I

105TH CONGRESS

1ST SESSION H. R. 966

To provide reimbursement under the Medicare Program for telehealth services,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 6, 1997

Mr. COMBEST (for himself and Mr. HILLIARD) introduced the following bill;

which was referred to the Committee on Commerce, and in addition to

the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions

as fall within the jurisdiction of the committee concerned

A BILL

To provide reimbursement under the Medicare Program for

telehealth services, and for other purposes.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Improved Access for Telehealth Act of 1997.’’

6 (b) TABLE OF CONTENTS.—The table of contents for

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings and purposes.

Sec. 3. Definitions.
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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.

1 SEC. 2. FINDINGS AND PURPOSES.

2 (a) FINDINGS.—The Congress finds the following:

3 (1) Hospitals, clinics, and individual health care

4 providers are critically important to the continuing

5 health of rural populations and the economic stabil6 ity of rural communities.

7 (2) Rural communities are underserved by spe8 cialty health care providers.

9 (3) Telecommunications technology has made it

10 possible to provide a wide range of health care serv11 ices, education, and administrative services between

12 health care providers, patients, and administrators

13 across State lines.

14 (4) The delivery of health services by licensed

15 health care providers is a privilege and the licensure

16 of health care providers and the ability to discipline
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1 such providers is necessary for the protection of citi2 zens and for the public interest, health, welfare, and

3 safety.

4 (5) The licensing of health care providers to

5 provide telehealth services has a significant impact

6 on interstate commerce and any unnecessary bar7 riers to the provision of telehealth services across

8 State lines should be eliminated.

9 (6) Rapid advances in the field of telehealth

10 give Congress a need for current information and

11 updates on recent developments in telehealth re12 search, policy, technology, and the use of this tech13 nology to supply telehealth services to rural and un14 derserved areas.

15 (7) Telehealth networks can provide hospitals,

16 clinics, health care providers, and patients in rural

17 and underserved communities with access to spe18 cialty care, continuing education, and can act to re19 duce the isolation from other professionals that

20 these health care providers sometimes experience.

21 (8) In order for telehealth systems to continue

22 to benefit rural and underserved communities, the

23 Medicare program under title XVIII of the Social
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1 Security Act (42 U.S.C. 1395 et seq.) must reim2 burse the provision of health care services from re3 mote locations via telecommunications.

4 (b) PURPOSES.—The purposes of this Act are as fol5 lows:

6 (1) To mandate that the Health Care Financ7 ing Administration reimburse the provision of clini8 cal health services via telecommunications.

9 (2) To determine if States are making progress

10 in facilitating the provision of telehealth services

11 across State lines.

12 (3) To create a coordinating entity for Federal

13 telehealth research, policy, and program initiatives

14 that reports to Congress annually.

15 (4) To encourage the development of rural tele16 health networks that supply appropriate, cost-effec17 tive care, and that contribute to the economic health

18 and development of rural communities.

19 (5) To encourage research into the clinical effi20 cacy and cost-effectiveness of telehealth diagnosis,

21 treatment, or education on individuals, health care

22 providers, and health care networks.

23 SEC. 3. DEFINITIONS.

24 In this Act:
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1 (1) HEALTH CARE PROVIDER.—The term

2 ‘‘health care provider’’ means anyone licensed or cer3 tified under State law to provide health care services

4 who is operating within the scope of such license.

5 (2) SECRETARY.—The term ‘‘Secretary’’ means

6 the Secretary of Health and Human Services.

7 TITLE I—MEDICARE REIM8 BURSEMENT FOR TELE9 HEALTH SERVICES

10 SEC. 101. MEDICARE REIMBURSEMENT FOR TELEHEALTH

11 SERVICES.

12 (a) IN GENERAL.—Not later than July 1, 1998, the

13 Secretary shall make payments from the Federal Supple14 mentary Medical Insurance Trust Fund under part B of

15 title XVIII of the Social Security Act (42 U.S.C. 1395j

16 et seq.) in accordance with the methodology described in

17 subsection (b) for professional consultation via tele18 communications systems with an individual or entity fur19 nishing a service for which payment may be made under

20 such part to a beneficiary under the Medicare program

21 residing in a rural area (as defined in section

22 1886(d)(2)(D) of such Act (42 U.S.C. 1395ww(d)(2)(D)))
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1 or an underserved area, notwithstanding that the individ2 ual health care provider providing the professional con3 sultation is not at the same location as the individual fur4 nishing the service to that beneficiary.

