I
106TH CONGRESS
1ST SESSION
H. R. 3420
To improve the Medicare telemedicine program, to provide grants for the
development of telehealth networks, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 17, 1999
Mr. BILBRAY (for himself, Mr. NORWOOD, Mr. THOMPSON of California, and
Mr. BRYANT) 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 jurisdic-
tion of the committee concerned
A BILL
To improve the Medicare telemedicine program, to provide
grants for the development of telehealth networks, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Telehealth Improve-
ment Act of 1999’’.
SEC. 2. IMPROVEMENT OF TELEHEALTH SERVICES.
(a) MEDICARE COVERAGE OF TELEHEALTH SERV-
ICES.—
(1) ALL SERVICES FURNISHED UNDER MEDI-
CARE.—Section 4206(a) of the Balanced Budget Act
of 1997 (42 U.S.C. 1395l note) is amended by strik-
ing ‘‘furnishing a service for which payment may be
made under such part’’ and inserting ‘‘furnishing a
service for which payment may be made under such
title’’.
(2) PHYSICAL, OCCUPATIONAL, AND
SPEECH
THERAPY.—Subsections (a) and (d)(1) of section
4206 of the Balanced Budget Act of 1997 (42
U.S.C. 1395l note) are each amended by adding at
the end the following new sentence: ‘‘For purposes
of the preceding sentence, the term ‘practitioner’
shall include physical, occupational, and speech
therapists.’’.
(3) TELEHEALTH CONSULTATION USING STORE
AND FORWARD TECHNOLOGY.—Section 4206(a) of
the Balanced Budget Act of 1997 (42 U.S.C. 1395l
note), as amended by paragraph (2), is further
amended by adding at the end the following new
sentence: ‘‘Payment shall also be made under this
section for professional consultations utilizing tech-
nology that provides for the asynchronous trans-
mission of health care information, in single or
multimedia formats, for the objective of any or all
of the following:
‘‘(1) Medical diagnosis.
‘‘(2) Medical treatment.
‘‘(3) Medical education.’’.
(b) MEDICARE REIMBURSEMENT FOR TELEHEALTH
SERVICES IN ALL RURAL AREAS.—Section 4206 of the
Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is
amended—
(1) in subsection (a), by inserting ‘‘and in any
area’’ before ‘‘that is designated as a health profes-
sional shortage area under section 332(a)(1)(A) of
the 
Public 
Health 
Service 
Act 
(42 
U.S.C.
254e(a)(1)(A))’’; and
(2) in subsection (d), by striking ‘‘who does not
reside in a rural area (as so defined) that is des-
ignated as a health professional shortage area under
section 332(a)(1)(A) of the Public Health Service
Act (42 U.S.C. 254e(a)(1)(A))’’ and inserting ‘‘who
resides in a county in a rural area (as so defined)
or a county that is not otherwise included in a Met-
ropolitan Statistical Area’’.
(c) PERMITTING PRESENTATION
OF PATIENT
BY
HEALTH CARE PROVIDERS.—Section 4206(a) of the Bal-
anced Budget Act of 1997 (42 U.S.C. 1395l note), as
amended by subsection (a), is further amended—
(1) by inserting ‘‘(1)’’ after ‘‘(a) IN GEN-
ERAL.—’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2)(A) In the case of telehomecare (as described in
subparagraph (D)) a registered nurse, acting under the
directions of a physician or practitioner, may present the
beneficiary for the professional consultation. In the case
of such a presentation the presence of a referring or con-
sulting physician or practitioner is not required.
‘‘(B) Telehomecare may be furnished in areas other
than in rural areas.
‘‘(C) In this section, the term ‘‘registered nurse’’
means a registered nurse who is licensed to practice nurs-
ing and is operating within the scope of that license.
‘‘(D) 
For 
purposes 
of 
subparagraph 
(A),
telehomecare consists of home health services furnished
using a electronic device capable of two-way audio and
video transmissions, and capable of monitoring and trans-
mitting vital statistics of a patient, including measuring
blood pressure and temperature of a patient.’’.
