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 de-
termined 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.
Be it enacted by the Senate and House of Representa-
tives 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
‘‘Improved Access for Telehealth Act of 1997.’’
(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.
Sec. 3. Definitions.
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 stabil-
ity of rural communities.
(2) Rural communities are underserved by spe-
cialty health care providers.
(3) Telecommunications technology has made it
possible to provide a wide range of health care serv-
ices, education, and administrative services between
health care providers, patients, and administrators
across State lines.
(4) The delivery of health services by licensed
health care providers is a privilege and the licensure
of health care providers and the ability to discipline
Security Act (42 U.S.C. 1395 et seq.) must reim-
burse the provision of health care services from re-
mote locations via telecommunications.
(b) PURPOSES.—The purposes of this Act are as fol-
lows:
(1) To mandate that the Health Care Financ-
ing Administration reimburse the provision of clini-
cal 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 tele-
health networks that supply appropriate, cost-effec-
tive care, and that contribute to the economic health
and development of rural communities.
(5) To encourage research into the clinical effi-
cacy and cost-effectiveness of telehealth diagnosis,
treatment, or education on individuals, health care
providers, and health care networks.
SEC. 3. DEFINITIONS.
In this Act:
(1) HEALTH
CARE
PROVIDER.—The term
‘‘health care provider’’ means anyone licensed or cer-
tified under State law to provide health care services
who is operating within the scope of such license.
(2) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Health and Human Services.
TITLE 
I—MEDICARE 
REIM-
BURSEMENT 
FOR 
TELE-
HEALTH SERVICES
SEC. 101. MEDICARE REIMBURSEMENT FOR TELEHEALTH
SERVICES.
(a) IN GENERAL.—Not later than July 1, 1998, the
Secretary shall make payments from the Federal Supple-
mentary Medical Insurance Trust Fund under part B of
title XVIII of the Social Security Act (42 U.S.C. 1395j
et seq.) in accordance with the methodology described in
subsection (b) for professional consultation via tele-
communications systems with an individual or entity fur-
nishing a service for which payment may be made under
such part to a beneficiary under the Medicare program
residing in a rural area (as defined in section
1886(d)(2)(D) of such Act (42 U.S.C. 1395ww(d)(2)(D)))
or an underserved area, notwithstanding that the individ-
ual health care provider providing the professional con-
sultation is not at the same location as the individual fur-
nishing the service to that beneficiary.
(b) METHODOLOGY FOR DETERMINING AMOUNT OF
PAYMENTS.—Taking into account the findings of the re-
port required under section 192 of the Health Insurance
Portability and Accountability Act of 1996 (Public Law
104–191; 110 Stat. 1988), the findings of the report re-
quired under paragraph (c), and any other findings related
to the clinical efficacy and cost-effectiveness of telehealth
applications, the Secretary shall establish a methodology
for determining the amount of payments made under sub-
section (a), including the cost of the consultation service,
a reasonable overhead adjustment, and a malpractice risk
adjustment.
(c) SUPPLEMENTAL REPORT.—Not later than Janu-
ary 1, 1998, the Secretary shall submit a report to Con-
gress which shall contain a detailed analysis of—
(1) how telemedicine and telehealth systems are
expanding access to health care services;
(2) the clinical efficacy and cost-effectiveness of
telemedicine and telehealth applications;
(3) the quality of telemedicine and telehealth
services delivered; and
(4) the reasonable cost of telecommunications
charges incurred in practicing telemedicine and tele-
health in rural, frontier, and underserved areas.
(d) EXPANSION
OF TELEHEALTH SERVICES
FOR
CERTAIN MEDICARE BENEFICIARIES.—
(1) IN GENERAL.—Not later than January 1,
1999, the Secretary shall submit a report to Con-
gress that examines the possibility of making pay-
ments from the Federal Supplementary Medical In-
surance Trust Fund under part B of title XVIII of
the Social Security Act (42 U.S.C. 1395j et seq.) for
professional consultation via telecommunications sys-
tems with an individual or entity furnishing a service
for which payment may be made under such part to
a beneficiary described in paragraph (2), notwith-
standing that the individual health care provider
providing the professional consultation is not at the
same location as the individual furnishing the service
to that beneficiary.
(2) BENEFICIARY
DESCRIBED.—A beneficiary
described in this paragraph is a beneficiary under
the Medicare program who does not reside in a rural
area (as so defined) or an underserved area, who is
homebound or nursing homebound, and for whom
being transferred for health care services imposes a
serious hardship.
(3) REPORT.—The report described in para-
graph (1) shall contain a detailed statement of the
potential costs to the Medicare program under title
XVIII of that Act of making the payments described
in that paragraph using various reimbursement
schemes.
