I
107TH CONGRESS
1ST SESSION
H. R. 2706
To improve the provision of telehealth services under the Medicare Program,
to provide grants for the development of telehealth networks, and for
other purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 1, 2001
Mr. OSE introduced the following bill; which was referred to the Committee
on Energy and Commerce, and in addition to the Committee on Ways
and Means, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned
A BILL
To improve the provision of telehealth services under the
Medicare Program, to provide grants for the development
of telehealth networks, and for other purposes.
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 ‘‘Medicare Telehealth
Validation Act of 2001’’.
SEC. 2. EXPANSION AND IMPROVEMENT OF TELEHEALTH
SERVICES.
(a) EXPANDING ACCESS TO TELEHEALTH SERVICES
TO ALL AREAS.—
(1) IN GENERAL.—Section 1834(m), as added
by section 223(b) of the Medicare, Medicaid, and
SCHIP Benefits Improvement and Protection Act of
2000 (114 Stat. 2763A–487), as enacted into law by
section 1(a)(6) of Public Law 106–554, is amended
in paragraph (4)(C)(i) by striking ‘‘and only if such
site is located’’ and all that follows and inserting
‘‘without regard to the geographic area where the
site is located, and includes an entity that partici-
pates in a Federal telemedicine demonstration
project that has been approved by (or receives fund-
ing from) the Secretary of Health and Human Serv-
ices as of December 31, 2000.’’.
(2) STORE AND FORWARD TECHNOLOGY.—Such
section is further amended in paragraph (1) by
striking ‘‘in the case of any Federal telemedicine
demonstration program conducted in Alaska or Ha-
waii,’’.
(b) INCREASING TYPES OF ORIGINATING SITES.—
Paragraph (4)(C)(ii) of such section 1834(m) is amended
by adding at the end the following new subclauses:
‘‘(VI) A skilled nursing facility
(as defined in section 1819(a)).
‘‘(VII) An assisted living facility.
‘‘(VIII) A board and care facility.
‘‘(IX) A school.
‘‘(X) A county mental health
clinic.
‘‘(XI) The residence of an indi-
vidual enrolled under this part.
(c) FACILITATING THE PROVISION OF TELEHEALTH
SERVICES ACROSS STATE LINES.—
(1) IN GENERAL.—For purposes of expediting
the provision of telehealth services, for which pay-
ment is made under the Medicare Program, across
State lines, the Secretary of Health and Human
Services shall, in consultation with representatives of
States, physicians, health care practitioners, and pa-
tient advocates, encourage and facilitate the adop-
tion of provisions allowing for multistate practitioner
licensure across State lines.
(2) DEFINITIONS.—In paragraph (1):
(A) TELEHEALTH
SERVICE.—The term
‘‘telehealth service’’ has the meaning given that
term 
in 
subparagraph 
(F) 
of 
section
1834(m)(4) of the Social Security Act (42
U.S.C. 1395m(m)(4)).
(B) 
PHYSICIAN, 
PRACTITIONER.—The
terms ‘‘physician’’ and ‘‘practitioner’’ has the
meaning given those terms in subparagraphs
(D) and (E), respectively, of such section.
(C) 
MEDICARE
PROGRAM.—The 
term
‘‘medicare program’’ means the program of
health insurance administered by the Secretary
of Health and Human Services under title
XVIII of the Social Security Act (42 U.S.C.
1395 et seq.).
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 or 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 health or 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) PREFERENCE.—The Secretary shall establish
procedures to prioritize financial assistance under this sec-
tion 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 cause to have published in the
Federal Register or the ‘‘HRSA Preview’’ 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) The provision of telenursing services de-
signed to enhance care coordination and promote pa-
tient self-management skills.
(6) The provision of services designed to pro-
mote patient understanding and adherence to na-
tional guidelines for common chronic diseases, such
as congestive heart failure or diabetes.
(7) Transmission costs, maintenance of equip-
ment, and compensation of specialists and referring
health care providers.
(8) Development of projects to use telehealth to
facilitate collaboration between health care providers.
(9) Electronic archival of patient records.
(10) Collection and analysis of usage statistics
and data that can be used to document the cost-ef-
fectiveness of the telehealth services.
(11) 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 off the premises of the telehealth site and any
transmission costs not directly related to the grant.
(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) PROMPT IMPLEMENTATION.—The Secretary shall
take such actions as are necessary to carry out the grant
program as expeditiously as possible.
(j) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
$40,000,000 for fiscal year 2002, and such sums as may
be necessary for each of the fiscal years 2003 through
2008.
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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