(d) REVISION OF PAYMENT METHODOLOGY.—Sec-
tion 4206(b) of the Balanced Budget Act of 1997 (42
U.S.C. 1395l note) is amended—
(1) by redesignating paragraphs (1), (2), (3),
and (4) as subparagraphs (A), (B), (C), and (D), re-
spectively;
(2) by inserting ‘‘(1)’’ before ‘‘Taking into ac-
count’’;
(3) in subparagraph (A), as so redesignated, to
read as follows:
‘‘(A) The payment shall be made under a fee
schedule established by the Secretary that provides
for payment for the referring physician or practi-
tioner and for the consulting physician or practi-
tioner. If the referring physician or practitioner de-
termines it appropriate, such referring physician or
practitioner may be present during the professional
consultation. The amount of the payment to the
physicians or practitioners shall not be greater than
the current fee schedule of such consulting physician
or practitioner for the health care services pro-
vided.’’;
(2) in subparagraph (B), to read as follows:
‘‘(B) The payment shall include payment to a
provider of services for the costs associated with pro-
fessional consultation via telecommunications sys-
tems. Such costs shall include facility fees, costs of
maintenance of telehealth equipment and of tele-
communications facilities, and costs of staff incurred
in furnishing such professional consultations. In no
case may a beneficiary be billed for any such charges
or fees.’’; and
(3) by adding at the end the following new
paragraph:
‘‘(2) The Secretary shall establish a separate code (or
codes) for purposes of claims for payment for items and
services furnished under this section.’’.
(e) REPORTS TO CONGRESS.—Section 4206 of the
Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is
amended by adding at the end the following new sub-
section:
‘‘(e) ADDITIONAL REPORTS TO CONGRESS.—
‘‘(1) INITIAL REPORT.—Not later than August
1, 2003, the Secretary of Health and Human Serv-
ices shall prepare and submit to Congress a report
concerning—
‘‘(A) the number, percentage, and types of
health care providers who are—
‘‘(i) currently providing telehealth
services across State lines;
‘‘(ii) currently licensed to provide tele-
health services across State lines, including
the number and types of health care pro-
viders licensed to provide such services in
more than three States; and
‘‘(iii) expressing an interest in pro-
viding such services across State lines;
‘‘(B) the status of any reciprocal, mutual
recognition, fast-track, or other licensure agree-
ments between or among various States;
‘‘(C) the status of any efforts to develop
uniform national sets of standards for—
‘‘(i) the licensure of health care pro-
viders to provide telehealth services across
State lines;
‘‘(ii) the exclusion from full State
medical licensure requirements for licensed
providers of other States when called in
consultation by a licensed provider of the
State in which the patient consultation oc-
curs: and
‘‘(iii) the incorporation of telehealth li-
censure into existing State medical licen-
sure processes when the provider of tele-
health services is providing medical serv-
ices via telehealth that are identical to
medical services that fall within the scope
of existing State medical licensure when
provided directly to the patient by the pro-
vider;
‘‘(D) a projection of future utilization of
telehealth consultations across State lines;
‘‘(E) State efforts to increase or reduce li-
censure as a burden to interstate telehealth
practice; and
‘‘(F) any State licensure requirements that
appear to constitute unnecessary barriers to the
provision of telehealth services across State
lines.
‘‘(2) ANNUAL REPORT.—
‘‘(A) IN GENERAL.—Not later than August
1, 2004, and each July 1 thereafter, the Sec-
retary of Health and Human Services shall pre-
pare and submit to Congress, an annual report
on relevant developments concerning the mat-
ters referred to in subparagraphs (A) through
(F) of paragraph (1).
‘‘(B) RECOMMENDATIONS.—If, with re-
spect to a report submitted under subparagraph
(A), the Secretary of Health and Human Serv-
ices determines that States are not making
progress in facilitating the provision of tele-
health services across State lines by eliminating
unnecessary requirements, adopting reciprocal
licensing arrangements for telehealth services,
implementing uniform requirements for tele-
health licensure, or other means, the Secretary
shall include in the report recommendations
concerning the scope and nature of Federal ac-
tions required to reduce licensure as a barrier
to the interstate provision of telehealth services.
(f) INTERIM, FINAL RULE.—The Secretary shall
publish a rule under this section in the Federal Register
by not later than 180 days after the date of the enactment
of this section to carry out the provisions of this section.
