[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
       TELEMEDICINE: A PRESCRIPTION FOR SMALL MEDICAL PRACTICES?

=======================================================================



                                HEARING

                               before the

                 SUBCOMMITTEE ON HEALTH AND TECHNOLOGY

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS

                             UNITED STATES

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                             JULY 31, 2014

                               __________

                               [GRAPHIC] [TIFF OMITTED] 
                               

            Small Business Committee Document Number 113-080
              Available via the GPO Website: www.fdsys.gov




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                   HOUSE COMMITTEE ON SMALL BUSINESS

                     SAM GRAVES, Missouri, Chairman
                           STEVE CHABOT, Ohio
                            STEVE KING, Iowa
                         MIKE COFFMAN, Colorado
                      BLAINE LUETKEMEYER, Missouri
                     MICK MULVANEY, South Carolina
                         SCOTT TIPTON, Colorado
                   JAIME HERRERA BEUTLER, Washington
                        RICHARD HANNA, New York
                         TIM HUELSKAMP, Kansas
                       DAVID SCHWEIKERT, Arizona
                       KERRY BENTIVOLIO, Michigan
                        CHRIS COLLINS, New York
                        TOM RICE, South Carolina
               NYDIA VELAZQUEZ, New York, Ranking Member
                         KURT SCHRADER, Oregon
                        YVETTE CLARKE, New York
                          JUDY CHU, California
                        JANICE HAHN, California
                     DONALD PAYNE, JR., New Jersey
                          GRACE MENG, New York
                        BRAD SCHNEIDER, Illinois
                          RON BARBER, Arizona
                    ANN McLANE KUSTER, New Hampshire
                        PATRICK MURPHY, Florida

                      Lori Salley, Staff Director
                    Paul Sass Deputy Staff Director
                      Barry Pineles, Chief Counsel
                  Michael Day, Minority Staff Director



                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Chris Collins...............................................     1
Hon. Janice Hahn.................................................     2

                               WITNESSES

Karen S. Rheuban, M.D., Senior Associate Dean for CME and 
  External Affairs Director, University of Virginia Center for 
  Telehealth, University of Virginia, Charlottesville, VA........     3
Megan McHugh, Ph.D., Research Assistant Professor, Dirctor, 
  Program in Healthcare Policy and Implementation, Center for 
  Healthcare Studies, Institute for Public Health and Medicine & 
  Department of Emergency Medicine, Northwestern University, 
  Feinberg School of Medicine, Chicago, IL.......................     5
Maggie Basgall, Community Development Specialist, Nex-Tech, 
  Lenora, KS, testifying on behalf of NTCA - The Rural Broadband 
  Association....................................................     7
Brenda J. Dintiman, M.D., FAAD, Fair Oaks Skin Care Center, 
  Fairfax, VA, testifying on behalf of the American Academy of 
  Dermatology....................................................     9

                                APPENDIX

Prepared Statements:
    Karen S. Rheuban, M.D., Senior Associate Dean for CME and 
      External Affairs Director, University of Virginia Center 
      for Telehealth, University of Virginia, Charlottesville, VA    19
    Megan McHugh, Ph.D., Research Assistant Professor, Director, 
      Program in Healthcare Policy and Implementation, Center for 
      Healthcare Studies, Institute for Public Health and 
      Medicine & Department of Emergency Medicine, Northwestern 
      University, Feinberg School of Medicine, Chicago, IL.......    36
    Maggie Basgall, Community Development Specialist, Nex-Tech, 
      Lenora, KS, testifying on behalf of NTCA - The Rural 
      Broadband Association......................................    43
    Brenda J. Dintiman, M.D., FAAD, Fair Oaks Skin Care Center, 
      Fairfax, VA, testifying on behalf of the American Academy 
      of Dermatology.............................................    51
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    Parkinson's Action Network...................................    55


        TELEMEDICINE: A PRESCRIPTION FOR SMALL MEDICAL PRACTICES

                              ----------                              


                        THURSDAY, JULY 31, 2014

                  House of Representatives,
               Committee on Small Business,
             Subcommittee on Health and Technology,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:09 a.m., in 
Room 2360, Rayburn House Office Building, Hon. Chris Collins 
[chairman of the Subcommittee] presiding.
    Present: Representatives Collins, Coffman, Luetkemeyer, and 
Hahn.
    Chairman Collins. Well, good morning everyone. This hearing 
will come to order. I want to welcome our witnesses and thank 
you all for being here.
    Small businesses as all of us know are innovators, and 
particularly now in health care. Small companies are 
transforming medical care with new products, new services and 
cutting-edge technology. And small medical practices are 
changing as well. They are helping us connect and serve a more 
mobile population.
    Telemedicine refers to patient medical care where the 
provider and patient are separated by distance. Although the 
adoption of telemedicine has been slow, it is increasing, and 
recently, several medical organizations adopted model policies 
for its appropriate use.
    This technology offers the promise of connecting small 
physician practices with patients, other medical providers, 
hospitals in areas that are medically underserved.
    Today, some small practices are finding it difficult to 
stay afloat due to the burdens of complying with the health 
care law and the cost of operating a small practice. 
Telemedicine may provide opportunities for these practices to 
broaden their reach and offer more accessible care to more 
patients, serve a larger geographic area, or consult with 
distant medical colleagues.
    Some have suggested that small practices can be the hub 
that connects a patient's health care team. But small practices 
can encounter numerous barriers to telemedicine. The cost of 
technology, broadband availability, licensing requirements and 
reimbursement rules from private insurers, as well as Medicare 
and Medicaid, may limit or delay the adoption of telemedicine.
    Today this subcommittee will examine a topic that touches 
both health and technology, the use of telemedicine and its 
possibilities for small medical practices. We look forward to 
hearing from our distinguished panel of witnesses about this 
exciting convergence of medicine and technology.
    I would now like to yield to Ranking Member Hahn for her 
opening remarks.
    Ms. Hahn. Where are the women? Oh, they are all here. I 
usually always say that with the witnesses, but this is a good 
crop of witnesses.
    Thank you, Mr. Chairman.
    Welcome to the witnesses, I look forward to hearing from 
you. And as the chairman said, the coming expansion of 
telemedicine has the potential to increase access to health 
care to underserved communities, both in our inner cities and 
rural areas and keep Americans across the country healthy and 
independent.
    Today's hearing offers us an opportunity to examine ways in 
which we can increase the use of telemedicine, especially among 
small medical practices.
    We know that if implemented correctly, small practices may 
be able to cut costs, connect with patients that would be 
otherwise out of reach and improve patient care. Enabling 
doctors to better communicate with their patients has been 
shown to dramatically decrease hospital readmission rates and 
give patients peace of mind.
    Enabling health care providers to communicate with each 
other would mean expanded access to the latest treatments and 
the best possible care available. Unfortunately, questions 
surrounding reimbursement, licensing, liability and the cost of 
technology have prevented many small practices from adopting 
telemedicine services.
    The technology we need is ready. However, our Nation's 
health care system is not. In the coming years, we as a country 
will have to address how telehealth care is reimbursed. How and 
where doctors are able to practice remotely and how to handle 
sensitive patient information.
    None of these questions have easy answers, and I appreciate 
every one of our witnesses for joining us today in hopes of 
shining some light on these and other issues. I look forward to 
hearing from all of you and from my colleagues.
    Colleagues, where are they? They are not here.
    As the telemedicine expansion continues, I hope we can work 
together so that doctors can provide patients with the very 
best care possible.
    I yield back.
    Chairman Collins. Thank you.
    Before we start, there will be votes coming up at some 
point, we'll see where we are in the hearing. And worst case, 
we will adjourn and then come back and finish. It is also our 
last day in session for 5 weeks. So there is a lot going on, 
and we will play this by ear.
    If committee members have an opening statement prepared, I 
will ask that they submit those for the record. Also, we have 
some timing lights, you'll see them start out as green, turn 
yellow, and turn red. We certainly have some latitude with 
those, but it is just a guide for your 5 minutes.
    Our first witness today is Dr. Karen Rheuban. Dr. Rheuban 
is senior associate dean for continuing medical education and 
external affairs director for the University of Virginia's 
Center for Telehealth in Charlottesville, Virginia.
    Dr. Rheuban is past president of the American Telemedicine 
Association, very appropriate for today's hearing.
    Welcome Dr. Rheuban, you have 5 minutes for your testimony.

STATEMENTS OF KAREN S. RHEUBAN, M.D., SENIOR ASSOCIATE DEAN FOR 
   CME AND EXTERNAL AFFAIRS DIRECTOR, UNIVERSITY OF VIRGINIA 
CENTER FOR TELEHEALTH, UNIVERSITY OF VIRGINIA, CHARLOTTESVILLE, 
    VA; MEGAN MCHUGH, PH.D., RESEARCH ASSISTANT PROFESSOR, 
  DIRECTOR, PROGRAM IN HEALTHCARE POLICY AND IMPLEMENTATION, 
CENTER FOR HEALTHCARE STUDIES, INSTITUTE FOR PUBLIC HEALTH AND 
   MEDICINE & DEPARTMENT OF EMERGENCY MEDICINE, NORTHWESTERN 
 UNIVERSITY, FEINBERG SCHOOL OF MEDICINE, CHICAGO, IL; MAGGIE 
 BASGALL, COMMUNITY DEVELOPMENT SPECIALIST, NEX-TECH, LENORA, 
     KS, TESTIFYING ON BEHALF OF NTCA, THE RURAL BROADBAND 
ASSOCIATION; AND BRENDA J. DINTIMAN, M.D., FAAD, FAIR OAKS SKIN 
CARE CENTER, FAIRFAX, VA, TESTIFYING ON BEHALF OF THE AMERICAN 
                     ACADEMY OF DERMATOLOGY

              STATEMENT OF KAREN S. RHEUBAN, M.D.

    Dr. Rheuban. Chairman Collins, Ranking Member Hahn, 
committee members, thank you for your invitation to testify 
regarding the opportunities and challenges faced by health care 
providers seeking to incorporate telehealth into everyday 
practice.
    I am the director of the Center for Telehealth at the 
University of Virginia and a practicing pediatric cardiologist. 
At our center, we connect patients at 128 different sites 
across the Commonwealth of Virginia for access to specialty 
care. Telemedicine or connected care is not a new specialty, a 
new procedure or a new clinical service but rather technology 
designed to enable the provision of health care services at a 
distance, whether it is down the road, or across the State, or 
across the country.
    Twenty-first century telemedicine services can be provided 
live by a high-definition video conferencing, supported by 
peripheral devices or asynchronously using storing forward 
technology or using remote patient monitoring tools keeping 
patients healthy at home.
    Telemedicine improves patient triage, reduces the burden of 
travel for care, enhances timely access to care and saves 
lives. A few examples: Telemedicine helps us to treat acute 
stroke victims in critical access hospitals when every second 
counts. It allows us to manage high-risk pregnant women in 
their home communities, reducing premature deliveries.
    Through telemedicine, we provide sorely needed mental 
health services. We screen patients for diabetic retinopathy, 
the number one cause of blindness in working adults. We monitor 
heart failure patients after discharge from the hospital to 
keep them healthier at home and in the workforce.
    Regardless of the delivery system and, in particular, as we 
migrate from volume-based to value-based systems of care, 
telehealth supports patient engagement and self management. As 
supported by extensive evidence, telemedicine improves clinical 
outcomes and also lowers the cost of care.
    It is widely accepted that our Nation faces a shortage of 
physicians and other health professionals, expected to worsen 
with our aging population, higher rates of chronic illness and 
greater numbers of covered individuals. The use of telemedicine 
maximizes provider efficiency, but again most importantly, it 
is good for patients.
    Despite our country's multibillion dollar investment in 
telemedicine, broadband expansion, and health information 
technologies, efforts to promulgate continued integration of 
telemedicine, unfortunately, still remains stifled by 20th 
century Federal and State barriers to more widespread adoption.
    Opportunities for small practices to adopt telehealth are 
extensive, depending on the credentials of the provider and the 
model they might wish to deploy. Primary care and specialty 
care providers can connect to their patients or to one another 
through video conferencing. They may offer clinical services 
through store and forward technologies, serve on panels for 
telemedicine services companies, and utilize remote patient 
monitoring in the home to manage their patients with chronic 
illness.
    Regardless of the model chosen, it is imperative that 
interested practitioners take into consideration all relevant 
Federal and State policies and specialty society best 
practices. Significant challenges still impact telehealth 
practice, such as originating sight restrictions on 
reimbursement by Medicare and varying degrees of reimbursement 
by State Medicaid programs and private payers.
    Last year, sadly, Medicare reimbursed less than $12 million 
nationwide for telemedicine related services. A patient's or 
provider's zip code should not determine eligibility for 
telemedicine care when, on the other hand, our Medicare and 
Medicare programs spend many hundreds of millions of dollars 
annually on transportation costs. As an example, last year our 
UVA program saved patients more than 4.8 million miles of 
driving for access to care. It keeps patients local in their 
community.
    Equally challenging are variable state board regulations 
that have led to continued uncertainty for practitioners, 
confusion about credentialing and privileging regulations, lack 
of licensure portability, which is a deterrent to interstate 
practice. Anti-kickback laws, HIPAA privacy and security 
regulations, evolving technology platforms, device 
interoperability and health information exchange are all 
important issues to be considered, as is the cost of sufficient 
bandwidth.
    In conclusion, telehealth is a valuable tool to address the 
significant challenges of access to high quality care to 
mitigate workforce shortages, improve population health and 
lower the cost of care. There are many opportunities for small 
practices to integrate telehealth into everyday practice.
    However, even for large health care systems such as our 
own, managing and navigating the complex legal and regulatory 
environment which impacts telehealth can be very challenging. 
It is imperative that we create and implement policies that 
foster certainty, high quality, secure and sustainable 
solutions that empower patients, and providers, and payers to 
adopt 21st century models of care. Thank you.
    Chairman Collins. Thank you Dr. Rheuban.
    I would now like to yield Ranking Member Hahn for the 
introduction of our next witness.
    Ms. Hahn. Thank you.
    I am pleased to introduce Dr. Megan McHugh, research 
assistant, professor, and director of health policy and 
implementation at the Institute for Public Health and Medicine 
Center for Health Care Studies at Northwestern University, 
Feinberg School of Medicine.
    Dr. McHugh's research focuses on Federal health policy and 
advocacy and has been awarded support by prestigious 
institutions like the Robert Wood Johnson Foundation, CMS, CDC 
and the Kaiser Family Foundation.
    She holds a masters from the College of William and Mary 
and a Ph.D. in public policy from the George Washington 
University.
    Welcome Dr. McHugh.

                STATEMENT OF MEGAN MCHUGH, PH.D.