5 (b) METHODOLOGY FOR DETERMINING AMOUNT OF

6 PAYMENTS.—Taking into account the findings of the re7 port required under section 192 of the Health Insurance

8 Portability and Accountability Act of 1996 (Public Law

9 104–191; 110 Stat. 1988), the findings of the report re10 quired under paragraph (c), and any other findings related

11 to the clinical efficacy and cost-effectiveness of telehealth

12 applications, the Secretary shall establish a methodology

13 for determining the amount of payments made under sub14 section (a), including the cost of the consultation service,

15 a reasonable overhead adjustment, and a malpractice risk

16 adjustment.

17 (c) SUPPLEMENTAL REPORT.—Not later than Janu18 ary 1, 1998, the Secretary shall submit a report to Con19 gress which shall contain a detailed analysis of—

20 (1) how telemedicine and telehealth systems are

21 expanding access to health care services;

22 (2) the clinical efficacy and cost-effectiveness of

23 telemedicine and telehealth applications;

24 (3) the quality of telemedicine and telehealth

25 services delivered; and
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1 (4) the reasonable cost of telecommunications

2 charges incurred in practicing telemedicine and tele3 health in rural, frontier, and underserved areas.

4 (d) EXPANSION OF TELEHEALTH SERVICES FOR

5 CERTAIN MEDICARE BENEFICIARIES.—

6 (1) IN GENERAL.—Not later than January 1,

7 1999, the Secretary shall submit a report to Con8 gress that examines the possibility of making pay9 ments from the Federal Supplementary Medical In10 surance Trust Fund under part B of title XVIII of

11 the Social Security Act (42 U.S.C. 1395j et seq.) for

12 professional consultation via telecommunications sys13 tems with an individual or entity furnishing a service

14 for which payment may be made under such part to

15 a beneficiary described in paragraph (2), notwith16 standing that the individual health care provider

17 providing the professional consultation is not at the

18 same location as the individual furnishing the service

19 to that beneficiary.

20 (2) BENEFICIARY DESCRIBED.—A beneficiary

21 described in this paragraph is a beneficiary under

22 the Medicare program who does not reside in a rural

23 area (as so defined) or an underserved area, who is

24 homebound or nursing homebound, and for whom
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1 being transferred for health care services imposes a

2 serious hardship.

3 (3) REPORT.—The report described in para4 graph (1) shall contain a detailed statement of the

5 potential costs to the Medicare program under title

6 XVIII of that Act of making the payments described

7 in that paragraph using various reimbursement

8 schemes.

9 TITLE II—TELEHEALTH

10 LICENSURE

11 SEC. 201. INITIAL REPORT TO CONGRESS.

12 Not later than January 1, 1998, the Secretary shall

13 prepare and submit to the appropriate committees of Con14 gress a report concerning—

15 (1) the number, percentage and types of health

16 care providers licensed to provide telehealth services

17 across State lines, including the number and types

18 of health care providers licensed to provide such

19 services in more than 3 States;

20 (2) the status of any reciprocal, mutual recogni21 tion, fast-track, or other licensure agreements be22 tween or among various States;

23 (3) the status of any efforts to develop uniform

24 national sets of standards for the licensure of health
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1 care providers to provide telehealth services across

2 State lines;

3 (4) a projection of future utilization of tele4 health consultations across State lines;

5 (5) State efforts to increase or reduce licensure

6 as a burden to interstate telehealth practice; and

7 (6) any State licensure requirements that ap8 pear to constitute unnecessary barriers to the provi9 sion of telehealth services across State lines.

10 SEC. 202. ANNUAL REPORT TO CONGRESS.

11 (a) IN GENERAL.—Not later than January 1, 1999,

12 and each July 1 thereafter, the Secretary shall prepare

13 and submit to the appropriate committees of Congress, an

14 annual report on relevant developments concerning the

15 matters referred to in paragraphs (1) through (6) of sec16 tion 201.

17 (b) RECOMMENDATIONS.—If, with respect to a report

18 submitted under subsection (a), the Secretary determines

19 that States are not making progress in facilitating the pro20 vision of telehealth services across State lines by eliminat21 ing unnecessary requirements, adopting reciprocal licens22 ing arrangements for telehealth services, implementing

23 uniform requirements for telehealth licensure, or other

24 means, the Secretary shall include in the report rec25 ommendations concerning the scope and nature of Federal
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1 actions required to reduce licensure as a barrier to the

2 interstate provision of telehealth services.

