2001Telemedicine

Report to Congress

2001Telemedicine

Report to Congress

U.S. Department of Health and Human Services Health Resources and Services Administration • Office for the Advancement of Telehealth

2001Telemedicine

Report to Congress

2001Telemedicine

Report to Congress

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January 2001

U.S. Department of Health and Human Services • Health Resources and Services Administration • Office for the Advancement of Telehealth

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EDITORIAL STAFF

Dena S. Puskin, Sc.D.DirectorOffice for the Advancement of TelehealthHealth Resources and Services AdministrationU.S. Department of Health and Human Services

Joanne K. Kumekawa, MBADirector of PolicyOffice for the Advancement of TelehealthHealth Resources and Services AdministrationU.S. Department of Health and Human Services

CONTRIBUTORS

Joanne KumekawaPrincipal WriterDirector of PolicyOffice for the Advancement of Telehealth,HRSA, DHHS

Mel Blackwell, Vice PresidentRural Health Care DivisionUniversal Service Administrative Company

Everette T. Beers, PhD.Center for Devices and Radiological HealthFood and Drug Administration, DHHS

Craig DobyskiHealth Insurance SpecialistCenter for Health Plans and ProvidersHealth Care Financing Administration, DHHS

William England, PhD., J.D.Operations DirectorRural Health Care DivisionUniversal Service Administrative Company

Melvyn Greberman, M.D., M.P.H.Center for Devices and Radiological HealthFood and Drug Administration, DHHS

Eric S. Marks, M.D., Associate DeanMedical JurisprudenceUniformed ServicesUniversity of Health Services, DOD

ACKNOWLEDGEMENTS

We would like to acknowledge the input andreviews by Carolyn Hutcherson, RN, MN, NancySharp, MSN, RN, FAAN, John Fanning, LLB, MaryJo Deering, PhD,David G. Brown, PhD, TomMcGinnis, Daisy DeWitt, Cathy Wasem, RN, MN,Amy Barkin, MSW, MPH, CEAP, ACSW, BCD,Robert Waters, JD, Donald M.Witters, andSamantha Wallack.

We owe special thanks to KJ Dickerson for thecover and report design.

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Executive Summary• Current Trends 1• Key Issues 1

Table 1: HCFA Telemedicine Reimbursement Requirements 2Table 2: Telemedicine Standards and Guidelines 5

• Research and Evaluation 8• Emerging Trends and Policy Issues 8• Next Steps 9

Introduction• Overview 13• Current Trends 13• Structure of the Report 14

Payment Issues• Overview 17• Medicare Reimbursement and the First Two Years 17

Table 1: HCFA Telemedicine Reimbursement Requirements 18• Legislation 19• Other Payment Coverage 19• Next Steps 20

Legal Issues• Overview 21• State Medical Licensure and Licensure Models 21

Table 2: Generic Licensure Models 21Table 2: Generic Licensure Models (cont.) 22Table 3: Specific Licensure Models 23

• Physician and Nurse State Licensurefor Telemedicine Practice 21

• Legal Issues Relating to the Internet 24• Other Related Issues 25• Next Steps 26

Safety and Standards• Overview 27• FDA Regulatory Role 28• FTC, Consumers and the Internet 29• Medical Errors 30• Next Steps 31

Privacy, Security and Confidentiality• Overview 33• Health Insurance Portability and Accountability Act 33• Consumer Privacy and the Internet 34• Industry Self Regulation 35

ContentsContents

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• Legislation and Regulation 36• The Federal Trade Commission’s Regulatory Role 36• Next Steps 37

Telecommunications Infrastructure• Overview 39• Next Steps 39

Evaluation and Research• Overview 41• Patient and Physician Satisfaction with Telemedicine 41

Table 4: Patient/Provider Satisfaction with Telemedicine 42• Telemedicine Cost Savings 44• Next Steps 45

Emerging Trends and Related Policy Issues• Overview 47• Technology Changes 47• Related Technology Policy Issues 48• Aging Demographics, Home Health Care

and Urban Telemedicine 49

Conclusion 51

APPENDICES

1: The Medicare, Medicaid, and SCHIP Benefits Improvements and Beneficiary Protection Actof 2000, Sections 223 and 504. