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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 2171 Introduced in Senate (IS)]

104th CONGRESS
  2d Session
                                S. 2171

  To provide reimbursement under the Medicare program for telehealth 
                   services, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 30, 1996

Mr. Conrad (for himself and Mr. Kerrey) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
  To provide reimbursement under the Medicare program for telehealth 
                   services, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Comprehensive 
Telehealth Act of 1996''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
        TITLE I--MEDICARE REIMBURSEMENT FOR TELEHEALTH SERVICES

Sec. 101. Medicare reimbursement for telehealth services.
                     TITLE II--TELEHEALTH LICENSURE

Sec. 201. Initial report to Congress.
Sec. 202. Annual report to Congress.
TITLE III--PERIODIC REPORTS TO CONGRESS FROM THE JOINT WORKING GROUP ON 
                               TELEHEALTH

Sec. 301. Joint working group on telehealth.
              TITLE IV--DEVELOPMENT OF TELEHEALTH NETWORKS

Sec. 401. Development of telehealth networks.
Sec. 402. Administration.
Sec. 403. Guidelines.
Sec. 404. Authorization of appropriations.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds the following:
            (1) Hospitals, clinics, and individual health care 
        providers are critically important to the continuing health of 
        rural populations and the economic stability of rural 
        communities.
            (2) Rural communities are underserved by specialty care 
        providers.
            (3) Telecommunications technology has made it possible to 
        provide a wide range of health care services, education, and 
        administrative services between practitioners, patients, and 
        administrators across State lines.
            (4) The delivery of health services by licensed health 
        practitioners is a privilege and the licensure of health care 
        practitioners and the ability to discipline such practitioners 
        is necessary for the protection of citizens and for the public 
        interest, health, welfare, and safety.
            (5) The licensing of health care practitioners to provide 
        telehealth services has a significant impact on interstate 
        commerce and any unnecessary barriers to the provision of 
        telehealth services across State lines should be eliminated.
            (6) Rapid advances in the field of telehealth give the 
        Congress a need for current information and updates on recent 
        developments in telehealth research, policy, technology, and 
        the use of this technology to supply telehealth services to 
        rural and underserved areas.
            (7) Telehealth networks can provide hospitals, clinics, 
        practitioners, and patients in rural and underserved 
        communities with access to specialty care, continuing 
        education, and can act to reduce the isolation from other 
        professionals that these practitioners sometimes experience.
            (8) In order for telehealth systems to continue to benefit 
        rural and underserved communities, Medicare must reimburse the 
        provision of health care services from remote locations via 
        telecommunications.
    (b) Purposes.--The purposes of this Act are as follows:
            (1) To mandate that the Health Care Financing 
        Administration reimburse the provision of clinical health 
        services via telecommunications.
            (2) To determine if States are making progress in 
        facilitating the provision of telehealth services across State 
        lines.
            (3) To create a coordinating entity for Federal telehealth 
        research, policy, and program initiatives that reports to 
        Congress annually.
            (4) To encourage the development of rural telehealth 
        networks that supply appropriate, cost-effective care, and 
        which contribute to the economic health and development of 
        rural communities.
            (5) To encourage research into the clinical efficacy and 
        cost-effectiveness of telehealth diagnosis, treatment, or 
        education on individuals, practitioners, and health care 
        networks.

        TITLE I--MEDICARE REIMBURSEMENT FOR TELEHEALTH SERVICES

SEC. 101. MEDICARE REIMBURSEMENT FOR TELEHEALTH SERVICES.

    (a) In General.--Not later than January 1, 1998, the Secretary of 
Health and Human Services (hereafter in this section referred to as the 
``Secretary'') shall make payments from the Federal Supplementary 
Medical Insurance Trust Fund under part B of title XVIII of the Social 
Security Act in accordance with the methodology described in subsection 
(b) for professional consultation via telecommunications systems with 
an individual or entity furnishing a service for which payment may be 
made under such part to a Medicare beneficiary residing in a rural area 
(as defined in section 1886(d)(2)(D) of such Act) or an underserved 
area, notwithstanding that the individual health care practitioner 
providing the professional consultation is not at the same location as 
the individual furnishing the service to the Medicare beneficiary.
    (b) Methodology for Determining Amount of Payments.--Taking into 
account the findings of the report required under section 192 of the 
Health Insurance Portability and Accountability Act of 1996, including 
those findings relating to the clinical efficacy and cost-effectiveness 
of telehealth applications, the Secretary shall establish a methodology 
for determining the amount of payments made under subsection (a), 
including the cost of the consultation service, a reasonable overhead 
adjustment, and a malpractice risk adjustment.
    (c) Additional Analysis Included in Report.--Section 192 of the 
Health Insurance Portability and Accountability Act of 1996 is 
amended--
            (1) by inserting ``and telehealth'' after ``telemedicine'' 
        each place it appears, and
            (2) by redesignating paragraphs (2) and (3) as paragraphs 
        (3) and (4), respectively, and by inserting after paragraph (1) 
        the following new paragraph:
            ``(2) include an analysis of--
                    ``(A) how telemedicine and telehealth systems are 
                expanding access to health care services,
                    ``(B) the clinical efficacy and cost-effectiveness 
                of telemedicine and telehealth applications,
                    ``(C) the quality of telemedicine and telehealth 
                services delivered, and
                    ``(D) the reasonable cost of telecommunications 
                charges incurred in practicing telemedicine and 
                telehealth in rural, frontier, and underserved 
                areas;''.