3 TITLE III—PERIODIC REPORTS

4 TO CONGRESS FROM THE

5 JOINT WORKING GROUP ON

6 TELEHEALTH

7 SEC. 301. JOINT WORKING GROUP ON TELEHEALTH.

8 (a) IN GENERAL.—

9 (1) REDESIGNATION.—The Joint Working

10 Group on Telemedicine, established by the Secretary,

11 shall hereafter be known as the ‘‘Joint Working

12 Group on Telehealth’’ with the chairperson being

13 designated by the Director of the Office of Rural

14 Health Policy.

15 (2) MISSION.—The mission of the Joint Work16 ing Group on Telehealth is—

17 (A) to identify, monitor, and coordinate

18 Federal telehealth projects, data sets, and pro19 grams,

20 (B) to analyze—

21 (i) how telehealth systems are expand22 ing access to health care services, edu23 cation, and information,
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1 (ii) the clinical, educational, or admin2 istrative efficacy and cost-effectiveness of

3 telehealth applications, and

4 (iii) the quality of the services deliv5 ered, and

6 (C) to make further recommendations for

7 coordinating Federal and State efforts to in8 crease access to health services, education, and

9 information in rural and underserved areas.

10 (3) PERIODIC REPORTS.—The Joint Working

11 Group on Telehealth shall report not later than Jan12 uary 1 of each year (beginning in 1998) to Congress

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

14 of the telehealth field generally.

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

16 under subsection (a)(3) shall provide—

17 (1) an analysis of—

18 (A) how telehealth systems are expanding

19 access to health care services,

20 (B) the clinical efficacy and cost-effective21 ness of telehealth applications,

22 (C) the quality of telehealth services deliv23 ered,

24 (D) the Federal activity regarding tele25 health, and
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1 (E) the progress of the Joint Working

2 Group on Telehealth’s efforts to coordinate

3 Federal telehealth programs; and

4 (2) recommendations for a coordinated Federal

5 strategy to increase health care access through tele6 health.

7 (c) TERMINATION.—The Joint Working Group on

8 Telehealth shall terminate immediately after the annual

9 report filed not later than January 1, 2002.

10 (d) AUTHORIZATION OF APPROPRIATIONS.—There

11 are authorized to be appropriated such sums as are nec12 essary for the operation of the Joint Working Group on

13 Telehealth on and after the date of the enactment of this

14 Act.

15 TITLE IV—DEVELOPMENT OF

16 TELEHEALTH NETWORKS

17 SEC. 401. DEVELOPMENT OF TELEHEALTH NETWORKS.

18 (a) IN GENERAL.—The Secretary, acting through the

19 Director of the Office of Rural Health Policy (of the

20 Health Resources and Services Administration), shall pro21 vide financial assistance (as described in subsection

22 (b)(1)) to recipients (as described in subsection (c)(1)) for

23 the purpose of expanding access to health care services

24 for individuals in rural and frontier areas through the use

25 of telehealth.
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1 (b) FINANCIAL ASSISTANCE.—

2 (1) IN GENERAL.—Financial assistance shall

3 consist of grants or cost of money loans, or both.

4 (2) FORM.—The Secretary shall determine the

5 portion of the financial assistance provided to a re6 cipient that consists of grants and the portion that

7 consists of cost of money loans so as to result in the

8 maximum feasible repayment to the Federal Govern9 ment of the financial assistance, based on the ability

10 to repay of the recipient and full utilization of funds

11 made available to carry out this title.

12 (3) LOAN FORGIVENESS PROGRAM.—

13 (A) ESTABLISHMENT.—With respect to

14 cost of money loans provided under this section,

15 the Secretary shall establish a loan forgiveness

16 program under which recipients of such loans

17 may apply to have all or a portion of such loans

18 forgiven.

19 (B) REQUIREMENTS.—A recipient de20 scribed in subparagraph (A) that desires to

21 have a loan forgiven under the program estab22 lished under such paragraph shall—

23 (i) within 180 days of the end of the

24 loan cycle, submit an application to the
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1 Secretary requesting forgiveness of the

2 loan involved;

3 (ii) demonstrate that the recipient has

4 a financial need for such forgiveness;

5 (iii) demonstrate that the recipient

6 has met the quality and cost-appropriate7 ness criteria developed under subparagraph

8 (C); and

9 (iv) provide any other information de10 termined appropriate by the Secretary.