    Ms. McHugh. Thank you, Chairman Collins, Ranking Member 
Hahn and members of the subcommittee.
    I'm honored to have been invited to testify today. My name 
is Megan McHugh, and I am a research assistant professor at 
Northwestern University. And my research and teaching focuses 
on Federal health policy and the impact of policy changes on 
health care costs, quality and access. And the opinions that I 
am going to share today are my own and not of the university
    First, I would like to make three points: First, by 
adopting telemedicine services, small physician practices may 
be better prepared to participate and succeed in new models of 
care. The traditional fee-for-service payment system which pays 
providers for each visit, procedure or test is an obstacle to 
achieving the triple aim of better health care, better health 
and lower cost.
    In an effort to move away from the fee-for-service model, 
the Center for Medicare and Medicaid Innovation which was 
created by the Affordable Care Act is supporting the 
development of new payment and delivery models, which reward 
providers for delivering high quality, low-cost care.
    Telemedicine has played an important role in these value-
based purchasing programs. For example, under the bundled 
payment demonstration providers have the flexibility and the 
financial incentive to care for patients using the best means 
possible at a lowest cost. And since some data suggests that 
telemedicine offers comparable care quality at a lower cost 
than traditional in-person visits, providing care via 
telemedicine is a natural choice.
    Given the momentum towards value-based purchasing, small 
physician practices would be well served by exploring whether 
and how telemedicine may help them provide high-quality care at 
a lower cost.
    My second point is that reimbursement and state licensing 
policies serve as barriers to the adoption of telemedicine by 
small physician practices. Medicare generally limits payment 
for telemedicine services to interactive audio and video 
telecommunications with realtime conversations where the 
original sites are located in a rural area.
    As a result, telemedicine accounts for a very small portion 
of Medicare services, as we just heard. However, through the 
rulemaking process, CMS has been gradually expanding 
reimbursement for telemedicine. For example, just this year CMS 
changed the geographic criteria for originating sites, which 
will expand reimbursable telemedicine services to more rural 
Medicare beneficiaries.
    Although research on the impact of telemedicine on cost, 
quality and access is very promising, the evidence, I believe, 
is not conclusive. And as a result, I believe that the gradual 
expansion of telemedicine coverage under Medicare is a sensible 
course of action and one that will produce a slow but steady 
increase in the number of small practices that effectively and 
efficiently use telemedicine.
    And a good first start, in my opinion, would be to extend 
coverage for telemedicine to all value-based purchasing 
programs, like patient-centered medical homes and accountable 
care organizations.
    With regard to licensure, some State medical boards require 
telemedicine providers practicing across State lines to have a 
valid license in the State where the patient is located. And 
providers who want to practice across State lines must obtain 
an additional State license, which can be administratively 
burdensome.
    This burden may by greater for small practices, which are 
less likely to have support staff who can help them navigate 
this process. My personal opinion is that the current medical 
licensure system is inadequate to address the growing practice 
of telemedicine. And there are several alternative models that 
could be considered, though each of them might raise some 
political and potentially legal challenges.
    Then, third, any policy that expands the use of 
telemedicine should be carefully monitored. The academic 
literature on the impact of telemedicine is voluminous and 
still growing, and overall, the evidence suggests that 
telemedicine can improve access to care as well as the value of 
care.
    However, evidence of the impact of telemedicine is not 
entirely consistent. Some studies have shown no positive 
benefits to telemedicine. Clearly, there's a need for continued 
research in this area, but there's another issue concerning 
research that I believe needs to be addressed and that is that 
many studies of the effectiveness of telemedicine have been 
conducted within hospitals or large physician practices. So, as 
a result, our understanding of the impact of telemedicine among 
small physician practices is much more limited.
    In conclusion, telemedicine is an important tool for small 
practices as payers transition away from the fee-for-service 
model. State and Federal policymakers have the ability to 
facilitate the adoption of telemedicine through policies 
related to reimbursement and licensing, but expansion should be 
coupled with oversight to monitor impact.
    Again, I'd like to thank you for allowing me to appear 
before you today and share my opinions, and I would be happy to 
answer my questions that you might have.
    Chairman Collins. Thank you very much, Dr. McHugh.
    Our next witness is Maggie Basgall.
    Maggie is the community relations representative for Nex-
Tech in Lenora, Kansas. Recently, Ms. Basgall was involved in a 
telemedicine pilot project, collaborating with local hospitals 
and clinics regarding their broadband needs. She is testifying 
on the behalf of the NTCA, the Rural Broadband Association.
    Welcome, and you have 5 minutes.

                  STATEMENT OF MAGGIE BASGALL

    Mr. Basgall. Great. Good morning and thank you for having 
me. Chairman Collins, Ranking Member Hahn and members of the 
subcommittee, I am honored to be here today on behalf of the 
NTCA, the Rural Broadband Association, to discuss the use of 
telemedicine and its possibilities for small medical practices 
from the perspective of Nex-Tech.
    Nex-Tech serves over 2,200 broadband customers and has over 
2,300 voice access lines spread across a 9,300 square mile area 
in rural northwest and central Kansas. We serve 11 hospitals 
and 14 clinics among several other small physician practices.
    I worked as a community development specialist for Nex-Tech 
for the past 4 years. I have a passion for rural communities, 
because I lived in rural Kansas for most of my life. Most of 
the my time with Nex-Tech is spent working with our 
communities, particularly our anchor institutions, such as 
health care providers.
    Nex-Tech recently focused a pilot project on telemedicine 
in efforts to promote a greater adoption of advanced 
telemedicine capabilities. We spent time meeting with each 
hospital and several of the clinics in the small physician 
practices in our footprint.
    Collaborating with these health care providers was very 
enlightening as we learned of the rather large barriers they 
are faced with in looking at adopting telemedicine. Hospitals 
and clinics are undergoing large changes stemming from the 
Affordable Care Act and other regulatory changes. Several are 
still in the process of converting to electronic health care 
records and looking into new financial challenges. Others share 
that much of their time and efforts have to be focused toward 
doctor recruitment, insurance barriers, and other pertinent 
issues.
    That being said, however, they are all aware of the 
importance of broadband and how their access to affordable, 
reliable connections is significant. We have noticed an 
increase in subscribed bandwidth for our health care 
facilities, even in just the last couple of years.
    We have several hospitals with 50 megabyte per second 
connections and higher. Many are currently using it for 
everyday activities, such as offsite backup, checking insurance 
eligibility, sending and receiving digitalized files, 
conducting research, et cetera.
    Most of these hospitals are engaging in some forms of 
telemedicine, generally consisting of consultations from 
patient to mental health care provider or screen-to-screen 
trainings and Webinars. There are more uses that our hospitals 
and clinics could delve into.
    So many of our customers live in areas that are literally 
hours and hours from the nearest specialist or major hospital. 
Telemedicine has been but could be even more so of the 
lifesaver for those in our area.
    Even with health care staff time and efforts directed to 
it, there are other factors that come into play as well. As 
we've talked about, there is a lack of health insurance 
reimbursement for care through telemedicine and a lot of 
questions regarding physician licensure.
    In visiting with hospitals, there is also a lack of 
resources showcasing tangible applications or even overall 
guidance that hospitals can utilize to get a sense of the 
efficiencies that can be added.
    There are programs available that these hospitals, clinics, 
and physician practices can look toward for funding, but so 
often these programs are overwhelming and can be difficult to 
navigate through.
    We do have fascinating ideas and programs that are 
developing at a regional hospital in our footprint, Hays 
Medical Center. They are currently preparing to deploy robots 
to four pilot locations that can effectively transport a doctor 
stationed at a hospital to a remote area.
    There the patient can interact with the doctor through the 
robot with the use of plug-ins equipped to conduct diagnostic 
testing. Possibilities such as these are endless, but seeing 
these through fruition can be another story.
    Unfortunately, due to a lot of these barriers mentioned, we 
haven't been able to move forward with our telemedicine pilot 
project we began in 2012. Not only are our area health care 
facilities facing these types of barriers, but Nex-Tech is as 
well. Telemedicine cannot be implemented without an underlying 
robust wired network. Unfortunately, Nex-Tech has been faced 
with a number of regulatory uncertainties stemming from the 
Federal Communication Commission's high-cost fund reforms.
    Due to the high expense of delivering quality communication 
networks in rural areas, rural providers need predictable 
universal service support. However, in 2011, the FCC made 
changes from what was available to the Quantile Regression 
Analysis, QRA, which has created great uncertainty in the rural 
telecom arena.
    While the FCC has now eliminated the QRA, we have reverted 
back to the previous methodology, a new Connect America Plan 
for rural telecommunications providers still has not been 
developed.
    In summary, we at Nex-Tech are just absolutely thrilled to 
be able to collaborate with our area hospitals clinics and 
physician practices on current and future ideas and projects in 
telemedicine arena. However, we must be able to continue to 
deliver the services that hospitals are currently subscribed to 
and be ready for the influx of those who continue to need more 
bandwidth as they grow and technology advances.
    Rural America will not realize the promise of telemedicine, 
however, without a broadband USF that offers carriers the 
regulatory certainty needed to make network investments and an 
insurance industry that lacks telemedicine coverage.
    Guidance is also needed for health care facilities to take 
advantage of all that telemedicine offers. We look forward to 
working with Congress and the appropriate agencies to ensure 
these programs work as efficiently and effectively as possible. 
Thank you.
    Chairman Collins. Thank you very much.
    Our final witness is Dr. Brenda Dintiman. She is a 
physician with Fair Oaks Skin Care Center in Fairfax, Virginia. 
Dr. Dintiman is a board certified dermatologist who has 
practiced for over 16 years. She is testifying on behalf of the 
American Academy of Dermatology.
    Thank you very much.