                     TITLE II--TELEHEALTH LICENSURE

SEC. 201. INITIAL REPORT TO CONGRESS.

    Not later than July 1, 1997, the Secretary of Health and Human 
Services shall prepare and submit to the appropriate committees of 
Congress a report concerning--
            (1) the number, percentage and types of practitioners 
        licensed to provide telehealth services across State lines, 
        including the number and types of practitioners licensed to 
        provide such services in more than 3 States;
            (2) the status of any reciprocal, mutual recognition, fast-
        track, or other licensure agreements between or among various 
        States;
            (3) the status of any efforts to develop uniform national 
        sets of standards for the licensure of practitioners to provide 
        telehealth services across State lines;
            (4) a projection of future utilization of telehealth 
        consultations across State lines;
            (5) State efforts to increase or reduce licensure as a 
        burden to interstate telehealth practice; and
            (6) any State licensure requirements that appear to 
        constitute unnecessary barriers to the provision of telehealth 
        services across State lines.

SEC. 202. ANNUAL REPORT TO CONGRESS.

    (a) In General.--Not later than July 1, 1998, and each July 1 
thereafter, the Secretary of Health and Human Services shall prepare 
and submit to the appropriate committees of Congress, an annual report 
on relevant developments concerning the matters referred to in 
paragraphs (1) through (6) of section 201.
    (b) Recommendations.--If, with respect to a report submitted under 
subsection (a), the Secretary of Health and Human Services determines 
that States are not making progress in facilitating the provision of 
telehealth services across State lines by eliminating unnecessary 
requirements, adopting reciprocal licensing arrangements for telehealth 
services, implementing uniform requirements for telehealth licensure, 
or other means, the Secretary shall include in the report 
recommendations concerning the scope and nature of Federal actions 
required to reduce licensure as a barrier to the interstate provision 
of telehealth services.

TITLE III--PERIODIC REPORTS TO CONGRESS FROM THE JOINT WORKING GROUP ON 
                               TELEHEALTH

SEC. 301. JOINT WORKING GROUP ON TELEHEALTH.

    (a) In General.--
            (1) Redesignation.--The Joint Working Group on 
        Telemedicine, established by the Secretary of Health and Human 
        Services, shall hereafter be known as the ``Joint Working Group 
        on Telehealth'' with the chairperson being designated by the 
        Director of the Office of Rural Health Policy.
            (2) Mission.--The mission of the Joint Working Group on 
        Telehealth is--
                    (A) to identify, monitor, and coordinate Federal 
                telehealth projects, data sets, and programs,
                    (B) to analyze--
                            (i) how telehealth systems are expanding 
                        access to health care services, education, and 
                        information,
                            (ii) the clinical, educational, or 
                        administrative efficacy and cost-effectiveness 
                        of telehealth applications, and
                            (iii) the quality of the services 
                        delivered, and
                    (C) to make further recommendations for 
                coordinating Federal and State efforts to increase 
                access to health services, education, and information 
                in rural and underserved areas.
            (3) Periodic reports.--The Joint Working Group on 
        Telehealth shall report not later than January 1 of each year 
        (beginning in 1998) to the Congress on the status of the 
        Group's mission and the state of the telehealth field 
        generally.
    (b) Report Specifics.--The annual report required under subsection 
(a)(3) shall provide--
            (1) an analysis of--
                    (A) how telehealth systems are expanding access to 
                health care services,
                    (B) the clinical efficacy and cost-effectiveness of 
                telehealth applications,
                    (C) the quality of telehealth services delivered,
                    (D) the Federal activity regarding telehealth, and
                    (E) the progress of the Working Group's efforts to 
                coordinate Federal telehealth programs; and
            (2) recommendations for a coordinated Federal strategy to 
        increase health care access through telehealth.
    (c) Termination.--The Joint Working Group on Telehealth shall 
terminate immediately after the annual report filed not later than 
January 1, 2002.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary for the operation of the Joint 
Working Group on Telehealth on and after the date of the enactment of 
this Act.