11 (C) CRITERIA.—As part of the program

12 established under subparagraph (A), the Sec13 retary shall establish criteria for determining

14 the cost-effectiveness and quality of programs

15 operated with loans provided under this section.

16 (c) RECIPIENTS.—

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

18 grant or loan under this section an entity described

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

20 State office of rural health or other appropriate

21 State entity, prepare and submit to the Secretary an

22 application, at such time, in such manner, and con23 taining such information as the Secretary may re24 quire, including—
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1 (A) a description of the anticipated need

2 for the grant or loan;

3 (B) a description of the activities which the

4 entity intends to carry out using amounts pro5 vided under the grant or loan;

6 (C) a plan for continuing the project after

7 Federal support under this section is ended;

8 (D) a description of the manner in which

9 the activities funded under the grant or loan

10 will meet health care needs of underserved rural

11 populations within the State;

12 (E) a description of how the local commu13 nity or region to be served by the network or

14 proposed network will be involved in the devel15 opment and ongoing operations of the network;

16 (F) the source and amount of non-Federal

17 funds the entity would pledge for the project;

18 and

19 (G) a showing of the long-term viability of

20 the project and evidence of health care provider

21 commitment to the network.

22 The application should demonstrate the manner in

23 which the project will promote the integration of

24 telehealth in the community so as to avoid redun25 dancy of technology and achieve economies of scale.
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1 (2) ELIGIBLE ENTITIES.—An entity described

2 in this paragraph is a hospital or other health care

3 provider in a health care network of community4 based health care providers that includes at least—

5 (A) two of the following:

6 (i) community or migrant health cen7 ters;

8 (ii) local health departments;

9 (iii) nonprofit hospitals;

10 (iv) private practice health profes11 sionals, including rural health clinics;

12 (v) other publicly funded health or so13 cial services agencies;

14 (vi) skilled nursing facilities;

15 (vii) county mental health and other

16 publicly funded mental health facilities;

17 and

18 (viii) providers of home health serv19 ices; and

20 (B) one of the following, which must dem21 onstrate use of the network for purposes of

22 education and economic development (as re23 quired by the Secretary):

24 (i) public schools;

25 (ii) public library;
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1 (iii) universities or colleges;

2 (iv) local government entity; or

3 (v) local nonhealth-related business

4 entity.

5 An eligible entity may include for-profit entities so

6 long as the network grantee is a nonprofit entity.

7 (d) PRIORITY.—The Secretary shall establish proce8 dures to prioritize financial assistance under this title con9 sidering whether or not the applicant—

10 (1) is a health care provider in a rural health

11 care network or a health care provider that proposes

12 to form such a network, and the majority of the

13 health care providers in such a network are located

14 in a medically underserved, health professional

15 shortage areas, or mental health professional short16 age areas;

17 (2) can demonstrate broad geographic coverage

18 in the rural areas of the State, or States in which

19 the applicant is located;

20 (3) proposes to use Federal funds to develop

21 plans for, or to establish, telehealth systems that will

22 link rural hospitals and rural health care providers

23 to other hospitals, health care providers and pa24 tients;
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1 (4) will use the amounts provided for a range

2 of health care applications and to promote greater

3 efficiency in the use of health care resources;

4 (5) can demonstrate the long-term viability of

5 projects through use of local matching funds (cash

6 or in-kind);

7 (6) can demonstrate financial, institutional, and

8 community support for the long-term viability of the

9 network; and

10 (7) can demonstrate a detailed plan for coordi11 nating system use by eligible entities so that health

12 care services are given a priority over non-clinical

13 uses.

14 (e) MAXIMUM AMOUNT OF ASSISTANCE TO INDIVID15 UAL RECIPIENTS.—The Secretary may establish the maxi16 mum amount of financial assistance to be made available

17 to an individual recipient for each fiscal year under this

18 title, and establish the term of the loan or grant, by pub19 lishing notice of the maximum amount in the Federal Reg20 ister.

21 (f) USE OF AMOUNTS.—

22 (1) IN GENERAL.—Financial assistance pro23 vided under this title shall be used—
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1 (A) with respect to cost of money loans, to

2 encourage the initial development of rural tele3 health networks, expand existing networks, or

4 link existing networks together; and

5 (B) with respect to grants, as described in

6 paragraph (2).