          STATEMENT OF BRENDA J. DINTIMAN, M.D., FAAD

    Dr. Dintiman. Chairman Collins and Ranking Member Hahn, as 
a fellow of the American Academy of Dermatology Association, 
which represents more than 13,000 dermatologists nationwide, 
and a past president of the Medical Society of Northern 
Virginia, I commend you for holding a hearing on how 
telemedicine can further the efficiency, quality and access to 
health care.
    I am here today to discuss barriers of implementing 
telemedicine as a modality of care. Specifically, lack of 
reimbursement and cumbersome credentialing posed the greatest 
challenges. Although some reimbursement exists, it is not 
consistent across payers or across States to allow for proper 
patient access. Telemedicine is an innovative, rapidly evolving 
method of care delivery. The Academy supports the appropriate 
use of telemedicine as a means of improving access to the 
expertise of board-certified dermatologists to provide high 
quality, high value care.
    As a physician who runs a small dermatology practice in 
Northern Virginia, I currently use DermUtopia for the provision 
of telemedicine. This is a HIPAA compliant, mobile phone, and 
Web-based application. Through this application, I am able to 
evaluate, triage and treat both my patients and patients who do 
not have a primary dermatologist.
    We are aiming to go treat Medicaid patients through 
DermUtopia. However, there have been delays in ability to 
solidify funding, despite the fact that Medicaid has been 
improved for reimbursement for telehost services in Virginia.
    I have faced several barriers to most effectively providing 
care via telemedicine. While I face these barriers as a 
physician, it is ultimately the patients, often the most 
economically vulnerable, that are the most directly affected. 
The largest barrier, as noted, is reimbursement for telehealth 
services. Without reimbursement, providers and patients are 
unlikely to utilize telehealth.
    The benefits of such reimbursement would be widespread, 
telederm can save a patient time missed from work, travel time 
and, in the correct clinical context, allow for timely 
diagnosis and treatment when face-to-face care is unavailable 
or inaccessible.
    While telederm has traditionally been used to increase 
access to the remote or underserved areas, it indeed has great 
potential for serving a variety of patients for dermatological 
needs. For instance, insured patients in urban areas may face 
similar access delays or issues as those in geographically 
remote areas and therefore benefit from teledermatology.
    I have seen firsthand a number of patients that could have 
had the consultation done virtually and prevented an onerous 
trip to the office or to an urgent care or emergency room. An 
89-year old woman who lives alone at home, with no family in 
the area, and who would need to be brought to the doctor via 
wheelchair and transport vehicle, may be more easily evaluated 
via telemedicine.
    A nursing home patient with dementia who requires a nurse 
aide, and transportation, and coordination costs from the 
nursing home to evaluate a leg ulcer or an early infection 
could be effectively evaluated via teledermatology. A 2-year 
old with severe eczema, an infection, who cannot get in to see 
a dermatologist due to lack of access to a Medicaid 
dermatologist and inability for the parents to transport them 
during work hours, across the city, two bus rides, away could 
be easily evaluated and monitored via teledermatology.
    Overall, telemedicine provides a modality of care which can 
expand patient access to medical specialists, such as 
dermatologists. But barriers to implementation remain. Most 
notably issues of proper credentialing and reimbursement exist 
to varying degrees across States. These barriers impact 
providers but ultimately can hinder patient access to care.
    I as well as the academy appreciate the subcommittee's 
continued leadership on this issue. And look forward to working 
with you to ensure that patients can benefit from high quality, 
timely and cost-efficient care for telemedicine. Thank you.
    Chairman Collins. Thank you very much.
    I want to thank all of our witnesses.
    So far, we haven't had votes called. So, at this point, I 
would like to yield to Mr. Luetkemeyer for his 5 minutes of 
questioning.
    Mr. Luetkemeyer.
    Mr. Luetkemeyer. Thank you, Mr. Chairman.
    Ms. Dintiman, thank you for your testimony. I was kind of--
as we go through the process here of talking about 
telemedicine, I'm kind of curious, you're involved in the 
practice every day. How many more patients can you see? In 
other words, how much more benefit can it be when you have the 
ability to do telemedicine here? I realize every case is 
different, but I mean just----
    Dr. Dintiman. Well, I think, as she said, these studies 
have not been done, but we're anxious to do them, pilots and to 
see what the benefits could be. Personally, I think I could see 
5 to 10 more patients a day.
    Mr. Luetkemeyer. Very good.
    Dr. Dintiman. And that's with the effectiveness of 
evaluating them through the applications, through the computer, 
through the details that are provided, because teledermatology 
is a unique specialty that allows the pictorial view of the 
disease.
    Mr. Luetkemeyer. How do you minimize or mitigate the 
liability situation that you have as a doctor when you diagnose 
someone and someone else takes that diagnosis and then 
administers the care? How do you mitigate that? Are you 
concerned about it at all?
    Dr. Dintiman. Of course, our concerns are to protect the 
physician and protect the patient, ultimately. It is 
interesting a lot of care is already provided via the phone, 
with very little details, and with sometimes misinformation 
communicated through a phone. Whereas, with the use of video or 
stored forward technology, you're getting so many more details 
and so much more important information that allows you to you 
make a very important triage or suggestion to advise the 
patient to come in, advise the patient to go to the ER. I think 
that, in many ways, it protects the physician to have 
telemedicine as part of their practice.
    Mr. Luetkemeyer. Excellent.
    Ms. Basgall, you went at length with regards to the 
broadband problem that is very prevalent in a lot of rural 
parts of our country. And you know, to me this is probably the 
biggest problem I would see other than, perhaps, reimbursement 
with regards to telemedicine from the standpoint of the benefit 
it could be to the rural areas. Yet, with the barrier of the 
lack of broadband, in some areas, it would seem that would be a 
huge hurdle.
    I know I live in the rural part of Missouri, and I am 
barely within a broadband area myself. And so I know there are 
a lot of areas within my own district that do not have 
broadband. So can you speak to that a little bit about the 
concerns, how you are working with providers, maybe some 
hurdles and some things that perhaps we can help you with to be 
able to enhance that?
    Mr. Basgall. Sure. Well, Nex-Tech is actually sitting in a 
very good position as far the broadband that we are table to 
offer our customers because of some past RUS loans, because of 
the broadband stimulus grant and loans that we were able to 
get. We were able to build out fiber optics and also WiMAX, a 
wireless technology, to reach several of our customers that are 
out in a rural area, who otherwise had dialup service.
    So I feel like we are sitting in a pretty good position, 
where we can continue to work with those. You are always going 
to have customers who aren't in line of sight of a tower and 
are down in a draw or have trees surrounding them, and you just 
continue to work with them and say, what else can we do? Can 
you look for a unique solution for that? Can you put up a pole 
or put whatever might be able to work for them?
    As far as other companies in other areas, I know that it is 
a large issue, and I think a lot of maybe investments that 
would have otherwise been made at this time haven't been due to 
the regulatory uncertainty. I believe in the written testimony 
we have some statistics where it talks about the number of RUS 
loan applicants that were during the first 3 years of the 
program versus the past 3 and how those have dropped 
tremendously just because people aren't certain of--it has to 
be feasible in order to make it work. And when it is uncertain, 
it is difficult to make that happen.
    Mr. Luetkemeyer. Thank you.
    Dr. McHugh, you talked about licensing across State lines 
is a problem. And I am sure when you practice across the States 
you have to have a license, so when you practice telemedicine 
across State lines, it is a whole new world there of licensing. 
Can you talk about the problems and what kind of solutions you 
may have?
    Ms. McHugh. Sure. This is a bit of a challenge, especially 
where State medical boards have made decisions to limit 
practice to physicians who are located in the same State as the 
patients. It really limits competition, and it limits the 
ability for the patients to seek care outside of the State 
lines.
    There are several different approaches that could be used 
to address this problem anywhere from Federal approaches, where 
the Federal Government decides that we're going to have sort of 
a national leadership in term of licensing of telemedicine 
providers, to keeping this a State responsibility and having 
States come together through some sort of interstate agreement, 
where one State will recognize licensure in another State.
    Mr. Luetkemeyer. Is there a movement along that line?
    Ms. McHugh. There has been some advocacy along that line, 
but there has not been not been a whole lot of groundswell of 
support. I don't believe that many States have signed on to 
that yet.
    Mr. Luetkemeyer. I see I am over my time.
    Thank you, Mr. Chairman.
    Chairman Collins. Thank you, Mr. Luetkemeyer.
    I yield to Ranking Member Hahn for her questions.
    Ms. Hahn. Thank you, Mr. Chairman.
    I really appreciate all of your testimony. I learned a lot 
listening to each and every one of you. Some of my questions 
were already asked by Representative Luetkemeyer, but I was 
thinking along the same lines.
    One of the things that comes to my mind is patient privacy. 
And I was going to direct this to Dr. Rheuban, but any of you 
might want to answer that. There has been a high profile case 
lately of a doctor who was found secretly videotaping one of 
his patients in the exam room, and I think that just sort of 
sends fear through--I know women particularly.
    What would be your take on who should design the protocols 
for processing, sending patient information? And can or should 
the Federal Government be involved in helping to regulate 
telemedicine to ensure patient privacy?
    Dr. Rheuban. That is an excellent question. And certainly, 
all HIPAA privacy and security regulations apply to 
telemedicine providers as well. So I don't know that we 
necessarily need to regulate even more. The American 
Telemedicine Association has developed practice guidelines and 
standards. And I believe they should be sufficient, but it is a 
matter of training; working with industry, working with a 
provider community, working with the Federation of State 
Medical Boards so that everyone understands where we are 
currently; and then educating providers themselves about the 
appropriate use of telemedicine.
    Ms. Hahn. Does anyone else have any comments on that?
    Dr. Dintiman. Yes. I think that if you go to the ATA 
meeting, the American Telemedicine Meeting, you see that HIPAA 
compliance and security is of utmost importance. The technology 
is there. The enthusiasm of the scientists that come to these 
meetings is there.
    I think that what we may not realize is already a lot of 
information is communicated in non-HIPAA compliant ways. And so 
we need to actually channel the physicians and the health care 
providers to use these various secure systems that have been 
developed, because I think ultimately that is risk for the 
patient, but it can be overcome.
    Ms. Hahn. Now, Dr. Dintiman, you talked a little bit about 
how it could work in the world of dermatology. And you also 
mentioned possibly a patient in a nursing home with 
Alzheimer's. I was wondering how the rest of the doctors could 
comment on, what do you see as good cases for telemedicine? And 
are there ones that, of course, would not ever able to be 
accommodated by telemedicine? I just would like to hear a few 
more, what are the actual cases you think that would be served 
well by this?
    Ms. McHugh. Well, I will just jump in and say that when you 
think about the functionality and the capabilities of 
telemedicine, you know, they cover such a broad range of 
functions, you know. You can have a consultation. You can 
diagnose. You can do remote monitoring. You can even have 
physician mentoring.
    And so when you think broadly about the scope that 
telemedicine covers, it is really hard to imagine a specialty 
that couldn't be aided by telemedicine. I mean, you can even 
think about things beyond traditional specialties. So, for 
example, I teach a graduate health policy course, and one of my 
students is an emergency physician who wrote a terrific paper 
on the use of telemedicine for EMS, Emergency Medical Services. 
You can imagine an ambulance even going out into the field and 
getting really expert advice about whether to transport a 
patient and where to transport a patient.
    Dr. Rheuban. I don't think you even need to imagine it, 
because it is already here. So, in our program, we are 
providing services in more than 45 different subspecialties of 
health care. We do rely on our clinicians as to their comfort 
level of providing the service. We have protocols in place that 
have been developed with the providers to be sure we are doing 
the right thing for the right patient at the right time. 
American Telemedicine Association has many dozens of special 
interest groups that work with the specialty societies. If you 
want some use case scenarios, high-risk obstetrics 
telemedicine, cancer services. We do screening for diabetic 
retinopathy, acute stroke care. In my own speciality of 
pediatric cardiology, I can use a electronic stethoscope and 
read an ultrasound in the nursery where there is a baby that 
may have low blood oxygen. It is pretty much, as Dr. McHugh 
said, diverse across our specialties.
    Ms. Hahn. Thank you. I know my time is up, but I will say I 
read something which none of you have actually touched on was 
the doctor-to-doctor use of this. And I was reading an example 
of a doctor who had, alone at night, kind of dealing with a 
case, no one was around, and the opportunities of sending to 
another doctor these kinds of video or pictures and having a 
consultation with another physician.
    Thank you very much.
    Chairman Collins. Yes, thank you.
    I would like to now yield to Mr. Coffman for 5 minutes.
    Mr. Coffman. Thank you, Mr. Chairman.
    I thank you all for coming here to testify on telemedicine. 
And obviously, my hope and I think the hope of many members of 
Congress is what can we do to reduces cost and expand access to 
health care.
    So I am wondering if you all could elaborate on I think 
three things: Number one, to what extent have we--what are the 
frontiers for telemedicine in terms of, what can we still 
exploit in terms of opening access, lowering costs? And then, 
the second part, what are the impediments to do that? Are they 
cultural within the provider community, or are they regulatory 
in nature? And then I think the third would be just an idea in 
terms of what it could mean to our health care system if we 
could advance telemedicine further in terms of opening up 
access and reducing cost.
    Dr. Rheuban, why don't we start with you, please?
    Dr. Rheuban. Thank you.
    I think the frontiers are the delivery of care in the 
nontraditional environment, so in the workplace potentially, 
when people are traveling, many--in the home. We have a lot of 
cost savings data actually that are available. And as an 
example, in our own program, I mentioned the high-risk 
obstetrics telemedicine program. We have reduced preterm 
delivery and reduced days in our NICU by 39 percent. That is a 
huge cost saver for State Medicaid program and for the payer 
community.
    In stroke, if you can provide timely access to a stroke 
neurologist and appropriate use of clot-busting medication, 
that saves huge disability, saves lives, and saves--nursing 
home care. Nursing homes are a wonderful place because the 
challenge of transporting patients, the cost of the Medicare 
program.
    Remote patient monitoring in the home. We have done about 
650 patients we supported after discharge from the hospital, 
and we have reduced readmission by 50 percent in those patients 
who would have bounced back. So those, again, cost savings. So 
the frontier is being broader in terms of our look-see and how 
we can do it and eliminating some of the regulatory barriers 
that have limited providers from utilizing these opportunities.
    Mr. Coffman. Okay. Thank you.
    Ms. McHugh. Mr. Coffman, you had asked whether the barriers 
are more public policy related versus cultural. I would argue 
that they are both. There is certainly a lot that policymakers 
can do to expand the use of telemedicine, but I think that 
cultural barriers are an important one that we haven't really 
touched on yet. Work and quality improvement has shown for 
decades that changing physician behavior is very, very 
difficult. But one thing that is very much in your purview is 
to change reimbursement policies. As I mentioned, my personal 
opinion is that expanding telehealth coverage value-based 
purchasing programs would be a natural and next step for that, 
because under value-based purchasing programs, physicians and 
hospitals are incentivized to provide high-quality care at the 
lowest cost. In some cases, we know that providers don't have 
the flexibility to use telemedicine under these programs, even 
though it could be a very useful tool to improve the value of 
care delivered.
    Mr. Coffman. Ms. Basgall.
    Mr. Basgall. Yes. I would also like to touch on those same 
lines. The frontier in our rural area seems to just be let's 
get this started, let's move past just the face-to-face 
consultations they are currently having with--most of it is 
focused on the mental health side. We have a shortage, I think, 
of mental health psychologists, psychiatrists in our area. So a 
lot of times the hospitals are using kind of an ITV sort of set 
up for those means. So I think we just need to get past that.
    But I think one of the--like you mentioned, cultural, one 
of biggest barriers is we have an aging population, and that is 
both doctors and patients. So doctor recruitment will be 
interesting as they are trying get some younger doctors in to 
focus on, maybe they will have a want or a desire to bring in 
some of this technology. And then also helping our customers 
understand broadband and bring that into their lives a little 
bit more so.
    Mr. Coffman. Dr. Dintiman?
    Dr. Dintiman. I would like to focus on the cost saving 
aspect of telemedicine. I really think that if we look at our 
rehab centers and nursing home, how we could bring the care to 
the patient, instead of bringing the patient to an office or an 
emergency room without knowing where they need to be. For 
example, if we bring the care to the patient, we can evaluate a 
leg ulcer or an early infection more quickly and get the care 
implemented so they do not end up a patient that is 
hospitalized.
    Secondly, I think one of our biggest patient populations is 
our obese and diabetic population that can be monitored through 
teleophthalmology. They can be monitored through 
teledermatology. They have leg ulcers that are, again, big cost 
to the health care system as well as the other complications of 
diabetes. So I feel that we can see this in many specialties 
that we bring the care to the patient, and the system will save 
money.
    Mr. Coffman. Well, thank you all for your testimony today 
and for working in this frontier I think that has such promise 
in terms of opening up access and lowering costs and hopefully 
maintaining, if not improving, quality.
    Madam Chairman, I yield back--Mr. Chairman.
    Ms. Hahn. I like Madam Chairman.
    Chairman Collins. Thank you very much.
    Well, we have timed this fairly well. They have called 
votes, but we still have some time. I would like to ask a few 
questions to close this out.
    On the reimbursement issue, I mean, we talked a lot about 
Medicare and Medicaid. Dr. McHugh, what about the private 
insurers? Start with the basic question: Do they make the 
decision themselves whether they reimburse because you have one 
insurance company in an area saying, we will reimburse our 
doctors for telemedicine, and yet another private insurance 
company saying no, or is this a statewide issue?
    Ms. McHugh. So insurers do make the decision themselves. 
However, they have to follow State laws regarding mandated 
benefits. So some States have laws saying that insurers who 
offer coverage in their State must offer that particular 
benefit.
    Chairman Collins. So you could have, though, a cutting-edge 
company saying, we're going do it.
    Ms. McHugh. Uh-huh.
    Chairman Collins. So if the insurance company can do it, a 
State might mandate it, but in the case of, I think, there are 
20 States, as I understand it, that have a reimbursement 
policy, but that leaves 30 States without one. So, in those 
States, a private insurer could decide it is good business for 
them.
    Ms. McHugh. Absolutely. We see many insurers being swayed 
by the evidence and going far beyond offering coverage for the 
services that are mandated. They realize it makes good business 
sense.
    Chairman Collins. So, Ms. Basgell, some rural areas, and 
certainly mine--I have a very rural area. We have 25,000 to 
50,000 households that don't have broadband coverage, and part 
of that gets back to the definition of what is an underserved 
area or not. Have you seen any cases where somebody could have 
a small, office setting, or clinic setting, in a rural area 
that has broadband, so a patient could actually drive 5 miles 
there and connect at that point to a physician that is 50 miles 
away, almost like a call center? Have you seen anything like 
that?
    Mr. Basgall. You know, the most that we have seen as far as 
that goes is on the mental health side. And again, I think it 
goes back to some the closest psychologists are, you know, an 
hour and a half, 2 hours away. In my area, I think a lot of 
people are used to driving, and it is maybe not as bothersome 
to them to go to see their doctor physically, rather than 
online.
    I do think it also goes back to it the aging population and 
what their comfort level is. I think that there are a lot that 
are just more comfortable being there physically, but as we 
have a younger population coming back to our area, I think that 
that is starting right now. We are seeing a trend where some 
younger people are moving back to their hometowns. I think if 
that continues, I think that that comfort level will rise, and 
maybe we will see more of that in the foreseeable future.
    Chairman Collins. We have college kids that may be seeing, 
for various reasons, a mental health professional at home. They 
developed a relationship with that person. They go off to 
college. Maybe they are back and forth. It would appear that 
would be a very appropriate use. You can't just say to a 
college student in another State, because of licensing 
procedures, you have to start a new relationship. Would anyone 
like to comment on that?
    Dr. Rheuban. That is absolutely a perfect use case and 
example of why the lack of licensure portability can be a 
challenge. That provider that is caring for that student would 
have to have a license to practice medicine in that State.
    Now the Federation of State Medical Boards is moving 
forward with an interstate compact to try to expedite the 
licensure process, but it is still going to be time consuming. 
And we look to seeing how quickly and how expedited this 
process will be. Your example is a perfect example about why we 
need some broader vision in that regard.
    Chairman Collins. Would any of you like to comment?
    Dr. McHugh, is that a proper role, perhaps, for the Federal 
Government? I think some of us would say we defer to the 10th 
Amendment and States' rights. I, for one, am very reluctant to 
ever step in with a Federal policy or support of Federal policy 
that tramples on States rights. But you know, we seem to be in 
this telemedicine quandary of 20 States have reimbursement 
policies; 30 States don't. The licensing issue was brought to 
bear recently with a football physician who was treating his 
team in another State, and a player sued him. That brought that 
to the forefront. Is this one where perhaps some Federal 
statutes could give some limited coverage?
    Ms. McHugh. I think so. Certainly the Federal Government 
coming in and taking over this responsibility does introduce 
some issues with federalism. However, as a consumer and a 
parent, I want high quality care. And whether it is the Federal 
Government who shows leadership or State governments who show 
leadership, if States aren't going to act, I would like to see 
the Federal Government act.
    Dr. Rheuban. I would like to point out there are 50 
different State Medicaid programs with all different 
regulations as well. And that is a major challenge for our 
patients, especially as we see more insured patients under the 
Medicaid program. So I would certainly be supportive of greater 
oversight when it comes to medicaid programs and telemedicine 
as well.
    Chairman Collins. It almost seems like you could have some 
exceptions for existing patient relationships to avoid that. I 
am from western New York. A lot of our older population goes 
south for 3 months to Florida. There is another case; they have 
the relationship. It is not a New York doctor poaching in the 
Florida area for clients, but rather an existing client 
relationship, much like the college student and so forth.
    Do you ever think you could see something where there would 
be protections and/or licensing granted to existing patient-
doctor relations different than a new patient? Is that even a 
possibility?
    Dr. Dintiman. I think that that is very doable and 
especially to--some of the States have a specific telemedicine 
license. It doesn't give you full access, but you do have the 
ability to treat patients across lines.
    And I just wanted to remind us that there are many States 
that have--there is a huge shortage of pediatric specialties, 
such as pediatric rheumatology and endocrinology. There are 
whole States that don't have one pediatric rheumatologist. I 
think those people should have the ability to have a 
telemedicine consult, even if there is not an existing 
relationship.
    Chairman Collins. I think our time has come to an end. I 
have other questions, but I think what we have seen here is 
common sense. We would like to think that common sense should 
carry the day. And technology has now moved to us a place we 
can better serve an aging population or a rural population 
where we know there is going to be a shortage of doctors. There 
is already a shortage of specialties. There are many mental 
health professionals that are doing concierge medicine; they 
don't even take insurance. I know in the dermatology 
profession, especially, you can wait 18 months to get--they 
call it an annual skin check, but they should now call it an 
18-month skin check. So I think common sense says we need to 
move it forward. If a doctor doesn't get paid, they are not 
going to be participate, so reimbursement. The licensure 
issues. No one wants to be put in a position of not complying 
with the laws relative to their license or, in some cases, 
their own liability insurance policies.
    So what our purpose was today, and I think we accomplished 
it, was to start a discussion. I think this is only the second 
hearing in Congress on telemedicine. It is messy with State 
laws. It is messy with Medicare and Medicaid and different 
practices and existing relationships and so forth. But if we 
don't start the discussion at some point--and we are seeing a 
hodgepodge of things move forward State by State.
    So, again, your testimony was quite timely. We appreciate 
all of your comments and hope that this discussion is helpful 
to those of us who just want to move forward in a common sense 
direction.
    I ask unanimous consent of members that we have 5 
legislative days to submit statements and supporting materials 
for the record.
    And with no objection, that is so ordered.
    The hearing is now adjourned.
    [Whereupon, at 11:02 a.m., the subcommittee was adjourned.]
                            A P P E N D I X


