and then she received it. So real life is

actually happening now even without. So that is, I guess, basic

telemedicine. Because everything was on the phone, without having

the consultation between two physicians. So it is not just mammograms. It is other things that are happening.

I was noticing in your testimony that Texas and a number of

States utilize Medicaid for telemedicine, and I know it is a little

further along. Could HCFA look at the successes—obviously, we

also have some problems of how Medicaid may be reimbursed, but

the successes of telemedicine and the Medicaid experience in the 17

States that we have had in to both rulemaking and also make suggestions to Congress on how we can change Medicare law to take

advantage of the technology?

Mr. BERENSON. Yes. I think that in preparing for this hearing it

became clear that we also didn’t know enough about what private

insurers were doing, as well as Medicaid agencies, and I think we

need to do a better job of convening the other payers to see if we

can’t progress a little faster in this area. But, yes, there are experiences clearly in both sectors, Medicaid as well as the private sector,

and in terms of dealing with this concern about overexpansion but

at the same time getting the services out where they are needed.

So we need to do that, yes.

Mr. GREEN. I know right now Medicare only pays for the consultations. And, again, I have seen actually observing surgery and

things like that that could help, and I understand the concern

about cost, and we share that, too, because I mean every few years

we have to deal with the expansion of Medicare to make sure it is

still there for our constituents. What do you think that it would be

for the cost of Medicare? Can you give us some kind of idea what

such expansion would be on a cost basis, realizing we are the Commerce Committee and not the Appropriations Committee?

Mr. BERENSON. Again—and I should also say when we somehow

get perceived as being too slow and too bureaucratic—we are aware

22

that what we do which makes perfect sense in a health manpower

shortage area, in a rural area, where there is no alternative, will

often be looked at by others as a basis for expansion into other

areas.

I think we are quite confident that we can make significant

changes that would apply in rural areas, at not a significant cost.

There might even be a savings. There is no evidence of program integrity problems thus far in the rural areas. But what we are concerned about, and particularly on the cost side, is what would happen if these technologies that are not inherently limited to rural

areas became the standard across the entire program. That is

where we have concern. So to the extent that we are being perhaps

a little too cautious in expanding in rural areas, it is because what

we do there becomes the basis for expansion elsewhere.

I don’t have a number for you on the cost. I think if it were not

done correctly and carefully, with standards in place, it could be a

huge expansion and cost to the program if it went beyond the target, which are health manpower shortage areas.

Mr. GREEN. Well, maybe that is my concern.

Mr. Chairman, with just a little forbearance, I understand the

rural application, but, again, I think we could look at some cost

savings because the costs per bed at some of my suburban hospitals

is much cheaper than the cost at a major medical center, but if you

utilize the expertise at that medical center for the suburban hospital, again, 20, 25 miles away, it is not anywhere near rural, we

could see some cost benefits to the Medicare program.

Mr. BERENSON. There could be, but there also could be just a

great expansion in utilization. That is why, as part of this modernization activity that I talked to, we are looking at other reimbursement mechanisms, perhaps an administrative fee, to support

telemedicine. That is not a reimbursement at a specific service

level rather a some modified forms of a capitation payment system

that provides a payment over a period of time where the practitioners themselves then determine what the utilization will be

within that limitation.

That is why in the home health example, where we will now be

paying a 60-day episode fee to a home health agency for taking

care of a beneficiary with a certain medical problem, we would encourage the agencies to provide an adjunct to the plan of care that

the physician has signed off to by incorporating telemedicine into

that whole plan of care. Again, inhome health the payment will essentially be predetermined, such that we have less concern about

utilization. It may well be that we can expand telemedicine very

broadly in a fee-for-service environment, but we are concerned

about having the standards in place to determine how to do that.

Mr. BILBRAY [presiding]. The gentleman’s time has expired. The

gentleman from Tennessee.

Mr. BRYANT. Thank you, Mr. Chairman.

I apologize to the witnesses, but we are on different schedules

here. I have to come and go, and sometimes we are late. I appreciate you coming and look forward to your testimony, as well as the

second panels testimony.

I represent a very diverse district. It has urban areas and quite

a bit of rural area, and I see telemedicine as being one of the soluVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00026 Fmt 6633 Sfmt 6602 E:\HEARINGS\67112 pfrm03 PsN: 67112
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tions that will go to a major problem that we have in those areas

of access to health care, and I have joined with the Chairmans bill

in cosponsoring that bill. I think it is a good bill. I have questioned

Mike Hash when he comes up about this, and he is going to get

back with me and follow up with each other on this, and we have

worked hard on this issue. We also have Dr. Burgiss from the University of Tennessee here today to testify on the second panel about

what is happening there with telemedicine.

So, with that said, I want to ask you a couple of questions; and

I hear the bells going off for us to go vote, also. So we will probably

get this in before we have to go, but if you could keep your answers

relatively short in light of the bells.

But it is my understanding that under the new health care Prospective Payment System, the PPS, home health care providers

may use PPS dollars in the manner they believe most appropriate

to improve the patient outcomes. Excepting that a telemedicine encounter is technically not a visit for the purposes of PPS payment,

I assume then that the current policy allows a home health agency

to spend PPS dollars to utilize telemedicine technology consistent

with patient care standards. Is my assumption consistent with

HCFA’s view on this subject?

Mr. BERENSON. Yes, as long as the use of telemedicine services

is consistent with the plan of care that the physician certifies. I

don’t think we would want telemedicine visits to substitute completely for the services that are specified in the plan of care, but

there can be some minor substitution and certainly adjunct use of

telemedicine in the context of a plan of care.

As we get more experience with the effectiveness, physicians will

then be more willing to sign off on plans of care that do have telemedicine visits, in some cases perhaps substituting with what

would have been physical visits, but at this moment we think that

the requirement for a set of services face-to-face should be maintained with the incentive now for the agencies to use telemedicine

as an adjunct to those services.

Mr. BRYANT. In regard to the demonstration projects, I understand you are actually working on some now regarding telemedicine, and you may not have these figures, I don’t know, and if you

don’t if you could late file this to your testimony today, but could

you give me the statistics on how many claims have been submitted from these demonstration projects? You expressed concern

about the potential cost. So I just wonder how many are actually

being——

Mr. BERENSON. There are very few. I don’t have the exact number on me. Remarkably few—and that has been one reason why we

believe we need to rethink these demonstrations. We are in discussions to do that, as well as rethinking the narrowness of the application to teleconsultations because there have been very few. We

will provide for the record the actual number.

Mr. BRYANT. I am getting inquiries here, but can you give me a

ballpark figure, just an estimate before you submit the actual figures? Could it be as low as 19,000?

Mr. BERENSON. I think it is fewer.

Mr. BRYANT. Fewer than 19,000?

24

Mr. BERENSON. I think it is a couple of hundred for last year. I

don’t have the cumulative number. I think last year was perhaps

200 or something.

[The following was received for the record:]

There were 298 claims filed through the end of the second quarter, 2000 under

the Telemedicine Demonstration Project.

Mr. BRYANT. One final question. I think Mike Hash said this,

and I understand you may have said this also, that HCFA is going

to be releasing recommendations on changes that should be made

to this issue of telehealth, telemedicine. Can you tell me specifically

when we can expect those recommendations from HCFA?

Mr. BERENSON. Well, it is anticipated for this fall. I don’t know

whether prior to adjournment or not. I mean, unfortunately, it is

in a clearance process. The areas that we will be addressing, some

of them I have talked about today. One is the expansion of services

beyond teleconsultations, and we are likely to be recommending an

expansion to certain other kinds of services. We will be making

some comments about store-and-forward technology, and we will be

talking about presenters. I don’t have a specific date for you.

Mr. BRYANT. Just for the record, we may well be celebrating

Christmas with you here before the adjournment——

Mr. BERENSON. I have heard that.

Mr. BRYANT. [continuing] which we all hope is not the case. I

also want to clarify that the 19,000 figure should have been

$19,000 rather than 19,000 claims. So if you could give us a dollar

amount and the actual number. I yield back my time.

Mr. BILBRAY. Yes. Gentlemans time has expired.

Gentleman from Ohio will be recognized before we adjourn for

the vote.

Mr. STRICKLAND. Thank you, Mr. Chairman.

Doctor, you mentioned this clearance process, and one of the

frustrations that I have had with HCFA—and I am not sure it is

HCFA’s fault. There may need to be a legislative remedy. But I reflect back on my colleague, Representative Capps’, use of language.

She used words like ‘‘archaic system’’, ‘‘lag’’, ‘‘slow’’ and so on. My

personal experience with HCFA has been that these words are appropriate.

I don’t want to lay blame, because the blame may rest up here

instead of with HCFA, but it seems to me that there is legitimate

reason to be concerned about the slowness with which HCFA responds to legislation, to rulemaking, to clearance and the like. Do

you know if this is a concern within HCFA itself and if there are

any efforts under way to try to modernize or update the system or

is, in your judgment, legislation required to reform this agency and

some of the processes within the agency in order for it to be appropriately responsive to modern needs and situations?

Mr. BERENSON. I am aware of one particular situation that you

are involved with where we have been very slow. We obviously are

concerned about it. It is, I think, a more complex question, and I

am probably not the appropriate person to address it.

I think to some extent there are requirements associated with

the Administrative Procedures Act and FACA and some other

things. But part of it is, on an issue like this one, there would be

quality of care concerns, program integrity concerns, payment conVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00028 Fmt 6633 Sfmt 6602 E:\HEARINGS\67112 pfrm03 PsN: 67112
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cerns, and at least our process right now permits all the parties

who are responsible for those different areas to weigh in. On important reports we also need to go through a departmental clearance

process which in some cases is where some of the lag comes. It is

of concern to me for sure, and I don’t have a facile answer for you.

Mr. STRICKLAND. I understand that, but I guess what I come

back to in my own thinking is the fact that—I mean, we can and

have in the past made major national decisions regarding war and

peace in a relatively compressed period of time because we considered it important or essential to do so; and, as I say, I am not—

you know, I don’t want to lay blame at the feet of this agency, because I am not sure that is where the appropriate problem is, but

it seems to me that as a Congress and as a committee we ought

to be concerned about how this agency is able to carry out its responsibilities in a timely fashion. And what we are talking about

here in terms of telehealth is, you know, I think is a good example

of how we cannot allow ourselves to be bogged down for years with

arcane procedures while the technology is escaping those who most

truly need it.

Mr. BERENSON. I appreciate that. I would take the opportunity

to make one point, however, which is that, and I am the head of

the Center for Health Plans and Providers which is essentially the

payment side of Medicare—both the payments to Medicare+Choice

plans and all of the payment policies to hospitals and physicians

and others. On a number of issues we are 1 or 2 persons deep. If

something else comes along, something else literally gets put on

the shelf for months at a time. We have fewer employees now than

20 years ago.

So I am not coming here requesting a massive expansion. I do

think one of the issues in some of these areas is simply resources

and staff and contracting authority to be able to move as quickly

as I think this particular topic deserves, and we have to continually

make tradeoffs on which we are going to do first, and I do think

that is serious concern.

Mr. STRICKLAND. Thank you, Mr. Chairman, and in view of our

time, I will yield my time.

Mr. BILBRAY. Thank you. I appreciate the gentleman from Ohio

for yielding; and we will thank you very much, Doctor, and dismiss

you at this time.

We would call up the next panel. We are going to go vote, so it

gives you time to set up. And I appreciate the patience of everyone.

I apologize. It is a procedure that we all live with. Thank you, Doctor.

[Brief recess.]

Mr. BRYANT [presiding]. We are going to restart the hearing, and

Chairman Bilirakis will be delayed a little bit. So we are going to

move forward with the introductions.

Mr. Strickland from Ohio is not back yet from the vote but would

like to more formally introduce Dr. Ross-Lee whom I believe is

from Ohio.

Ms. ROSS-LEE. Yes.

Mr. BRYANT. We will interrupt whatever stage we are at that

point if it is not too disruptive to allow him to do that, but for now

26

I am just going to begin from my left and introduce very briefly the

witnesses.

We have Dr. Karen Rheuban, who is Medical Director, Office of

Telemedicine, and a professor of pediatrics at the University of Virginia—with the University of Virginia Health System in Charlottesville. Welcome.

We have Mr. Joe Tracy, I don’t see where—all right. I am not

going right to left here. Well, I will introduce Mr. Tracy anyway.

He is the Director of Telehealth at the University of Missouri

Health Sciences Center in Columbia, Missouri. Welcome to you.

And Ms. Sally Davis here, Program Director at Telehealth and

Management Development, Marquette General Health System in

Marquette, Michigan, Upper Peninsula, near what is the name——

Mr. STUPAK. Now, I know why you are the substitute chairman.

Mr. BRYANT. Tryout, actually. Okay. These Michigan names get

me every time.

Mr. Jim Reid is here. He is Director of Telemedicine and Network Services with the Midwest Rural Telemedicine Consortium

with Mercy Hospital Foundation, and he is testifying on behalf of

the Center for Telemedicine Law which is located here in Washington, DC.

And then the gentleman I referred to in my statement, Dr. Sam

Burgiss, who is the Project Director of Telemedicine at the University of Tennessee Medical Center in Knoxville, actually, and the

other end of the State from where I live.

And we will reserve—Dr. Ross-Lee is here, of course, there; and

she will be more formally introduced later by our colleague from

Ohio.

Let me jump back. Dr. Rheuban, you have a patient here, and

we have Ms. Lisa Hubbard, you are here, and this beautiful young

lady next to you is Alexandra Bartley, and she is the patient.

Mr. RHEUBAN. That is correct.

Mr. BRYANT. Great, welcome. Good to have you here.

Also, in finishing up the introductions very quickly, Ms. Mary

Patrick is here. She is Director of Quality Improvement with Blue

Cross and Blue Shield of Montana in Helena, Montana.

And Jim Grigsby, who is Study Manager with the Center for

Health Services and Policy Research at the University of Colorado

Health Sciences Center from Denver, Colorado, and welcome to

you, also.

If we could, I think each one of you, 5 minutes.

We will begin with Dr. Rheuban.

27

STATEMENTS OF KAREN RHEUBAN, MEDICAL DIRECTOR, OFFICE OF TELEMEDICINE, PROFESSOR OF PEDIATRICS, UNIVERSITY OF VIRGINIA HEALTH SYSTEM, ACCOMPANIED BY

LISA HUBBARD AND ALEXANDRA BARTLEY; SALLY DAVIS,

PROGRAM DIRECTOR, TELEHEALTH AND MANAGEMENT DEVELOPMENT, MARQUETTE GENERAL HEALTH SYSTEM; JOSEPH TRACY, DIRECTOR OF TELEHEALTH, UNIVERSITY OF

MISSOURI HEALTH SCIENCES CENTER; JAMES REID, DIRECTOR OF TELEMEDICINE AND NETWORK SERVICES, WEST

RURAL TELEMEDICINE CONSORTIUM, MERCY HOSPITAL

FOUNDATION, ON BEHALF OF CENTER FOR TELEMEDICINE

LAW; SAM BURGISS, PROJECT DIRECTOR, TELEMEDICINE,

UTN MEDICAL CENTER AT KNOXVILLE; BARBARA ROSS-LEE,

DEAN, OHIO UNIVERSITY COLLEGE OF OSTEOPATHIC MEDICINE; MARY R. PATRICK, DIRECTOR OF QUALITY IMPROVEMENT, BLUE CROSS AND BLUE SHIELD OF MONTANA; AND

JIM GRIGSBY, STUDY MANAGER, CENTER FOR HEALTH

SERVICES AND POLICY RESEARCH, UNIVERSITY OF COLORADO HEALTH SCIENCES CENTER

Ms. RHEUBAN. Thank you.

Mr. Chairman, distinguished members of the subcommittee, I

would like to express my gratitude to the Commerce Committee for

this opportunity to represent the University of Virginia Health System today. My name is Dr. Karen Rheuban, and I am a pediatric

cardiologist at the University of Virginia where I also serve as

Medical Director of the Office of Telemedicine and as Associate

Dean for Continuing Medical Education.

I am pleased to introduce Ms. Lisa Hubbard of Honaker, Virginia, and her daughter Miss Alexandra Bartley, who are here to

share with the committee their personal experience with telemedicine services provided to Alexandra in a rural community health

center in Southwest Virginia.

For those who reside and work in and around Washington, DC,

it might seem difficult to imagine that amongst the many counties

of adjacent Virginia, those of mountainous Southwest and Western

Virginia are home to some of our Nation’s most medically underserved, geographically isolated and socioeconomically disadvantaged citizens.

In Virginia, as in other rural States, it is not unusual for patients to travel 5 to 7 hours to receive medical or surgical consultative services if they seek medical attention at all. When one considers the cost of lost wages, overnight stays, food and automotive

expenses, it is clear that this travel imposes great burdens on our

rural families.

In an effort to enhance access to a broad range of services not

locally available, in 1996 the University of Virginia committed considerable internal resources to the development and establishment

of a telemedicine program. We faced the significant barriers of high

telecommunications costs, expensive clinical workstations, nonreimbursement and nonfamiliarity and/or lack of acceptance of advanced technologies by many patients and physicians.

From the inception of our program we have provided clinical

services without charge to patients for whom no reimbursement

was available. We developed contractual relationships such as our

28

correctional telehealth program to allow us to recoup many of our

overhead costs. We successfully petitioned Virginia Medicaid for a

waiver of their policy of nonreimbursement. Despite the prevailing

policies of nonreimbursement by the private sector, we continue to

offer telemedicine consultative services to all our citizens and have

turned no one away.

In 1997, with Federal and other grant funding, we established

the Southwest Virginia Alliance for Telemedicine. This partnership

has established five operational telemedicine sites, and we are in

the process of installing two additional facilities, all in medically

underserved counties of Southwest Virginia to date, our Office of

Telemedicine has facilitated more than 2,200 clinical encounters,

linking remotely located patients with UVA consultants representing 24 specialties and subspecialties. Our network now consists of 20 remote sites in the Commonwealth of Virginia.

We consider the services provided by telemedicine to be an extension of our traditional mode of health care delivery. Through these

linkages we have saved the lives of infants and adults by providing

timely diagnostic services and therapeutic intervention.

Last week, through a telemedicine linkage, a UVA dermatologist

diagnosed a life-threatening case of a flesh eating streptococcal

skin infection that had been thought to be a case of shingles. We

have diagnosed an infection in the heart of a gravely ill adult patient whose diagnosis had eluded local primary care practitioners.

We have identified and offered immediate treatment to an infant

with a rare and complicated congenital heart defect who would

have died without immediate intervention. We use these same networks to provide health professional and patient education.

Much like our experience, most large-volume telehealth programs

are those that provide reimbursable correctional telehealth services

or are located in States wherein legislative mandates have directed

third party reimbursement. Currently, inmates in our Virginia correctional facilities have access to higher quality specialty care than

do many of our other tax-paying citizens.

These technologies with such vast potential to improve the

health of our citizens still face considerable barriers to full deployment. We are thankful to the Congress for enacting the 1996 Telecommunications Law, following which we have witnessed the barrier of high telecommunications costs fall substantially with competition. In 1995, we were quoted a rate of $5,872 per month for

a T1 line linking our hospital to a hospital in Southwest Virginia

last month, we leased that same T1 line for $775 per month. We

thank the Commerce Committee for that. However, without relief

of the obstacle of limited reimbursement, full deployment of these

technologies will not occur.

Virginia Medicaid has willingly endorsed reimbursement for consultations and follow-up visits. Much like the Department of Corrections, Medicaid, as a payer, funds the transportation of patients.

Astonishingly, the patient transportation budget of Virginia Medicaid for fiscal year 2000 exceeded $53 million.

The Balanced Budget Act of 1997, with provisions for reimbursement of telehealth services to Medicaid recipients, is a step forward

but falls short in its implementation. As they establish reimbursement policies, many third party payers follow closely the paramVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00032 Fmt 6633 Sfmt 6602 E:\HEARINGS\67112 pfrm03 PsN: 67112
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eters established by HCFA. Legislation before Congress offers further steps toward the achievement of these goals.

Amongst the HCFA rules for reimbursement viewed to be an obstacle include the following: Location of the remote site from which

the consult is originated. HCFA rules allow Medicare to reimburse

telemedicine consults only when the residence of the patient or the

location of the workstation falls within a primary health professional shortage area. The Federal classification of a primary HPSA

does not take into account the distribution of specialist physicians

in that region. We believe that all Medicare patients should have

access to consultative services via telemedicine when deemed appropriate by their primary care provider, issues of licensure notwithstanding.

Fee splitting. Nowhere else in clinical practice does the consulting physician share the fee for a clinical encounter with a referring physician. HCFA rules require that the consultant paid by

Medicare split the fee 75/25.

Reimbursement rates. Reimbursement should be at standard

Medicare rates to the consulting practitioner. When divided with

the remote referring practitioner, the lower fee and greater administrative burden is a disincentive to participation in telehealth programs.

Broader range of reimbursable CPT codes. Reimbursement

should also include a broader range of CPT codes to include ENM

codes rather than just consultation codes. It is also an equal hardship for patients to travel many hours for a follow-up appointment

as it is for an initial encounter. In the case of a post-operative visit,

travel may be more difficult for a patient recovering from surgery

than for the initial consultation.

Almost done. Telepresenter requirement——

Mr. BRYANT. I notice you are reading quickly here.

Ms. RHEUBAN. It is our experience that the referring clinician

need not be in attendance during a telemedicine encounter. When

a patient travels to receive care from a consultant, the referring

health professional does not travel along with the patient. A broader range of providers should receive reimbursement for telehealth

encounters.