7 (2) GRANTS AND LOANS.—The recipient of a

8 grant or loan under this title may use financial as9 sistance received under such grant or loan for the

10 acquisition of telehealth equipment and modifica11 tions or improvements of telecommunications facili12 ties including—

13 (A) the development and acquisition

14 through lease or purchase of computer hard15 ware and software, audio and video equipment,

16 computer network equipment, interactive equip17 ment, data terminal equipment, and other fa18 cilities and equipment that would further the

19 purposes of this section;

20 (B) the provision of technical assistance

21 and instruction for the development and use of

22 such programming equipment or facilities;

23 (C) the development and acquisition of in24 structional programming;
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1 (D) demonstration projects for teaching or

2 training medical students, residents, and other

3 health professions students in rural training

4 sites about the application of telehealth;

5 (E) transmission costs, maintenance of

6 equipment, and compensation of specialists and

7 referring health care providers;

8 (F) development of projects to use tele9 health to facilitate collaboration between health

10 care providers;

11 (G) electronic archival of patient records;

12 (H) collection and analysis of usage statis13 tics and data that can be used to document the

14 cost effectiveness of the telehealth services; or

15 (I) such other uses that are consistent with

16 achieving the purposes of this section as ap17 proved by the Secretary.

18 (3) EXPENDITURES IN RURAL AREAS.—In

19 awarding a grant or cost of money loan under this

20 section, the Secretary shall ensure that not less than

21 50 percent of the grant or loan award is expended

22 in a rural area or to provide services to residents of

23 rural areas.
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1 (g) PROHIBITED USES.—Financial assistance re2 ceived under this section may not be used for any of the

3 following:

4 (1) To build or acquire real property.

5 (2) Expenditures to purchase or lease equip6 ment to the extent the expenditures would exceed

7 more than 40 percent of the total grant funds.

8 (3) To purchase or install transmission equip9 ment (such as laying cable or telephone lines, micro10 wave towers, satellite dishes, amplifiers, and digital

11 switching equipment).

12 (4) For construction, except that such funds

13 may be expended for minor renovations relating to

14 the installation of equipment.

15 (5) Expenditures for indirect costs (as deter16 mined by the Secretary) to the extent the expendi17 tures would exceed more than 20 percent of the total

18 grant funds.

19 (h) MATCHING REQUIREMENT FOR GRANTS.—The

20 Secretary may not make a grant to an entity State under

21 this section unless that entity agrees that, with respect

22 to the costs to be incurred by the entity in carrying out

23 the program for which the grant was awarded, the entity

24 will make available (directly or through donations from

25 public or private entities) non-Federal contributions (in-
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1 cash or in-kind) in an amount equal to not less than 50

2 percent of the Federal funds provided under the grant.

3 SEC. 402. ADMINISTRATION.

4 (a) NONDUPLICATION.—The Secretary shall ensure

5 that facilities constructed using financial assistance pro6 vided under this title do not duplicate adequate established

7 telehealth networks.

8 (b) LOAN MATURITY.—The maturities of cost of

9 money loans shall be determined by the Secretary, based

10 on the useful life of the facility being financed, except that

11 the loan shall not be for a period of more than 10 years.

12 (c) LOAN SECURITY AND FEASIBILITY.—The Sec13 retary shall make a cost of money loan only if the Sec14 retary determines that the security for the loan is reason15 ably adequate and that the loan will be repaid within the

16 period of the loan.

17 (d) COORDINATION WITH OTHER AGENCIES.—The

18 Secretary shall coordinate, to the extent practicable, with

19 other Federal and State agencies with similar grant or

20 loan programs to pool resources for funding meritorious

21 proposals in rural areas.

22 (e) INFORMATIONAL EFFORTS.—The Secretary shall

23 establish and implement procedures to carry out informa24 tional efforts to advise potential end users located in rural
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1 areas of each State about the program authorized by this

2 title.

3 SEC. 403. GUIDELINES.

4 Not later than 180 days after the date of enactment

5 of this Act, the Secretary shall issue guidelines to carry

6 out this title.

7 SEC. 404. AUTHORIZATION OF APPROPRIATIONS.

8 There are authorized to be appropriated to carry out

9 this title, $25,000,000 for fiscal year 1998, and such sums

10 as may be necessary for each of the fiscal years 1999

11 through 2004.

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