    Testimony before the Committee on Small Business 
Subcommittee on Health and Technology

    July 31, 2014

    Karen S. Rheuban MD
    Professor of Pediatrics
    Director, University of Virginia Center for Telehealth
    P.O. Box 800711
    University of Virginia Health System
    Charlottesville, Virginia, USA 22908
    [email protected]
    434-924-2481 (phone)
    434-982-1415 (fax)

    Chairman Collins, Ranking Member Hahn, members of the 
Subcommittee on Health and Technology, thank you for the 
invitation to provide testimony regarding the opportunities and 
challenges for small medical practices seeking to incorporate 
telehealth into everyday practice. My name is Dr. Karen 
Rheuban, and I direct the Center for Telehealth at the 
University of Virginia. I am the Principal Investigator of the 
federally funded Mid Atlantic Telehealth Resource Center, a 
past president of the American Telemedicine Association and 
Board Chair of the Virginia Telehealth Network. I also have the 
privilege of serving as Board Chair of the Virginia Department 
of Medical Assistance Services (Medicaid). Although the focus 
of my testimony relates to opportunities for and barriers to 
the use of telehealth at the provider level, it is also 
important to note there are parallel implications for small 
business development in sectors such as telemedicine services 
companies and technology innovation.

    ``Telemedicine'' is defined as the practice of medicine 
using electronic communications, information technology or 
other means between a provider in one location, and a patient 
in another location. Generally, telemedicine is not an audio-
only telephone conversation, e-mail/instant messaging 
conversation, or fax. Telemedicine is not a new specialty, a 
new procedure or a new clinical service but rather, technology 
designed to enable the provision of healthcare services at a 
distance. 21st Century telemedicine services can be provided 
live, via high definition interactive videoconferencing 
supported by peripheral devices, or provided asynchronously, 
using store and forward technologies, or through the use of 
remote patient monitoring tools.

    Telemedicine has been demonstrated to mitigate many of our 
nation's significant challenges including disparities in access 
to care, healthcare workforce shortages, and geographic mal-
distribution of providers. Telemedicine improves patient 
triage, clinical outcomes, reduces the burden of travel for 
care, and fosters more timely access to care. Telemedicine 
tools support patient engagement and self-management where 
appropriate, and, as supported by extensive evidence published 
in the peer-reviewed literature, improves clinical outcomes, 
and lowers the cost of care \1\,\2\.
---------------------------------------------------------------------------
    \1\ Lustig, Tracy A. The role of telehealth in an evolving health 
care environment: workshop summary. National Academics Press, 2012.
    \2\ Schwamm, Lee H., Heinrich J. Audebert, Pierre Amarenco, Neale 
R. Chumbler, Michael R. Frankel, Mary G. George, Philip B. Gorelick et 
al. ``Recommendations for the Implementation of Telemedicine Within 
Stroke Systems of Care A Policy Statement From the American Heart 
Association.'' Stroke 40, no. 7 (2009): 2635-2660.

    Vetted by and in collaboration with the relevant specialty 
societies, the American Telemedicine Association has developed 
and published practice guidelines designed to ensure best 
---------------------------------------------------------------------------
practices in telemedicine that ensure high quality care.

    Examples of telehealth supported care include:

           Remote diagnosis of stroke with timely use 
        of thrombolytic (clot busting) agents to reduce 
        morbidity and mortality, improve patient outcomes, and 
        lower overall costs of care;

           Delivery of telemedicine supported 
        obstetrical services to women at high risk for 
        complicated pregnancies ultimately resulting in 
        improved clinical outcomes, lessened infant mortality 
        rates, reduced days in neonatal intensive care and 
        lower costs of care;

           Regular ophthalmologic screening of patients 
        with diabetes for retinopathy, the number one cause of 
        blindness in working adults;

           Better management of chronic illness such as 
        heart failure, diabetes, hypertension, chronic 
        obstructive pulmonary disease;

           Improved access to cancer screening tools, 
        collaborative diagnosis through virtual tumor boards 
        and even remote access to clinical trials;

           Access to mental health services for 
        children and adults to include emergency psychiatry 
        services;

    Telemedicine supports an integrated systems approach 
focused on disease prevention, enhanced wellness, chronic 
disease management, decision support, improved efficiency, 
quality and patient safety.\3\
---------------------------------------------------------------------------
    \3\ Kvedar, Joseph, Molly Joel Coye, and Wendy Everett. ``Connected 
health: A review of technologies and strategies to improve patient care 
with telemedicine and telehealth.'' Health Affairs 33, no. 2 (2014): 
194-199.

    Opportunities for small practices to adopt telehealth 
relate to the model they wish to deploy and the credentials of 
the provider. Primary care providers can serve as ``originating 
sites'' so as to connect their patients to specialists, they 
may offer direct-to-consumer services for their own patients, 
they may choose to serve on panels for telemedicine services 
companies offering direct-to-consumer services for their own 
patients or others, and/or they may engage in remote patient 
monitoring services for chronic disease management for their 
patients. Specialty care providers may serve as consulting 
``distant site'' providers to provide consultative services and 
follow up visits either through their offices or at the 
hospital. Specialists may also serve as ``originating sites'' 
to connect to other providers. They may offer services live 
using videoconferencing technologies or through store and 
forward applications. Specialty care providers may choose to 
serve on panels of consultants for telemedicine services 
companies, offer direct-to-consumer services for their patients 
or for payers and telemedicine services companies, and 
participate in remote patient monitoring models. Regardless of 
the model chosen, is imperative that willing providers take 
into consideration all relevant federal, state, specialty 
society policies and best practices that impact telehealth 
---------------------------------------------------------------------------
practice.

    A) Rural healthcare:

    Although rural communities face the same basic challenges 
in access, quality and costs as their urban counterparts, they 
do so at far greater rates, attributable to a host of factors. 
``Core health care services'' as defined by the Institute of 
Medicine as primary care, emergency medical services, long term 
care, mental health and substance abuse services, oral health 
and other services are considerably less accessible in rural 
communities.\4\ Where local specialty care services are not 
available, particularly in rural and underserved regions and 
health professional shortage areas, telemedicine offers timely 
access to care and spares patients the burden of long distance 
travel for access to that care.
---------------------------------------------------------------------------
    \4\ Institute of Medicine, Committee on the Future of Rural Health 
Care. ``Quality through collaboration: The future of rural heath 
care.'' (2014).

    Rural communities lack sufficient patient volumes to 
support specialty and subspecialty practices. Primary care 
providers are often overwhelmed with complex patients with 
acute and chronic illness. Telehealth technologies offer ready 
access to critical services when rural providers partner with 
---------------------------------------------------------------------------
tertiary and quaternary care facilities.

    Attracting health professionals to rural communities 
remains a daunting task and retaining those health 
professionals to practice in rural communities is all the more 
difficult. Rural healthcare providers generally work longer 
hours, see more patients and have grater on-call demands 
because of lack of cross coverage opportunities. Strategies to 
recruit and retain clinicians to practice in rural and frontier 
communities must include applications that enhance the 
management of patients with acute and chronic illness, and 
reduce the chronic sense of isolation experienced by those 
practitioners by affording enhanced connectivity to colleagues, 
and educational opportunities.

    Telehealth should be viewed as integral to rural 
development. More than 90% of patients seen through our UVA 
telemedicine program remain within their community healthcare 
environment, resulting in a reduction of unnecessary transfers, 
and thereby contributes to the economic viability of community 
hospitals.

    B) Urban healthcare

    Although the challenges of unfavorable geography and 
distance tend to be uniquely rural, socioeconomic issues, 
health disparities, and other serious barriers to access to 
quality healthcare are equally compelling in urban areas. 
Poverty, unhealthy behaviors and adverse health status 
indicators are as prevalent in the shadow of our finest urban 
academic health centers as they are in rural communities. 
Isolated, vulnerable urban patients also suffer from high rates 
of chronic illness, and for whom a bus ride across town can be 
as challenging as is a long ride for rural patient.

    C) Workforce

    It is widely accepted that our nation faces a shortage of 
physicians and other health professionals which is anticipated 
to worsen with our aging population, higher rates of chronic 
illness, and greater numbers of covered individuals seeking 
care following the implementation of the Affordable Care Act. 
The Association of American Medical Colleges (AAMC) in a recent 
communication with the Committee on Veterans Affairs reported 
an estimated shortage of 46,000 primary care physicians and 
45,000 specialists by 2020.\5\ The incorporation of telehealth 
technologies into integrated systems of care offers tools with 
great potential to address some of the challenges of access, 
specialty shortages, and changing patient needs both in the 
rural and urban setting.
---------------------------------------------------------------------------
    \5\ https://www.aamc.org/download/385178/data/
aamclettertocongressionalconfereesonveteranaffairslegislation.pdf

    The aging of our population has already created increased 
demand for specialty healthcare services to address both acute 
and chronic disease in the elderly. Such a demand, in the face 
of anticipated provider shortages, requires a fundamental shift 
from the model of physician centered care to one focused on 
patient centered care using interdisciplinary teams, evidence 
based medicine, the use of informatics in decision support and 
telehealth technologies when specialty care services are not 
locally available. Home telehealth and remote monitoring in the 
arena of chronic disease management improves care and prevents 
---------------------------------------------------------------------------
hospital readmissions.

    To facilitate this paradigm shift, it is imperative that we 
train a broad spectrum of health professionals to deliver 21st 
Century healthcare facilitated by telehealth technologies.

    D) Example: The University of Virginia Center for 
Telehealth

    The UVA Telemedicine program serves as an example of both 
traditional and innovative applications in telehealth. Our 
Center for Telehealth was established initially as the Office 
of Telemedicine in 1996. Since the establishment of our 
program, we have developed collaborations and agreements 
connecting the UVA Health System with 128 sites across the 
Commonwealth using high definition video-teleconferencing, 
store and forward technologies, remote patient monitoring and 
mobile health applications to improve access to healthcare 
services for the citizens of the Commonwealth. We connect with 
hospitals, clinics, health centers, community service boards, 
medical practices, correctional facilities, skilled nursing 
facilities and emergency medical services. Our telemedicine 
program has reduced the burden of travel for Virginians by more 
than 9 million miles, saved lives and fostered innovative 
models of care delivery and workforce development. We have 
launched a care coordination and remote patient monitoring 
program designed to reduce hospital readmissions, and to manage 
chronic disease in the community setting. UVA telemedicine 
supported clinical care spans the continuum from prenatal 
services, to acute care consultations and follow up visits, to 
chronic disease management and palliative care. We have 
leveraged these efforts to also expand broadband communications 
services in rural regions of the Commonwealth.

    The UVA Telemedicine program has received funding from 
HRSA, USDA, the Department of Commerce, and the Rural 
Healthcare Support Mechanism of the Federal Communications 
Commission. We have worked with our colleagues at the Centers 
for Medicare and Medicaid Services, and with the Institute of 
Medicine to help advance the implementation of policies that 
allow for innovation, sustainability and high quality patient 
care. In 2010, the Center was awarded a federal grant to serve 
as the Mid Atlantic Telehealth Resource Center (MATRC) to 
provide technical assistance to providers, healthcare systems, 
state governments and other entities in eight states and the 
District of Columbia.

    The Center for Telehealth has also worked closely with all 
relevant agencies of the Commonwealth of Virginia to help build 
our telemedicine network, to pilot innovative applications, and 
to ensure sustainability through sound state public policy 
collaborations that integrate telehealth into mainstream 
healthcare in the Commonwealth. These efforts led to broad 
reimbursement by Virginia Medicaid in 2003 and in 2010, a 
legislative mandate for parity third party payment.

    Our Center for Telehealth tracks a host of metrics to 
include process metrics for emergency care (time from consult 
request to completion of encounter), process metrics for non-
emergency services which are compared to traditional face to 
face services, clinical outcomes metrics, hospital readmissions 
rate, miles of travel avoided, comparisons to national 
benchmarked telemedicine programs, patient satisfaction, and 
other organizational metrics.

    Examples of UVA telemedicine clinical outcomes metrics 
include:

          a) High-risk obstetrics telemedicine in which we 
        compared traditional face to face care with care 
        provided via telemedicine to 374 high risk pregnant 
        women. We have documented a reduction in NICU hospital 
        days for the infants born to these patients by 39% 
        compared to control patients, reduced patient no-shows 
        by 62% and reduced patient travel by these pregnant 
        women by 162,000 miles.\6\
---------------------------------------------------------------------------
    \6\Veith, Sharon T et al, ``Perinatologists and Advanced Practice 
Nurses Collaborate to Provide High Risk Prenatal Care in Rural Virginia 
Communities.'' In Association of Women's Health, Obstetric and Neonatal 
Nurses (June 14-18), 2014). AWHONN, 2014.

          b) In partnership with BroadAxe Care Coordination, 
        remote patient monitoring tools have been deployed to 
        prevent hospital readmission and have been an effective 
        tool for patients with heart failure, acute myocardial 
        infarction, chronic obstructive pulmonary disease, and 
        pneumonia, reducing all cause 30 day readmissions by 
---------------------------------------------------------------------------
        45%.

          c) Store and forward ophthalmologic screening for 
        retinopathy, the number one cause of blindness in 
        working adults has been provided to underserved adults 
        with diabetes. Over two years, 1736 screens have been 
        performed, with 802 abnormal patients identified (46%) 
        as being at risk for blindeness.

          d) Remote patient monitoring tools have been used to 
        reduce the burden of diabetes in the community setting. 
        All clinical metrics tracked (Hgb A1c, fasting blood 
        sugar and blood pressure) have had impressive 
        reductions in the range of 9-10%.
          e) More than 2000 patients have participated in the 
        video-based interactive patient education programs of 
        our diabetes community network.