And, last, remote site fee. Despite a reduction in costs, many

small rural clinics and hospitals are still unable to afford the capital expenditures and ongoing telecommunications costs inherent in

the establishment and maintenance of a telemedicine facility. We

believe that Medicaid and if possible Medicare should fund a small

infrastructure fee to offset a portion of the overhead of the rural

telemedicine facility. Alternatively, the patient receiving services

could fund a component of that expenditure in the form of a small

co-pay determined on a sliding scale.

On behalf of the University of Virginia, we thank the subcommittee for holding this hearing and for considering additional

legislation that may abolish other barriers to the full deployment

and utilization of telehealth technologies.

Thank you.

[The prepared statement of Karen Rheuban follows:]

30

PREPARED STATEMENT OF KAREN SCHULDER RHEUBAN, PROFESSOR OF PEDIATRICS, MEDICAL DIRECTOR, OFFICE OF TELEMEDICINE, ASSOCIATE DEAN FOR CONTINUING

MEDICAL EDUCATION, UNIVERSITY OF VIRGINIA HEALTH SYSTEM

Chairman Bilirakis, Distinguished members of the subcommittee, I would like to

express my gratitude to the Commerce Committee for this opportunity to represent

the Office of Telemedicine of the University of Virginia Health System at this subcommittee hearing on reimbursement for telehealth services. My name is Dr. Karen

Rheuban and I am a pediatric cardiologist at the University of Virginia where I also

serve as Medical Director of the Office of Telemedicine and as Associate Dean for

Continuing Medical Education. I am pleased to introduce Mrs. Lisa Hubbard of

Honaker, Virginia, who has agreed to share with the Committee her experience with

telemedicine and its role in the care provided to her daughter, Alexandra Bartley.

For those who reside and work in and around Washington D.C., it might seem

difficult to imagine that amongst the many counties of adjacent Virginia, those of

mountainous southwest and western Virginia are home to some of our nation’s most

medically underserved, geographically isolated and socioeconomically disadvantaged

citizens. In Virginia, as in other rural states, it is not unusual for patients with complex medical problems to travel five to seven hours to receive medical or surgical

consultative services, if they seek medical attention at all. When one considers the

cost of overnight stays, lost time from work, the high cost of gasoline and other

automotive expenses, this travel imposes great burdens on these families. For more

than thirty years, in an effort to enhance access to a broad range of clinical and

educational services not locally available, University of Virginia faculty have traveled throughout the Commonwealth to provide on-site medical care to patients and

educational programs for health professionals. In 1996, to further enhance access to

these clinical and educational services, the University committed considerable internal resources to the development and establishment of a Telemedicine program. We

faced the significant barriers of: a. High telecommunications costs; b. Expensive

clinical workstations; c. Non-reimbursement for telehealth services by payers; and

d. Non-familiarity and/or lack of acceptance of advanced technologies applied to

health by many patients and physicians.

At the inception of our program, we provided clinical services without charge to

patients for whom no reimbursement was available. We simultaneously began to develop contractual relationships and other strategies to allow us to recoup many of

our overhead costs. Despite a persistent climate in Virginia of nonreimbursement

by the private sector for telehealth services, we continue to offer these services to

all our citizens, and have turned no one away, regardless of financial or insurance

status.

In 1997, with Federal funding through the Department of Commerce NTIA Technology Opportunities Program, the USDA Rural Utilities Service Telemedicine and

Distance Learning Grant Program, state funding through the Virginia Healthcare

Foundation, an appropriation by the General Assembly and with donations from

Bell Atlantic, Sprint and GTE, we established the Southwest Virginia Alliance for

Telemedicine. This partnership has established five operational telemedicine facilities and we are in the process of installing two additional facilities, all in medically

underserved counties of SW Virginia (Appendix A). None of our grant funds reimburse clinical consultative or educational activities; rather they fund within the network, infrastructure, technology and telecommunications costs.

To date, since fiscal year 1997, our Office of Telemedicine has facilitated more

than 2200 clinical encounters (Appendix B), linking remotely located patients with

consultants representing 24 specialties and subspecialties (Appendix C). Of those

encounters, since January 1999, when Medicare began authorizing reimbursement

for telemedicine services, we have seen only 22 Medicare eligible beneficiaries and

of these consultations, only 10 were eligible for reimbursement under current HCFA

rules.

Our network currently consists of 20 remote sites in the Commonwealth of Virginia (Appendix A). We consider the services provided via telemedicine to be an extension of our traditional mode of health care delivery. We consider our office, an

electronic clinic.

We have used these networks to provide the following services not locally available: a. Care of patients with HIV/AIDS and/or Hepatitis C, b. Interpretation of remotely obtained pediatric cardiac ultrasounds, including life-saving initial assessments of neonates with critical cardiovascular disease, c. Tele-dermatology consultations, d. Cervical cancer screening and oncologist guided cervical biopsies, e. Telepsychiatry services—including consultations for hearing impaired patients by the

Commonwealth’s only sign language capable psychiatrist, f. Postoperative care following corrective surgery for congenital defects to children such as Alexandra, g. A

31

collaborative Tumor board linking our Cancer Center faculty with physicians at a

remote community hospital, h. Hundreds of hours of patient education for people

suffering from diabetes, i. Health professional education to aid remote community

hospitals and practitioners meet JCAHO, OSHA and state licensure mandates, j.

Educational programs for project Headstart personnel by our developmental pediatricians, and k. Educational programs for high school students interested in a career

in the health professions.

Through our telemedicine linkages, we have saved the lives of infants and adults

by providing timely diagnostic services and therapeutic interventions. Last week a

dermatologist diagnosed a case of a ‘‘flesh eating’’ streptococcal skin infection that

had been thought to be a case of shingles. We have correctly diagnosed an infection

in the heart of a gravely ill adult patient whose diagnosis eluded local primary care

practitioners. We have identified and offered immediate treatment to an infant with

a rare and complicated congenital heart defect, who would have died without immediate intervention.

As reported by the Association of Telehealth Providers, in 1999, Virginia was

ranked fourth in the nation in terms of numbers of telemedicine consultations. In

reality, much like our experience, most large volume telehealth programs are those

programs that provide reimbursable correctional telehealth services, or are located

in states wherein legislative mandates have directed third party reimbursement.

Currently, inmates in our Virginia correctional facilities have access to higher quality specialty care than do many of our other tax paying citizens. As an example,

the faculty of the University of Virginia and those of Virginia Commonwealth University provide expert HIV/AIDS care to Virginia inmates via telemedicine. The survival rates and viral loads of our incarcerated populations have recently been reported to be significantly better than that of patients similarly affected in the nonincarcerated population. This is primarily because through our correctional telemedicine program, inmates have access to AIDS experts and they receive regular

follow-up care.

These technologies with such vast potential to improve the health of our citizens

still face considerable barriers to full deployment. We are thankful to the Congress

for enacting the 1996 Telecommunications Law. We have witnessed one barrier,

high telecommunications costs, fall substantially with the appearance of competition. For example, in 1995, the University of Virginia was quoted a rate of $5872/

month for a T1 line linking our hospital to a community hospital in Southwest Virginia. In the year 2000, real competition has arrived, even to the most remote regions of Appalachian Virginia. Last month, we leased that same T1 line for $775/

month. Similarly, videoconferencing workstations, high-resolution cameras and

other peripheral devices are now very affordable. However, without relief of the obstacle of limited reimbursement, full deployment of these technologies will not happen.

Virginia Medicaid has willingly endorsed reimbursement for consultations and follow up visits, regardless of the geographic location of the patient or the workstation,

as long as the facility is authorized to bill Medicaid. Much like the Department of

Corrections, Medicaid, as a payer, funds the transportation of patients. The transportation budget of Virginia Medicaid patients for fiscal year 1999-2000 exceeded

$53 million dollars. Reimbursement has been authorized by Medicaid for a broad

range of services to include telehealth services provided to children eligible for the

Children’s Health Insurance Program. They have also authorized reimbursement for

innovative programs that address specific local clinical needs. For example, in the

Lenowisco Planning District, there are no gynecologic cancer specialists. In conjunction with the Scott County Health Department, we have established a program to

provide telehealth facilitated cervical cancer screening.

The Balanced Budget Act of 1997, with provisions for reimbursement of telehealth

services to Medicare recipients falls short in its implementation. Even for those

services for which Medicare reimbursement is available, the terms as established by

HCFA are in need of modification. Without a major revision of the rules adopted

by HCFA, telehealth programs will fall short of the goal of enhancing access to quality healthcare for all our citizens. As they establish reimbursement policies, many

of the third party payers follow closely the reimbursement parameters established

by HCFA for Medicare beneficiaries. Legislation before this Congress, to include SB

2505, Telehealth Improvement and Modernization Act of 2000, and HR 4841, Medicare Access to Telehealth Services Act of 2000, are steps towards the achievement

of these goals.

32

RELEVANT ISSUES FOR REIMBURSEMENT FOR SERVICES PROVIDED TO MEDICARE

BENEFICIARIES:

Location of remote site (site of origination of the consultation):

We believe that all patients should have access to services deemed appropriate by

their primary care provider—issues of licensure within the state notwithstanding.

HCFA rules allow Medicare to reimburse telemedicine consultations only when either the residence of the patient or the location of the workstation falls within a

primary health professional shortage area. Unfortunately, the federal classification

of a HPSA does not take into account the distribution of specialist physicians in that

region. A community may not be eligible for HPSA classification because of its numbers of primary care practitioners; yet that very region may have no specialist physicians available to serve as consultants when needed. For some patients who reside

in counties that do not qualify as a HPSA or medically underserved area because

of relative to proximity to a nearby city, geographic, medical or other socioeconomic

considerations may preclude access to clinical services.

Fee splitting:

Nowhere else in clinical practice does the consulting physician share the fee for

a clinical encounter with a referring physician. HCFA rules require that the consultant, paid by Medicare, split the fee with the referring physician 75%/25%. Such a

policy may be viewed as a violation of federal anti-kickback statutes, is cumbersome

to administrate, and for most hub sites will be difficult to implement.

Reimbursement rates:

Reimbursement should be at standard Medicare rates to the consulting practitioner. When divided 75%/25% with the remote referring practitioner, the lower fee

and greater administrative burden is a disincentive to participation in telehealth encounters for the consultant physician.

Broader range of reimbursable CPT codes:

Reimbursement should also include a broader range of CPT codes rather than

consultation codes (99241-99275). It is an equal hardship for patients to travel many

hours for a follow-up appointment as it is for an initial encounter. In the case of

a postoperative visit, travel may be more difficult for a patient recovering from surgery than for the initial consultation. As long as the referring and specialist physicians deem the technology adequate to provide the service, we believe that all visits

reimbursable under traditional Medicare provisions should be reimbursable when

provided via telemedicine technologies.

Telepresenter requirement

It is our experience that a referring physician, nurse practitioner or physician’s

assistant need not be in attendance during a telemedicine encounter. When a patient travels to receive care from a consultant, the referring health professional does

not travel to participate in that encounter. We believe any licensed healthcare professional acting under the instructions of the referring health professional or the

consulting health professional to be effective telepresenters at remote sites, and that

the decision as to the necessity for a telepresenter should be left to the referring

or consulting practitioner. In our correctional telemedicine program, licensed registered nurses have proven themselves to be valuable telepresenters. For mental

health encounters, with their attendant sensitive issues of confidentiality (and the

lack of a need for technical support inherent in the use of medical peripheral devices) we do not believe personnel other than the patient and the consultant mental

health provider need be present.

Eligible provider

A broader range of providers should receive reimbursement for telehealth encounters. Any licensed health professional eligible for traditional Medicare reimbursement should be considered eligible for reimbursement of services provided via telemedicine.

Remote site fee

In the absence of federal or grant funding, small clinics and hospitals are least

likely to afford the capital expenditures and the ongoing telecommunications costs

inherent in the establishment and maintenance of a telemedicine facility. We believe

that Medicaid, and if possible, Medicare should fund a small infrastructure fee to

offset a portion of the overhead costs of the rural telemedicine facility. Alternatively,

the patient receiving services could fund a component of that expenditure in the

form of a small co-pay determined on a sliding scale ($5-$20). In the former model,

33

programs such as Medicaid stand to save transportation dollars; in the latter model,

it is the patient who saves the expense of travel to the consultant.

Despite all the limitations outlined above, since FY 1997, the Office of Telemedicine of the University of Virginia has facilitated >2200 clinical encounters with patients in the Commonwealth of Virginia. We have saved lives by providing timely

diagnostic services and therapeutic recommendations to patients of all ages. We

have used our linkages to provide patient education, health professional education,

and teacher training and even courses for local high school students.

On behalf of the University of Virginia Health System, and other academic medical centers dedicated to providing outreach to patients in need, we thank the Commerce Committee and the Congress for enacting legislation that has created competition in the telecommunications marketplace. We also thank the Subcommittee

on Health for considering additional legislation that may abolish other barriers to

the full deployment and utilization of telehealth technologies that could enhance access to quality healthcare for all our citizens.

34

35

36

37

Mr. BRYANT. We let you have that extra 2 minutes only because

you brought Miss Bartley with you. Let me warn you, the rest of

you haven’t done that.

Ms. Davis—Ms. Hubbard, you have a statement? Okay. Great.

Thank you. I am just ignoring you all around today, aren’t I?

STATEMENT OF LISA HUBBARD

Ms. HUBBARD. That is all right.

Mr. Chairman and members of the subcommittee, I would like to

thank the U.S. Congress for inviting me to come here today to tell

you about my daughter Alex and how we feel about the use of telemedicine to help provide care to the citizens of rural America. My

name is Lisa Hubbard and I live in Honaker, Virginia, a small

community in Southwest Virginia. My daughter Alex is 5 years old,

and she is a kindergarten student at Honaker Elementary.

When Alex was born, we noticed she had what looked like a

small scratch on her right check. A few weeks later, we were told

that it was a hemangioma, a blood vessel tumor on her face. The

hemangioma grew and grew until it nearly covered her entire

cheek. She also had a cleft palate.

When Alex was 6 months old, we were referred to Dr. Kant Lin,

a pediatric plastic surgeon at the University of Virginia. There was

no doctor in our area who was qualified to treat our daughter. Alex

and I made our first trip to Charlottesville, a 6-hour drive each

way.

Dr. Lin decided that he would first try to shrink the hemangioma

with conservative treatments, with oral steroids. That meant we

had to come to Charlottesville once per month for him to look at

the tumor. When that didn’t work, he decided to inject steroids directly into the tumor, which meant we had to come every other

week. Finally, he decided that surgery was the only solution. Sometime after her surgery, a telemedicine workstation was installed at

the Thompson Family Health Center in Vansant, Virginia. We

made our first visit to Dr. Lin over telemedicine linkages.

Our trips to Charlottesville were very difficult for Alex who was,

of course, as an infant still in diapers and bottle fed. The trips were

very difficult for me as well, both financially and emotionally. I

usually had to make this long trip with my daughter alone. I had

to find the money for a hotel room, gas and food, plus I missed 2

days of work and pay because, as you can imagine, sick time and

vacation time disappear pretty quickly.

It cost me more than $100 to make the trip, not to mention my

lost wages of $80 a day. Sometimes we only saw Dr. Lin for a brief

visit so that he could look and measure the hemangioma. We drove

all that way for such a short visit with her surgeon.

The telemedicine program has provided a wonderful service to

rural patients and families such as ours. Instead of driving 12

hours round trip, we now only travel 40 minutes round trip to the

Thompson Family Health Center in Vansant, Virginia, to receive

the same wonderful care from Dr. Lin.

Alex is currently enrolled in the Aetna Insurance Program, but

it does not cover the services provided through telemedicine. The

University of Virginia provides a sliding scale fee program for indigent patients, but we do not qualify for that program. If the UniVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00041 Fmt 6633 Sfmt 6602 E:\HEARINGS\67112 pfrm03 PsN: 67112
38

versity charged me for Dr. Lin’s fee, it would cost me $150 since

Aetna will not cover this visit. Thankfully, the University has

waived this fee for me, but if I made the long drive to Charlottesville facing the hardship and expense of that trip, Aetna would reimburse Dr. Lin, but I would be forced to bear the expenses of traveling to see him.

There are so many other rural citizens who face these same difficulties in receiving care from qualified specialists. I hope that the

U.S. Congress will consider enacting legislation to make it easier

for us to do so through the use of telemedicine. Thank you very

much.

Mr. BILIRAKIS. Thank you, Ms. Hubbard.

Alexandra, are we going to hear anything from Alexandra?

Would you like to say anything to us?

Ms. BARTLEY. Thank you for having me.

Mr. BILIRAKIS. Thank you for being here.

Ms. Sally Davis is a Program Director for Telehealth and Management Development with Marquette General Health Systems.

Ms. Davis, welcome. Please proceed.

STATEMENT OF SALLY DAVIS

Ms. DAVIS. Thank you. I have a hard act to follow.

Mr. Chairman and members of the subcommittee, thank you for

paying attention to telehealth, especially as it pertains to the delivery of health care in rural areas.

I am an employee of Marquette General Health System, a 352-

bed regional referral center in Michigan’s Upper Peninsula; and, as

Congressman Stupak has been pointing out, we are a very rural

area.

The 15 counties of the Upper Peninsula span a distance east to

west of over 300 miles. It takes 6 hours to drive from one end to

the other—and that is in good weather—and we cover two time

zones. Our population density is just 19 people per square mile,

and in some counties it drops as low as six people per square mile.

In the middle of the peninsula sits Marquette. We are not a large

city by any means, only 22,000 people, yet we have a regional referral with specialists whose skills parallel those found in any metropolitan area.

When people want to come to access our specialty care, they need

to drive up to 3 hours per one-way visit. When residents of the

Upper Peninsula need to access subspecialty care outside of the jurisdiction of Marquette General, they travel distances such as Ms.

Bartley. It is not unusual for people to spend 18 hours of drive time

two ways, hotel room, 2 days off from work and, of course, the

other expenses that are incurred during travel for a subspecialty

appointment of 15 or 30 minutes.

Marquette General Health System, along with 15 other independent community hospitals, make up the Upper Peninsula

health care network. Six of our network members are Critical Access Hospitals. Another soon will be. Every county in our region

holds health professional shortage designation on a partial basis.

That is significant when it comes to the current HCFA regulations

for telemedicine reimbursement.

39

Our telehealth network began in the fall of 1994 with a focus on

professional education and a commitment to community usage. Administrative applications were quickly incorporated and are now a

major application of our system. Clinical applications began that

first year but have progressed much more slowly due to the same

barriers that mirror other telehealth programs.

At present, we are a 23-site network. Our utilization runs 48 percent education, 30 percent administration, 11 percent clinical and

11 percent community usage. During the upcoming year we are expecting tremendous growth in a lot of the areas that other telehealth programs are moving in.

But I have traveled here not to speak of our program as much

to show my support of your interest in telehealth and to encourage

actions that can increase access to health care. My comments center around grant programming and reimbursement.

The Upper Peninsula telehealth network has accomplished a

great deal in our last 51⁄2 years, and we are very proud of the impact we have had on health care efficiencies in our region. Yet we

would have accomplished none of this, not even attempted telehealth programming, if it were not for Federal grant funding.

Our six critical access hospitals with their 15 acute care beds and

an average daily census that would be a challenge to even the most

creative financial mind would not have been able to justify the capital outlay. Yet our telehealth network has provided its contribution to the improvement of the bottom line for these hospitals.

I urge you to continue telehealth grant programming so that

other rural areas can reap the same benefits. Until these technologies are routine within the delivery of medical care and until

transmission costs are reasonable and equitable, such funding is

needed. Federal grants have supported the pioneers who are testing theories, identifying barriers and are paving the roads around

these barriers. We have made much progress, but there is still

work to be done.

Second, there is a very important issue of reimbursement. I mentioned previously that every county in our area holds partial HPSA

designation. We should be the ideal candidates to access the current HCFA standards. Yet we have not. We did not come to that

party, as Mr. Berenson said. Why? For the same reasons that are

listed here in your memo from the health team that came out, for

the same reasons I have put in my written testimony and as in the

written testimony of other members who are testifying here today.

Like us, most of the telehealth programs do not use the right limitations in reimbursement.

What needs to be accomplished is patient access to providers

without the requirement of telepresenters, the elimination of fee

sharing and adequate compensation for the delivery of services and

increase in the scope of providers to include all those currently eligible for reimbursement by HCFA, the inclusion of store-and-forward technologies, access for patients not residing in HPSAs, and

the support of home health telemedicine.

The model programs have come a long way in discovering telehealth systems that work in appropriate applications. Telehealth is

an evolving norm and is making the difference between access and

40

no access to care. Unfortunately, it will never leave the evolving

stage until practitioners and services are reimbursed appropriately.

Yesterday, I sat through some of the Firestone hearings and listened to your colleagues question why some of the deaths and some

of the injuries were not prevented. I suggest to you that access to

health care through telemedicine is still a life and death matter,

and I appreciate your concern for all of those rural health patients

who will need to access specialty care in the future, patients such

as my parents who live in a community of less than 2,000 people,

who are in their mid-eighties, who have multiple health problems,

who are unable to drive and whose specialty care is an hour and

a half away.

Thank you.

[The prepared statement of Sally Davis follows:]

PREPARED STATEMENT OF SALLY DAVIS, PROGRAM DIRECTOR, TELEHEALTH AND

MANAGEMENT DEVELOPMENT, MARQUETTE GENERAL HEALTH SYSTEM

Mr. Chairman and Members of the Subcommittee, thank you for the opportunity

to serve as a witness today regarding telehealth as it pertains to rural health care.

During my presentation you will hear about the geographical area I represent, the

accomplishments of our telehealth network, the challenges we still face, and, most

importantly, how you can affect the further deployment of telehealth in rural areas

of the United States.