Such rule shall be effective and final immediately on an
interim basis, but is subject to change and revision after
public notice and opportunity for a period (of not less than
60 days) for public comment. In connection with such rule,
the Secretary shall specify the process for the timely re-
view and approval of applications of entities to be eligible
telehealth networks pursuant to such rules and consistent
with this section.
SEC. 3. GRANT PROGRAM FOR THE DEVELOPMENT OF
TELEHEALTH NETWORKS.
(a) IN GENERAL.—The Secretary of Health and
Human Services (in this section referred to as the ‘‘Sec-
retary’’), acting through the Director of the Office for the
Advancement of Telehealth (of the Health Resources and
Services Administration), shall make grants to eligible re-
cipients (as described in subsection (b)(1)) for the purpose
of expanding access to health care services for individuals
in rural areas, frontier areas, and medically underserved
areas through the use of telehealth.
(b) ELIGIBLE RECIPIENTS.—
(1) APPLICATION.—To be eligible to receive a
grant under this section, an eligible 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 con-
taining such information as the Secretary may re-
quire, including the following:
(A) A description of the anticipated need
for the grant.
(B) A description of the activities which
the entity intends to carry out using amounts
provided under the grant.
(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 will meet
health care needs of underserved rural popu-
lations within the State.
(E) A description of how the local commu-
nity or region to be served by the network or
proposed network will be involved in the devel-
opment and ongoing operations of the network.
(F) The source and amount of non-Federal
funds the entity would pledge for the project.
(G) A showing of the long-term viability of
the project and evidence of health care 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 redun-
dancy of technology and achieve economies of scale.
(2) ELIGIBLE ENTITIES.—An eligible entity de-
scribed in this paragraph is a hospital or other
health care provider in a health care network of
community-based health care providers that includes
at least two of the organizations described in sub-
paragraph (A) and one of the institutions and enti-
ties described in subparagraph (B) if the institution
or entity is able to demonstrate use of the network
for purposes of education and economic development
(as required by the Secretary).
(A) The organizations described in this
subparagraph are the following:
(i) Community or migrant health cen-
ters.
(ii) Local health departments.
(iii) Nonprofit hospitals.
(iv) Private practice health profes-
sionals, including community and rural
health clinics.
(v) Other publicly funded health or so-
cial services agencies.
(vi) Skilled nursing facilities.
(vii) County mental health and other
publicly funded mental health facilities.
(viii) Providers of home health serv-
ices.
(B) The institutions and entities described
in this subparagraph are the following:
(i) A public school.
(ii) A public library.
(iii) A university or college.
(iv) A local government entity.
(v) A local nonhealth-related business
entity.
An eligible entity may include for-profit entities so
long as the recipient of the grant is a not-for-profit
entity.
(d) PRIORITY.—The Secretary shall establish proce-
dures to prioritize financial assistance under this section
based upon the following considerations:
(1) The applicant is a health care provider in
a health care network or a health care provider that
proposes to form such a network that furnishes or
proposes to furnish services in a medically under-
served area, health professional shortage area, or
mental health professional shortage area.
(2) The applicant is able to demonstrate broad
geographic coverage in the rural or medically under-
served areas of the State, or States in which the ap-
plicant is located.
(3) The applicant 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) The applicant will use the amounts provided
for a range of health care applications and to pro-
mote greater efficiency in the use of health care re-
sources.
(5) The applicant is able to demonstrate the
long-term viability of projects through cost participa-
tion (cash or in-kind).
(6) The applicant is able to demonstrate finan-
cial, institutional, and community support for the
long-term viability of the network.
(7) The applicant is able to provide a detailed
plan for coordinating system use by eligible entities
so that health care services are given a priority over
non-clinical uses.
(e) MAXIMUM AMOUNT OF ASSISTANCE TO INDI-
VIDUAL RECIPIENTS.—The Secretary shall establish, by
regulation, the terms and conditions of the grant and the
maximum amount of a grant award to be made available
to an individual recipient for each fiscal year under this
section. The Secretary shall publish in the Federal Reg-
ister notice of the terms and conditions of a grant under
this section and the maximum amount of such a grant
for a fiscal year.