    E) Issues for consideration:

    Despite the federal government and private industry's 
multi-billion dollar investment in telemedicine, broadband 
expansion and health information technologies, disappointingly, 
efforts to promulgate continued integration of telemedicine 
remain stifled by 20th Century federal and state barriers to 
more widespread adoption. If challenging to large healthcare 
systems such as ours, it follows naturally that despite great 
promise, these obstacles create significant challenges for 
small medical practices seeking to use telehealth tools. Larger 
systems can draw upon the expertise of contract attorneys, 
information technology specialists, a robust billing staff, 
electronic medical records and picture archiving and 
communications services, credentialing and privileging staff, 
and other support systems to help facilitate telehealth 
integration.

    Currently, 26 different federal agencies report engagement 
in telehealth, be it through research or other grant funding 
opportunities, the establishment of broadband communications 
networks, clinical service delivery, device development and 
regulation, and other interests. The Fed-Tel working group 
efforts to coordinate telehealth policy has made some progress, 
however, there still remains a serious lack of coordination of 
practical policies across these agencies in part because of 
statutory barriers.\7\
---------------------------------------------------------------------------
    \7\ Doarn, Charles R., Sherilyn Pruitt, Jessica Jacobs, Yael 
Harris, David M. Bott, William Riley, Christopher Lamer, and Anthony L. 
Oliver. ``Federal Efforts to Define and Advance Telehealth--A Work in 
Progress.'' TElemedicine and e-Health 20, no. 5 (2014): 409-418.

    As an example: mal-aligned federal definitions of rural 
have resulted in federal grant support for telemedicine 
technology and broadband connectivity deployed to certain 
clinics and hospitals eligible for funding according to those 
agency definitions of rural, but sustainability is thwarted by 
statutory barriers that deny Medicare reimbursement because of 
a more limited Medicare definition of rural and other 
originating site restrictions. Inconsistent state policies and 
regulations create additional barriers for otherwise willing 
providers seeking to integrate telehealth into care delivery 
---------------------------------------------------------------------------
models.

          1) Reimbursement

          a) Medicare:

    Payment coverage restrictions remain a major impediment to 
the broader adoption of telehealth by providers. Congress, in 
1997, through the Balanced Budget Amendment, and in 2000, 
though the Benefits Improvement and Protection Act (BIPA), 
authorized the Center for Medicare and Medicaid Services (CMS) 
to reimburse for telehealth services provided to rural Medicare 
beneficiaries across a broad range of CPT codes and services. 
However, the current Medicare telehealth provisions in the 
Social Security Act 1834(m), enacted in 2000, have not kept 
pace with advancements in technology, and more than a decade of 
best practices and outcomes research. In the Act, Congress, 
directed CMS to study and report opportunities to expand 
coverage within two years. Fourteen years later, no such report 
has been produced.\8\
---------------------------------------------------------------------------
    \8\ Medicare, Medicaid, and SCHIP Benefits Improvement and 
Protection Act (BIPA) section 223(d).

    The Affordable Care Act did not expand eligible originating 
sites in the traditional Medicare program in part because of 
adverse scoring by the Congressional Budget Office that failed 
to take into account services provided in lieu of face to face 
care, and Medicare savings accrued by patient monitoring 
programs. Pilot programs have been launched through the Center 
for Medicare and Medicaid Innovation that include remote 
patient monitoring. The regulations for Accountable Care 
Organizations still require the patient originating site to 
conform to the regulations set forth in Section 1834(m) without 
flexibility to include providers serving patients living in 
metropolitan communities across the nation including patients 
in nursing homes.\9\ These statutory barriers placed on 
telehealth programs are borne out by the meager reimbursements 
reported by CMS for telemedicine services. In 2013, CMS 
reported fewer than $12 million dollars in reimbursements for 
``allowable charges'' NATIONWIDE which include distant site and 
originating site fees. (Attachment A: CTEL). Although physician 
offices and community based clinics are ideal originating sites 
for telemedicine encounters, the current Medicare originating 
site payment ($24.63) is insufficient to cover the costs of 
establishing and maintaining a telemedicine services. In its 
2014 physician payment schedule, CMS expanded its operating 
definition of rural from non-metro counties only to also 
include those regions defined as rural by the Office of Rural 
Health Policy.
---------------------------------------------------------------------------
    \9\ Grabowski, David C., and A. James O'Malley. ``Use of 
telemedicine can reduce hospitalizations of nursing home residents and 
generate savings for medicare.'' Health Affairs 33, no. 2 (2014): 244-
250.

---------------------------------------------------------------------------
          b) Medicaid:

    Currently 47 state Medicaid programs provide some form of 
reimbursement for the delivery of telehealth facilitated care 
to Medicaid beneficiaries. However, there is no consistency in 
telehealth coverage across the Medicaid programs, despite clear 
needs of patients served by our Medicaid programs and in the 
face of coverage expansion post implementation of the 
Affordable Care Act. Most Medicaid programs pay for 
transportation of patients and yet, in many states, there are 
still considerable limitations on coverage for telehealth 
services. In 2013, Virginia Medicaid expended $70 million 
dollars on non-emergency transport of Medicaid 
beneficiaries.\10\ A consistent federal-state approach to 
Medicaid payment for telehealth services would provide cost-
savings both in operations costs (transportation) and more 
importantly, in access to care and models of care delivery. 
Virginia Medicaid has taken many positive steps integrating 
telehealth for its beneficiaries, and since 2003, has provided 
telehealth coverage for urban and rural beneficiaries. Virginia 
Medicaid covers live-interactive video based consultations and 
follow-up care for all Medicaid enrollees. Our Medicaid program 
has begun to cover certain store-forward services by Medicaid 
providers, and has integrated remote patient monitoring for our 
(urban and rural) dual enrollees, the most vulnerable and 
costly patients we serve, though our newly launched pilot with 
CMS ``Commonwealth Coordinated Care''. Virginia Medicaid has 
also expanded the list of eligible providers and services 
beyond the eligible providers in Medicare. Medicaid coverage 
decisions requested by providers are analyzed based on clinical 
need, technical viability of the service, models supported by 
other payers, support of professional organizations, 
establishment of protocols, costs, and risk of fraud and abuse. 
In 2013, Virginia Medicaid reported reimbursements of $570,000 
for more than 10,000 telemedicine claims in the fee for service 
and managed care programs.\11\
---------------------------------------------------------------------------
    \10\ Communication with Hazelton, A., Virginia Department of 
Medical Assistance Services, July 2014.
    \11\ Communication: Nelson, J, Virginia Department of Medical 
Assistance Services, July 2014.

---------------------------------------------------------------------------
          c) Private pay:

    Twenty-one states plus the District of Columbia require 
that private insurance cover telehealth services. These states 
are: Arizona, California, Colorado, Georgia, Hawaii, Kentucky, 
Louisiana, Maine, Maryland, Michigan, Mississippi, Missouri, 
Montana, New Hampshire, New Mexico, Oklahoma, Oregon, 
Tennessee, Texas, Vermont, Virginia, and the District of 
Columbia. Some of the commercial payers support payment for 
telemedicine services even in the absence of a state mandate. 
Others have developed or adopted direct-to-consumer models as 
either a benefit to members, or an additional payment option.

          d) Other models:

    A number of telemedicine services companies have developed 
models to provide contractual services to hospitals, 
correctional facilities and other entities, by recruiting 
individual physician providers and contractually fully managing 
the interface between physician, hospital and patient 
(examples: Specialists on Call, Insight Telepsychiatry). 
Other companies contract with payers or directly with patients 
in direct to consumer model (examples: Teladoc, American 
Well, MD Live) and offer services via video-based encounters 
and telephone services to the home, workplace or travel 
locations. The Federation of State Medical Boards \12\ and the 
American Medical Association \13\ have issued recent policy 
documents and guiding principles to ensure patient safety, 
quality of care, privacy of patient information, protecting the 
patient-physician relationship while promoting improved care 
coordination and communication with medical homes.
---------------------------------------------------------------------------
    \12\ http://www.fsmb.org/Media/Default/PDF/FSMB/Advocacy/
FSMB--Policy.pdf.
    \13\ REPORT 7 OF THE COUNCIL ON MEDICAL SERVICE (A-14) Coverage of 
and Payment for Telemedicine, June, 2014.

---------------------------------------------------------------------------
    2. Boards of Medicine policies:

    Inconsistent board regulations across the states and 
territories have led to continued confusion for practitioners. 
Some state boards have adopted positions of opposition to the 
mainstream adoption of telehealth requiring an in-person visit 
prior to any subsequent telehealth encounters. We applaud the 
Federation of State Medical Boards, for its April, 2014 Report 
Appropriate Regulation of Telemedicine (SMART) Workgroup 
report. This report, ``Model Policy for the Appropriate Use of 
Telemedicine Technologies in the Practice of Medicine'' 
establishes a framework and common language for adoption by the 
states.\12\ As stated by the FSMB, ``this new policy document 
provides guidance to state medical boards for regulating the 
use of telemedicine technologies in the practice of medicine 
and educates licensees as to the appropriate standards of care 
in the delivery of medical services directly to patients via 
telemedicine technologies. It is the intent of the SMART 
Workgroup to offer a model policy for use by state medical 
boards in order to remove regulatory barriers to widespread 
appropriate adoption of telemedicine technologies for 
delivering care while ensuring the public health and safety.'' 
Notably, this working group provided guidance to the Boards of 
Medicine that an initial telemedicine encounter (live 
interactive video based or store and forward) can indeed 
establish a bona-fide doctor patient relationship so long as 
the encounter conforms to current standards of practice. 
Indeed, our experience and that of others supports that 
concept. Timely access to care is a key driver of telemedicine 
programs....as an example, it is highly unlikely that any acute 
stroke victim might pre-emptively have scheduled an in person 
visit with a stroke neurologist prior to suffering his/her 
first stroke. We rely upon our clinicians and their respective 
specialty societies to determine the wisdom and need for an 
initial in-person visit when developing our telehealth 
protocols.

    The SMART Working group also established additional 
guidelines for the Boards that address informed consent, 
privacy and security of patient records, patient choice, 
prescribing, licensure, continuity of care and access to 
emergency care. In particular, the FSMB model policy clearly 
states that prescribing as a result of a telemedicine encounter 
should follow all current standards of practice in terms of 
indications, appropriateness and safety considerations.

    3. Credentialing and Privileging

    Credentialing and privileging are important elements of 
telehealth practice so as to ensure patient safety, quality and 
that appropriate services are provided by the appropriately 
credentialed provider. Telehealth has been incorporated into 
the Joint Commission standards beginning in 2000 and in their 
revised standards of 2004. In 2011, after extensive 
deliberations with telehealth providers, CMS published much 
welcomed new regulations in its hospital Conditions of 
Participation standards to address credentialing and 
privileging to include proxy arrangements so as to further 
facilitate the delivery of telemedicine services across the 
nation.\14\ Despite this progress, there remain delays in the 
credentialing and privileging processes, and confusion amongst 
practitioners and hospitals regarding roles and 
responsibilities to include the requisite sharing of quality 
data.
---------------------------------------------------------------------------
    \14\ http://www.ofr.gov/OFRUpload/OFRData/2011-
10875--PI.pdf.

---------------------------------------------------------------------------
    4. Licensure

    State medical licensure is a slow, costly and cumbersome 
process for providers who wish to offer services through 
telemedicine to patients physically located in other states. 
The process of securing multiple licenses is time consuming at 
its best, with requirements for extensive primary source 
verification, an application and fee for licensure in the 
states in which the provider might wish to evaluate and treat 
patients. So as to ensure the ability of the Boards to respond 
to complaints and enforce actions against providers, in 
response to requests for licensure portability, in April, 2014, 
the Federation of State Medical Boards (FSMB) developed an 
expedited licensure process. As compared to true licensure 
portability, as has been applied in the Nurse Compacts and as 
proposed in legislative proposals, this new process still risks 
being time consuming and costly to providers. Nonetheless, the 
FSMB expedited licensure proposal is an improvement over 
current licensure policy.

    5. Stark and Anti-kickback laws

    Providers and healthcare systems must be aware of the 
implications of the Stark and Anti-kickback laws when 
considering models for acquisition of telehealth equipment and 
technology. As reported on the CMS website, ``the Anti-Kickback 
Statute (42 U.S.C. Section 1320a-7b(b) makes it a criminal 
offense to knowingly and willfully offer, pay, solicit, or 
receive any remuneration to induce or reward referrals of items 
or services reimbursable by a Federal health care program.\15\ 
Where remuneration is paid, received, offered, or solicited 
purposefully to induce or reward referrals of items or services 
payable by a Federal health care program, the Anti-Kickback 
Statute is violated.
---------------------------------------------------------------------------
    \15\ https://www.cms.gov/Outreach-and-Education/Medicare-Learning-
Network-MLN/MLNProducts/downloads/
Fraud--and--Abuse.pdf

    The Physician Self-Referral Law (Stark Law) (42 U.S.C. 
Section 1395nn) prohibits a physician from making a referral 
for certain designated health services to an entity in which 
the physician (or an immediate member of his or her family) has 
an ownership/investment interest or with which he or she has a 
---------------------------------------------------------------------------
compensation arrangement, unless an exception applies.''

    Both these statutes must be considered as important risks 
for telemedicine providers or entities who ``purchase, lease, 
order, or arrange for or recommend the purchasing, leasing, or 
ordering of any good, facility, service, or item for which 
payment may be made in whole or in part under a federal health 
care program......Health care providers must take utmost 
precaution and care in developing processes and procedures to 
implement telemedicine programs to avoid liability under the 
Stark and Anti-Kickback statutes.''.\16\
---------------------------------------------------------------------------
    \16\ Ali, S. http://ctel.org/wp-content/uploads/2011/12/CTeL-The-
Practice-of-Telemedicine-The-Impact-of-Stark-and-Anti-Kickback.pdf

---------------------------------------------------------------------------
    6. Broadband availability:

    The Rural Healthcare Program of the Federal Communications 
Commission's Universal Service Fund was established following 
the passage of the Telecommunications Act of 1996. This program 
has been extraordinarily useful in expanding broadband services 
for eligible entities located in rural areas by providing 
discounts for ongoing connectivity that compare to those rates 
available to urban providers. Unfortunately as compared to the 
e-Rate, High Cost, and Low Income programs, the Rural 
Healthcare Programs have not fully met their Commission defined 
funding cap because of onerous, complex application processes, 
and statutory exclusions to eligibility that do not always 
align with health disparities. In the Telecommunications 
Program, as an example, for profit hospitals, initially 
considered ineligible entities, may receive funding support for 
connectivity to the Emergency Department but other connections 
within that hospital are not eligible, even if that hospital is 
the sole provider in a rural county.\17\
---------------------------------------------------------------------------
    \17\ FCC Report and Order, Order on Reconsideration and further 
Notice of Proposed Rule Making, Federal Register: January 22, 2004 
Volume 69, Number 14
---------------------------------------------------------------------------
    Other ineligible entities include emergency medical 
services providers and skilled nursing facilities. For-profit 
clinics and solo practices are not eligible for support. Good 
faith efforts by the FCC to expand within their statutory 
authority, has led to somewhat broader use of the 
Telecommunications Program. The FCC Pilot Program and the 
Health Care Connect Fund, allows, through consortia, 
collaborations that may include urban providers. Chapter 10, 
Healthcare, of the National Broadband Plan, outlined important 
steps to integrate broadband communications services into 
sustainable models of healthcare delivery.\18\
---------------------------------------------------------------------------
    \18\ Thomes, Cynthia, ``The National Broadband Plan: Connecting 
America. Administered by the Federal Communications Commission, 445 
12th Street SW, Washington, DC 20554. Retrieved October 15, 2010, from 
http://www.broadband.gov.'' (2011): 435-436.