I am an employee of Marquette General Health System—a 352-bed regional referral center. I initiated our region’s telehealth network during my tenure as the director of education for our institution, and continue to serve as the director of telehealth.

Our area is very rural. Although the majority of the Michigan’s population and

economy resides in its well-recognized lower peninsula, Michigan also includes a

second peninsula to the north. The fifteen rural counties of the Upper Peninsula

total an area of 16,452 square miles. Its east west distance of over 300 miles includes communities in two time zones, and is home to approximately 314,134 people.

That’s a population density of 19 people per square mile. In some counties the density drops to 6 people per square mile. It takes six hours to travel from one end

of the peninsula to the other. That’s if the wildlife stays off the roads and the

weather conditions are good. We are known for our severe weather, particularly the

kind that closes roads during the wintertime.

In the middle of the peninsula, sitting on the shores of Lake Superior, is Marquette. We’re not a large city by any means (22,000 people) yet we have a regional

referral center with specialists whose skills parallel those found in any metropolitan

area. To access specialty care, our patients drive up to three hours one-way. When

residents of the Upper Peninsula need sub-specialty care beyond the services available at Marquette’s regional referral center, they travel to Detroit, Ann Arbor, Mayo

Clinic or Milwaukee. A normal drive to seek quaternary care is an 18 hour round

trip, most often taken over a two-day period. That’s 18 hours of drive time, at least

one night stay in a hotel, two days off from work and meal expenses for a 15-30

minute sub-specialty appointment.

My organization, Marquette General Health System, along with 15 other independent community hospitals and health care institutions make up the Upper Peninsula Health Care Network. Six of our network members hold Critical Access Hospital (CAH) designation. A seventh CAH hospital is anticipated within the next

year. Every county in our region holds partial Health Professional Shortage Area

(HPSA) designation. We believe in the independence of the communities, the benefits derived through the synergy of working together, and the connectivity to quaternary care centers for those times when services cannot be provided at the local or

regional level.

Our telehealth network began in the fall of 1994 with a focus on professional education and a commitment to community usage. Administrative applications were

quickly incorporated and are now a major application of the system. Clinical applications began the first year, but have progressed much more slowly due to barriers

that mirror other telehealth programs: lack of reimbursement, the need for dedicated staff to promote clinical usage, the complexities of developing systems to accommodate the applications, and the need for technologies to be conveniently located

for practitioners.

41

At present, we are a 23-site network with systems in critical access hospitals,

community hospitals, the regional referral center, and rural health clinics. Our utilization runs 48% education, 30% administration, 11% clinical, and 11% community

usage. During the upcoming year we anticipate tremendous growth. We will add

sites, increase the number of systems, focus on clinical applications, add home

health telemedicine in three counties, and merge Internet Protocol with ISDN transmission.

Administrative applications provide direct travel savings and go far beyond the

often recognized convenience for CEOs and directors. The ability to meet on a regular basis, and involve more of the key people, has propelled our regional health

care network partners toward our goals faster, and on a greater scale, that anticipated. Video conferenced meetings have proven to add efficiencies to the health care

systems in our region.

With education we bring improved knowledge and skills to the isolated rural practitioners that would otherwise have to spend extended time away from their patients to acquire necessary credits for relicensure. We also increase the number of

health care staff able to participate in continuing education. This education of professionals is essential for the community confidence in their small, struggling hospitals. Through our educational programming we also provide support group services to individuals who reside in communities without the critical mass to maintain

their own support group services. And we bring health care information to rural

residents who cannot otherwise access the information needed to manage their diseases. Ontonagon is a County with 5% of their population diagnosed as having diabetes. It was also a county without outpatient diabetes and nutrition education until

such services became available through our telehealth network. The skills of the

providers, the emotional support in dealing with chronic diseases, and the information necessary to control an individual’s diabetes—all are important components of

improving health care that often go unmeasured.

Our clinical applications allow rural residents to visit their specialty provider

when a specialist is not available locally. Patient visits are available for

cardiothoracic surgical follow-ups, enterostomal/skin therapy, neonatology, psychiatry, psychology, pediatrics, social work, obstetrics, oncology, physical therapy and

nutrition. Telehealth encounters often mean the difference between getting care in

a timely manner or waiting for care beyond an acceptable time limit. Physician to

physician consultations take place when a diagnosis needs to be confirmed or when

the need for a patient transfer is in question.

I have traveled here not to speak of our program as much as to show my support

of your interest in telehealth and to encourage actions that can increase access to

health care through telehealth technologies. My comments center around grant programming and reimbursement.

The Upper Peninsula Telehealth Network has accomplished a great deal over the

past 51⁄2 years. We’re very proud of the impact we have had on health care in our

region and the model that we provide for other rural areas. Yet we would have accomplished none of this—wouldn’t have even attempted a telehealth program - without federal grant support. The Upper Peninsula does not have a major research university with a medical focus within our boundaries. Nor do we have a large multihospital corporation for which the cost justification of a telehealth network comes

easier. We are simply a group of small, independent health care organizations dedicated to bring the best health care to our residents. Our six Critical Access Hospitals with their 15 acute care beds and an average daily census that would be of

concern to even the most creative financial minds, would not have been able to justify the initial capital outlay. Yet, the telehealth network has provided its contribution to the improvement of the bottom line for these hospitals.

I urge you to continue telehealth grant programming so that other rural areas can

provide improved access to care. Until these technologies are a routine within the

delivery of medical care, and until transmission costs are reasonable and equitable,

such funding is needed. Federal grants have supported the pioneers who are testing

and proving the applications that improve access to care. The model programs

throughout the United States have tested theories, identified barriers, and are paving the roads around these barriers. We have made much progress, yet there is still

work to be done.

Secondly, there’s the very important issue of reimbursement. As I mentioned,

eleven percent (11%) of our applications are what we consider clinical/medical connections. I am confident that this number would be higher if reimbursement was

more available. Although we have received grant support, our history does not include the rural telemedicine grant program through the Office for the Advancement

of Telehealth. To date, our practitioner incentive payments have been restricted to

a few consults for children with special health care needs. Thus, our medical appliVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00045 Fmt 6633 Sfmt 6621 E:\HEARINGS\67112 pfrm03 PsN: 67112
42

cations are reliant on contractual arrangements, bundled services, and the pioneering spirit of practitioners willing to forgo payment.

I mentioned previously that every county in the Upper Peninsula holds partial

HPSA designation. This is important since, under the current HCFA rules, only

those patients residing in HPSA areas can be telemedicine beneficiaries. Ours

should be an ideal network to access practitioner reimbursement through the current HCFA guidelines, yet we have not pursued this avenue. The reason we haven’t

is that the current regulations don’t reflect practice and efficiencies. Our applications are not unlike other telehealth programs:

• The person who presents the patient to the specialist is most often a nurse, or

in psychiatric cases a social worker. In some situations, such as nutritional

counseling for diabetic patients, there is no telepresenter in the room with the

patient. Most often there is not a need for the patient to be presented by another physician, physician assistant or nurse practitioner for quality care to

occur. In fact, an RN with special training in chemotherapy administration is

usually more qualified to present a patient for pre chemotherapy assessment

than is the patient’s family care doctor.

• The 75/25-fee split is not attractive to the consulting practitioner. Not only is the

consultant providing expertise at a reduced rate, the billing/fee sharing process

is cumbersome.

• Some of the services we provide, or would like to provide, involve practitioners

that are eligible for HCFA reimbursement but are not eligible under the telehealth bill.

• Some of the services we want to provide involve store and forward technology,

which does not qualify for HCFA telehealth reimbursement. Yet this technology

works very well in specialty areas where the patient does not need to be

present.

Like us, most of the telehealth programs do not utilize the technologies to their

fullest because of the limitations in reimbursement. What needs to be accomplished

is patient access to providers without the requirement of telepresenters, the elimination of fee sharing and adequate compensation for the delivery of services, an increase in the scope of providers to include all those currently eligible for reimbursement by HCFA, the inclusion of store and forward technologies, access for patients

not residing in HPSAs, and the support of home health telemedicine.

It’s not those of us who sit here before you as witnesses that need reform in the

reimbursement of telehealth and the assured continuation of the technology within

the routine. As an administrator, I’m far more removed from the actual patient experience than I want to be. For you as policy makers, it must be more so. Yet what

you do here at the nation’s capital connects so tightly to very personal and highly

emotional experiences. What you do is for Emma who can now have her dialysis

monitored by a nephrologist at a hospital two hours away. It’s for the expectant

mother whose closest obstetrical service is 87 miles away. It’s for five month old

Rena who was born with just one finger on each hand and one toe on each foot,

so she can be assessed for corrective surgery by her pediatric hand specialist 500

miles away.

The use of telehealth technologies allows for safe, efficient and effective delivery

of health care. The quality is assured through the normal structure and function

of health organizations and practitioner guidelines. Contrary to some earlier predictions, there has not been abuses of the systems and technology. These facts have

been proven by the current telehealth programs—most of which our government has

financially supported.

The model programs have come a long way in discovering telehealth systems that

work and appropriate applications. Telehealth is an evolving norm and is making

the difference between access and no access to care. Unfortunately it will never

leave the evolving stage until practitioners and services are reimbursed appropriately. Your committee’s time and attention today is crucial for those of us struggling to provide access to care through telehealth technologies. And it is critical for

the future patients who will receive care via this technology. Thank you for the attention to this issue and for your efforts toward increased access to care through

telehealth.

Mr. BILIRAKIS. Thank you very much, Ms. Davis.

Mr. Joe Tracy is Director of Telehealth for University of Missouri

Health Sciences Center, Columbia, Missouri. Mr. Tracy, welcome.

Please proceed, sir.

43

STATEMENT OF JOSEPH TRACY

Mr. TRACY. Thank you. Mr. Chairman and committee members,

it is an honor to be here today to speak to you on the topic of telehealth. Thank you for this opportunity.

I have been the director of the Missouri Telehealth Network at

the University of Missouri Health Science Center since 1995, its

very beginning. Our network has provided services to rural patients from newborns to the frail elderly. We have seen approximately 2,000 cases and multiple medical specialties via the interactive video network, and we have conducted and interpreted over

1,600 teleradiology exams.

Our program is based on the reality that telehealth is not a new

or different medical service but it is simply a new way to deliver

standard services to people in underserved areas. Policies that discourage telehealth do not deprive these communities of some exotic

treatment but of the day-to-day health care most Americans take

for granted.

Patients are the main beneficiaries of telehealth. They receive

standard specialty care that is not typically found in or near their

community. Studies at the University of Missouri indicate that

about 25 percent of these patients would not have received care

until some later time, if at all, if telehealth were unavailable. Even

when patients would have received their care anyway, using telehealth reduces their travel costs. Travel savings for our patients in

our rural network average approximately $40 on automobile travel

alone for every telehealth visit.

In terms of some of our patients, I remember a newborn with serious heart problems that was kept alive with the help of telehealth by a very good but nervous rural physician until our helicopter arrived. I remember a frail elderly woman in a nursing

home whose health severely limited her ability to travel. She was

able to see her doctor in a room down the hall instead of taking

a 4-hour round trip and possibly returning to the nursing home

with other problems brought on by the stress of travel.

As the committee knows very well, rural hospitals and clinics are

struggling to stay alive. A small hospital that can offer a wide

range of specialty telehealth services is stronger and more likely to

survive. A rural doctors office where patients can see their specialist in one of the exam rooms via telehealth is more likely to

hold onto those patients. Telehealth is not only good for patients

but it is also good for rural doctors and hospitals.

Telehealth will not be mainstreamed unless the many problems

associated with the current laws and regulations relating to Medicare reimbursement are resolved. Medicare reimbursement alone

will not make telehealth an automatic success, but the lack of

Medicare reimbursement will most certainly mean failure.

Some of these reimbursement barriers seem to reflect the fear

that telehealth will result in overutilization of health care. Experience in several dozen telehealth projects nationwide has made it

very clear that this fear is unwarranted. But there is an even more

basic reason to reject this approach. What is being prevented by

the barriers is not overutilization but adequate access to health

care for Americans living in rural or other underserved areas. People living in those areas have as much right to Medicare benefits

44

as any other American and allowing them to use telehealth to exercise that right should not be considered an extraordinary benefit.

There is no doubt the current laws and rules for Medicare reimbursement have effectively prevented the submission of claims to

HCFA. Our most recent nationwide study of telehealth networks

indicated that 15 of 21 networks responding did not—and I want

to repeat that—did not submit a single claim for telehealth between July and December 1999. This is explained by several problems with the laws and regulations on telehealth. One is the assumption that telehealth usually involves two clinicians, a rural

provider with the patient on one end and a specialist on the other.

But our research indicates this only happens in 6 percent of cases.

Whether by telehealth or in person a primary care provider does

not have the time to be present when the patient sees the specialist. If that is required for telehealth, telehealth will simply not

happen.

Another problem is that HCFA reimbursement is currently limited to services delivered in federally designated health professional shortage areas or to patients who reside in those areas.

HPSAs are defined by a lack of primary care, while telehealth usually provides specialty care. A rural community with sufficient primary care can still be without the specialty care that telehealth

could provide.

I want to finish now by focusing on the most controversial and

problematic regulation and that is fee sharing. If a telehealth claim

is filed and subsequently paid, the current rules mandate that 25

percent of the specialist fee for that telehealth visit must be sent

by the specialist to the referring provider. In nontelehealth cases,

this type of fee sharing would be a Federal crime. Doctors cannot

pay other doctors for referrals, and they are reluctant to do something via telehealth that would be illegal in person, no matter what

I tell them.

The language regarding fee sharing must be removed from the

law and regulations. HRSA’s Office for the Advancement of Telehealth, NIH’s National Library of Medicine and several other Federal agencies have made a large financial commitment to the development of telehealth throughout the country. I think we would all

hate to see that investment wasted.

I sincerely hope that you will continue the effort to pass new legislation and correct the problems associated with the current laws

and regulations. Thank you.

[The prepared statement of Joseph Tracy follows:]

PREPARED STATEMENT OF JOSEPH TRACY, DIRECTOR OF TELEHEALTH, UNIVERSITY OF

MISSOURI HEALTH SCIENCES CENTER, COLUMBIA MISSOURI

It is an honor to be here today to speak to the committee on the topic of telehealth. Thank you for this opportunity.

I have been the Director of the Missouri Telehealth Network at the University

of Missouri Health Sciences Center since its beginning in 1995. Our network has

provided services to rural patients ranging from newborns to the frail elderly. We

have seen approximately 2000 cases in multiple medical specialties via the interactive video network and have interpreted over 16,000 teleradiology exams.

Our program is based on the reality that telehealth is not a new or different medical service but is simply a new way to deliver standard services to people in underserved areas. Policies that discourage telehealth do not deprive these communities

of some exotic treatment but of the day-to-day health care most Americans take for

granted.

45

Patients are the main beneficiaries of telehealth. They receive standard specialty

care that is not typically found in or near their community. Studies at the University of Missouri indicate that about 25% of these patients would not have received

care until some later time—if at all—if telehealth were unavailable. Even when the

patient would have received the care anyway, using telehealth reduces their travel

costs. Travel savings for patients in our rural network average approximately $40

on automobile travel alone for every telehealth visit.

We have had many experiences that bring these patient benefits down to earth.

I recall a newborn with serious heart problems kept alive, with the help of telehealth, by a very good but scared rural physician until the helicopter arrived. A frail

elderly woman in a nursing home—someone whose health severely limited her ability to be transported—was able to see her doctor in a room down the hall instead

of taking a 4-hour ride to our facility. These benefits were not created by some wonderful new treatment, but by the kind of every-day access to standard care that telehealth can bring to underserved communities.

As the committee knows very well, rural hospitals and clinics are struggling to

stay alive. A small hospital that can offer a wide range of specialty telehealth services is stronger and more likely to survive. A rural doctor’s office where patients can

see their specialists in one of the exam rooms via telehealth is more likely to hold

onto those patients. Telehealth is good for rural doctors and hospitals.

However, telehealth will not be mainstreamed unless the problems associated

with Medicare reimbursement are resolved. Many of these problems are related to

the BBA of 1997 and HCFA’s interpretation of the act. Medicare reimbursement

alone will not make telehealth an automatic success, but the lack of Medicare reimbursement will most certainly mean failure.

Some of these reimbursement barriers seem to reflect the fear that telehealth will

result in over-utilization of health care. Experience in several dozen telehealth

projects nationwide has made it clear that this fear is unwarranted. But there is

an even more basic reason to reject this approach. What is being prevented here

is not over-utilization but adequate health care for rural Americans and those living

in other underserved areas. People living in those areas have as much right to

Medicare benefits as any other American. Allowing them to use telehealth to exercise that right should not be considered an extraordinary benefit.

There can be no doubt that the current laws and rules for Medicare reimbursement have effectively prevented the submission of telehealth claims to HCFA. Our

most recent nationwide study of telehealth networks indicated that 15 of the 21 networks responding did not submit a single telehealth Medicare claim between July

and December 1999.

This is explained by several key problems with current laws and regulations on

telehealth. One is the assumption that telehealth usually involves two clinicians, a

rural primary care provider with the patient and a specialist at the other end. Our

research indicates that this occurs in less than 6% of cases. Whether by telehealth

or in person, a primary care physician does not have time to be present when the

patient sees a specialist. If that is what is required for telehealth, telehealth simply

will not happen.

Another key problem is that HCFA reimbursement is currently limited to services

delivered in a Federally Designated Primary Care Health Professional Shortage

Area (HPSA) or to patients who reside in those areas. HPSAs are defined by a lack

of primary care, while telehealth usually provides specialty care. A rural community

with sufficient primary care can still be without the specialty care telehealth could

provide.

I want to finish now by focusing on the most controversial regulation and that

is fee-sharing. If a telehealth claim is filed and subsequently paid the current rules

mandate that 25% of the specialist’s fee for the telehealth visit must be sent by the

specialist to the referring provider. In non-telehealth cases, fee-sharing would be a

federal crime. Doctors are understandably reluctant to do something via telehealth

that would be illegal in person, no matter what I tell them. This barrier is a bit

subtler than the others, but it is a serious problem.

HRSA’s Office for the Advancement of Telehealth, NIH’s National Library of Medicine, and several other Federal agencies have made a large financial commitment

to the development of telehealth throughout the country. I think we would all hate

to see that investment wasted. I sincerely hope that you will continue the effort to

pass new legislation correcting problems with the 1997 BBA and HCFA’s interpretation of that act.

Mr. BILIRAKIS. Thank you very much, Mr. Tracy.

Mr. Jim Reid is Director of Telemedicine and Network Services

with Midwest Rural Telemedicine Consortium, Mercy Hospital

46

Foundation. He is here on behalf of the Center for Telemedicine

Law out of here, Washington, DC. Mr. Reid, please proceed.

STATEMENT OF JAMES REID

Mr. REID. Thank you, Mr. Chairman and members of the subcommittee. I, as you have said, am Director of the Midwest Rural

Telemedicine Consortium, the MRTC, based at Mercy Medical Center, Des Moines. It is a 45 node network serving hospitals, clinics

and nursing homes in 30 communities in north and south central

Iowa.

As you said, I am also on the Board of Directors for the Center

for Telemedicine Law here in Washington. The CTL is a nonprofit

organization that focuses on legal and regulatory barriers to telemedicine. CTL has worked closely with telemedicine providers, policymakers and the public to analyze the effects and costs of current

Federal and State telemedicine reimbursement policies.

I should also indicate that I am physician assistant with 10 years

experience practicing family and emergency medicine in urban and

extremely remote settings, and certainly I could not come before

this committee without recognizing the support of this committee

and its excellent staff that has been given to improving the PA

physician team practice environment. So thank you for that.

Since its beginnings in 1993, the MRTC has played an important

role in efforts to evaluate the effects of telemedicine on health care

costs, quality and access. In 1994, HCFA awarded its first telemedicine reimbursement demonstration grants to the MRTC.

MRTC’s participation in that demonstration has given us firsthand

experience in dealing with impractical and restrictive reimbursement regulations, and it is largely to that experience that this testimony is prepared.

I also couldn’t help but note Dr. Berenson’s comment that no one

has come to their party. Frankly, we have been at their party for

their 4 years, and the reason that no one else is coming is because

they are only letting in people in checkered suits, and they are not

serving any food.

Well, having spent half my allotted time making introductory

comments, I feel compelled to cut to the chase for you.

As you know, Medicare currently has two payment processes in

place for telemedicine services. The first established was the telemedicine reimbursement demonstration, of which my program is a

part. The second involves the HPSA payment rules enacted by

HCFA in response to the Balanced Budget Act of 1997. They are

chillingly similar processes and equally ineffective in enabling the

delivery of telehealth care services. In short, because of HCFA’s

overly narrow interpretation of the telemedicine provisions in BBA,

Medicare reimbursement for telemedicine services has been limited

in scope and unreasonably restrained. Frankly, these restraints are

threatening the viability of many federally funded telemedicine

programs across the United States.

Congress can take five critical steps toward clarifying the intent

of the Balanced Budget Act and increasing access to telemedicine

services for America’s seniors citizens. You asked Mr. Berenson for

specific directives, what could be done in a regulatory fashion, what

could be done statutorily. These are my suggestions in that regard.

47

First, Congress should clarify the physicians providing direct

care through telemedicine may receive payment for the evaluation

and management services and medicine services routinely employed in telemedicine patient care. Because of their restrictive

consultation-only rules, Medicare reimburses for just 12 out of hundreds of CPT codes. These 12 codes describe consultation services

and assume that two practitioners will be involved in every telemedicine encounter. You have already heard the statistics on this

from Mr. Tracy. Only a small percentage really require to two providers.

Our own research shows that these 12 approved codes, the codes

under which our demonstration is currently run, constitute only 5.6

percent of all outpatient codes, outpatient services reimbursed by

Medicare, and they ask us why we don’t have many patients in the

study.