              TITLE IV--DEVELOPMENT OF TELEHEALTH NETWORKS

SEC. 401. DEVELOPMENT OF TELEHEALTH NETWORKS.

    (a) In General.--The Secretary of Health and Human Services 
(hereafter referred to in this title as the ``Secretary''), acting 
through the Director of the Office of Rural Health Policy (of the 
Health Resources and Services Administration), shall provide financial 
assistance (as described in subsection (b)(1)) to recipients (as 
described in subsection (c)(1)) for the purpose of expanding access to 
health care services for individuals in rural and frontier areas 
through the use of telehealth.
    (b) Financial Assistance.--
            (1) In general.--Financial assistance shall consist of 
        grants or cost of money loans, or both.
            (2) Form.--The Secretary shall determine the portion of the 
        financial assistance provided to a recipient that consists of 
        grants and the portion that consists of cost of money loans so 
        as to result in the maximum feasible repayment to the Federal 
        Government of the financial assistance, based on the ability to 
        repay of the recipient and full utilization of funds made 
        available to carry out this title.
            (3) Loan forgiveness program.--
                    (A) Establishment.--With respect to cost of money 
                loans provided under this section, the Secretary shall 
                establish a loan forgiveness program under which 
                recipients of such loans may apply to have all or a 
                portion of such loans forgiven.
                    (B) Requirements.--A recipient described in 
                subparagraph (A) that desires to have a loan forgiven 
                under the program established under such paragraph 
                shall--
                            (i) within 180 days of the end of the loan 
                        cycle, submit an application to the Secretary 
                        requesting forgiveness of the loan involved;
                            (ii) demonstrate that the recipient has a 
                        financial need for such forgiveness;
                            (iii) demonstrate that the recipient has 
                        met the quality and cost-appropriateness 
                        criteria developed under subparagraph (C); and
                            (iv) provide any other information 
                        determined appropriate by the Secretary.
                    (C) Criteria.--As part of the program established 
                under subparagraph (A), the Secretary shall establish 
                criteria for determining the cost-effectiveness and 
                quality of programs operated with loans provided under 
                this section.
    (c) Recipients.--
            (1) Application.--To be eligible to receive a grant or loan 
        under this section an entity described in paragraph (2) shall, 
        in consultation with the State office of rural health or other 
        appropriate State entity, prepare and submit to the Secretary 
        an application, at such time, in such manner, and containing 
        such information as the Secretary may require, including--
                    (A) a description of the anticipated need for the 
                grant or loan;
                    (B) a description of the activities which the 
                entity intends to carry out using amounts provided 
                under the grant or loan;
                    (C) a plan for continuing the project after Federal 
                support under this section is ended;
                    (D) a description of the manner in which the 
                activities funded under the grant or loan will meet 
                health care needs of underserved rural populations 
                within the State;
                    (D) a description of how the local community or 
                region to be served by the network or proposed network 
                will be involved in the development and ongoing 
                operations of the network;
                    (E) the source and amount of non-Federal funds the 
                entity would pledge for the project; and
                    (F) a showing of the long-term viability of the 
                project and evidence of provider commitment to the 
                network.
        The application should demonstrate the manner in which the 
        project will promote the integration of telehealth in the 
        community so as to avoid redundancy of technology and achieve 
        economies of scale.
            (2) Eligible entities.--An entity described in this 
        paragraph is a hospital or other health care provider in a 
        health care network of community-based providers that includes 
        at least--
                    (A) two of the following:
                            (i) community or migrant health centers;
                            (ii) local health departments;
                            (iii) nonprofit hospitals;
                            (iv) private practice health professionals, 
                        including rural health clinics;
                            (v) other publicly funded health or social 
                        services agencies;
                            (vi) skilled nursing facilities;
                            (vii) county mental health and other 
                        publicly funded mental health facilities; and
                            (viii) home health providers; and
                    (B) one of the following, which must demonstrate 
                use of the network for purposes of education and 
                economic development (as required by the Secretary):
                            (i) public schools;
                            (ii) public library;
                            (iii) universities or colleges;
                            (iv) local government entity; or
                            (v) local nonhealth-related business 
                        entity.
        An eligible entity may include for-profit entities so long as 
        the network grantee is a nonprofit entity.
    (d) Priority.--The Secretary shall establish procedures to 
prioritize financial assistance under this title considering whether or 
not the applicant--
            (1) is a health care provider in a rural health care 
        network or a provider that proposes to form such a network, and 
        the majority of the providers in such a network are located in 
        a medically underserved, health professional shortage areas, or 
        mental health professional shortage areas;
            (2) can demonstrate broad geographic coverage in the rural 
        areas of the State, or States in which the applicant is 
        located;
            (3) proposes to use Federal funds to develop plans for, or 
        to establish, telehealth systems that will link rural hospitals 
        and rural health care providers to other hospitals, health care 
        providers and patients;
            (4) will use the amounts provided for a range of health 
        care applications and to promote greater efficiency in the use 
        of health care resources;
            (5) can demonstrate the long term viability of projects 
        through use of local matching funds (cash or in-kind); and
            (6) can demonstrate financial, institutional, and community 
        support for the long-term viability of the network.
    (e) Maximum Amount of Assistance to Individual Recipients.--The 
Secretary may establish the maximum amount of financial assistance to 
be made available to an individual recipient for each fiscal year under 
this title, and establish the term of the loan or grant, by publishing 
notice of the maximum amount in the Federal Register.
    (f) Use of Amounts.--
            (1) In general.--Financial assistance provided under this 
        title shall be used--
                    (A) with respect to cost of money loans, to 
                encourage the initial development of rural telehealth 
                networks, expand existing networks, or link existing 
                networks together; and
                    (B) with respect to grants, as described in 
                paragraph (2).
            (2) Grants and loans.--The recipient of a grant or loan 
        under this title may use financial assistance received under 
        such grant or loan for the acquisition of telehealth equipment 
and modifications or improvements of telecommunications facilities 
including--
                    (A) the development and acquisition through lease 
                or purchase of computer hardware and software, audio 
                and video equipment, computer network equipment, 
                interactive equipment, data terminal equipment, and 
                other facilities and equipment that would further the 
                purposes of this section;
                    (B) the provision of technical assistance and 
                instruction for the development and use of such 
                programming equipment or facilities;
                    (C) the development and acquisition of 
                instructional programming;
                    (D) demonstration projects for teaching or training 
                medical students, residents, and other health 
                professions students in rural training sites about the 
                application of telehealth;
                    (E) transmission costs, maintenance of equipment, 
                and compensation of specialists and referring 
                practitioners;
                    (F) development of projects to use telehealth to 
                facilitate collaboration between health care providers;
                    (G) electronic archival of patient records;
                    (H) collection of usage statistics; or
                    (I) such other uses that are consistent with 
                achieving the purposes of this section as approved by 
                the Secretary.
            (3) Expenditures in rural areas.--In awarding a grant or 
        cost of money loan under this section, the Secretary shall 
        ensure that not less than 50 percent of the grant or loan award 
        is expended in a rural area or to provide services to residents 
        of rural areas.
    (g) Prohibited Uses.--Financial assistance received under this 
section may not be used for any of the following:
            (1) To build or acquire real property.
            (2) Expenditures to purchase or lease equipment to the 
        extent the expenditures would exceed more than 40 percent of 
        the total grant funds.
            (3) To purchase or install transmission equipment (such as 
        laying cable or telephone lines, microwave towers, satellite 
        dishes, amplifiers, and digital switching equipment).
            (4) For construction, except that such funds may be 
        expended for minor renovations relating to the installation of 
        equipment.
            (5) Expenditures for indirect costs (as determined by the 
        Secretary) to the extent the expenditures would exceed more 
        than 20 percent of the total grant funds.
    (h) Matching Requirement for Grants.--The Secretary may not make a 
grant to an entity State under this section unless that entity agrees 
that, with respect to the costs to be incurred by the entity in 
carrying out the program for which the grant was awarded, the entity 
will make available (directly or through donations from public or 
private entities) non-Federal contributions (in cash or in kind) in an 
amount equal to not less than 50 percent of the Federal funds provided 
under the grant.