    Despite significant outreach efforts, through 2012, 
utilization of the fund still remains less than 30% of the 
funding cap established by the Commission after passage of the 
Telecommunications Act of 1996. Total funding commitments 
reported on the Rural Healthcare website through June 2012 were 
$114,123,355 of which $47,723,468.67 were allocated to 
providers in Alaska.\19\
---------------------------------------------------------------------------
    \19\ http://www.usac.org/rhc/tools/news/default.aspx?pgm=telecom

    The cumbersome and time consuming application process and 
confusing regulations surrounding the rural healthcare programs 
remain a disincentive for participation by individual providers 
and small practices even if they otherwise meet the eligibility 
---------------------------------------------------------------------------
requirements set forth in the Act.

    7. Patient Privacy and Disclosure

    Providers must ensure that any telemedicine collaboration 
conform fully to the regulations of the Health Insurance 
Portability and Accountability Act (HIPAA). As with in-person 
healthcare, providers have a duty to maintain confidentiality 
and security of patient data. Where a technical staff is 
included in the healthcare team at both originating and distant 
sites, and with the additional components of technologies and 
communications service providers, it is imperative that 
providers pay special attention and adhere to both the privacy 
and security elements of the HIPAA regulations. The HIPAA 
Omnibus Rule requires that providers and their healthcare 
associates have in place a Business Associate Agreement (BAA) 
when interactions include protected health information. 
Business associates include entities that create, receive, 
maintain, or transmit protected health information to perform 
certain functions on behalf of a covered entity. They also 
include subcontractors of the business associate delegated a 
function, activity, or service in a capacity other than as a 
member of the business associate's workforce. HIPAA also 
requires the covered entity be able to conduct audit trails to 
ascertain the presence of breaches which is not readily 
available with certain video based applications. As an example, 
in 2011, Skype issued the following statement:

    ``Skype is not a business associate subject to HIPAA, nor 
have we entered into any contractual arrangements with covered 
entities to create HIPAA-compliant privacy and security 
obligations. Instead, Skype is merely a conduit for 
transporting information, much like the electronic equivalent 
of the US Postal Service or a private courier. Skype does not 
use or access the protected health information (PHI) 
transmitted using our software. However, Skype has implemented 
a variety of physical, technical and administrative safeguards 
(including encryption techniques) aimed at protecting the 
confidentiality and security of the PHI that may be transmitted 
using Skype's calling and video calling products.''\20\
---------------------------------------------------------------------------
    \20\ Skype Statement: onlinetherapyinstitute.com/2011/03/
videoconferencing-secure-encrypted-hipaa-compliant/

    Many practitioners are unaware of the complex nuances of 
these regulations as they relate to telemedicine and do not 
have in place the legal infrastructure to assist them in 
managing the additional regulations that govern telehealth 
practice.\21\
---------------------------------------------------------------------------
    \21\ http://caltrc.org/wp-content/uploads/2014/01/HIPAA-for-TRCs-
2014.pdf

---------------------------------------------------------------------------
    8. Informed consent

    Informed consent is a requisite element of all healthcare 
encounters. Telehealth practice adds additional layers of 
disclosure, to include authentication of the identity and 
location of the patient and provider, provider credentials, and 
delivery systems utilized during the encounter. In addition, 
providers must have in place an emergency plan should the 
clinical situation warrant a higher level of care, and a plan 
for care in the event of technology failure and all should be 
disclosed to the patient as a component of the consent.

    The FSMB Model Policy makes the following recommendations 
regarding Informed Consent.\12\
---------------------------------------------------------------------------
    \12\ FSMB

    ``Appropriate informed consent should, as a baseline, 
---------------------------------------------------------------------------
include the following terms:

     Identification of the patient, the physician and 
the physician's credentials;

     Types of transmissions permitted using 
telemedicine technologies (e.g. prescription refills, 
appointment scheduling, patient education, etc.);

     The patient agrees that the physician determines 
whether or not the condition being diagnosed and/or treated is 
appropriate for a telemedicine encounter;

     Details on security measures taken with the use of 
telemedicine technologies, such as encrypting data, password 
protected screen savers and data files, or utilizing other 
reliable authentication techniques, as well as potential risks 
to privacy notwithstanding such measures;

     Hold harmless clause for information lost due to 
technical failures; and

     Requirement for express patient consent to forward 
patient-identifiable information to a third party.''

    9. Standards and Practice Guidelines:

    The American Telemedicine Association and its >2500 member 
supported Special Interest Groups, Committees and Discussion 
groups have developed standards to address technical 
applications, and clinical practice guidelines, many of which 
have been endorsed by specialty societies.\22\
---------------------------------------------------------------------------
    \22\ Krupinski, Elizabeth A., and Jordana Bernard. ``Standards and 
Guidelines in Telemedicine and Telehealth.'' In Healthcare, vol. 2, no. 
1, pp. 74-93. Multidisciplinary Digital Publishing Institute, 2014.

    These standards and practice guidelines extend beyond the 
practice guidelines that currently exist for traditional 
healthcare. The development of standards and guidelines, 
addressing both interoperability (such as HL 7, DICOM, or 
H.320, 323, 324, compression standards for videoconferencing) 
and specialty specific applications (such as teleophthalmology 
or telepathology), will increase functionality related to and 
acceptance of advanced technologies applied to healthcare. The 
Special Interest Groups of the American Telemedicine 
Association have worked collaboratively with the clinical 
specialty societies to develop practice guidelines in 
telehealth that conform to accepted standards of care. These 
guidelines are developed after careful review of the evidence, 
and in consultation with the specialty societies. Examples 
include teleophthalmology, teledermatology, telemental health, 
tele-ICU, home telehealth, telerehabilitation, and 
telepathology. Practice guidelines and standards guide 
providers and payers in models of best practice, informed by 
---------------------------------------------------------------------------
the evidence.

    10. Provider education, technical support and training

    Training programs in telehealth are important additional 
elements of health professional education and include the 
appropriate use of telehealth technologies, board regulations, 
relevant standards and guidelines, interprofessional models of 
practice enhanced by telehealth, and specific training to 
operate and troubleshoot videoteleconferencing equipment, 
devices and patient monitoring tools. The American Telemedicine 
Association offers certification for certain for-credit 
programs, and others have developed hybrid on-line and hands on 
training. With HRSA funding, and in partnership with the 
Virginia Health Workforce Development Authority we have trained 
300 health professionals across the disciplines to become 
certified telehealth presenters, and/or coordinators to keep 
pace with the demand for such trainees. Telehealth should be 
incorporated into every medical and nursing school curriculum, 
with subsequent experiences during graduate medical education 
so as to prepare our physicians and nurses on the appropriate 
use of telehealth in everyday practice.

    11. The evidence:

    In 2013, the American Telemedicine Association reported 
``Over 40 years of research has yielded a wealth of data about 
the cost effectiveness and efficacy of many telemedicine 
applications.''\23\
---------------------------------------------------------------------------
    \23\ http://www.americantelemed.org/docs/default-source/policy/
examples-of-research-outcomes---telemedicine's-impact-on-healthcare-
cost-and-quality.pdf

    More than 20,000 citations in the peer reviewed literature 
address outcomes across the specialties, including pediatric 
cardiology, high risk pregnancies, congestive health failure, 
asthma, chronic obstructive pulmonary disease, cancer, 
telepathology, teleradiology, diabetes care, dermatology and 
wound care, to name just a few. The overwhelming evidence is 
that telemedicine and remote patient monitoring compares 
favorably with in person care, and in many cases, is associated 
---------------------------------------------------------------------------
with better outcomes.

          a. Home telehealth

        Home telehealth is defined as the use of synchronous or 
        asynchronous telecommunications technologies by a home 
        care provider to link patients to out-of-home sources 
        of medical care, education, or other services. These 
        services may incorporate interactive home telehealth 
        technologies using POTS (plain old telephone service) 
        or broadband telecommunications technologies. Home 
        telehealth programs generally include monitoring 
        devices such as pulse oximetry, blood pressure, EKG, 
        blood sugar, weight, temperature, and passive 
        monitoring of motion. It has been reported by the Food 
        and Drug Administration, which regulates medical 
        devices, that home care systems represent the fastest 
        growing segment of the medical device industry.

    Home telehealth can be utilized by traditional home health 
agencies, for the delivery of hospice care, or for case 
management by providers, clinics or hospitals to facilitate 
chronic disease management for patients. Home telehealth 
programs reduce readmission rates, visits to the emergency 
room, physician visits, and impart significant cost savings. 
The federal government supports major initiatives for aging in 
place such as PACE, but does not cover the technologies that 
will keep people healthy, and independent in their own homes.

    The Veteran's Administration has published data to 
demonstrate that the VA Care Coordination and Home Telehealth 
program reduces hospital admissions by 19% and hospital days by 
25% for patients with chronic disease.\24\
---------------------------------------------------------------------------
    \24\ Darkins, Adam, Patricia Ryan, Rita Kobb, Linda Foster, Ellen 
Edmonson, Bonnie Wakefield, and Anne E. Lancaster. ``Care coordination/
home telehealth: the systematic implementation of health informatics, 
home telehealth, and disease management to support the care of veteran 
patients with chronic conditions.'' Telemedicine and e-Health 14, no. 
10 (2008): 1118-1126.

    Integration of home telehealth into rural models of 
healthcare is a particularly efficient cost-effective choice 
when one considers the distances traveled by home health staff 
in rural areas. Factoring in the time spent traveling to the 
home, significant cost savings accrues with the use of these 
technologies. Dimmock et al report the cost savings associated 
with the supplementation of regular in home visits by home 
telehealth visits at approximately $50/visit.\25\
---------------------------------------------------------------------------
    \25\ Dimmock, S et al, A case study of benefits and potential 
savings in rural home telemedicine, Home Healthcare Nurse, 2000: 18 (2) 
124-135.

    A recent analysis of the evidence for telemedicine 
interventions to include remote patient monitoring has 
identified significant cost-savings and improved outcomes when 
applied to the management of chronic illness.\26\ These 
findings are consistent with our earlier referenced UVA Center 
for Telehealth experience.
---------------------------------------------------------------------------
    \26\ Bashshur, Rashid L., et al. ``The Empirical Foundations of 
Telemedicine Interventions for Chronic Disease Management.'' 
Telemedicine and e-Health (2014).

---------------------------------------------------------------------------
    12. Acceptance of advanced technologies

    Patient acceptance of and satisfaction with the use of 
telehealth technologies for consultation and ongoing acute and 
chronic care has been remarkably positive, attributable in part 
to the obvious benefit of timely access to locally unavailable 
specialty healthcare that spares patients the burden and 
expense of travel to remote tertiary and quarternary healthcare 
facilities. Indeed, we have collected data in many of our 
programs that demonstrates the telehealth ``no-show'' rate is 
considerably lower than the in-person clinic ``no shoe rate.\6\
---------------------------------------------------------------------------
    \6\ Veith, Sharon T et al

    Provider acceptance of advanced technologies and telehealth 
tools has been equally gratifying for patient consultation, 
patient education, distance learning opportunities, and for 
---------------------------------------------------------------------------
collaborations in remote patient monitoring.

    Conclusion:

    Telehealth is an essential tool to address the significant 
challenges of access to high quality care for both acute and 
chronic disease management, to mitigate workforce shortages, 
improve population health and lower cost of care. There are 
many opportunities for small practices to integrate telehealth 
models into every-day practice. However, even for large 
healthcare systems, managing and navigating the complex legal 
and regulatory environment which impacts the practice of 
healthcare using telehealth tools can be challenging. For small 
group practices and solo practitioners, telehealth holds great 
promise, but the administration and regulatory challenges can 
be overwhelming. Thus it is imperative that we create and 
promulgate policies that foster certainty, transparency, high 
quality, secure and sustainable solutions that empower 
patients, providers and payers to adopt 21st Century models of 
care.

[GRAPHIC] [TIFF OMITTED] 1

               Telemedicine and Small Physician Practices


    Testimony presented before the House Committee on Small 
                           Business,

             Subcommittee on Health and Technology

                         July 31, 2014

    Megan McHugh, PhD
    Research Assistant Professor
    Director, Program in Health Policy and Implementation
    Center for Healthcare Studies, Institute for Public Health 
and
    Medicine &
    Department of Emergency Medicine
    Northwestern University
    Feinberg School of Medicine
    Thank you Chairman Collins, Ranking Member Hahn, and 
members of the Subcommittee. I am honored to have been invited 
to testify before you today on this important policy topic. My 
name is Megan McHugh, and I am a research assistant professor 
at Northwestern University, Feinberg School of Medicine. My 
research and teaching focus on federal health policy and the 
impact of policy changes on health care cost, quality, and 
access. The opinions that I will share today are my own, and 
not the University's.

    My testimony is organized around three points:

          1. By adopting telemedicine services, small physician 
        practices may be better prepared to participate and 
        succeed in new payment and delivery models, such as 
        bundled payment.
          2. Reimbursement and state licensing policies serve 
        as barriers to the adoption of telemedicine by small 
        practices.
          3. Any policy that expands the use of telemedicine 
        should be carefully monitored. While there is promising 
        evidence about the value of telemedicine, the evidence 
        is not conclusive (or easily accessible to physicians 
        in small practices).

    Telemedicine and New Payment and Delivery Models

    There is widespread agreement that the traditional fee-for-
service system, which pays providers for each visit, procedure, 
or test, is an obstacle to achieving the triple aim of better 
health care, better health, and lower cost.\1\,\2\ Researchers, 
health care advisory groups, and policy makers have called for 
public and private payers to move away from the fee-for-service 
system toward reimbursement models that reward providers for 
the quality of care delivered, cost consciousness, and patient 
satisfaction.\3\-\5\ As a result of these calls, the way in 
which physicians and hospitals are paid is beginning to change. 
For example, the Centers for Medicare and Medicaid Innovation 
(CMMI), created under the Affordable Care Act, launched a 
bundled payment initiative in which providers receive a fixed, 
negotiated fee covering a set of treatment services for an 
episode of care (e.g., hip replacement, stroke). Providers are 
also required to report quality data. The single, set payment 
per episode encourages providers to manage costs and integrate 
care, and the reporting requirements promote accountability for 
care quality.\6\ Similarly, the CMMI is supporting new models 
at the state level. The State of Oregon received a grant to 
reorganize its delivery system into coordinated care 
organizations (CCOs). CCOs are networks of different types of 
providers that have agreed to work together to manage the care 
of Medicaid enrollees financed by a single per-patient budget.

    Telemedicine has an important place in these value-based 
purchasing models. Reimbursement is not contingent upon in-
person services; instead, providers have the flexibility and 
the financial incentive to care for patients using the best 
means possible at the lowest cost. Several studies have shown 
that telemedicine costs less than in-person visits, and may 
reduce utilization of high-cost services. One study found that 
the availability of telemedicine videoconferencing after hours 
in nursing homes reduced hospital readmissions and led to 
approximately $150,000 in Medicare savings per nursing home 
each year.\7\ Additionally, a primary care electronic 
consultation system that allowed iterative communication 
between a referring physician and specialist resulted in 20% 
fewer specialty referrals.\8\

    Given the momentum towards value-based purchasing, small 
physician practices and hospitals would be well-served by 
exploring whether and how telemedicine could be used to support 
high-quality care at a reduced cost.

    Challenges to the Adoption of Telemedicine by Small 
Practices

    While there are several barriers to the adoption of 
telemedicine by small physician practices, the two that are 
arguably the most important and policy relevant are 
reimbursement and licensing.