HCFA is denying reimbursement for the vast majority of codes

used in traditional and in telemedical patient care. Congress

should act immediately to ensure Medicare beneficiaries have access to the full range of services available through telemedicine.

Second, Congress should eliminate the requirement for a telepresenter. We have heard these comments before. HCFA rules require

a patient be presented by a telepresenter which has been defined

in my written comments. As stated, the great majority of telemedicine services provided involve only one provider and one patient at

each end of the connection. Requiring two practitioners artificially

inflates telehealth encounter costs, needlessly wastes medical resources and discourages patient access to telehealth services.

HCFA should be directed to remove the current requirement for a

telepresenter.

Third, Congress should extend the Medicare reimbursement beyond HPSAs to all rural areas and medically underserved urban

areas. Based upon Medicare expenditures for telemedicine services

to date, there is absolutely no reason to be concerned about runaway costs. Congress should authorize Medicare reimbursement for

telemedicine services provided to patients in all nonmetropolitan

statistical areas and in urban HPSAs.

Fourth, Congress should eliminate the cumbersome BBA feesplitting provisions. As previously stated, 94 percent of telehealth

encounters only require one provider and one professional service

payment. To require a treating practitioner to send a part of a payment to another provider is unrealistic, impractical and, frankly,

impossible to implement. It is also perceived as an inappropriate

inducement to services.

Fifth and finally, Congress should ensure that home health patients can also benefit from telemedicine. Congress can accomplish

this goal by expressly authorizing home health agencies to use PPS

dollars for the deploying and use of telehome services.

In summary, through MRTC and projects like it, we have proven

that telemedicine technology has the potential to dramatically improve the lives of Americans who live in medically underserved

areas. I can’t think of a better example than we have had here

today. We need your help to capture this potential and to put it to

work for America’s senior citizens.

48

Thank you for the opportunity to share my thoughts with you on

this very important topic, and later on as time allows I will welcome any questions you might have.

[The prepared statement of James Reid follows:]

PREPARED STATEMENT OF JAMES REID, DIRECTOR, MIDWEST RURAL TELEMEDICINE

CONSORTIUM

Mister Chairman and Members of the Committee, my name is Jim Reid, and I

am director of the Midwest Rural Telemedicine Consortium. MRTC is a 45 node

telemedicine network that serves hospitals, clinics, and nursing homes in thirty

communities in north and south central Iowa. Program offices are at Mercy Medical

Center in Des Moines, Iowa.

I also serve on the Board of Directors of the Center for Telemedicine Law, based

here in Washington. The CTL is a non-profit organization that focuses on legal and

regulatory barriers to telemedicine. CTL has worked closely with telemedicine providers, policy makers, and the public to analyze the effects and costs of current federal and state telemedicine reimbursement policies.

I am particularly pleased to offer testimony before my own Congressman and a

member of my hospital’s medical staff. We appreciate Congressman Ganske’s interest in and support for telemedicine.

Since its beginnings in 1993, MRTC has played an important role in efforts to

evaluate the effects of telemedicine on health care costs, quality and access. In 1994,

the Health Care Financing Administration awarded its first telemedicine demonstration grant to the Mercy Foundation to fund MRTC. MRTC’s participation in

the Medicare Telemedicine Reimbursement Demonstration has given us first hand

experience in dealing with impractical and restrictive reimbursement regulations

and it is to that experience that this testimony is prepared.

The success of MRTC in expanding access to health care and improving the quality of care available to medically underserved areas is a testament to the power of

telemedicine to improve lives. But despite the successes of MRTC and projects like

it, the potential of telemedicine to improve the lives of Americans is not being fully

realized. While more than 25 percent of our Nation’s senior citizens live in medically

underserved areas, Medicare reimbursement for telemedicine services has been limited in scope and unreasonably restrained by HCFA’s overly narrow interpretation

of the telemedicine provisions in the Balanced Budget Act of 1997. The limits on

Medicare reimbursement and narrow interpretation are threatening the viability of

telemedicine projects across the United States.

Congress can take five critical steps toward clarifying the intent of the Balanced

Budget Act and increasing access to telemedicine services for America’s senior citizens.

First, Congress should increase access to telemedicine services by clarifying that

physicians providing direct patient care through telemedicine may receive payment

for the ‘‘evaluation and management’’ services and ‘‘medicine’’ services routinely employed in telemedical patient care. The BBA provided Medicare reimbursement for

telemedicine consultations provided to residents of Health Professional Shortage

Areas or HPSAs. Unfortunately, BBA language used the term ‘‘teleconsultation’’

throughout. To HCFA ‘‘consultation’’ has a very specific meaning, which lead to

their very narrow interpretation of Congress’ intent in the BBA, and their promulgation of very limited telemedicine reimbursement rules which effectively discourage

providers and patients from using telehealth technologies.

Medical services are described and billed using Current Procedural Terminology

(CPT) codes. Because of their restrictive ‘‘teleconsultation only’’ rules, Medicare reimburses for just twelve out of hundreds of CPT codes—all of which describe consultation services and assume that two practitioners will be involved in the telehealth encounter. Those twelve approved CPT codes describe only 5.6 percent of all

outpatient Medicare services delivered in 1998 and totally ignore the reality that

the majority of telemedicine services provided today are direct care visits involving

a patient at one end and a provider at the other. HCFA is denying reimbursement

for the vast majority of codes used in traditional and telemedical patient care.

Through MRTC and projects like it, we have proven that telemedicine is an effective tool for providing direct patient care to patients in medically underserved areas.

Yet, HCFA’s restrictive policy prevents physicians from receiving Medicare reimbursement for direct telemedical patient care. Congress should act immediately to

ensure that Medicare beneficiaries have access to the full range of telemedicine

services.

49

Second, Congress should increase access to telemedicine services by eliminating

any requirement for a telepresenter. Current HCFA rules require patients be ‘‘presented’’ by a telepresenter who is either the referring practitioner—referring practitioner being defined by HCFA as a physician, PA, NP, nurse midwife, clinical nurse

specialist, clinical psychologist or clinical social worker—or a direct employee of the

referring practitioner who is one of the listed practitioners. This is an unduly restrictive requirement and totally ignores how medicine is practiced. A recent assessment of telehealth encounters conducted by the University of Missouri Health

Sciences Center in conjunction with 21 U.S. telehealth networks revealed that only

261 (5.9%) of 4,424 telehealth encounters involved or required clinicians on both

ends. Requiring two practitioners artificially inflates telehealth encounter costs,

needlessly wastes medical resources, and discourages patient access to telehealth

services. HCFA should be directed to remove the current requirement for a telepresenter.

Third, Congress should increase access to telemedicine services by extending

Medicare reimbursement to all rural areas and certain urban areas. The BBA limited Medicare reimbursement services provided to patients in certain rural areas

underserved for primary care, MRTC’s experience suggests that telemedicine services can also meet the needs of patients in other settings. Specifically, rural communities lacking access to specialty care and urban areas lacking access to both primary and specialty care can benefit from telemedicine technology. Based upon Medicare expenditures for telemedicine services to date, there is no reason to be concerned about runaway costs due to telemedicine reimbursement. To improve access

to health care in all medically underserved communities, Congress should authorize

Medicare reimbursement for telemedicine services provided to patients in all nonmetropolitan statistical areas and urban HPSAs.

Fourth, Congress should eliminate the cumbersome BBA fee-splitting provisions

that were based on a misunderstanding of what constitutes a telemedicine encounter. When BBA was written, the authors believed that two physicians or other practitioners would participate in a ‘‘consultation.’’ Consequently BBA provided a fee

splitting arrangement to allow both practitioners to be paid out of a single fee. As

previously stated, only one professional service payment is necessary. To require the

treating practitioner to send a part of the payment to another provider is unrealistic, impractical, and impossible to implement. It also could be perceived as an inappropriate inducement to provide telemedicine services.

Fifth, Congress should ensure that home health patients can also benefit from

telemedicine. Congress can accomplish this goal by expressly authorizing home

health agencies to use PPS dollars for the deployment and use of telehomecare

equipment.

Through MRTC and projects like it, we have proven that telemedicine technology

has the potential to dramatically improve the lives of Americans who live in medically underserved communities. We need your help to capture this potential and put

it to work for America’s senior citizens.

Thank you for this opportunity to share my thoughts with you on this important

topic. I welcome any questions you might have for me.

Mr. BILIRAKIS. Thank you very much, Mr. Reid.

I am going to ask the gentleman from Tennessee to introduce Dr.

Burgiss.

Mr. BRYANT. Thank you, Mr. Chairman.

I am once again pleased to acknowledge Dr. Burgiss from the

University of Tennessee at Knoxville, and we have a very significant family—well, a residency practice up there at the University

of Tennessee at the other end of the State, and Dr. Burgiss is extremely well qualified. He is one of the—certainly in Tennessee—

one of the pioneers in telemedicine, and as mentioned, as we discussed beforehand, is also called upon to help with inquiries from

around the country, and we are trying to focus those and his efforts

more in Tennessee now so that we can get all the benefits that we

can have from telemedicine in Tennessee. And thank you, Mr.

Chairman, for that.

Mr. BILIRAKIS. I thank the gentleman.

Dr. Burgiss, please proceed, sir.

50

STATEMENT OF SAM BURGISS

Mr. BURGISS. Thank you.

Mr. Chairman and members of the committee, thank you for this

opportunity to speak about the application of telehealth in home

care. In addition to responsibilities I have with the University of

Tennessee Medical Center Telemedicine Network at Knoxville, I

am also the Chair of the American Telemedicine Association’s special interest group in telehome care.

The University of Tennessee telemedicine network began its telehealth program in 1995 with rural patients located in their communities receiving care from physicians and other providers located in

our medical center. In April 1998, with a grant from the Office for

the Advancement of Telehealth of the Department of Health and

Human Services, the UT telemedicine network began providing

care in patient homes using home care agency nurses located in

their offices. We now have the capability of caring for patients

using telehealth in over 100 homes in congestive heart failure, diabetes and other traditional home care services.

As an example of this care, Ms. HY had a slow heart rate of approximately 40 beats per minute. On one occasion, the telehealth

nurses in their office detected that Ms. HY’s rate in her home was

26. 911 was called. Ms. HY received a pacemaker and has become

more active.

The lowest cost of health care can be obtained by providing the

correct level of care at the correct time. To repeat, the lowest cost

of health care can be obtained by providing the correct level of care

at the correct time. Since care in the home has the potential to be

the lowest cost when compared with assisted living facilities, nursing homes and hospitals, national laws and policies should support

quality home care being provided cost effectively.

Telehealth has the potential to reduce the cost of home care for

suitable patients and conditions. Home care programs that have

used telehealth provide homes with video conferencing and/or monitoring instruments. Video conferencing provides interactive audio

and video between the patient and nurse, typically using standard

home telephone lines. Monitoring instruments at the patient’s

home transmit data to a central station using the telephone line,

or digital medical instruments can be viewed by the video.

Home care by telehealth is typically provided by home health

nurses and may also be provided by physicians located in their offices and consulting with patients in their homes.

In a study of 14 patients having 444 telehome visits in 15

months, patients reported the following: an increased sense of security that medical help was readily available, reduced confusion over

medication use, time savings during the televisit, increased sense

of being in control, increased personal attention from nursing staff,

increased privacy, and quality of care same as or better than a traditional in-home visit. The cost saved for the televisit compared

with a traditional visit averaged $49.33 cents per visit for nurse

transportation and labor costs during travel.

Costs of equipment for telehome care use can range from less than $1,000 to $10,000 per home. Assuming that two telehome care

visits occur per patient per week, it would take 10 to 100 weeks

to amortize the cost of equipment based on the travel cost savings

51

of approximately $50, as stated previously. It is evident that costeffective home care depends on limiting the cost of equipment

taken to the home to that which is needed by the patient.

In addition to a decreased cost of providing home care, published

telehealth studies have shown potential cost of care benefits from

fewer office visits for patients, reduced emergency room visits, reduced hospitalization rates as much as 50 percent, reduced in-home

visits, in-person home visits of 49 percent, and fewer long-term

care placements. For example, Mr. F, who has congestive heart failure, was being admitted for hospital care an average of 7 days each

quarter. After telehealth care began in his home, he was admitted

for only one 23-hour observation in a year.

In summary, as a leader in telehealth programs providing home

care, I request your support for laws and policies which enable the

cost-effective delivery of care for patients in their home using both

traditional and telehealth methods. For high-quality and cost-effective telehealth care, these laws and policies should, A, not require

a professional medical person as the presenter of patients in

homes; B, permit the use of store-and-forward technology which is

used for patient monitoring; and, C, recognize telehealth home care

as a service by HCFA under the prospective pay system for purposes of care and accounting. None of these requests will require

additional funding from HCFA. They are all budget neutral.

Thank you.

[The prepared statement of Sam Burgiss follows:]

PREPARED STATEMENT OF SAM BURGISS, MANAGER, UT TELEMEDICINE NETWORK, UNIVERSITY OF TENNESSEE MEDICAL CENTER

Chairman Bliley and Members of the Committee, thank you for this opportunity

to speak about the application of telehealth in home care. I am Sam Burgiss, manager of the University of Tennessee Medical Center Telemedicine Network at Knoxville. The University of Tennessee Medical Center Telemedicine Network began its

telehealth program in 1995 with rural patients located in their communities receiving care from physicians and other providers located in our medical center. This

care uses interactive video conferencing between the provider and a patient presented by a nurse, and uses remote patient monitoring technologies.

In April 1998 with a grant from the Office for the Advancement of Telehealth of

the Department of Health and Human Services, the UT Telemedicine Network

began providing care in patient homes using home health agency nurses located in

their offices. Interactive video equipment and hand held digital instruments are

available for 29 homes from UT Home Health Services. Another project funded by

a charitable trust began in 1999 to provide telehealth care in the homes of 35 congestive heart failure patients and 44 diabetic patients referred by their primary care

physicians. The project was developed to provide care for the people of Scott County,

Tennessee; to evaluate the potential improvement in the physical function of the patients; and to evaluate the potential decrease in health care costs due to hospital

readmissions. As an example of this care, Ms. HY had a slow heart rate of approximately 40 beats per minute. On one occasion, the telehealth nurses detected that

the rate was 26, and 911 was called. Ms. HY received a pacemaker and has become

more active.

The lowest cost of health care can be obtained by providing the correct level of

care at the correct time. Certainly using a specialist too soon increases cost. Delaying needed care can increase the morbidity of the patient and increase the cost of

treatment at a later time. As shown in a study of 87 rural dermatology patients,

the cost of care for dermatologic conditions before examination by a dermatologist

using telehealth was twice that of the cost of care by the dermatologist.1 Since care

in the home has the potential to be the lowest cost when compared with assisted

living facilities, nursing homes, and hospitals; national laws and policies should support quality home care being provided cost-effectively.

Telehealth has the potential to reduce the cost of home care for suitable patients

and conditions. Home care programs that have used telehealth provide homes with

52

video conferencing and/or monitoring instruments. Video conferencing provides

interactive audio and video between the patient and nurse typically using the standard home telephone line. Monitoring instruments at the patient’s home transmit

data to a central station using the telephone line, or digital medical instruments can

be viewed by the video. Home care by telehealth is typically provided by home

health nurses and may also be provided by physicians located in their offices and

consulting with patients in their homes.

In a study of 14 patients having 444 telehome visits in 15 months, patients reported the following: a) an increased sense of security that medical help was readily

available, b) reduced confusion over medication use, c) time savings during the televisit, d) increased sense of being in control, e) increased personal attention from

nursing staff, f) increased privacy, and g) quality of care same as or better than a

traditional in-home visit.2 The cost saved for the televisit compared with a traditional visit averaged $49.33 per visit for nurse transportation and labor cost during

travel. Visit time in two studies averaged 18 minutes for telehealth compared with

a traditional average time of 45 minutes.2,3 Nurse productivity more than doubled

during home televisits due to less distractions and more focus while creating high

levels of patient satisfaction.

Cost of equipment for telehomecare use can range from less than $1,000 to

$10,000. Assuming that two telehomecare visits occur per patient per week, it would

take from 10 to 100 weeks to amortize the cost of the equipment based on the travel

cost savings of approximately $50 as stated previously. It is evident that cost-effective home care depends on limiting the cost of the equipment taken to the home

to that which is needed by the patient.

In addition to a decreased cost of providing home care, telehealth has shown potential cost of care benefits from fewer office visits for patients, reduced emergency

room visits, reduced in-patient hospitalizations, and fewer long-term care placements.4 For example, Mr. F., who has congestive heart failure, was being admitted

for hospital care on an average of seven days each quarter. After telehealth care

began in his home, he was admitted for only one 23 hour observation in a year. Ten

published or presented studies on the use of telehealth in home care, by and large,

show that: a) the need for in-person home visits declines, b) patient satisfaction is

excellent, c) hospitalization rate decreases as much as 50% suggesting improved patient care and reduced cost of care.5 None of the studies suggest any decline in quality of care, or any negative outcomes.5

As a leader in telehealth programs providing home care, I request your support

for laws and policies which enable the cost-effective delivery of care for patients in

their homes utilizing both traditional and telehealth methods. For high quality and

cost-effective telehealth care, these laws and policies should a) not require a professional medical person as the presenter of patients in homes, b) permit the use of

store-and-forward technology which is used for patient monitoring, and c) recognize

telehealth home care as a service by HCFA under the Prospective Pay System for

purposes of care and costing.

References

1 Burgiss SG, Julius CE, Watson HW, Haynes BK, Buonocore E, Smith GT. Telemedicine for

dermatology care in rural patients. Telemedicine Journal, 3(3), 1997, 227-233. 2Dimmick SL, Mustaleski C, Burgiss SG, Welsh T. A case study of benefits & potential savings in rural home telemedicine. Home Healthcare Nurse, 18(2), February 2000, 125-135. 3 Johnston B, Wheeler L, Deuser J. Kaiser Permanente Medical Center’s pilot tele-home

health project. Telemedicine Today, 4(7), August 1997, 16-17, 19. 4 Jossey P, Gustke S. Financial feasibility of rural telehomecare. Fourth Annual Meeting of

the American Telemedicine Association, April 1999, Salt Lake City, UT. 5Mahmud K. E-mail communication. August 25, 2000.

UT TELEMEDICINE NETWORK, UNIVERSITY OF TENNESSEE, CENTER FOR COMMUNITY

HEALTH, SCOTT COUNTY TELEMEDICINE

SUCCESS STORIES

What a difference a pacemaker makes

As part of the UTCCH Program that cares for participants with congestive heart

failure, the physiologic monitoring equipment determined that one of the new patients (HY) had a heart rate that was consistently in the 40s, a slow heart rate.

Her doctor was notified, and he counseled observation. When HY’s heart rate

dropped into the 30s, and she complained of chest pain and shortness of breath, she

was sent to the Scott County Emergency Department. From there she was sent to

Oak Ridge Methodist Medical Center, where she was seen by a cardiologist. He

changed her medications and her heart rate rebounded to between 50 and 60 beats

53

per minute. However, on Feb. 24, HY’s heart rate dropped precipitously to 26, and

911 was called. HY was rushed to the Scott County Emergency Department. She

was transferred to Methodist Medical Center, where a pacemaker was installed.

Since she has returned home, HY can now walk through her house and no longer

needs her nitroglycerine patch. She is taking fewer medications. She recently went

to the beauty shop, a special event because she had not been able to leave her house

and was confined much of the time to bed when she entered the Scott County Telemedicine Program.

Controlling high blood pressure

Another Telemedicine Program participant with CHF had problems with elevated

blood pressure spikes that were detected through the physiologic monitoring program. When her diastolic pressure exceeded 100, her doctor was notified. He adjusted her medication, which brought her BP down. However, cardiac monitoring

also showed an increasing number of heart arrythmias. Her doctor was again notified and she was sent to Parkwest Medical Center. As of this writing, she has fewer

life-threatening arrythmia episodes and her medications have been reduced.

Video Monitoring in the Home

The ability to see Telemedicine Program participants in their homes has been particularly beneficial. Two participants (IB and BS) had developed blood clots in their

legs. As usual during a video visit, the participants were asked about new problems,

and both IB and BS complained of pain. Swelling and discoloration in their legs

were plainly visible on the monitor. Their doctors were promptly notified in each

case. A brief hospitalization ensued to start anti-coagulant therapy for blood clot

lysis. As a result, BS is back riding his horses. IB is much more mobile around her

home and was able to take her planned vacation to Florida.

Summary

Ten of the 30 (33%) CHF Telemedicine Program participants have been able to

make significant lifestyle improvements and/or reduce their dependence on medications. In the diabetes program, 8 of 30 (26%) have been able to fine tune their diabetes management through either medication changes or the initiation of insulin therapy. Additionally, 100% of these participants have said that they like their new

blood sugar monitors because the lancets are sharper and finer and their fingers are

not as sore.

Mr. BILIRAKIS. Thank you very much, Dr. Burgiss.

To introduce Dr. Ross-Lee, Mr. Strickland the gentleman from

Ohio.

Mr. STRICKLAND. Thank you, Mr. Chairman.

It is my pleasure to welcome to this committee one of my favorite

constituents, Dr. Ross-Lee, who is the Dean of the College of Osteopathic Medicine at Ohio University right in the center of my Appalachian district.

I would like to share with my friend from Michigan, Mr. Stupak,

the fact that, prior to coming to Ohio, she was the associate dean

at the College of Osteopathic Medicine at Michigan State University. Michigan’s loss is Ohio’s gain.

And, last but not least, the wonderful singer/entertainer Diana

Ross is the sister of our honored guest today. And Dr. Ross-Lee, it

is wonderful to have you and thank you for all you do for Appalachia, Ohio.