TITLE II—TELEHEALTH
LICENSURE
SEC. 201. INITIAL REPORT TO CONGRESS.
Not later than January 1, 1998, the Secretary shall
prepare and submit to the appropriate committees of Con-
gress a report concerning—
(1) the number, percentage and types of health
care providers licensed to provide telehealth services
across State lines, including the number and types
of health care providers licensed to provide such
services in more than 3 States;
(2) the status of any reciprocal, mutual recogni-
tion, fast-track, or other licensure agreements be-
tween or among various States;
(3) the status of any efforts to develop uniform
national sets of standards for the licensure of health
care providers to provide telehealth services across
State lines;
(4) a projection of future utilization of tele-
health 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 ap-
pear to constitute unnecessary barriers to the provi-
sion of telehealth services across State lines.
SEC. 202. ANNUAL REPORT TO CONGRESS.
(a) IN GENERAL.—Not later than January 1, 1999,
and each July 1 thereafter, the Secretary 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 sec-
tion 201.
(b) RECOMMENDATIONS.—If, with respect to a report
submitted under subsection (a), the Secretary determines
that States are not making progress in facilitating the pro-
vision of telehealth services across State lines by eliminat-
ing unnecessary requirements, adopting reciprocal licens-
ing arrangements for telehealth services, implementing
uniform requirements for telehealth licensure, or other
means, the Secretary shall include in the report rec-
ommendations 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,
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 Work-
ing Group on Telehealth 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,
(E) the progress of the Joint Working
Group on Telehealth’s efforts to coordinate
Federal telehealth programs; and
(2) recommendations for a coordinated Federal
strategy to increase health care access through tele-
health.
(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 nec-
essary 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, acting through the
Director of the Office of Rural Health Policy (of the
Health Resources and Services Administration), shall pro-
vide 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 re-
cipient 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 Govern-
ment 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 
de-
scribed in subparagraph (A) that desires to
have a loan forgiven under the program estab-
lished 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-appropriate-
ness criteria developed under subparagraph
(C); and
(iv) provide any other information de-
termined appropriate by the Secretary.
(C) CRITERIA.—As part of the program
established under subparagraph (A), the Sec-
retary 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 con-
taining such information as the Secretary may re-
quire, 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 pro-
vided 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;
(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;
and
(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 entity described
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—
(A) two of the following:
(i) community or migrant health cen-
ters;
(ii) local health departments;
(iii) nonprofit hospitals;
(iv) private practice health profes-
sionals, including 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;
and
(viii) providers of home health serv-
ices; and
(B) one of the following, which must dem-
onstrate use of the network for purposes of
education and economic development (as re-
quired 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 proce-
dures to prioritize financial assistance under this title con-
sidering whether or not the applicant—
(1) is a health care provider in a rural health
care network or a health care provider that proposes
to form such a network, and the majority of the
health care providers in such a network are located
in a medically underserved, health professional
shortage areas, or mental health professional short-
age 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 pa-
tients;
(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);
(6) can demonstrate financial, institutional, and
community support for the long-term viability of the
network; and
(7) can demonstrate a detailed plan for coordi-
nating system use by eligible entities so that health
care services are given a priority over non-clinical
uses.
(e) MAXIMUM AMOUNT OF ASSISTANCE TO INDIVID-
UAL RECIPIENTS.—The Secretary may establish the maxi-
mum 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 pub-
lishing notice of the maximum amount in the Federal Reg-
ister.
(f) USE OF AMOUNTS.—
(1) IN
GENERAL.—Financial assistance pro-
vided under this title shall be used—
(A) with respect to cost of money loans, to
encourage the initial development of rural tele-
health 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 as-
sistance received under such grant or loan for the
acquisition of telehealth equipment and modifica-
tions or improvements of telecommunications facili-
ties including—
(A) 
the 
development 
and 
acquisition
through lease or purchase of computer hard-
ware and software, audio and video equipment,
computer network equipment, interactive equip-
ment, data terminal equipment, and other fa-
cilities 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 in-
structional 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 health care providers;
(F) development of projects to use tele-
health to facilitate collaboration between health
care providers;
(G) electronic archival of patient records;
(H) collection and analysis of usage statis-
tics and data that can be used to document the
cost effectiveness of the telehealth services; or
(I) such other uses that are consistent with
achieving the purposes of this section as ap-
proved 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 re-
ceived 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 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 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 pro-
vided 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 Sec-
retary shall make a cost of money loan only if the Sec-
retary determines that the security for the loan is reason-
ably 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 informa-
tional 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 1998, and such sums
as may be necessary for each of the fiscal years 1999
through 2004.
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