SEC. 402. ADMINISTRATION.

    (a) Nonduplication.--The Secretary shall ensure that facilities 
constructed using financial assistance provided under this title do not 
duplicate adequate established telehealth networks.
    (b) Loan Maturity.--The maturities of cost of money loans shall be 
determined by the Secretary, based on the useful life of the facility 
being financed, except that the loan shall not be for a period of more 
than 10 years.
    (c) Loan Security and Feasibility.--The Secretary shall make a cost 
of money loan only if the Secretary determines that the security for 
the loan is reasonably adequate and that the loan will be repaid within 
the period of the loan.
    (d) Coordination With Other Agencies.--The Secretary shall 
coordinate, to the extent practicable, with other Federal and State 
agencies with similar grant or loan programs to pool resources for 
funding meritorious proposals in rural areas.
    (e) Informational Efforts.--The Secretary shall establish and 
implement procedures to carry out informational efforts to advise 
potential end users located in rural areas of each State about the 
program authorized by this title.

SEC. 403. GUIDELINES.

    Not later than 180 days after the date of enactment of this Act, 
the Secretary shall issue guidelines to carry out this title.

SEC. 404. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this title, 
$25,000,000 for fiscal year 1997, and such sums as may be necessary for 
each of the fiscal years 1998 through 2004.
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