[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 385 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 385

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 3, 1997

  Mr. Conrad (for himself, Mr. Kerrey, Mr. Harkin, Mr. Wellstone, Mr. 
  Baucus, Mr. Cochran, and Mr. Inouye) 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 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 stability of rural 
        communities.
            (2) Rural communities are underserved by specialty health 
        care providers.
            (3) Telecommunications technology has made it possible to 
        provide a wide range of health care services, 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 such providers is 
        necessary for the protection of citizens and for the public 
        interest, health, welfare, and safety.
            (5) The licensing of health care providers 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 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, 
        health care providers, 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 health care providers sometimes 
        experience.
            (8) In order for telehealth systems to continue to benefit 
        rural and underserved communities, the Medicare program under 
        title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) 
        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 that 
        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, 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 certified 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 REIMBURSEMENT FOR TELEHEALTH 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 Supplementary 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 telecommunications 
systems with an individual or entity furnishing 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 individual health care provider providing the 
professional consultation is not at the same location as the individual 
furnishing the service to that 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 (Public Law 
104-191; 110 Stat. 1988), the findings of the report required 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 subsection (a), including the cost of the consultation service, a 
reasonable overhead adjustment, and a malpractice risk adjustment.
    (c) Supplemental Report.--Not later than January 1, 1998, the 
Secretary shall submit a report to Congress 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 telehealth 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 Congress that examines the 
        possibility of making payments from the Federal Supplementary 
        Medical Insurance 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 systems with an individual 
        or entity furnishing a service for which payment may be made 
        under such part to a beneficiary described in paragraph (2), 
        notwithstanding 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 paragraph (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 Congress 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 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 health care providers 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 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 
section 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 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, 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 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 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 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, 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;
                    (E) 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;
                    (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 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 health care 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) providers of home health services; 
                        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 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 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);
            (6) can demonstrate financial, institutional, and community 
        support for the long-term viability of the network; and
            (7) can demonstrate 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 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 health 
                care providers;
                    (F) development of projects to use telehealth to 
                facilitate collaboration between health care providers;
                    (G) electronic archival of patient records;
                    (H) collection and analysis of usage statistics 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 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 1998, and such sums as may be necessary for 
each of the fiscal years 1999 through 2004.
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