Mr. BILIRAKIS. Doctor, please proceed.

STATEMENT OF BARBARA ROSS-LEE

Ms. ROSS-LEE. She is my little sister, by the way.

I think it is still morning. Good morning, Mr. Chairman and

members of the Committee on Commerce. I would like to thank

you, the Subcommittee on Health and Environment, I would like

to thank you for inviting me to give testimony on this very important issue, telehealth.

54

My name, as you know now, is Barbara Ross-Lee; and I am the

Dean of the College of Osteopathic Medicine at Ohio University. I

began my career in osteopathic medicine as a family physician providing care for underserved populations. I have a long acquaintance

with the issues of access, particularly related to preventive and primary care services.

Our college is located in the region of this country known as Appalachia, in the southeastern part of the State of Ohio. Sparsely

populated, southeastern Ohio is a region that is dominated by high

poverty rates, limited employment opportunities and poor health

indicators. The counties are primarily rural with limited transportation, government, economic or communication infrastructure.

In addition, a majority of the rural southern Ohio counties continue to hold designations as Health Professional Shortage Areas

by the Federal Government. Health care delivery depends on a

very fragile infrastructure of rural providers. Addressing the issues

of access within the bounds of acceptable costs, available people

and technology transcends issues of health care and exemplifies the

entrenched systemic disparities in rural infrastructure.

The high rate of poverty in rural Appalachia, including Southeast

Ohio, is the most consistent single contributing factor to limitations

in transportation, economic development, educational opportunities

and medical services. Recently identified discrepancies in access to

digital information technology by rural underrepresented populations which we refer to as the digital divide are an additional

symptom of the larger problem. As the new E-service economy

holds great promise for one side of the digital divide, in rural underserved areas it represents a new symptom of a preexisting problem of limited resources and unmet basic service needs.

It is clear from a technical standpoint that telemedicine works

and can and does provide medical services for geographically isolated populations. Financing for telemedicine services is perhaps

the most critical measure of the field’s maturity and prospects for

growth. The availability of high-capacity information infrastructure

is a limiting factor to the expansion of both telecommunicationsbased health care delivery and economic development.

The anticipation that we saw or felt when HCFA announced the

changes to telemedicine reimbursement and designated HPSA

areas has changed from a mood of excitement to a mood of frustration and despair over the last few years. The current 75/25 method

of reimbursement for telemedicine and the absence of bandwidth

infrastructure in rural America does nothing to promote the advantages of this new technology. It further feeds the digital divide in

rural America and deepens a preexisting schism in health care

service availability.

Not providing reimbursement for store-and-forward consultation

is another hindrance to further enhancing health care delivery in

rural America through the use of telemedicine technology. These

are the types of consults most often compatible with rural practice.

It is within this kind of utilization that telemedicine really brings

many benefits to an underserved rural population.

At the Ohio University College of Osteopathic Medicine we have

great success in the utilization of a mobile van for the delivery of

preventive pediatric health care. In other words, we took the servVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00058 Fmt 6633 Sfmt 6602 E:\HEARINGS\67112 pfrm03 PsN: 67112
55

ice to the population. We have seen significant positive health outcomes such as increased immunization rates and pediatric screening examination through these efforts.

Through the combined hard work of community leaders working

with Congressman Ted Strickland’s office we have secured financing of a second van targeted toward the underserved adult community in Southeastern Ohio. The new van will incorporate telehealth

to improve preventive screening for our underserved and isolated

adult populations. We will use this technology through our existing

technology infrastructure at existing schools and community centers.

In addition to our vans, we also have a telepsychiatry program

that was launched and initiated through a collaboration with many

mental health providers in Southeast Ohio. The reality is, without

this telepsychiatry program, we would have had no pediatric telepsychiatry in at least 10 counties in Southeastern Ohio.

To sum this up, let me just say we would like to, based upon our

experience both in outreach as well as our experience with telepsychiatry, we would like to be bold enough to suggest a proposal

for your consideration as it relates to rural communities in this

country. We would like to suggest that you consider establishing

digital health care empowerment zones for rural America. Community leaders, volunteer organizations and rural health care providers would partner in the development of empowerment zones for

the express purpose of developing innovative methods of health

care delivery utilizing digital technology in all parts of rural America.

Empowerment zones would analyze the current digital infrastructure, assess the health care needs of their communities and

develop strategies with measurable health outcome objectives. The

digital health care empowerment zone for rural America could be

funded by block grants. The proposed empowerment zones would

be granted waivers from existing Federal Medicare and State Medicare reimbursement guidelines.

I could give you more, some specifics, but I would like to thank

you for inviting me here.

Mr. BILIRAKIS. Thank you, Dr. Ross. That is a good suggestion.

One of the things we will tell you when we finish up here—I

guess I will tell you now—is that legislation to try to cover many

of the areas that have been discussed here today is being worked

on now. Majority and minority staffs have been working on it for

quite some time but certainly not going to be enough to cover the

entire waterfront. So the hope is that we will not let this end with

the legislation that I am talking about.

Mr. Stupak has an awful lot to do with that legislation, too. His

input is based on his personal experiences.

So in that process we will, of course, take everything into consideration. We appreciate very much suggestions and recommendations made by the witnesses. That really helps a lot.

[The prepared statement of Barbara Ross-Lee follows:]

PREPARED STATEMENT OF BARBARA ROSS-LEE, DEAN, COLLEGE OF OSTEOPATHIC

MEDICINE, OHIO UNIVERSITY

Good morning Mr. Chairman and Members of the Committee on Commerce, Subcommittee on Health and Environment. I would like to thank you for inviting me

56

to give testimony on this very important issue—Telehealth. My name is Barbara

Ross-Lee, D.O. and I am the Dean of the College of Osteopathic Medicine at Ohio

University. I began my career in osteopathic medicine as a family physician providing care for underserved populations. I have a long acquaintance with the issues

of access.

My college is located in the region of this country known as Appalachia, in the

Southeastern part of the state of Ohio. Sparsely populated, Southeastern Ohio as

a region is dominated by high poverty rates, limited employment opportunities, and

poor health indicators. The counties are primarily rural with limited transportation,

government, economic, or communication infrastructure. The area also contains

small communities that are lacking the resources and expertise to access the telecommunications resources available to communities in metropolitan areas of the

state and to provide the professional development necessary to be competitive in the

technologically advancing world.

In addition, a majority of rural southern Ohio counties continue to hold designation as Health Professional Shortage Areas (HPSA) by the federal government. Historically, rural medically underserved areas of Southeast Ohio have experienced

great difficulty in recruiting and retaining primary care physicians. Because there

is presently very little economic and professional support, physicians choose to locate in urban areas where they can access technologies and communicate with large

specialized medical groups.

Health care delivery in Appalachian Ohio depends on a fragile infrastructure of

rural providers. This region, consisting of 29 counties in the southeast quadrant, includes over 1.4 million individuals living in the most impoverished conditions in the

state. Health care services are sparsely distributed, with 23 of the counties designated as either full or partial primary care HPSA. Availability of specialty providers is almost non-existent. Geographic isolation, a poorly developed system of

roads, inadequate levels of health infrastructure, little employment-based insurance,

inadequate transportation systems, and diffusely distributed populations further exacerbate the problem of providing adequate services under current health care models. As a result, many inhabitants have no continuing sources of care, do not seek

or delay seeking medical care when initially needed, instead showing up with more

severe acute illnesses in emergent care facilities. Similarly, patients with chronic

disease are less likely to receive adequate management of their condition thereby

increasing their risk of significant and debilitating complications. Each of these scenarios results in poorer outcomes to the patient and higher costs to the health care

system.

These concerns are exemplified by the experience of Vinton County, Ohio (right

next door to my county). Its 12,000 residents are sparsely distributed across several

villages within the county’s 414 square miles. High rates of poverty (children—

60.9% in 1999, #1 in Ohio) and unemployment (10.9% in 1998; 153% state average),

low rates of insurance coverage, absence of a public transportation system, and

other factors associated with impoverished areas (41.3% of adults >25 did not have

a high school education in 1998; 20% of households were without a telephone in

1990) make health care unattainable to a large segment of the area’s residents.

Donald Barton, DVM, County Health Commissioner has repeatedly expressed concern about the ability of resources within the community to meet the health care

needs of the populace. Only two physicians practice within the county, both in the

county seat of McArthur Village, qualifying it as a designated Health Professional

Shortage Area. It is unrealistic to expect that health care providers can establish

thriving practices in the county’s other smaller villages due to the limited patient

base. Advances in technology, more specifically telemedicine, would provide a feasible model for meeting these needs without developing an unrealistic and

unsustainable bricks-and-mortar foundation in each of the communities.

Rural Healthcare Issues

Many residents in rural areas of Ohio have limited access to preventive and primary health care services. Addressing the issue within the bounds of acceptable

cost, available people, and technology transcends issues of healthcare and exemplifies the entrenched systemic disparities in rural infrastructure. A study by the Office of Technology Assessment (OTA) cited three problems that are specific to residents of rural areas:

• Although the rural population has relatively low mortality rates, a disproportionate number of rural people suffer from chronic illness. Furthermore, infant

mortality is slightly higher than in urban areas and the number of deaths from

injury are dramatically higher.

57

• The lack of public transportation systems and the existence of few local healthcare

providers make it difficult for rural individuals to reach facilities where they

can obtain care. • The OTA found that physical barriers to access, difficult as they are, might be

overshadowed by financial barriers.

The high rate of poverty in rural Appalachia, including southeast Ohio, is the

most consistent single contributing factor to limitations in transportation, economic

development, educational opportunities, political representation, and medical services. Recently identified discrepancies in access to digital information technologies

by rural underrepresented populations (i.e. the ‘‘digital divide’’) are an additional

symptom of the larger problem. As the new e-service economy holds great promise

for one side of the digital divide, in rural underserved areas, it represents a new

symptom of a pre-existing problem of limited resources and unmet basic service

needs.

Studies suggest that rural communities have a disproportionately greater need for

health care services than their urban and suburban counterparts. As an example,

it has been estimated that nearly 60% of traffic fatalities occur in rural areas.

Telemedicine

A significant outcome of many federally funded projects is an overwhelmingly

positive outcome in technological terms. It is clear, from a technical standpoint, that

telemedicine works and can (and does) provide medical services for geographically

isolated populations. Financing for telemedicine services is perhaps the most critical

measure of the field’s maturity and prospects for growth. Long enabled by the

crutch of public funding for program start-up, few managers have had much incentive to justify services from a business perspective. As a result, loss of federal or

state grant funding has meant the end of some otherwise worthwhile programs. As

telemedicine services have gained wider adoption, telecommunications cost still rank

highest as an operational barrier followed closely by the lack of a comprehensive

cost reimbursement plan. Without a stable reimbursement plan by Medicare, Medicaid, and third party payers, implementation of telemedicine will lag woefully behind the technological abilities to make operational those needed services to rural

healthcare consumers and healthcare providers.

Limited Infrastructure

The availability of high capacity information infrastructure is a limiting factor to

the expansion of both telecommunications based healthcare delivery and economic

development. Live consultant interactions depend more reliably on broadband services. As many rural communities are still struggling to attain the most basic services provided by limited local Internet Service Providers (ISPs), broadband services

are being deployed in more populous and prosperous areas around the country.

Broadband or high-speed Internet access is provided by a series of technologies that

give users the ability to send and receive data at volumes and speeds far greater

than current Internet access over traditional telephone lines. High-speed two-way

connections can be used for interactive applications such as online classrooms, economic development, or support services for rural healthcare.

The deployment of broadband to the American home is being financed and implemented by the private sector as a business strategy. Less dense populations are

much less attractive to private sector investment. Based on the economics of limited

subscribers, geographic barriers, and shortage of economic development opportunities, it is unclear how advanced telecommunications services will be provided, supported, and sustained in rural underserved areas.

Reimbursement

There are many issues surrounding the methodology HCFA has adopted in reimbursing providers for Telehealth services, especially within rural America. Recent

U.S. data figures indicate that there are a greater percentage of Medicare beneficiaries in rural America when compared to urban settings. Medicare payments to

those few physicians that practice in the many small rural communities like those

seen in Southeastern Ohio account for over 60% of practice revenues. Within our

small rural hospitals in Appalachia, Medicare payments may run as high as 90%

at times. With counties that have as few as two physicians and no mid-level health

care providers, access to health care remains a ‘‘high priority’’ problem for the senior

citizens in rural Southeastern Ohio. This decreased access to health care in Appalachia is occurring in a population that demonstrates a higher than expected incidence of chronic debilitating diseases such as Diabetes, Chronic Obstructive Lung

Disease, Obesity, Heart Disease and elevated cholesterol levels. Telemedicine offers

much to aid in the care of these disease entities as well as other disorders among

rural residents. It remains true however, that the methodology adopted by HCFA

58

in promoting telemedicine has hindered rather than helped bring healthcare to the

Medicare recipients of Southeastern Ohio, and other rural areas throughout our

country.

The anticipation that we saw when HCFA announced the changes to telemedicine

reimbursement in designated HPSA areas has changed from a mood of excitement

to a mood of frustration and despair over the last year. The current 75/25 method

of reimbursement for telemedicine in the absence of bandwidth infrastructure in

rural America does nothing to promote the advantages of this new technology. It

merely acts as a disincentive to opportunities for expansion of access to care for

Medicare recipients who are already disadvantaged in the healthcare provision continuum. It focuses on maintaining a bottom line cost sharing by providers using a

methodology that has been deemed illegal when practiced independently by physicians (fee-splitting). It further feeds the digital divide in rural America and deepens

a pre-existing schism in healthcare service availability.

Those of us in rural communities already experience great difficulty in recruiting

and sustaining an adequate supply of primary care health providers. For the purposes of telemedicine, current HCFA policies increase costs to provider participants

in terms of time, facility utilization, staffing, administration and equipment; further

burdening an already overburdened and fragile healthcare system. Rural primary

care providers are not reimbursed on a reasonable cost basis for goods used, services

rendered or time and effort provided as a presenter. They are reimbursed at an arbitrary figure of 25% of the fee received and administered by the consultant provider.

Potential reimbursement for ‘‘store and forward’’ consultation is another possibility to further enhancing healthcare delivery in rural America through the use of

telemedicine technology. These are the type of consults most often compatible with

rural practice. In many instances what is needed is a review of current lab data

or tests to enhance patient care. For a breast cancer patient, a review of current

red and white blood cell counts may allow the rural primary care doctor or rural

hospital to adjust and administer a dose of chemotherapy, rather than requiring a

three to four hour drive to see her oncologist. For a patient with severe diabetes,

the ability to store and forward blood sugar measurements along with other lab data

to their endocrinologist will save time, effort and money. Surely a reasonable rate

of reimbursement for asynchronous medical care makes common sense. It is within

this kind of utilization that telemedicine really brings many benefits to an underserved rural population, rather than HCFA’s insistence that any telemedicine involve a ‘‘live’’ interactive conference.

At the Ohio University College of Osteopathic Medicine, we have had great success in the utilization of a mobile van for the delivery of preventive pediatric

healthcare. We have seen significant positive health outcomes, such increased immunization rates and pediatric screening examinations, through these efforts.

Through the combined hard work of community leaders working with Congressman

Ted Strickland’s office, we have secured financing of a second van targeted toward

the underserved adult community in Southeastern Ohio. The new van will incorporate Telehealth to improve preventive screening for our underserved adult populations. We will use this technology through our existing infrastructure at schools

and community centers in Ohio. However, these services will be non-sustainable

without changes to the current Medicare reimbursement policies.1Telemedicine has

already enjoyed a positive track record at many locations. In order to best provide

these services to rural Medicare recipients, we advocate further improvements to

the Balanced Budget Act of 1997. We feel that measures like Senate Resolution

2505 and House Resolution 4771, that propose important changes to healthcare delivery through telemedicine are steps in the right direction.

We further suggest the consideration of ‘‘Digital Healthcare Empowerment Zones

for Rural America.’’ Community leaders, volunteer organizations and rural

healthcare providers will partner in the development of empowerment zones for the

express purpose of developing innovative methods of healthcare delivery utilizing

digital technology in rural America. Empowerment zones will analyze the current

digital infrastructure, assess the healthcare needs of their communities, and develop

strategies with measurable health outcome objectives. The Digital Healthcare Empowerment Zones for Rural America will be funded by block grants. Proposed empowerment zones will be granted waivers from existing federal Medicare and state

Medicaid reimbursement guidelines, on a community-by-community basis, to incorporate cost-based reimbursement that supports sustainable infrastructure and

healthcare delivery.

59

SUPPLEMENT

ADVANCED PRACTICE NURSE/TELEMEDICINE PROGRAM

A Collaborative Project of the Ohio University College of Osteopathic Medicine and

the Southern Consortium for Children

Background

The Southern Consortium for Children, a collaborative of four Alcohol, Drug Addiction and Mental Health Services Boards (ADAMHS), has been instrumental in

bringing psychiatric services for children to ten Appalachian counties in southern

Ohio. Approximately seven years ago, brokering services equivalent to one full-time

child psychiatrist into the local mental health provider agencies was the first step

in meeting the need for children’s outpatient psychiatric services. Prior to that time,

no child psychiatry services were available through the local agencies. The Advanced Practice Nurse/Telemedicine Program was designed to further increase access to those services. The program was funded by a grant from the Health Resources and Services Administration (HRSA), Office of Rural Health Policy, Rural

Outreach Program and covered seven of the ten counties served by the Consortium.

Additional funding was obtained from the Substance Abuse and Mental Health

Services Administration (SAMHSA) in the second year to include the remaining

three counties in the program.

The collaborative partners and their responsibilities in the program are:

• The Southern Consortium for Children—fiscal agent, project management

• Four local mental health agencies—house collaborative psychiatrist/nurse practices, provide support services

• Two child psychiatrists—provide psychiatric services (primarily prescribing and

monitoring medications)

• Two clinical nurse specialists (CNS)—provide psychiatric services (primarily monitoring medications; will begin prescribing in fall of 2001)

• The Ohio University College of Osteopathic Medicine—installation, management,

and maintenance of video teleconferencing system.

Services

The services provided through the program fall into two main categories: direct

service and education/consultation. The direct services that are provided by the psychiatrist/nurse collaborative practices include psychiatric assessment of children and

adolescents, prescription of medication, monitoring medication, and client and family education. All clients receiving direct services are children and adolescents between 4 and 18 years old and most (65-75%) are Medicaid-eligible.

The Behavioral Pediatric Case Seminar Series makes up the majority of the education/consultation piece. Initiated in September 1998, each program in the series

is a monthly hour-long presentation from noon to 1:00 PM. Each program consists

of a case study that is presented to a panel composed of a child psychiatrist, a CNS,

and a psychologist. The panel’s review of the case is then followed by questions from

the audience. Each program is presented via video teleconference with seven sites

currently participating across the ten-county region. As of May 2000, 604 participants have attended 20 programs in the series. The series began as a way to enhance communication between the child psychiatrists and pediatricians in order to

facilitate referrals and to increase the appropriateness of referrals from pediatricians to the mental health system. Now physicians, nurses, psychologists, social

workers, medical students, and school counselors among others attend the series.

The disciplines presenting cases have been equally diverse with consumers participating as well.

Videoconferencing

Videoconferencing has proven to be a powerful tool for education and consultation

in this program. It has also been used extensively for administrative functions. The

guidance provided by OUCOM has been instrumental in creating a

videoconferencing network that has addressed these functions effectively and in a

trouble-free manner.

However, the original intent of the program was, and continues to be, to use

videoconferencing technology to provide direct services to children. Ohio’s lack of

policy regarding Medicaid reimbursement for clinical services delivered via videoconference is one of two problems that have effectively prevented the use of the

technology for direct service. The other factor has been the lack of funds to connect

each satellite clinic to its parent clinic. The SCC has worked with the Ohio DepartVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00063 Fmt 6633 Sfmt 6621 E:\HEARINGS\67112 pfrm03 PsN: 67112
60

ment of Mental Health (ODMH) and the Ohio Department of Human Services

(ODHS) to help forge a policy regarding reimbursement.

A policy proposed by ODMH but not yet implemented would allow no more than

20% of services to be provided via videoconference. The SCC believes that, due to

the large geographical area, diffuse population and shortage of clinicians, rural

areas should be allowed more flexibility to utilize technology to meet the mental

health needs of their children.

Several grant proposals have been submitted in order to fund videoconferencing

systems for the satellite clinics. The SCC remains committed to the use of technology as an effective tool in addressing the behavioral health needs of children in

Appalachian Ohio.

Mr. BILIRAKIS. Well, Ms. Mary Patrick is Director of Quality Improvement, Blue Cross and Blue Shield of Montana. Ms. Patrick,

please proceed.

Ms. PATRICK. Just a side note here, do you sing, too?

Ms. ROSS-LEE. I dance.

STATEMENT OF MARY R. PATRICK

Ms. PATRICK. Mr. Chairman and committee members, it is an

honor and privilege to be here today from Blue Cross and Blue

Shield of Montana to share with you what has taken place in our

great State in the field of telemedicine. I thank you for your interest and support for this technology.

Montana, the fourth largest State in the Union, has lots of vast

beauty and open frontiers, big sky country, has a small population,

approximately 880,000 people, and lots of land, 147,000 square

miles, therefore making Montana a challenging place to deliver

health care. Almost half of our total population is classified as

rural. We have 56 hospitals and critical access facilities located primarily in the western part of our State.

We have a map up there to show you. You can just put a line

right down the center of the State, and you will see the eastern

part of our State is in great need of health care delivery.

Seven counties out of 56 total have no health care facility of any

type. Forty-three of Montana’s 56 counties have no psychiatrists,

and there are no psychologists and no psychiatrists east of Billings,

all the way up to the border of Canada, as well as specialties.