    Reimbursement

    Medicare generally limits payment for telemedicine services 
to interactive audio and video telecommunications with real-
time conversations where the originating sites are located in a 
rural area.\9\ As a result, telemedicine accounts for a very 
small portion of Medicare services. Only 369 providers had 10 
or more Medicare telehealth consultations in 2009, and in 2011, 
Medicare payments for telemedicine totaled over $6 
million.\10\,\11\ Medicare's rather cautious policies related 
to reimbursement for telemedicine are magnified because private 
insurers often look to the Medicare program when crafting their 
own reimbursement policies.

    However, through the rulemaking process, the Centers for 
Medicare and Medicaid Services (CMS) has been gradually 
expanding reimbursement for telemedicine. For example, CMS 
changed to geographic criteria for originating sites for 
calendar year 2014. Previously, payment for telemedicine 
services was limited to rural areas that were not located in a 
metropolitan statistical area (MSA). This year, payment for 
telemedicine services is also available in rural census tracts 
within MSAs, which will expand reimbursable telemedicine 
services to nearly 1 million rural Medicare beneficiaries. CMS 
also added coverage for complex chronic care services for 
patients with multiple chronic conditions, as well as 
transitional care management. Earlier this month, CMS proposed 
to add annual wellness visits, psychoanalysis, psychotherapy, 
and prolonged evaluation and management services to the list of 
covered services.

    Although research on the impact of telemedicine on cost, 
quality, and access is promising, the evidence is not 
conclusive. As a result, I believe the gradual expansion of 
telemedicine coverage under Medicare is a sensible course of 
action, and one that will produce a slow but steady increase in 
the number of small practices that effectively and efficiently 
use telemedicine.

    Licensing

    While state borders may be irrelevant to the delivery of 
quality care via telemedicine, they do present an important 
legal barrier. In most instances, physicians are limited to 
practicing in states where they are licensed. Telemedicine 
practice is regulated at the state level by state medical 
boards, which are given authority by state legislatures. Some 
state medical boards require telemedicine providers practicing 
across state lines to have a valid state license in the state 
where the patient is located.\12\ Those who support 
requirements for physicians to be licensed in the same state as 
their patients, including the American Medical Association, 
argue that easing state licensure could compromise patient 
safety. For example, state regulators may have no power to 
conduct an investigation of an out-of-state provider if a 
patient is harmed. Obtaining an additional state license to 
practice telemedicine typically costs between $200 and $600 per 
state, and the administrative and time burdens are substantial. 
These burdens may be greater for small practices, which are 
less likely to have support staff who can help navigate this 
process.

    My personal opinion is that the current medical licensure 
system is inadequate to address the growing practice of 
telemedicine. There are several alternative models that could 
be considered, though each presents challenges. For example, 
federal licensure and regulation would inevitably raise 
federalism concerns as professional licensure has historically 
been a state power. Another option is an interstate agreement 
that would grant privileges in all participating states, 
provided that the physician has a valid license in at least one 
of the participating states. However, when this approach was 
attempted by the nursing profession, only half the states 
adopted the interstate agreement.\13\

    Notably, decisions by state medical boards may come under 
greater scrutiny with the Supreme Court scheduled to hear oral 
arguments in the case of North Carolina State Board of Dental 
Examiners v. FTC. The board, overseeing the practice of 
dentistry, sent cease-and-desist letters to unlicensed 
practitioners who removed stains from teeth. The Federal Trade 
Commission accused the board of illegally excluding non-
dentists from the teeth-whitening market. While this conflict 
involves a dental board, the outcome could have repercussions 
for how states regulate medical practice. The court will 
consider whether a regulatory board whose members have a 
financial interest in the industry it is charged with 
regulating can define practice to reduce competition.

    Evidence on the Impact of Telemedicine

    The academic literature on the impact of telemedicine is 
voluminous and still growing. Overall, the evidence suggests 
that telemedicine can improve access to care and the value of 
care. Here are just two examples:

           The Veterans Health Administration has a 
        national home telehealth monitoring program that 
        provides routine care, care management, and case 
        management services to veterans with chronic illness 
        through remote monitoring. Patient satisfaction levels 
        are high (greater than 85 percent), the program 
        facilitated independent living, and it reduced hospital 
        days by 40 percent.\14\,\15\

           Using store-and-forward teledermatology 
        (where a referring physician uploads a patient history 
        and images of a skin lesion to a secure site for a 
        consulting dermatologist to review), dermatologists at 
        Kaiser Permanente in San Diego were able to handle 50 
        percent more cases compared to face-to-face visits.\15\ 
        Other research has shown that teledermatology consults 
        are just as accurate as in-person consults. Store-and-
        forward teledermatology consults reduce in-person 
        clinic appointments by 25 percent, and real-time 
        teledermatology consults reduce clinic appointments by 
        50 percent. Satisfaction among patients, referring 
        clinicians, and dermatologists is high.\16\

    However, evidence of the impact of telemedicine is not 
entirely consistent. For example, one study found that 
physicians were more likely to prescribe antibiotics when the 
visits occurred via telemedicine, suggesting that telemedicine 
may result in a more conservative care plan, which could have 
unintended consequences, such as antibiotic resistance.\17\ A 
randomized controlled trial found that telemonitoring for frail 
older adults did not reduce hospitalizations or emergency 
department visits, and was associated with greater 
mortality.\18\ In a recent compilation of systematic reviews on 
telemedicine, twenty reviews concluded that telemedicine was 
effective, 19 were less confident about the effectiveness of 
telemedicine but noted its potential, and 22 concluded that its 
effectiveness was limited or inconsistent.\19\

    Clearly, there is a need for continued research in this 
area. Additionally, there are two other issues concerning 
research that should be addressed. First, many studies of the 
effectiveness of telemedicine have been conducted within 
hospitals or large physician practices affiliated with health 
systems. As a result, our understanding of the impact of 
telemedicine among small, independent practices is much more 
limited. Second, information about the impact of telemedicine 
is typically published in the academic literature, which is not 
easily accessible to leaders of small practices. This limits 
physicians' ability to make informed decisions about whether or 
not to adopt telemedicine.

    Despite the gaps and inconsistencies in the evidence, I 
believe that telemedicine holds great potential to expand 
access, improve care, and reduce cost. This past year, my 
colleagues and I at Northwestern University designed a new 
model for primary care in partnership with a private 
foundation. Our model incorporates telemedicine, reflecting our 
belief that telemedicine can not only improve the value of 
health care, but also improve patient and provider 
satisfaction, and potentially make the practice of primary care 
more attractive to physicians. We are currently developing an 
implementation plan for the adoption of this primary care model 
by small physician practices.

    Conclusion

    In conclusion, telemedicine is an important tool for small 
practices as payers transition away from the fee-for-service 
model. State and federal policy makers have the ability to 
facilitate the adoption of telemedicine through policies 
related to reimbursement and licensing, but expansion should be 
coupled with oversight to monitor impact.

    Again, I would like to thank you for allowing me to appear 
before you today and share my opinions on this topic. I would 
be happy to take your questions.

[GRAPHIC] [TIFF OMITTED] 

    INTRODUCTION

    Good morning, my name is Maggie Basgall and I serve as the 
Community Development Specialist for Nex-Tech in Lenora, KS. 
Thank you for inviting me to join the panel this morning--it's 
an honor to testify on behalf of NTCA--The Rural Broadband 
Association and its nearly 900 small, rural telecom provider 
members who deliver high-speed broadband and other advanced 
telecom services to rural America that form the essential 
foundation of telemedicine and other innovative applications.

    Among its 25,000 plus customers spread across 9,300 square 
miles of rural northwest Kansas, Nex-Tech serve 11 hospitals, 
14 health clinics, and numerous small physician practices. Ten 
of those hospitals have already adopted telemedicine, and all 
plan to use it more extensively in the future. Thanks to Nex-
Tech's ambitious broadband-capable network deployment efforts 
through the years, many of these healthcare providers can 
access up to 100 Mbps broadband. Depending on size, these 
entities purchase a range of services from 20 Mbps to 100 
Mbps--the same speed recommended by the Federal Communications 
Commission's (FCC) 2010 National Broadband Plan (NBP) for 
achieving full functionality of real-time diagnostic 
imaging.\1\
---------------------------------------------------------------------------
    \1\ Federal Communications Commission. National Broadband Plan: 
Healthcare Broadband in America. 2004. Retrieved from www.broadband.gov

    Broadband is proving to be a great equalizer for rural 
America. This is especially true for health care needs in rural 
areas, as high-speed broadband helps healthcare providers serve 
patients more efficiently and effectively. One of Nex-Tech's 
goals is to provide doctors with the resources to fully realize 
what broadband capabilities generally and telemedicine more 
specifically can offer patients, especially through technology 
that helps overcome the distance between rural health centers 
---------------------------------------------------------------------------
and patients.

    To be clear upfront, broadband isn't only used and useful 
for telemedicine. It has become essential to the very provision 
of healthcare in any form or fashion, as doctors' offices, 
clinics, and hospitals need broadband to: backup systems at 
offsite data centers; connect with insurance companies to check 
eligibility; offer electronic billing; conduct research; and 
host educational webinars. Further, some hospitals provide IT 
services to other facilities and thereby reduce hardware and 
software costs.

    But even with these many benefits for the provision of 
healthcare generally, it is clear that broadband can play a 
special role in rural areas by enabling greater telemedicine 
functionality and helping residents overcome the challenges of 
distance that make so many tasks more expensive and time 
consuming. Telemedicine means a patient in need of an immediate 
mental health consultation who lives hours from the nearest 
facility can have an instant connection to their psychologist 
through a telemedicine platform at their local hospital. 
Another patient may need digital x-ray scans sent to a far-away 
physician who can assess how their fracture is progressing. 
These are only a few of examples of the telemedicine 
possibilities that robust broadband enables.

    To help promote greater adoption of advanced telemedicine 
capabilities, Nex-Tech recently assembled a pilot project with 
the goal of helping a large local hospital offer in-home 
treatment for patients through telemedicine. We assembled a 
team of technology and business experts to serve as advisers to 
our customer, and we offered to cover some technology costs for 
a couple of years to help get the project off the ground. 
Unfortunately, we had to suspend the project because, due to 
lack of health insurance reimbursement for care through in-home 
telemedicine, our customer couldn't make the service work 
financially over the long-term. The interest was there from all 
parties, but reimbursement was essential to make it work 
financially.

    Healthcare professionals generally need three significant 
barriers removed before they can adopt and implement 
telemedicine: 1) robust broadband capability, 2) money for 
hardware and software, and 3) staff who know how to use the 
technology. Insurance reimbursement may present a major barrier 
to in-home telemedicine, but availability and adoption of 
technology present other obstacles, not only in rural Kansas 
but in rural areas across the US.

    While barriers to in-home telemedicine remain, healthcare 
providers are still able to use numerous other existing and 
innovative applications that help them provide better care to 
patients. For example, thanks to robust, wired broadband that 
enables high-speed Wi-Fi at the rural health clinics in our 
service territory, soon hospitals will be able to deploy robots 
that can effectively transport a doctor stationed at a hospital 
to a far-away rural area. Patients who visit the clinic are 
able to interact with the doctor through the robot, which is 
equipped to conduct diagnostic testing. The same Wi-Fi is 
helpful to doctors who travel to clinics and need to use their 
mobile devices while on the premises to communicate with other 
health care professionals.

    Currently, licensing of doctors is handled at the state 
level and, as such, oftentimes providers cannot serve patients 
across state lines, which greatly limits the use and/or 
implementation of virtual telemedicine visits. The TELE-MED Act 
(H.R. 3077), introduced by Representatives Devin Nunes (R-CA) 
and Frank Pallone (D-NJ), improves seniors' access to care by 
permitting Medicare providers who are licensed to practice 
physically in one state, to treat patients electronically 
across state lines in any U.S. jurisdiction, without having to 
obtain additional state licensing or authorization. The bill 
builds upon recent congressional efforts that have expanded 
virtual care for military personnel and veterans. I applaud the 
efforts of Representative Nunes and Pallone for their 
leadership on this matter. Government programs provide some 
assistance. For example, the American Recovery and Reinvestment 
Act sought to promote use of electronic health records (EHRs) 
through Medicare and Medicaid and regional extension centers 
such as the Kansas Foundation for Medical Care, which provides 
ongoing technical assistance to practices. The NBP also 
recognized the potential of telemedicine over four years ago 
and recommended that the federal government further incentivize 
and promote widespread adoption.\2\ This is accomplished in 
part through the FCC's Universal Service Fund (USF) and the 
rural telecom lending and grant portfolio of the USDA's Rural 
Utilities Service (RUS). However, many rural health centers--
especially family practice physicians--still lack the resources 
to fully use telemedicine capabilities.
---------------------------------------------------------------------------
    \2\ Id.

    USF can help fill telemedicine deployment and adoption gaps 
through two of its four components. The USF High Cost fund 
supports the actual rural networks that Nex-Tech and about 
1,000 other small, rural telecom providers deploy all over the 
country. These networks deliver the broadband data and other 
traffic that make telemedicine possible; all of the efforts 
we're discussing would not be possible in the absence of those 
networks that high-cost USF support enables and sustains in the 
first instance. The USF Rural Health Care (RHC) fund can 
further help healthcare providers pay for services, thereby 
stimulating adoption and use. Most hospitals and doctors' 
offices operate on very tight budgets, such that telemedicine 
often has to take a back seat to other vital priorities, such 
as ensuring the facility is staffed with the best available 
doctors, physician assistants, and nurses. USF can help bridge 
this financial gap through RHC, which is available to non-
profit and public healthcare providers located in an FCC-
---------------------------------------------------------------------------
approved rural location.

    Finally, Nex-Tech couldn't have delivered broadband to 
rural western Kansas without the help of RUS's rural telecom 
portfolio and the seasoned experts that staff the department. 
Not only does RUS lend for broadband-capable plant in rural 
territory, it also offers a telehealth program that helps 
healthcare providers purchase the hardware necessary to use 
telemedicine. The critical role that USF and RUS play in 
telemedicine deployment and adoption are discussed further 
below.

    USDA RURAL UTILITIES SERVICE

    RUS Role in Telemedicine and Rural Telecom Deployment

    USDA's Rural Utilities Service's Distance Learning & 
Telemedicine (DLT) Grant Program helps healthcare providers 
adopt telemedicine through grants for capital assets such as 
computer hardware and software, audio and video equipment, and 
other network components. Traditionally, approximately 40% of 
program funds support telemedicine. Eligible entities include 
corporations, partnerships, and state or local units of 
government providing education and medical care via 
telecommunications. With funds for telemedicine in short supply 
at so many doctors' offices, clinics and hospitals. DLT has 
played a key role in establishing hundreds of telemedicine 
systems in rural areas across the U.S. USDA Community 
Facilities Loans and Grants are also available to help rural 
towns construct healthcare facilities and purchase equipment.

    RUS also plays a crucial role in rural broadband deployment 
through its telecom loan portfolio that finances network 
upgrades and deployments in rural areas. RUS has been lending 
for broadband-capable plant since the early 1990s. RUS lending 
and Universal Service Fund (USF) support are inextricably 
linked at 99.2% of RUS Telecommunications Infrastructure 
borrowers receive High-Cost USF support. The presence of high-
cost recovery is crucial to the RUS telecom and broadband loan 
calculus. RUS programs have helped rural providers deploy 
modern networks in many rural areas where the market would 
otherwise not support investment. Reliable access to capital 
helps rural carriers meet the broadband needs of rural 
consumers at affordable rates.