(f) USE OF AMOUNTS.—The recipient of a grant
under this section may use sums received under such
grant for the acquisition of telehealth equipment and
modifications or improvements of telecommunications fa-
cilities including the following:
(1) The development and acquisition through
lease or purchase of computer hardware and soft-
ware, 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.
(2) The provision of technical assistance and in-
struction for the development and use of such pro-
gramming equipment or facilities.
(3) The development and acquisition of instruc-
tional programming.
(4) Demonstration projects for teaching or
training medical students, residents, and other
health profession students in rural or medically un-
derserved training sites about the application of tele-
health.
(5) Transmission costs, maintenance of equip-
ment, and compensation of specialists and referring
health care providers.
(6) Development of projects to use telehealth to
facilitate collaboration between health care providers.
(7) Electronic archival of patient records.
(8) Collection and analysis of usage statistics
and data that can be used to document the cost-ef-
fectiveness of the telehealth services.
(9) Such other uses that are consistent with
achieving the purposes of this section as approved by
the Secretary.
(g) PROHIBITED USES.—Sums received under a
grant under this section may not be used for any of the
following:
(1) To acquire real property.
(2) Expenditures to purchase or lease equip-
ment to the extent the expenditures would exceed
more than 40 percent of the total grant funds.
(3) To purchase or install transmission equip-
ment (such as laying cable or telephone lines, micro-
wave 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 deter-
mined by the Secretary) to the extent the expendi-
tures would exceed more than 20 percent of the total
grant.
(h) ADMINISTRATION.—
(1) NONDUPLICATION.—The Secretary shall en-
sure that facilities constructed using grants provided
under this section do not duplicate adequately estab-
lished telehealth networks.
(2) COORDINATION WITH OTHER AGENCIES.—
The Secretary shall coordinate, to the extent prac-
ticable, with other Federal and State agencies and
not-for-profit organizations, operating similar grant
programs to pool resources for funding meritorious
proposals.
(3) INFORMATIONAL EFFORTS.—The Secretary
shall establish and implement procedures to carry
out outreach activities to advise potential end users
located in rural and medically underserved areas of
each State about the program authorized by this
section.
(i) INTERIM, FINAL RULE.—The Secretary shall pub-
lish a rule under this section in the Federal Register by
not later than 180 days after the date of the enactment
of this Act. Such rule shall be effective and final imme-
diately on an interim basis, but is subject to change and
revision after public notice and opportunity for a period
(of not less than 60 days) for public comment. In connec-
tion with such rule, the Secretary shall specify the process
for the timely review and approval of applications of enti-
ties to be eligible telehealth networks pursuant to such
rules and consistent with this section.
(j) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
$40,000,000 for fiscal year 2001, and such sums as may
be necessary for each of the fiscal years 2002 through
2007.
SEC. 4. JOINT WORKING GROUP ON TELEMEDICINE.
(a) IN GENERAL.—
(1) REPRESENTATION OF RURAL AREAS.—The
Joint Working Group on Telemedicine shall ensure
that individuals that represent the interests of rural
areas and medically underserved areas are members
of the Group.
(2) MISSION.—The mission of the Joint Work-
ing Group on Telemedicine is—
(A) to identify, monitor, and coordinate
Federal telehealth projects, data sets, and pro-
grams;
(B) to analyze—
(i) how telehealth systems are expand-
ing access to health care services, edu-
cation, and information;
(ii) the clinical, educational, or admin-
istrative efficacy and cost-effectiveness of
telehealth applications; and
(iii) the quality of the telehealth serv-
ices delivered; and
(C) to make further recommendations for
coordinating Federal and State efforts to in-
crease access to health services, education, and
information in rural and medically underserved
areas.
(3) ANNUAL
REPORTS.—Not later than two
years after the date of enactment of this Act and
each January 1 thereafter the Joint Working Group
on Telemedicine shall submit to Congress a report
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) the matters described in subsection
(a)(3)(B);
(B) the Federal activities with respect to
telehealth; and
(C) the progress of the Joint Working
Group on Telemedicine’s efforts to coordinate
Federal telehealth programs; and
(2) recommendations for a coordinated Federal
strategy to increase health care access through tele-
health.
(c) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated such sums as are nec-
essary for the Joint Working Group on Telemedicine to
carry out this section.
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