Great Falls, Missoula and Billings, which are located predominantly in the western part of the State, are considered our main

medical hubs as they are the only areas in the State that can provide all types of care, including open heart surgery. In such a widespread and sparsely populated State, many residents have to travel

long distances for health care services, particularly for specialty

care.

Blue Cross and Blue Shield of Montana has been reimbursing for

telemedicine consults for almost 7 years, since first requested to do

so by several participating mental health providers in our State

and the Eastern Montana Telemedicine Network. The Eastern

Montana Telemedicine Network consists of 13 medical and mental

health not-for-profit facilities located primarily in the eastern part

of our State capable of two-way video conferencing, and they definitely fill a gap for delivery of health care in this part of our State.

At this time, both Medicaid and Medicare reimburse for these

services in Montana. Medicaid has done so since the inception of

these services in Montana. Medicare currently reimburses for conVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00064 Fmt 6633 Sfmt 6602 E:\HEARINGS\67112 pfrm03 PsN: 67112
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sultations only and has several contingencies related to payment

for these services which most providers perceive as a problem.

In addition to consultations, there will be other telemedicine

services that residents of Montana will need. Telehome care is

something that will eventually be available for alternative health

care delivery, for long-term disability and home care. Montana is

predicted to have the third highest elderly per capita population in

the year 2025.

In addition to consultations, telepsychiatry has many other applications that could also benefit Montana’s sparsely distributed population. Medication review, discharge planning and follow-up care,

individual and family therapy, emergency consultations are some of

the additional realities of care through telemedicine technology.

According to the Eastern Montana Telemedicine Network, an average of 20 Medicare patients per month over 7 years utilized telepsychiatry services and paid out of their own pockets. Telemedicine

does not create new or different health care services. It simply provides a new way to deliver existing medical or health care services.

The day will come when regulatory and payment issues will be resolved and telemedicine will be fully integrated into our Nation’s

health care system.

Blue Cross and Blue Shield of Montana is proud to be a leading

participant in this process in our State. Thank you for your time

and for asking Blue Cross and Blue Shield of Montana to participate in this hearing.

Mr. BILIRAKIS. I guess one of the questions might be asked of you

is what is their reimbursement policy, but I won’t do that at this

point.

[The prepared statement of Mary R. Patrick follows:]

PREPARED STATEMENT OF MARY R. PATRICK, BLUE CROSS AND BLUE SHIELD OF

MONTANA

INTRODUCTION

It is an honor and privilege to be here today to share with you what has taken

place and is taking place in the great state of Montana in the field of telemedicine.

I have lived in Montana for almost 10 years and I have grown to appreciate the

vast beauty and open frontiers of the fourth largest state in the union. Our Big Sky

country has a population of some 880,000 people and covers a land area of more

than 147,000 square miles. In size, our border can encompass Virginia, Maryland,

Delaware, Pennsylvania, and New York, and still have room for the District of Columbia. Montana is a challenging environment for delivery of healthcare because of

our geography and demographics. While telemedicine technology has many clinical

and non-clinical uses in both urban and suburban areas, it is the rural applications

that are most near and dear to Montanans.

I hope to provide you with some insights into why Blue Cross and Blue Shield

of Montana was one of the first commercial healthcare payers to reimburse telemedicine services. Included in this overview will be a look at Montana’s demographics, Blue Cross and Blue Shield of Montana’s role in telemedicine, and some

interesting outcomes and satisfaction comments from a provider and member.

MONTANA DEMOGRAPHICS

Overview

• 882,799—1999 estimated population.

• Per capita personal income is $22,314.00 in 1999.

• 60,000 Native Americans from 11 federally recognized tribes, residing on the 7

designated reservations.

• Urban population accounts for 52.5% of the population.

• Rural population accounts for 47.5% of the population.

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• Growth of the 65 and over population is expected to increase from 13.1% in 1995

to 24.5% in 2025.

• Montana is projected to have the third highest proportion of elderly in 2025.

DELIVERY OF HEALTHCARE IMPACT

In such a widespread and sparsely populated state, many residents must travel

long distances for healthcare services, particularly for specialty care. If a person

lives in Virginia City, Montana, and needs open heart surgery, that person has to

travel anywhere from 3 to 4 hours at a minimum, depending on where their cardiac

surgeon is located. These services are available only in Billings, Missoula and Great

Falls.

When someone in a major metropolitan area develops chest pain and calls ‘‘911,’’

there is a good chance that an ambulance will respond with Advanced Cardiac Life

Support trained personnel within 10 minutes. That person would likely be transported to a level of facility equipped to handle all cardiac emergencies and situations

within 10-20 minutes.

A rancher outside of Dillon, Montana, located in the southern corner near the

Idaho border, who develops chest pain and calls ‘‘911’’ may not see an ambulance

arrive for an hour. There is also the possibility that there are no Advanced Cardiac

Life Support Personnel on board the ambulance. It is also quite likely that once the

patient is on board the ambulance, it may take another hour or more to arrive at

a Critical Access Facility. This type of facility can only temporarily stabilize an

acute cardiac patient until they can be airlifted to a facility equipped to handle this

type of emergency.

Blue Cross and Blue Shield of Montana

Blue Cross and Blue Shield of Montana has been providing health insurance to

Montanans for 60 years. We are home-grown, based in Helena, Montana. Overall,

we serve 280,000—half of the state’s insured population—across our state. We also

serve 140,000 seniors through Medicare Parts A and B.

Our health plans offer choice and access to all types of healthcare services for our

consumers. Given the rural nature of our state, we face challenges in providing

quality primary, particularly specialty care, to our members. An overview of specialty care availability in Montana is specified in the five attached maps.

Blue Cross and Blue Shield of Montana contracts with 1,160 family practice and

specialty participating physicians in our traditional indemnity network. A breakdown of numbers and distribution of specialty physicians is as follows:

• Four pediatric cardiologists—three are located in three out of the four main medical hubs’ in the western part of the state, and one located in Billings.

• One pediatric pulmonologist (located in the western part of the state).

• Thirteen cardiovascular surgeons, 38 cardiologists and 15 pulmonologists (none

are located east of Billings).

• Thirty-two neurologists and 23 neurosurgeons (none are located east of Billings).

• Three neonatologists (none are located east of Billings).

• There are a total of 56 hospitals and Critical Access Facilities in the state with

only five considered to be Tier I level facilities. Tier I facilities provide the highest level of acute care (none are located east of Billings). Seven counties are

without any type of healthcare facility.

In late 1993, our company was asked by Eastern Montana Telemedicine Network

(EMTN) in Billings and several of our providers to reimburse clinical services for

our members via telemedicine technology. EMTN is a consortium comprised of 13—

notforprofit medical and mental health facilities located primarily in counties east

of Billings. Each site is connected via two-way interactive videoconferencing technology to provide medical and mental health consultations, medical and higher education, and administrative and business services to residents in all communities of

the network. EMTN provided telemedicine services at various sites in the eastern

part of Montana.

Because of the potential benefits for our Blue Cross and Blue Shield of Montana

members, our Company initiated the process for approval for reimbursement of telemedicine services just like face-to-face consultations. Our multi-specialty physician

advisory board reviewed the proposal and advised that we should pay for telemedicine consultations because we reimburse face-to-face encounters minus the technology component. As a result, the referring health care professional would be reimbursed for an office visit and the consulting physician would be reimbursed for the

consultation visit. Upon initiation of reimbursement for these services, we asked the

health care professional community to include a specific modifier when billing for

these encounters to help us track utilization. We have not, however, been able to

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track utilization through this technology due to inconsistent compliance. While we

don’t want any extra burden on our health care professionals for the purpose of

tracking utilization, we do want to foster compliance to better quantify all quality

of care issues.

VALUE TO OUR MEMBERS:

Through the Eastern Montana Telemedicine Network, Montana has been able to

realize the positive outcomes of our Company’s decision to reimburse for telemedicine. Because psychiatry is consistently the highest utilized specialty in Montana,

and there are no psychiatrists east of Billings, we have chosen the following provider and member testimonials to share with you today:

A Billings, Montana psychiatrist has been providing psychiatric services to patients throughout eastern Montana for over 15 years. Since the inception of

EMTN (7years) this doctor has transitioned a case-load of over two hundred patients to telemedicine. His patients are always given a choice of coming to see

him in Billings or choosing to be seen over telemedicine. Ninety nine percent

of the time they chose to be seen over telemedicine. During a recent televisit

with this psychiatrist, one patient commented on how much they liked being

able to see him this way. She said, ‘‘ you know my daughter would have to take

a day off from work and put her child in day care to bring me to see you. This

is so much better for all of us.’’ On a recent patient evaluation form from

EMTN, the following comment was made, ‘‘This technology is a must for rural

areas like ours. This saved me a day’s drive down and a day’s drive back plus

the expense of a hotel for a 15 minute check.’’

MEDICAID AND MEDICARE REIMBURSEMENT IN MONTANA

Medicaid in Montana has reimbursed for telemedicine services since the inception

of telemedicine. In fiscal year 1995, Medicaid estimated that using telemedicine

saved Medicaid patients $65,000 in travel time, lost wages, food and lodging. Since

Medicaid reimburses for travel expense, this item was a tangible outcome for them

to measure and track.

As a result of the Balanced Budget Act (BBA) of 1997, Health Care Financing Administration (HCFA) was mandated to reimburse for select teleheatlh consultations

beginning January 1, 1999. This was an important first step in recognizing telehealth as a reimbursable service. The current rules remain in an evaluation period

as evidenced by the numerous federal bills that have been introduced to amend

these rules.

The BBA requires fees related to telemedicine encounters be shared (split) between the referring health care professional and the consulting specialist. The

Healthcare Financing Administration (HCFA) has interpreted this to mean that

75% of the normal consult fee should go to the specialist and 25% should go to the

referring health care professional. Fee sharing is the area of most concern to health

care professionals and those involved in telemedicine programs.

At this time HCFA only recognizes physicians, physicians assistants, nurse practitioners, nurse midwives, or clinical nurse specialists as providers of telemedicine

services who are eligible for reimbursement. HCFA’s rules exclude clinical psychologists and physical, occupational, and speech therapists. These health care professionals are normally reimbursed when providing services face-to-face.

A large majority of telemedicine programs utilize registered nurses, licensed practical nurses, or other health care professionals to present the patient to the physician over the telehealth system. The Health Care Financing Administration does not

recognize these providers to be eligible presenters of patients for reimbursement

purposes. The agency only recognizes the actual referring health care professional

or an employee of the referring health care professional, who could be a registered

nurse, licensed practical nurse, etc.

Telehomecare provides healthcare service delivery alternatives for individuals

with disabilities and home care clients with both acute and long-term needs. Many

patients or family member caregivers are capable of presenting themselves or the

family member to a health care professional over a telemedicine network for care.

Telehomecare lends itself to this type of presentation, as do certain psychiatric sessions. Self-presentation of a patient for telehomecare allows the patient to become

more involved in treatment and recovery. Also, telehomecare allows a reduction in

the number of visits by a nurse, who in turn reduces costs and allows for increased

interactions with the medical staff via the telehomecare health system. For telepsychiatry, those patients who can present themselves ensure confidentiality of such

sessions.

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CONCLUSION

Telemedicine is a tool for improving the rural health care system. Telemedicine

fosters the growth of integrated health care systems that serve both rural patients

and rural health care professionals. It provides rural patients with access to comprehensive health care services, both in their community and from distant health

care professionals. Rural health care professionals find their practice less isolating

because telemedicine facilitates contact with distant colleagues who share their interests.

The day will come when telemedicine is fully integrated into the rural health care

system. The effectiveness of telemedicine will have been established. The regulatory

and payment issues will have been resolved. Many players will have participated

in this process including Congress, states, telecommunications, health care professionals and others. Blue Cross and Blue Shield of Montana is proud to be a leading

participant in the process in our state.

Thank you for your time and for inviting Blue Cross and Blue Shield of Montana

to provide you with information on our progressive support and payment policies in

the area of telemedicine.

Telemedicine Reimbursement References

1. Campbell, Paul R., 1996, ‘‘Population Projections for States, by Age, Sex, Race and Hispanic

Origin: 1995 to 2025,’’ Report PPL-47, U.S. Bureau of the Census, Population Division

2. Census and Economics, Inc., 2000 State Profiles.

3. Department of Health and Human Services, HCFA, Medicare Program, Payment for Teleconsultations in Rural Health Professional Shortage Areas, Proposed rule, July 1998.

4. Eastern Montana Telemedicine Network, provider and member comments on Telemedicine

Service, 2000.

5. McLosky-Armstrong, Tracy, Sprang, Burgiss, Reid, Hammack, ‘‘Medicare Reimbursement

for Telehealth Encounters—Position Paper’’, October 5, 1999.

6. McLosky-Armstrong, Tracy, Sprang, Burgiss, ‘‘Medicare Reimbursement for Telehealth—An

Assessment of Telehealth Encounters, July 1, 1999-December, 1999, July 8, 2000.

7. Population Estimates Program, Population Division, U.S. Census Bureau, Washington D.C.,

2000.

8. Telemedicine—A Guide to Assessing Telecommunications in Health Care, Marilyn J. Field,

Editor, National Academy Press, Washington, D.C., 1996.

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Mr. BILIRAKIS. Dr. Grigsby is the Study Manager for the Center

for Health Services and Policy Research with the University of Colorado Health Sciences Center.

Dr. Grigsby, please proceed, sir.

STATEMENT OF JIM GRIGSBY

Mr. GRIGSBY. Thank you, Mr. Chairman, honorable members. I

appreciate the opportunity to speak with you today.

I think previous witnesses, because they tend to be providers or

involved in different aspects of telemedicine, have presented a

somewhat different perspective than I will. I am in basic agreement with previous witnesses, as well as with Dr. Berenson, that

some fundamental changes are necessary in coverage and payment

policy toward telemedicine, but I should say I am a research scientist primarily at the University of Colorado. I am in the Division

of Geriatric Medicine; and I do a combination of medical outcomes

research, primarily with Medicare beneficiaries, and cognitive neuroscience looking at neurologic functioning in older adults; and so

many of my remarks come from that perspective.

Telehealth, which is the use of telecommunications and information technology, is a term we have thrown around quite a bit today.

The basic idea of it is to deliver health services. It seems simple

enough on its face, but it presents actually a number of complex

issues for policymakers, legislators and health care practicers as

well. The concept of telehealth is nearly as broad, in fact, as is

medical care itself; and consequently it defies simplistic discussions

of effectiveness or cost effectiveness.

In general, it involves three components. First, it refers to the

provision of various kinds of health services, ranging from information about health and illness to diagnostic assessment, remote

monitoring of patients and robotic interventions. Second, the services involves persons that are different from a provider. And, third,

they are accomplished using any of a variety of telecommunications, video and information technologies.

Given the newness of the field and the wide range of possible

uses of the technology, some telehealth applications are probably

very effective and quite inexpensive. Others are likely to be extremely expensive and of little use for most practical purposes.

What this means is if you ask whether telehealth is effective or

cost effective there is no answer to your question. On the other

hand, if you ask whether interactive video is an effective means of

allowing people in remote rural communities to see specialists in

urban areas, not only can your question be answered but the answer is probably yes.

Efforts to develop coverage and payment policies so far have focused primarily on interactive video and in rural areas in a fee-forservice environment. While this is an important application, it appears that, over the coming years, it is going to represent a diminishing percentage of what actually transpires in telehealth; and it

is important that we realize that if a rational policy is to be devised

what we have to do is make relatively fine-grained distinctions

among different types of telemedicine practices and applications.

For a number of complex reasons, research data on telehealth

are very limited, often nonexistent. Because the evaluation of new

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1 Institute of Medicine Committee on Evaluating Clinical Applications of Telemedicine: (1996)

Telemedicine: A guide to assessing telecommunications in health care. MJ Field (ed.). Washington, DC: National Academy Press.

technology is an inherently time-consuming process, we are constantly falling farther behind as the technology and uses to which

it is put develop rapidly. For example, HCFA, at the direction of

Congress, established several telemedicine demonstration problems

in the 1990’s. At the time they were established, these were stateof-the-art. They were intended to use primarily interactive video for

the provision of specialty medical consultation to residents of rural

areas, and it was assumed that this was the primary direction in

which telemedicine was going to go.

An evaluation of these demonstrations was established, and that

demonstration project, the waiver that provided payment for those

demonstration programs and the evaluation itself were narrowly

defined. Initial projections were that there would be a large number of patients who would receive services under this program; and,

in fact, it has been quite limited, as Dr. Berenson and others have

pointed out. That represents historical factors, assumptions that

were made at one point about the direction of telemedicine and our

own lack of knowledge.

I am the principal investigator on the evaluation for HCFA of the

telemedicine demonstrations, and because the demonstrations

themselves have produced very low volumes of patients, we have

suggested a number of changes in direction in the evaluation and

in HCFA’s approach to this, including studies of home health care,

of the use of store-and-forward technology, and we are currently in

negotiations with HCFA about some of these possible changes.

They are under consideration, look upon them favorably, and we

are hopeful that in the very near future we will be able to redirect

the focus of our efforts to some extent.

Thank you.

[The prepared statement of Jim Grigsby follows:]

PREPARED STATEMENT OF JIM GRIGSBY, STUDY MANAGER, CENTER FOR HEALTH

SERVICES AND POLICY RESEARCH, UNIVERSITY OF COLORADO HEALTH SCIENCES

CENTER

DEFINITIONS AND APPLICATIONS OF TELEMEDICINE, TELEHEALTH, AND E-HEALTH

The terms telemedicine, telehealth, and e-health are often used somewhat interchangeably, and each may be defined in a number of different ways. In general, they

involve the following three components: 1) These terms refer to the provision of various kinds of health services, ranging from information about health and illness

through diagnostic assessment, remote monitoring of patient condition, and robotic

interventions. 2) The services in question involve persons who are at some distance

from the provider. 3) They are accomplished using any of a variety of telecommunications, video, and information technologies. The Institute of Medicine, in its 1996

report on the evaluation of telemedicine,1 discussed a number of definitions, some

of which also encompassed the use of these technologies for administrative and educational purposes.

While the term telemedicine is ordinarily used to refer to the remote provision of

medical care, the broader term telehealth often is used to include such things as patient education, public health, continuing education for health professionals, administrative meetings, and psychiatric discharge planning, among many others. Ehealth is frequently used to refer to commercial applications of Internet technology

that generate revenue either by selling health-related goods and services, by advertising such goods and services, or by obtaining and selling information about Internet users. Although the use of the telephone by itself to provide health services

could be considered to fall under most definitions of telemedicine, and there are data

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showing that many such uses are cost-effective, telephonically provided services are

not covered for Medicare beneficiaries, and most other purchasers of health services

also refuse to pay for telephone consultations.

Discussion of the effects and effectiveness of telemedicine and telehealth is often

complicated by the fact that the terms encompass a very wide array of technologies

and applications, varying along several different dimensions. For example, a telemedicine encounter may be conducted in real time between two or more persons at

different sites using interactive video (IAV) or audio (radio or telephone) technology.

A substantial percentage of telemedicine currently is accomplished in this manner

using IAV, with a consulting provider at one end of the link and a patient (and

sometimes another provider) at the other end. However, because of the high cost of

transmission and limitations on the local infrastructure, video technology is not

available everywhere. Consequently, in certain remote regions—such as much of

Alaska—paraprofessional community health aides may employ a kind of telemedicine that uses radio to allow them to consult with physicians or other providers

about patient management.

While the use of videoconference technology links patients and providers simultaneously, telemedicine and telehealth services also may be provided asynchronously,

in which case providers, or providers and patients, interact with one another somewhat less directly, through systems that transmit data by email, fax, or other means

of data transfer. Some systems of this sort involve personal computer-based storeand-forward systems, which are essentially multimedia email (i.e., containing images). Store-and-forward protocols generally involve transmission of images (e.g., CT

scans or x-rays), lab data, history, and physical exam findings bundled into a single

email message that is transmitted to a medical specialist or subspecialist for interpretation. The consultant then sends a report of findings and impressions by return

fax or email. Other telehealth systems involve transmission of certain physiologic

data—such as diabetics’ blood glucose values—generally over ordinary telephone

lines, possibly by means of a dedicated modem.

There is a broad and ever-expanding variety of uses of the various technologies

for providing different health services. Among others, these include the use of IAV

for specialty consultation, psychiatric evaluation, and psychiatric treatment; storeand-forward consultation and second opinions; compressed IAV for home health

care; facsimile transmission of EEG and EKG data; real-time telemetric transmission of vital signs; and regular remote monitoring of respiratory status, using

spirometry, of persons with asthma. Some providers have established World Wide

Web sites that provide educational material to patients with certain conditions, or

that permit communication between patients and providers. Should humans travel

to Mars, a sophisticated telemedicine system will assuredly be necessary, but the

same might be said of many remote terrestrial regions where access to health care

is severely limited.

Perhaps the most important point to be made here is that telemedicine and telehealth are not unitary phenomena, but are extremely variable in their specific aims

and implementation. The telemedicine programs of the early 1990s, which relied primarily on remote videoconference technology, bore a striking resemblance to the

very first telemedicine programs established in the late 1950s. However, recent advances in medical, computing, and telecommunications technologies have led to the

development of such a diverse range of technologies and applications that it no

longer makes sense to pose questions about the effectiveness or cost-effectiveness of

telehealth. Some telehealth applications are very effective and quite inexpensive,

while others are likely to be extremely expensive and of little use for most practical

purposes. Therefore, the questions to which we should turn our attention have to

do with whether certain applications of specific technologies are useful means of

handling specific health conditions.