    Nex-Tech began providing broadband in Western Kansas in 
1998 with the help of RUS financing. The company later acquired 
10 exchanges from another carrier and then used an RUS loan to 
build fiber tot he premise (FTTP) on those communities. This 
type of financing is not readily available from the private 
sector due to the challenges of operating in rural areas and 
the long-term payback in doing do, and this RUS financing comes 
in the form of loans that must be paid back with interest, 
creating a win/win situation for taxpayers and the rural 
broadband consumers who need the technology now.

    Unfortunately, the success, momentum, and economic 
deployment achieved from the RUS's telecommunication programs 
were put at risk as a result of the regulatory uncertainty 
arising out of USF reforms that are discussed in greater detail 
below. It will be all the more important to continue providing 
RUS with the resources it needs to lend to the rural telecom 
industry as demand for financing will inevitably increase when 
reforms are improved and regulatory certainty is restored. Once 
again, telemedicine efforts will be for naught if robust 
broadband-capable networks aren't there in rural areas to 
support those efforts or if the broadband services offered on 
those networks are not affordable and upgraded over time.

    THE USF HIGH COST FUND AND RURAL HEALTH CARE PROGRAM

    USF Rural Health Care Program

    The High Cost and Rural Health Care components of USF have 
a symbiotic relationship--the High Cost Fund supports the rural 
networks that carry telehealth and other data all over the 
world, and the Rural Health Care Fund can help healthcare 
providers purchase telecom services so they can send and 
receive data over the network. Both components are essential to 
telemedicine adoption.

    The RHC is available to non-profit and public healthcare 
providers located in an FCC-approved rural location. Within 
RHC, the Telecommunications Program provides discounts for 
telecommunications services and, as of last month, broadband. 
Funding for broadband is now available through the new 
Healthcare Connect Fund (HCF). HCF provides a 65 percent 
discount on eligible expenses related to broadband connectivity 
to rural health care providers. Finally, the new HCF is also 
serving participants in what was formerly known as RHC's Pilot 
Program, which provided funding for construction or 
implementation of state and regional broadband networks. 
Hundreds of health care providers are participating in the 
program through 50 active projects.

    Pilot Program participants include The University of Kansas 
City for Telemedicine & Telehealth (KUCTT), whose telehealth 
network has over 100 sites throughout the state--including Nex-
Tech customer Hays Medical Center. KUCTT uses the network to 
conduct clinical consultations and host educational events.

    The FCC's High Cost Fund Reforms

    As I have noted earlier, telemedicine simply cannot be 
implemented without an underlying robust, wired broadband 
network. Though demand for faster broadband is expected to 
increase dramatically in the near future, RUS received only 29 
broadband loan program applications for rural network loans in 
fiscal years 2011-2013, compared to 130 in the first three full 
years of the program.\3\ Why would an experienced lender such 
as RUS want for customers when demand for networks is high? 
Look no further than the state of rural telecom cost recovery 
mechanisms.
---------------------------------------------------------------------------
    \3\ U.S. Government Accountability Office, (2014). 
Telecommunications: USDA Should Evaluate the Performance of the Rural 
Broadband Loan Program. (GAO Publication No. GAO-14-471). Retrieved 
from http://www.gao.gov/assets/670/663578.pdf

    For example, the FCC's 2011 ``Quantile Regression 
Analysis'' (or ``QRA'') model to cap USF support for small 
carriers created rampant uncertainty in the rural telecom 
marketplace. In short, the QRA model took data from the 
investments and operations of hundreds of small carriers in the 
United States from two years in the past and then, on the basis 
of over a dozen different variables, ran those costs through a 
formula that created new caps each year to govern each 
carrier's USF support. This was an unsustainable approach to 
universal service that ran directly contrary to the 
congressional mandate that USF be predictable; the errors in 
capturing actual costs used and useful in providing universal 
service also meant the QRA model did not satisfy the 
---------------------------------------------------------------------------
congressional mandate that USF be sufficient.

    Despite the fact that the FCC ultimately eliminated the 
troubling QRA caps after a few years, the question of what 
comes next creates its own lingering regulatory uncertainty. 
Updates to legacy USF support rules are still very much-needed. 
For example, in rural areas served by smaller companies such as 
Nex-Tech, FCC rules still require customers to purchase 
landline voice service in order for their line to receive USF 
support. The customer is effectively denied the option of 
cutting the landline-voice cord and purchasing only broadband. 
Such outdated rules that undermine consumer freedom and inhibit 
technological evolution present an obstacle to the technology 
transition that consumers and industry are making and the FCC 
is working to expedite and facilitate in other contexts. 
Universal Service support should not be tied to a limited 
service, but available instead to advanced networks that 
provide consumers with access to a variety of essential, high-
quality services from which each consumer may choose.

    Nearly three years after a ``Transformation'' order, small, 
rate-of-return providers still await an updated cost recovery 
mechanism that will provide sufficient and predictable support 
for the simple act of responding to consumer demand for better 
broadband. Meanwhile, the Connect America Fund set up for 
larger companies in that 2011 order is in year four of 
development--a good indication that, if this is how long it 
takes to create and implement such changes, greater emphasis 
should be placed on creating a similar fund for smaller 
carriers as soon as possible. The FCC should move forward 
immediately to adopt and implement a carefully tailored update 
of USF that will provide sufficient and predictable support for 
broadband-capable networks in areas served by smaller rural 
carriers. Over 130 members of Congress--including Chairman 
Graves and other Small Business Committee leaders--along with 
dozens of organizations that serve rural America encouraged the 
FCC to act through a series of letters earlier this year.\4\
---------------------------------------------------------------------------
    \4\ See US House letter led by Representative Gardner and US Senate 
letter led by Senators Thune and Klobuchar, both sent to FCC Chairman 
Wheeler on May 6, 2014. See also rural organizations letter sent to 
Chairman Wheeler on March 5, 2014.

    The broadband revolution presents major opportunities for 
small businesses to innovate and grow, but the business (or 
entrepreneur with an idea) must have broadband access to take 
full advantage. Markets will ensure many consumers realize the 
full benefits of innovation at the lowest possible prices, but 
in rural areas there are often no such markets to speak of. 
Though small, rural providers have been leaders in broadband 
investment even under the current statutory and regulatory 
regime, further law and policy changes will be necessary to 
ensure high cost rural areas both become and remain served even 
as providers also edge broadband out into unserved areas. We 
cannot hope to realize the full benefits of broadband for the 
provision of healthcare generally, and telemedicine more 
specifically in rural areas, if outdated rules deny support for 
broadband-capable network investments or the threat of adverse 
changes to these USF rules create uncertainty in making the 
decisions to undertake such long-term investments. Sufficient 
and predictable USF support that provides recovery for both the 
initial costs of installing a rural broadband network and the 
ongoing costs of operating and upgrading the network over time 
must be seen as a prerequisite to any successful efforts in 
---------------------------------------------------------------------------
telemedicine.

    CONCLUSION

    Telemedicine already offers health care providers numerous 
ways to better serve patients, and many more exciting 
innovations are on the horizon. The desire for advanced 
telemedicine already exists, but now we must supply--and then 
sustain--the robust broadband capability, funding, and 
education to spur increased adoption of the services across the 
country.

    Nex-Tech and its counterparts in the rural telecom industry 
are thrilled to play a key role in this process by delivering 
the networks that carry the data, and we look forward to 
greater collaboration with the healthcare industry to work 
through any barriers to adoption.

    Rural America will not realize the promise of telemedicine 
without a broadband-oriented USF that offers carriers the 
regulatory certainty needed to make network investments. 
Support through the USF Rural Health Care Fund and RUS Distance 
Learning and Telemedicine Grant Program for doctors and nurses 
who need to purchase hardware, software, and telecom services 
will continue to be helpful in the advancement of telemedicine. 
We look forward to working with Congress and the appropriate 
agencies to ensure these programs work as efficiently and 
effectively as possible.

[GRAPHIC] [TIFF OMITTED] 

    U.S. House Small Business Committee
    Subcommittee on Health and Technology
    Hearing on
    ``Telemedicine: A Prescription for Small Medical 
Practices''
    July 31, 2014

    Chairman Collins and Ranking Member Hahn, as a fellow of 
the American Academy of Dermatology Association (Academy), 
which represents more than 13,000 dermatologists nationwide, 
and a past president of the Medical Society of Northern 
Virginia, I commend you for holding a hearing on how new 
technologies and advances in telemedicine can further 
efficiency, quality, and access to health care. We applaud you 
for raising awareness of this care delivery model and look 
forward to working with you to ensure that our patients can 
benefit from advances in telemedicine, while also receiving 
high-quality, timely, cost-efficient care.

    I am here today to discuss barriers of implementing 
telemedicine as a modality of care. Specifically, lack of 
reimbursement and cumbersome credentialing pose the greatest 
challenges. Although some reimbursement exists, it is not 
consistent across payers or across states to allow for proper 
patient access. To place this issue in context however I would 
like to first discuss who I am and who I am here on behalf of. 
The Academy is a leader in supporting the expansion of 
telemedicine, while ensuring quality of care is delivered. As 
dermatology is a visual specialty, it lends itself well to 
telemedicine in various patient scenarios.

    Telemedicine is an innovative, rapidly evolving method of 
care delivery. The Academy supports the appropriate use of 
telemedicine as a means of improving access to the expertise of 
Board certified dermatologists to provide high-quality, high-
value care. Teledermatology services are valuable means of 
improving patient care to underserved patients with limited 
access to speciality care, as a triage tool to determine which 
cases need to be seen in person most urgently, or as a platform 
to deliver care to those who are unable to receive the benefits 
of face-to-face dermatology visits. As the field of 
telemedicine continues to grow, there is significant potential 
to improve access to care coordination and communication 
between other specialities and dermatology.

    While teledermatology is a viable option to deliver high-
quality care to patients in some circumstances, the Academy 
supports the preservation of a patient's choice to have access 
to in-person dermatology services. Teledermatology providers 
choose between or combine two fundamentally different care 
delivery platforms (Store-and-Forward vs. Live Interactive), 
each of which have strengths and weaknesses. Live interactive 
teledermatology takes advantage of videoconferencing as its 
core technology. Participants are separated by distance, but 
interact in real time. Store-and-forward teledermatology refers 
to a method of providing asynchronous consultations to 
referring providers or patients. A dermatologic history and a 
set of images are collected at the point of care and 
transmitted for review by the dermatologist. In turn, the 
dermatologist provides a consultative report back to the 
referring provider or patient at the point of care.

    As a provider who runs a small dermatology practice in 
Northern Virginia, I currently utilize DermUtopia for the 
provision of telemedicine. This is a HIPAA compliant, mobile 
phone and web-based application. Through this application, I am 
able to evaluate and treat both my patients and those who do 
not have a primary dermatologist. We are also currently in 
discussions with the safety-net and federally qualified health 
clinics in the area, and hope to use this store-and-forward 
application to provide care for their patients in the near 
future.

    Some of these clinics will refer patients that they see 
through Project Access of Northern Virginia, a program of the 
Medical Society of Northern Virginia Foundation that provides 
specialty medical care to low-income, uninsured safety-net 
patients who reside in Northern Virginia. Additionally, we are 
aiming to treat Medicaid patients through DermUtopia. However, 
there have been delays in an ability to solidify funding, 
despite the fact that Medicaid has approved reimbursement for 
telehealth services.

    I have faced several barriers to most effectively providing 
care via telemedicine. While I face these barriers as a 
physician, it is ultimately the patients--often the most 
economically vulnerable--that are the most directly affected. 
The largest barrier as noted is reimbursement for telehealth 
services. Without assured reimbursement, providers and patients 
are unlikely to utilize telehealth. While Virginia law 
addresses coverage for telehealth services, this does not 
guarantee access with all private insurance and many states do 
not have similar policies. Provider knowledge and use of 
teledermatology is often limited in these areas. Congress can 
help set the stage for larger-scale reimbursement by, for 
example, enabling Medicare to reimburse for telemedicine 
services.

    Appropriate reimbursement for these physician services 
could be implemented in a variety of contexts. The Academy 
believes that retaining state-based licensure is the best way 
to preserve accountability and protect patients. However, we do 
favor changes, such as the Compact proposed by the Federation 
of State Medical Boards, which would make it easier for doctors 
to be licensed in multiple states. Support for studies of 
existing health systems that could show the impact of 
teledermatology on access, quality and cost of care in 
healthcare ecosystems would be beneficial. This would be 
pivotal in assessing the value of telemedicine and a great step 
in the goal of removing reimbursement as the biggest hindrance 
to the proliferation of telemedicine.

    The benefits of such reimbursement would be widespread. 
Teledermatology can save a patient time missed from work, 
travel time, and, in the correct clinical context, allows for 
timely diagnosis and treatment when face-to-face care is 
unavailable or inaccessible. While teledermatology has been 
traditionally used to increase access in remote or underserved 
areas, it indeed has great potential for serving a great 
variety of patients with dermatology care issues. For instance, 
insured patients in urban areas may face similar access delays 
or issues as those in geographically remote areas, and 
therefore benefit from teledermatology.

    I have seen first-hand a number of patients that could have 
had the consultation done virtually and prevented an onerous 
trip to the office, or to urgent care. For example, included 
are specific patients who could have a teledermatology 
consultation and receive treatment at their home or facility. 
An 89 year old woman who lives alone at home, with no family in 
the area, and who would need to be brought to the doctor via 
wheelchair and transport vehicle, may be more easily evaluated 
via telemedicine. A nursing home patient with dementia, who 
requires a nursing aid and transportation and coordination 
costs from the nursing home to evaluate multiple growths, could 
be evaluated via teledermatology. Finally, a 2 year old with 
severe eczema and infections who cannot get in to see a 
dermatologist due to lack of access to a Medicaid dermatologist 
and inability for parents to transport her during their work 
hours across the city, two bus rides away, could be evaluated 
and/or monitored via teledermatology.

    Many large health systems, including the Veterans Affairs 
(VA) and Kaiser Permanente, are reimbursed for their services 
and use telemedicine with great benefit. These programs help to 
improve access to dermatologic consultations within their 
integrated health system and reduce the turnaround time from 
referral to diagnosis. Additionally, a recent study by 
researchers at the University of Pennsylvania looked at 
individuals who were in the hospital who needed a doctor's 
assessment for a skin problem. All of the participants had an 
in-person consultation with a doctor, and the researchers also 
sent photos of their skin conditions to two independent 
dermatologists remotely. They discovered a 90% agreement for 
recommendations to be seen in person and a 95% agreement in 
recommendations for biopsy between the in-person and remote 
doctors. Finally, emergency setting studies have shown a high 
patient acceptance rate of teledermatology and that it can 
provide rapid and accurate diagnostic and treatment advice from 
a dermatologist. This is especially vital in the cases of 
commonly misdiagnosed dermatologic conditions.

    Overall, telemedicine provides a modality of care which can 
expand access to medical specialists, such as dermatologists, 
but barriers to implementation remain. Most notably issues of 
proper credentialing and reimbursement exist to varying degrees 
across states. These barriers impact providers but ultimately 
can hinder patient access to care. I, as well as the Academy, 
appreciate the subcommittee's continued leadership on this 
issue, and look forward to working with your office to ensure 
that patients can benefit from high-quality, timely, cost-
efficient care via telemedicine.
    ----------------------------------------------------------
    http://archderm.jamanetwork.com/
article.aspx?articleid=1829638

    \1\http://www.medscape.com/viewarticle/455635

    \1\http://ncbi.nlm.nih.gov/pubmed/21995470

    \1\http://archderm.jamanetwork.com/
article.aspx?articleid=1865056

    \1\http://www.nursingcenter.com/Inc/static?pageid=942376

    [GRAPHIC] [TIFF OMITTED] 


                                 
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