For illustrative purposes, consider the question, ‘‘is telehealth effective?’’ The

question is commonly asked, and sounds reasonable enough, but unfortunately is so

broad it has no meaningful answer. Because telehealth is really a vehicle for delivering health services of all sorts, this is tantamount to asking whether telecommunications systems work, and whether medical care is effective. If we are to learn anything of value about the use of information and telecommunications technology in

providing health care, the questions we ask must be precisely focused. We might,

for example, ask, ‘‘does the remote monitoring of blood glucose levels, with transmission of the recorded data via modem to a computer that analyzes the data and

notifies providers and/or patients when there are problems, result in better control

of blood glucose levels, less expensive management of diabetes, and a lower rate of

serious complications?’’

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THE EVALUATION OF TELEHEALTH

There exist limited data on the effectiveness and cost-effectiveness of telehealth.

In 1996, the Institute of Medicine of the National Academy of Sciences compiled a

comprehensive volume on telemedicine, with detailed recommendations for its evaluation. This worthwhile endeavor has thus far produced little fruit. This lack of relevant data may be traced to many factors, including the following:

• the constant change and refinement of the technology—by the time a research

study is published, the equipment, technology, and applications studied may be

obsolete; • an emphasis on the development and implementation of systems intended to provide clinical services, by administrators and clinicians for whom research is of

secondary importance; • relatively poor compliance with data collection protocols, even in programs that

have attempted to evaluate their telehealth services; • the very low volume of persons who receive telemedicine services, which makes

it difficult to obtain adequate samples for analysis, especially within specific

categories of disease; • the variability among telemedicine programs with respect to equipment, technology, applications, and services provided; • the rapid pace of change in the telecommunications and computer industries; for

example, personal computers did not even exist until the early 1980s, yet it is

now possible to purchase a desktop computer that meets the definition of a

supercomputer for under $3,000; • the use of telemedicine has not reached a sufficiently steady state, even within

most single programs, to permit comprehensive cost-effectiveness analysis; • reluctance on the part of many health care providers to use telemedicine—due in

part to the lack of a national coverage and payment policy, and in part to deeply

entrenched habits of practice; • policies, regulations, and legislation (e.g., limiting coverage) that retard the proliferation of telehealth; and • failure of agencies that have funded telemedicine projects to require systematic

evaluation of outcomes.

Discussions of research on telehealth generally concern themselves with three

major issues: costs, quality, and access. The essential question is whether these

services provide care of adequate quality at a reasonable cost. Also of interest is

whether they permit access to health care for persons for whom such care otherwise

might not be available. The issues that providers and policymakers would like to

see addressed include the following:

• Is telehealth care comparable in quality to health services provided in person? • How should such services be reimbursed? • Are the outcomes of in-person health care and telehealth care equivalent? • Is the cost of telehealth services roughly equivalent to that of face-to-face care? • Will telehealth increase access to health services? If so, what will be the effect

of telehealth on overall rates of use of health services? Will increases in some

areas (e.g., outpatient specialist consults) be offset by decreases in others (e.g.,

inpatient admissions)? • Are patients satisfied with the care they receive via telehealth?

Unfortunately, few data exist providing answers to these questions. Moreover, the

questions themselves are overly broad, and cannot possibly be answered in a meaningful way in a reasonable period of time. To a large extent, rapid technological

change and the flow of investment money drives the evolution and proliferation of

telehealth. New health care applications follow at a somewhat slower pace, while

the associated social, policy, and legislative issues lag well behind. Because technology assessment moves far more slowly than technological innovation and dissemination, the data required for planning and policy making are inevitably late in

coming, frequently out of date by the time they are available, and of limited use

for planning.

For example, the Health Care Financing Administration (HCFA), at the direction

of Congress, established five telemedicine demonstration programs in the mid-1990s.

These programs, which were state-of-the-art at the time they were initially funded,

were established primarily to use interactive video for the provision of specialty and

subspecialty medical consultation to residents of rural areas. With the benefit of

hindsight, it appears that they were based on a model that some telehealth providers now consider either unworkable or of limited applicability. In addition, the

payment waiver for the demonstration, obtained by HCFA with the approval of the

Office of Management and Budget, was narrowly defined (covering only specialty

consultation, and not common patient evaluation and management codes), and was

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based on projections of patient volumes that were considered realistic in 1995. Subsequent experience, however, has shown that the number of persons living in rural

areas who require consultative services—and who are likely to be referred for such

services by their primary care physicians—is significantly lower than anticipated.

As a consequence, the evaluation of the demonstrations and payment methodology

has collected minimal data. The problem of inadequate research data is not unique

to these demonstrations, however. For example, in the case of one federal agency,

an evaluation that had been in planning for several years was canceled before it

began.

WHAT DO WE KNOW ABOUT TELEHEALTH?

Certainly there are important reasons to evaluate the efficacy and effectiveness

of telehealth scientifically, and to assess its economic effects on the health care system. It should be kept in mind, however, that the effectiveness of most health services provided to Americans in conventional face-to-face modes of delivery has never

been evaluated. In fact, only in recent years have scientists, providers, and the government begun to place an emphasis on evidence-based medicine, accompanied by

the development of practice guidelines intended to ensure a relatively uniform, empirically-based, acceptable standard of care.

Although the evidence is quite limited, there are some data that support the effectiveness of certain telehealth applications. For example, interactive video consultation, evaluation, and management have been practiced clinically off and on for over

40 years, and most physicians who have used the technology—even the relatively

unsophisticated systems of the 1960s and 1970s—have found it an acceptable means

of providing a wide range of services. This general conclusion has been supported

by a handful of well-designed, but mostly older studies. It appears that interactive

video health care has some limitations, but if these are kept in mind and the technology is used appropriately, preliminary data suggest that it is generally safe and

effective.

Less is known about such applications as store-and-forward telemedicine, remote

monitoring of physiologic status, or the use of telemedicine in home health care.

Nevertheless there is reason to believe that these may be useful additions to the

more traditional health care system if used judiciously. At this time, the bulk of the

limited data supporting these methods is anecdotal, but generally positive.

We know very little about the actual costs of providing telehealth services. It is

clear that those applications involving interactive video tend to require significant

amounts of telecommunications bandwidth, and consequently have rather high (and

sometimes prohibitive) recurring costs, despite the availability of Universal Service

subsidies in some areas. As a rule, the few studies that have been conducted on

costs suggest that as long as patient volumes remain low (an almost ubiquitous

problem, especially in rural areas), interactive video health services are more costly

than those provided in person. This relationship may be reversed in the event that

volume could be increased, but if recent experience is a guide, it seems that the

number of telehealth encounters is liable to increase slowly. As a consequence, the

high telehealth encounter cost per patient is particularly problematic in rural

areas—especially those that are very sparsely populated—since these areas may

never have sufficient numbers of telehealth encounters to generate the revenue that

would support an interactive video system. In fact, for some geographic areas it is

difficult to imagine any scenario in which interactive video telehealth could become

financially self-sustaining.

Although it has not been examined carefully, a reasonable case could be made a

priori for the use of telehealth in home health care. Beginning 1 October 2000,

HCFA will reimburse home health agencies using a prospective payment system

(PPS), according to which an agency will receive lump sum payments (with certain

defined exceptions) for providing services to patients in the home, irrespective of the

number of visits required. Because preliminary data suggest that interactive video

may be useful for certain home health tasks, the home health industry has shown

considerable interest in implementing telehealth systems that could substitute for,

or augment, some in-person visits by nurses, therapists, or aides. While this telehealth application might reduce agency costs, and could potentially increase access

to care for patients, it also raises questions about the quality of care provided—

questions that presumably could be answered using data from the Outcome Assessment and Information Set (OASIS) HCFA’s instrument for assessing quality of care

and enabling outcome-based quality improvement. Thus, although we don’t currently have answers to these questions, their evaluation in this case could be relatively straightforward.

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There are limited data concerning the interpersonal/social aspect of the quality of

telemedicine. In general, however, studies of patient and provider satisfaction with

telemedicine have yielded mostly positive results (as is the case for studies of satisfaction with medical care in general).

The evaluation of telehealth is unique in that telehealth is not a specific treatment or device, a diagnostic or interventional tool with a fairly circumscribed use.

Instead, it is essentially a means of extending the services of health care providers

to persons who are not physically present in the provider’s office. Hence its scope

is exceptionally broad. Even if those who conduct research on these questions could

keep pace with change in technology in applications, it would be impossible to evaluate all the possible uses of telehealth/telemedicine.

CURRENT TRENDS IN TELEMEDICINE

The early 1990s saw the proliferation of telemedicine systems providing real-time,

wide-bandwidth video consultations, generally from a tertiary care hospital (often

referred to as a ‘‘hub’’) to outlying rural hospitals and clinics (the ‘‘spokes’’ in these

systems). However, the past few years have witnessed a shift toward PC-based

store-and-forward telemedicine, remote monitoring of patients’ condition, and home

health. In many cases, the former ‘‘hub and spoke’’ systems have diminished in importance, so that direct communications are increasingly possible between outlying

sites, and even between sites within different programs. The systems being used are

generally more convenient and probably cost-effective means of providing services,

many of which can be delivered across a readily available, accessible, and inexpensive Internet platform. Over time, the costs of equipment have dropped considerably

while its usefulness and usability have increased concomitantly. Telecommunications charges have remained relatively stable, but the availability of certain new

digital services has made the delivery of video-based services somewhat less expensive.

GOVERNMENT TELEMEDICINE POLICY

Since the 1960s, the federal government has supported the development of telemedicine through grants, contracts, and NASA or Department of Defense budget

line items that to date probably amount to over a billion dollars. A number of agencies currently provide such support, and their representatives have been actively involved in discussions that shape both policy and directions of growth in telemedicine. A comprehensive discussion of those policy issues is beyond the scope of this

testimony, but I will briefly mention two important and problematic policy matters:

coverage and payment for telemedicine services, the potential for fraud and abuse,

and interstate licensure.

With a few circumscribed exceptions (e.g., Congress mandated that coverage be

extended to certain Health Professional Shortage Areas effective January 1999),

Medicare reimbursement of fee-for-service telemedicine is not available, and it appears that HCFA may be reluctant to permit telehealth services under prospective

payment programs. The agency has been criticized for its caution in moving toward

a general coverage policy, but has expressed concern that insufficient data exist to

inform policy decisions. Other payers have been slow to set policies of their own,

although some commercial insurance companies pay for certain telemedicine services, as do Blue Cross/Blue Shield organizations, and Medicaid covers some telehealth encounters in nearly a third of the States.

Many of the issues involved in telehealth coverage policy are admittedly somewhat complex. As noted previously, discussions of telemedicine coverage policy tend

to treat telehealth as though it were a readily identifiable, unitary clinical phenomenon. A major problem with this line of thinking is the protean nature of the

health care that can be provided using computer and telecommunications technology. A comprehensive policy must take these important differences into consideration. In addition, many telemedicine providers are moving toward alternatives to

IAV consultation systems. Yet the primary focus of research for Medicare is on IAV

systems used for specialty and subspecialty consultation—systems which may represent a minority of telehealth applications by the time a policy is finally promulgated. Further research on the effects and effectiveness of telehealth is clearly needed, although at the current pace, the scientific data obtained are likely to lag many

years behind the current status of the technology and its applications.

An issue of some concern for policy makers is the potential for fraud and abuse.

Entrepreneurial health care providers have already drawn attention for implementing questionable schemes using the Internet, and similar operations—many

frankly criminal in nature—certainly will arise over time. Telehealth is not unique

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in this regard, however, and it seems eminently reasonable to develop methods for

detection of such abuses in conjunction with the development of coverage policies.

Finally, a lack of reimbursement for telehealth services is only one of several factors slowing the expansion of telemedicine. Licensure to practice medicine and other

health professions, for example, is regulated by the individual states, and bills have

been introduced or passed in some states that severely limit the interstate practice

of telehealth. Examinations assessing the competence of physicians are conducted

using national standards; patient outcome studies are done on a national, not statewide basis; and practice standard guidelines are developed on a national basis as

well. State regulation of licensure may well continue to hinder the spread of telehealth services.

Mr. BILIRAKIS. Thank you very much, Doctor.

I did want to announce before I go into my questions that there

will be a telemedicine demonstration immediately after we finish

up here, to be presented by Eastman Kodak, by VitelNet and

American Medical Development. Hopefully, most of us can stay for

that demonstration. They have gone to an awful lot of trouble to

present that to us.

Of course, the opening statements of all members of the subcommittee are a part of the record.

Ms. Patrick, what reimbursement policies does Blue Cross and

Blue Shield of Montana follow? Do you follow the HCFA reimbursement policies when you reimburse?

Ms. PATRICK. No, we don’t.

Mr. BILIRAKIS. You have your own criteria?

Ms. PATRICK. We pay just as we would for any face-to-face service encounter, patient encounter. We pay the referring physician a

visit, you know, for the initial diagnosis, and then we pay the consulting physician for their consultation.

Mr. BILIRAKIS. Any comments regarding that? I think we are all

pleased to hear that.

You know, in the process of any piece of legislation we have the

Congressional Budget Office in our lives, and they have to score,

as we call it, all legislation, and in other words price it. And of

course, as much as we keep harping on what we call dynamic scoring and things of that nature, we never get it. They are concerned

with the cost today and not concerned, unfortunately, with the ultimate savings, the preventative health care, for instance.

Dr. Burgiss, particularly in your case, looking over your written

submittal here you have given us an awful lot of information that

should be very helpful in terms of approaching them and trying to

get better scores, maybe not for this immediate piece of legislation

that I am talking about but downstream as we go along. And so

I would say to all of you, any information you can furnish to us in

that regard would be very, very helpful in the ultimate savings

that result.

I don’t know, Ms. Patrick, whether Blue Cross and Blue Shield

of Montana has basically conducted some sort of a study to determine is this costing them really more money or is it really saving

them money or whatever the case may be, but if that is the case,

please submit all that to us.

Ms. Davis, you indicate in your testimony that your region, the

Upper Peninsula, should be an ideal place for telemedicine because

every county in the UP, the Upper Peninsula, holds partial Health

Professional Shortage Area designation, which is a prerequisite for

HCFA reimbursement. And you state, current HCFA policies frusVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00080 Fmt 6633 Sfmt 6602 E:\HEARINGS\67112 pfrm03 PsN: 67112
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trate even the UP with unrealistic requirements regarding who can

be a telepresenter—the 75/25 split fee that many of you have mentioned, the strange roles governing store-and-forward technology

and the ineligibility of some services for reimbursement altogether.

Now, I know that Bart is aware of most of these, maybe all of

them, and he has had quite an input in what we are now working

on and hopefully will have an input on anything we do in the future when we expand our look at this area. Would you want to

share with us which of those HCFA policies you feel are most destructive to telemedicine in the Upper Peninsula?

Ms. DAVIS. I would suggest that when we work with physicians

and patients in putting together and coordinating telemedicine consultations the two most restrictive are who the presenter is. Most

often we have an RN and sometimes an LPN, and there are situations where the patient presents him or herself. And then the feesharing usually comes up at a later point when we talk to the physician about reimbursement; and, to be honest, there are times

when the physician is liable to say, let us forget it; I will see the

patient in my office.

Mr. BILIRAKIS. Any other comments from any other panelists in

that regard? Yes, Dr. Rheuban.

Ms. RHEUBAN. The issue of primary care practitioners leaving

their office to travel with a patient to the workstation is problematic as well. These doctors are very busy and for them to drive

even, for example, as Ms. Hubbard described, 40 minutes round

trip to a workstation at another clinic is an impediment because

they have patients waiting in their waiting room.

Mr. BILIRAKIS. Any further comments? Yes, Dr. Burgiss.

Mr. BURGISS. Yes. An example that well illustrates this, we have

a clinic in a rural area. The care provider is a nurse practitioner,

and that nurse practitioner is busy seeing the patients that are in

the waiting room. The nurse practitioner doesn’t have the time,

even in the same building, to present patients for telemedicine purposes. That should be done by her nurse associate instead of the

nurse practitioner who should be caring for those in the waiting

room.

Mr. BILIRAKIS. And do you feel that that nurse practitioner is

competent and capable to present this patient to——

Mr. BURGISS. Yes. The nurse practitioner or her nurse associate,

either one could do the presentation.

Mr. BILIRAKIS. My time is expired really, but just very quickly,

one of the areas that we are going to have to address—and this is

why telemedicine really did not take off a few years ago the way

some of us hoped it would—is the licensure requirements in various States. Any quick comments regarding that? Yes.

Mr. REID. Mr. Chairman, in response to that, for some medical

centers and some telemedicine programs, licensure, interstate licensure, cross-State licensure is an issue. But, to be perfectly honest, I think that that falls about No. 6 or seven on the list of things

that might ought to be fixed. The comparative number of people,

patients and providers that that issue affects is small, compared to

the issues we brought up about fee splitting, about scope of services

and eligibility.

Mr. BILIRAKIS. Dr. Ross-Lee.

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Ms. ROSS-LEE. I just wanted to add, one of the areas that we

haven’t touched on, because when you talk about the two ends of

the services, particularly in rural areas, the technical personnel to

support these systems is not there and very difficult to access. It

is interesting that becomes the pivotal issue often.

Mr. BILIRAKIS. What would you say, though, to the medical association that would demand that it be a licensed physician on each

end?

Ms. ROSS-LEE. Licensed physician on each end of the delivery?

Mr. BILIRAKIS. Yes or—well, licensed physician, a licensed individual but——

Ms. ROSS-LEE. Has to be on one end of the service.

Mr. BILIRAKIS. How about each end?

Ms. ROSS-LEE. Not necessarily each end.

Mr. BILIRAKIS. Not necessarily each end.

All right. I am going to yield to Mr. Brown.

Mr. BROWN. Thank you.

Dr. Grigsby, thank you for joining us. You provided us I thought

a pretty good definition of telehealth and some of the things—and

I think a pretty good understanding or gave us a pretty good understanding of the sort of range of services. Tell us, if you would,

in terms of cost, in terms of effectiveness, what aspects of telehealth have been most successful, what have been least successful.

Just sort of run through that, if you would, for us.

Mr. GRIGSBY. It is difficult to do with any sort of rigorous information because no good-quality, well-designed cost-effectiveness

studies have been conducted with the exception of studies in very

controlled populations like prisons, that sort of thing. Anecdotal

data suggests that many applications of telemedicine may well be

quite cost effective. Certainly, there may be savings for patients

who don’t have to do a lot of traveling. There may be other sorts

of savings as well.

Some people suggested store-and-forward technology might be

rather less expensive than face-to-face. Home care is a subject that

has been brought up considerably today, and a number people

think that the cost of home health visits could fall by as much as

60 to 65 percent if they were conducted using interactive video.

Mr. BROWN. What role does volume have in that in terms of comparing costs of telehealth versus patient service directly?

Mr. GRIGSBY. A significant role.

One of the difficulties, for example, in rural areas is that the

costs of providing the service remain relatively high due usually to

recurring costs that are fixed for telecommunications, for example.

So if you have a sparsely populated rural area and the volume of

referrals is low, then the cost per patient consults will then be relatively high. So as you are able to increase that volume, then you

may get some improvements in that ratio. The difficulty is, in

many rural areas there are some question whether it will ever be

possible to develop self-sustaining programs that will provide a

wide range of telemedicine services.

Mr. BROWN. Dr. Ross-Lee, do you want to comment on that?

Ms. ROSS-LEE. I was just agreeing with his comments that in

some rural areas, even using the technology, getting sustainable

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services that are cost effective over time, I am just not sure whether there is a formula to do that.

Mr. BROWN. Thank you, Mr. Chairman.

Mr. BILIRAKIS. Mr. Stupak, to inquire.

Mr. STUPAK. Thank you, Mr. Chairman.

Ms. Davis, assuming HCFA and private payers reimburse telehealth in a sensible way—that is a big if, but let us say they did—

how would Marquette use its network? In short, I guess what I am

trying to drive at is how could a network work more, better, get

more use out of the network we currently have?

Ms. DAVIS. Well, I think the fixes in reimbursement would certainly go a long way to convince physicians that it is a viable opportunity. We are also working on some other barriers that we

have. We feel that the convenience of the equipment to the physician is a real detriment, and that is one of our new initiatives for

the upcoming year. Certainly staff needs to be dedicated to promote

and to set up the systems around the telehealth consultations.

Those don’t come at the drop of a hat either.

So reimbursement certainly is one issue; and, as Joe Tracy pointed out, it is a significant issue in terms of furthering telehealth. It

won’t make or break it itself. There are other barriers out there.

So we are working on the other barriers, too, but certainly removing some of the restrictions in reimbursement would open the

doors.

We use the system for communities, the community hospitals to

allow their patients to present to our specialist. We have some specialists at Marquette General that consult with subspecialties at

educated care centers like University of Michigan.

We have used it when your specialists are traveling out among

the communities. For instance, in the case of pediatric cardiology,

we have one of them in the Upper Peninsula. So when that pediatric cardiologist is out in, say, Houghton and we have an infant

in our neonatal intensive care unit that needs the services immediately, we use it that way. So it is not always how some people

think of telemedicine consults with the rural physician referring to

the specialist.

And one thing that has been striking me today is that there is

no two or three set examples of telemedicine, that there are so

many different situations in which you could use it and you would

find so many different stories as you talk to each one of us on how

that happens.

Mr. STUPAK. I was going to offer—anyone else want to expand

on that, how else can we have optimum use of telemedicine, what

barriers must we overcome? Mr. Reid.

Mr. REID. Thank you, Mr. Stupak.

One of the clear issues as a HCFA demonstration program and

that I think as experienced by a lot of telehealth providers is the

scope of services currently reimbursed is so narrow it defines a

very small percentage of the patients that could receive care. And

I think that if we were going to try and optimize the use of our

network for clinical purposes, the first thing I would ask is we be

allowed to provide all the services that we can over telemedicine,

not just the very narrow limited scope of consultation codes, the 12

CPT codes I referred to earlier.

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There has been a lot of discussion about we just don’t know, we

don’t know what is safe, we don’t know what is efficacious, there

haven’t been any randomized controlled trials. To be perfectly honest, there are lots of services that HCFA recommends or reimburses for today that have never been proven with randomized controlled trials. They reimburse for the remote interpretation of

ECGs when faxed to the cardiologist. I am not aware of any randomized controlled trials to show the cardiologist could read faxed

ECGs as well as they could read the ECG they might hold in their

hand.

And this speaks to the point we have already said, this is not a

new technology. It is not a new service. It is a new way of providing the same old service. And with the limitations of the obvious, like surgical procedures, there are systems in place within

HCFA’s accounting and computer systems today that say, whoops,

this particular type of provider, this particular type of specialist,

why in the world is this person billing this particular code that describes something that is totally out of their presumed scope of

practice? The same sort of check and balance could be applied to

the services if they were just to be open to a broader service; okay,

we are not going to reimburse for surgical procedures performed

over telemedicine.

Mind you, the military might suggest that is doable. In a general

civilian population, it is not. So it is not unreasonable to think all

services could be empowered to be reimbursed with those sorts of

checks, and that would be our primary request.

Mr. STUPAK. Let me ask this question and defer maybe to the

doctors on the panel. In telehealth how can we use that to decrease

patients costs like maybe allowing earlier intervention such as diabetes management? Do you do that now? How is it working? What

other example besides diabetes would be an example? Dr. Rheuban.

Ms. RHEUBAN. We primarily have done a lot of diabetes education using our telehealth networks. We have actually done hundreds of hours at multiple sites simultaneously and let them all

chat with our diabetes educators in Charlottesville. And we think

education plays a key role in improving the health of our citizens.

So that is sort of a tagalong extra by having these networks in

place to be able to use it for other applications as well as for health

professional education as well.

In terms of costs, pediatric cardiology seems to be coming up, and

that is my specialty. I would say we are also enrolled in a multiinstitutional collaborative study to look at the costs of interpretation of pediatric cardiac ultrasounds remotely via telemedicine

versus the costs of transporting through ambulances and helicopters and fixed-wing patients to health care facilities where there

are pediatric cardiology services available.

We in Virginia also travel. We have field clinics all over the Commonwealth of Virginia, but when we travel to Southwest Virginia

we are there 1 day out of every 2 months. With the telemedicine

services, we are there all the time.

Mr. STUPAK. Thank you, Mr. Chairman. I see my time is up, so

thank you.

Mr. BILIRAKIS. Mr. Strickland.

Mr. STRICKLAND. Thank you, Mr. Chairman.

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Dr. Ross-Lee, you mentioned in your testimony this concept of

having digital health care empowerment zones for rural America.

It is an intriguing concept to me. Could you elaborate on what you

are thinking when you talk about that?

Ms. ROSS-LEE. Well, even as I have listened to the witnesses

today, as we describe our communities, as much as there is a significant need based on access both to primary care services and

specialty services, each of these communities is different, and certainly the problems that we are attempting to address are very

complicated and include more than just health care which seems

to be a symptom of a broader infrastructure problem. It makes

sense to me, therefore, to empower the communities themselves, to

look at communities as to what may be necessary for them to most

efficiently and most effectively use the technology to deliver the

kinds of services that would be appropriate for their community.

The earlier question about whether a licensed professional

should be on either end—I mean, I visited Alaska; and the reality

is they have lay people trained to deliver services, and without

them there would be no services. So I think we need to deal with

the specifics of the community, and this kind of empowerment zone

would allow you to do that. I mean, the community comes together

and plans, looks at what it needs, assesses its challenges and then

try and establish a system to do that.

Now, how do we fund that? I am not sure that HCFA is going

to be the mechanism for which we effectively integrate technology

into the health care of this country anyway. It is a reimbursement

mechanism. Most of the programs that currently exist exist by delivering services for free because the reimbursement for these services is not what is driving, you know, the train on the issue.

So I think that we should build an infrastructure, particularly in

rural America that already has fragile infrastructure, in a whole

bunch of ways. This may be the way to bring some equity between

urban and rural communities not just for health care but for education and economics and everything else.

Mr. STRICKLAND. Would any of the others of you like to comment

on this concept? I saw some heads going up and down as Dr. RossLee was speaking.

Mr. REID. As I think about the concept that she has proposed,

it certainly would be a challenge to implement, but it holds all

sorts of promise.

One of the things that we have all probably recognized is that

the technologies that we use, and particularly interactive video

technologies that we use, are rarely used exclusively for the delivery of health care services; and several Federal grantees today who

have received telemedicine grants are using their technologies for

other purposes as well with regards to continuing medical education, patient education, lay education, continuing education for

teachers and for other professionals in the community.

My own experience in extremely rural settings is that this technology becomes a resource to the entire community, not just to the

medical personnel, and so in that regard the concept of empowering

communities with digital technologies that would include interactive video or a high-speed network for information exchange will

empower the whole community, and I would think there would be

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great justification for that. If the medical metaphor happens to be

the sort of driving force for that, so be it.

Mr. STRICKLAND. Dr. Ross-Lee, you talked about our region, the

Appalachian region, and the high poverty rates and the high infant

mortality rates, more children dying as a result of injuries and the

like and the fact that you are going into some of the schools. How

do you get reimbursed for those kinds of services?

Ms. ROSS-LEE. We are usually grant funded. Grant funds usually

last 3 years. So we are out there beating the bushes every 3 years

to try and fund those programs. We are not reimbursed through

Medicare or Medicaid for those kinds of services that we are delivering.

Mr. STRICKLAND. So it is not just a Medicare reimbursement

problem, it is also Medicaid reimbursement problem we are facing

as well?

Ms. ROSS-LEE. Absolutely.

Mr. STRICKLAND. Mr. Chairman, I yield back my time.

Mr. BILIRAKIS. How about private insurance?

Ms. ROSS-LEE. No private insurance payments.

Mr. BILIRAKIS. You tried and no private insurance will pay?

Ms. ROSS-LEE. The populations we are dealing with, most of

them don’t qualify. We have counties where 75 percent of the population qualifies for Medicaid.

Ms. RHEUBAN. I would like to make a comment about private insurance in Virginia. Most of the payers do not reimburse for telehealth services. We have had on occasion an insurer comment

about the phenomenal response that the patient had and actually

eventually pay for that encounter primarily because then the hospitalization is at the community hospital level which is at lower

cost than at a tertiary care or another care facility to which the patient might have otherwise been transported.

I will also say—I will not mention the name of the managed care

entity, but when I approached one managed care entity about reimbursing telehealth services I was told directly, why would we ever

want to enhance access?

Mr. BILIRAKIS. Wow.

Mr. STRICKLAND. Mr. Chairman, could I ask a question?

Mr. BILIRAKIS. It is still your time, as a matter of fact.

Mr. STRICKLAND. I am just curious as to why you wouldn’t want

to give us the name of that HMO.

Mr. REID. Because they are still a payer in her State.

Mr. BILIRAKIS. Let us shift that question, that point over to Ms.

Patrick, your comment.

Ms. PATRICK. Now, what is the question again? I am still in

shock.

Mr. BILIRAKIS. I raised the point about private insurance paying,

and you have heard Dr. Rheuban’s comment. Have you all run

studies to determine that it is actually advantageous—obviously

advantageous to the patient but I mean advantageous to the company—to go ahead and pay for these services?

Ms. PATRICK. You know, there currently is no identifiable CPT

code for telemedicine utilization. So up to this point we have not

been able to adequately track, you know, our utilization. We do

know that through Eastern Montana Telemedicine Network data

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that we get from them as far as utilization goes and also data that

we get that we see from Medicaid and the amount of savings that

they have realized through this, we know that this is something

that we definitely want to continue to support and even expand

somehow and get involved as one of the players in our State to see,

you know, what gaps we can help with to deliver more of this type

of care.

Mr. BILIRAKIS. What is the story with Blue Cross and Blue

Shield in the other States?

Ms. PATRICK. You know, I have been asked to speak to this in

a couple of States, in Florida and in Utah, and I don’t know exactly

what the reservation is. I think they may be perceiving this as a

new—another kind of technology that, you know, maybe it is experimental, maybe it is not going to be cost effective. But in all reality,

to us at Blue Cross and Blue Shield of Montana, the bottom line

is it allows our members to have more access to care. Otherwise,

they wouldn’t have.

Mr. BILIRAKIS. There are a number of payers, as I understand it,

that do pay for these services. I understand that in Arizona and

Wisconsin, the 22 payers, and in Arkansas, 6 payers cover these

services.

Mr. Reid.

Mr. REID. Thank you, Mr. Chairman.

I actually had the pleasure of conducting a survey of telemedicine reimbursement practices in the States that are covered by

many of the Federal funded grant programs, and the data that we

collected suggested there were over 180 different payers who paid

for telemedicine services in some capacity in most States. There

were very few States who didn’t have one or more payers that paid.

There are States where Blue Cross pays, and States where Blue

Cross doesn’t.

I would say that I had the pleasure of working with eastern

Montana telemedicine, working with Ms. Patrick some 6 or 7 years

ago, and the vision that they showed in stepping forward and leading in that regard is unparalleled and, frankly, not seen since.

We have the challenge in each of our States because whether

Aetna or Blue Cross or Prudential covers in one State, their plan

is different, maybe under a different policy, a different intermediary in another State. So we as providers have the challenge

of going to each individual company within our State and saying,

well, come on, guys, why not, show us a good reason not to. And

the typical response is, well, because it is going drive up costs.

I actually had the pleasure of asking Ms. Patrick to come to my

State of Iowa now and speak to several payers in a closed door session. And you haven’t said it yet, but I am going to ask you to

verify that indeed in that setting you said that it has not driven

up your costs; you have been able to identify no additional cost.

Ms. PATRICK. We are not aware of any additional costs, you

know, from this service. So we do not have a problem whatsoever.

Mr. BILIRAKIS. You have not seen overutilization of the service?

Ms. PATRICK. We have—no.

Mr. BILIRAKIS. Taking advantage of the service.

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Ms. PATRICK. No. I think that our members are choosing video

conferencing, telemedicine instead of actually physically going

there, and understandably so.

Mr. BILIRAKIS. The bells have just sounded for a vote. With the

indulgence of my colleagues, Ms. Patrick—is it always an MD or

might the provider be someone other than an MD?

Ms. PATRICK. It could be someone other, yes.

Mr. BILIRAKIS. So now they present this to, let us say, the Mayo

Clinic or wherever it might be. Have you run into any problems or

have there been any problems with your State licensure board in

other words practicing medicine in Montana when you are not a

Montana-licensed doctor?

Ms. PATRICK. We haven’t had any activity as far as that goes, but

I do know that our legislature is currently looking at setting some

kinds of fees for providers to be able to participate or deliver this

service. I don’t think they are astronomically high fees.

Mr. BILIRAKIS. But in the process of setting those fees they would

be then satisfying the licensure requirement? You know—and talk

about the Montana Medical Board, for instance, practicing medicine without a license in Montana.

Ms. PATRICK. I believe so.

Mr. BILIRAKIS. That used to be quite a problem. I don’t really

know what the current picture is now since there has been some

reimbursement on the part of Medicare. That is an obstacle—that

is what I was really leading up to, Dr. Ross-Lee, when I asked you

my questions.

Ms. ROSS-LEE. It might also be a problem even as the licensure

boards, at least among physicians, are sharing a lot of information

and setting similar standards. But for the nonphysician providers

that are also listed as potential providers on either end the States

vary significantly in the licensure requirements there, and I am not

sure they have come very close.

Mr. BILIRAKIS. Anything further, Mr. Strickland or Mr. Brown?

Mr. STRICKLAND. No.

Mr. BILIRAKIS. All right. We are going to excuse you and thank

you, much gratitude for helping us out here, helping us do good

things.

We do have a vote on the floor. There will be a demonstration

presented. Certainly our staffs will be here if we are not able to

come back depending on what is happening over there.

The hearing is adjourned. Thank you very, very much.

[Whereupon, at 1:05 p.m., the subcommittee was adjourned.]

[Additional material submitted for the record follows:]

PREPARED STATEMENT OF HON. JOHN THUNE, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF SOUTH DAKOTA

Chairman Bilirakis and Ranking Member Brown: I commend you for your leadership you and the members of this subcommittee have shown in the area of Medicare

modernization and reform. By holding today’s hearing on telehealth, you are recognizing the importance of this issue to both patients and providers who live in rural

and medically underserved areas.

Telehealth as a method of health care delivery was, at one time, a new concept

in health care delivery, a theoretical way to connect patients with their doctors. But

telehealth is no longer an experiment, it’s a service that is used every day in rural

areas across the country. The district I represent comprises the entire state of South

Dakota. That’s 66 counties and 77,000 square miles made up primarily of farmland

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and grassland. When the citizens of South Dakota need to access their health care

provider, it is not uncommon to drive a hundred miles just to make a regular appointment.

During the August work period, I traveled around the state visiting rural hospitals, clinics, and nursing homes to get a closer look at the challenges faced by

rural health care providers. I saw some of the amazing things health care providers

are doing with telehealth technology. Lung specialists in Sioux Falls are using electronic stethoscopes to treat patients with pneumonia who live in Flandreau, a town

of 2,322 people. The Pine Ridge reservation, which sits in the nation’s poorest county per capita, is over 130 miles from the area’s major medical center in Rapid City.

Residents of Pine Ridge who may be dealing with depression no longer have to wait

for months to see a psychiatrist but can access a mental health provider using twoway interactive video cameras. Expectant mothers in Hoven can get good pre-natal

care using OB ultrasounds transmitted over phone lines without having to make the

90-minute drive to Aberdeen.

Telehealth services have become critical for these patients and the providers who

care for them. Back in 1997, Congress authorized several telehealth demonstration

projects to study the impact of telehealth on health care access, quality, and cost.

These projects have proven the feasibility of using technology to provide primary

and specialty care for patients in rural and medically underserved areas.

The Health Care Financing Administration (HCFA) however has created reimbursement policies that have had the effect of excluding services to those patients

who would derive the most benefit from access to telehealth; seniors who are often

unable to travel long distances for direct health care. In 1999, Medicare covered only

6 percent of all telehealth visits. That was about $11,000 in claims. Clearly, Congress intended that HCFA would provide more reimbursement for these critical

services.

With these facts in mind, I introduced H.R. 4841, the Medicare Access to Telehealth Services Act of 2000, a measure aimed at eliminating some of the reimbursement barriers to telehealth services. H.R. 4841 looks at Medicare reimbursement for

telehealth services and addresses the significant barriers in the Balanced Budget

Act of 1997 (BBA) to the continued use and expansion of this technology.

Some of the most onerous barriers will be discussed during today’s hearing. They

include requiring a telepresenter to be with the patient, forcing providers to share

their fees, limiting reimbursement areas and billing codes, and neglecting facility

costs.

As the discussions continue on further refinements of the BBA, I strongly urge

the members of this subcommittee to include provisions to address these funding

barriers. Congress has worked to ensure that technology is available to our constituents, now it’s time for this technology to work for us.

PREPARED STATEMENT OF CHILDREN’S NATIONAL MEDICAL CENTER

Background on CNMC

On behalf of the hundreds of thousands of children treated at our facilities over

the years, coming from every state in the country, we appreciate the opportunity

to offer testimony regarding our experiences in providing telehealth services in

medically underserved urban areas for a large Medicaid population.

Children’s National Medical Center (CNMC) has provided comprehensive quality

medical care and health services since 1870, and is the only integrated healthcare

system in the Washington D.C. area dedicated exclusively to the care of infants,

children, adolescents and young adults. In addition to our main campus, Children’s

network of care includes four inner-city pediatric health centers, six regional outpatient centers, several suburban ambulatory surgical locations, and a hearing and

speech center. CNMC consistently ranks among the nation’s top pediatric hospitals.

Above all, CNMC seeks to provide unparalleled pediatric healthcare services that

enhance the health and well-being of children regionally, nationally, and internationally. We are creating solutions to pediatric healthcare problems. To meet the

unique healthcare needs of children, adolescents, and their families, CNMC strives

to excel at the core components of our mission—Care, Advocacy, Research, and

Education.

A Model for Medically Underserved Urban Areas

Currently, much of our community outreach and our efforts to improve healthcare

access occur through our four Community Pediatric Health Centers (CPHC) located

throughout medically underserved urban areas in the District of Columbia. Since

the first opening in 1967, the CPHCs have provided three generations of District

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of Columbia families with high quality primary, specialty and preventive healthcare

services.

After a decade of preliminary work, CNMC established a formal Pediatric Telemedicine Program in 1997 in an effort to provide leading edge technological support

for clinical care and research. CNMC has actively pursued telemedicine in an effort

to define opportunities where technology can be leveraged to improve patient care

for the children of the region. The telemedicine team is dedicated to planning, implementing, and analyzing telemedicine activities in order to improve access to primary and specialty care, to increase convenience for patients and physicians, and

to improve education for physicians, healthcare professionals, families and patients.

Despite dramatic advances in our knowledge of how to treat the medical conditions of our population, children of urban underserved communities encounter many

obstacles when attempting to access quality healthcare—including socioeconomic

isolation, maldistributed health services, lack of health insurance, and poverty.

Fragmented access, inconsistent quality, excess costs, loss of continuity, and ineffective continuing medical education characterize the deficiencies of our existing health

care system.

Meeting the healthcare challenges of our inner city children and families with the

help of telemedicine requires a collaborative network of community partners. These

partnerships provide the foundation for a new technology-enabled delivery model,

the Pediatric Community Health Network (PCHN). Our proposed approach will be

a major step toward achieving our long-term goal of providing a means to improve

pediatric health indicators at the local and national level.

This technology-enhanced telemedicine model strives to achieve the following

goals:

1) increase access to primary and specialty healthcare for the child and family;

2) increase the convenience of healthcare delivery by bringing the specialists and

healthcare professionals to the child and the family;

3) decrease cost and time lost while seeking primary and specialty care (lost school

days, lost work days);

4) decrease delays in diagnosis by allowing earlier access to specialists, which in

turn will reduce costs and treatment time;

5) improve communication and provide a means to support the continuum of care

for the patient, family and healthcare provider(s);

6) improve healthcare education by providing patients and their families with better

resources and educational healthcare;

7) improve quality and effectiveness of medical follow-up appointments.

Through the use of telemedicine at our primary care clinics and outlying rural

sites, patients can have instant access to the myriad of specialists at our main campus. Oftentimes access to health care in large urban areas can be just as difficult

and time consuming as in rural areas. For many of our patients, travelling across

a large metropolitan area to reach another health care facility would require time

off from their jobs, time lost from school, and hours spent on public transportation

lines before reaching the facility. For the families that have access to this technology, this instant access to specialists reduces the need for follow-up appointments

that often must be canceled, and assists with earlier diagnosis that helps children

heal faster.

Children’s telemedicine program for the underserved urban pediatric community

is the first initiative of its kind. Our goal is to build a sustainable model that will

be replicated across the country. By deploying telemedicine in the urban setting, the

impact on the underserved community could be extensive. This technology that supports our telemedicine program empowers families and communities to improve the

health status of their most valuable asset—the children.

Barriers to Effective Use of Telemedicine

As promising as this technology and its applications may sound, significant reimbursement barriers prevent us from deploying this technology solution to a great extent in medically underserved urban communities and the surrounding area. The

significant challenges we face include:

• Funding for technology: Although the Office for the Advancement of Telehealth

in the Health Resources and Services Administration has provided support for

the development of telehealth services, their funding has been limited to rural

projects only. But children in medically underserved urban areas face many of

the same barriers to health care as rural patients, and could benefit substantially from telemedicine projects. We strongly urge Congress to support funding

for telemedicine projects in urban settings.

• Reimbursement for telehealth services for Medicaid patients: As Congress

considers improvement of the reimbursement mechanisms for telehealth servVerDate 11-MAY-2000 09:01 Nov 14, 2000 Jkt 010199 PO 00000 Frm 00090 Fmt 6633 Sfmt 6621 E:\HEARINGS\67112 pfrm03 PsN: 67112
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ices, we strongly urge you to remember the children and families that receive

their health care from Medicaid. Telehealth services should not be restricted to

Medicare beneficiaries. The Medicaid population is often overlooked or forgotten

during consideration, but the children who benefit from Medicaid services are

equally deserving.

Summary

Children’s National Medical Center is dedicated to improving the health status of

our community. We can not do this alone. The advancement of new technologies coupled with a highly competitive and challenging healthcare environment requires innovative patient care. It is critical that telemedicine be permitted to enter the mainstream delivery system.

According to the Children’s Defense Report in 1998,

Every 43 minutes a child was reported abused or neglected...

Every 6 hours a baby was born to a teenage mother...

Every 7 hours a baby was born at low birth weight...

Every 3 days a baby died during the first year of life...

These ‘‘moments’’ represent reality in the lives of many District of Columbia infants, children and adolescents, and are reflective of a growing trend in our region

and our nation. The region’s children face a long list of challenges that impact their

ability to receive quality health care so that they may lead healthy and productive

lives. While we understand the significance of bringing telemedicine to rural Medicare beneficiaries, we strongly urge Congress not to forget the medically underserved urban children who are Medicaid beneficiaries. They are important constituents, too.

We look forward to working with you to advance the use of telemedicine to help

build healthy communities. If you need further information regarding CNMC, please

do not hesitate to contact Greta Todd, CNMC Director of Legislative Affairs, at 202-

884-2340. Thank you again for your consideration of our concerns.

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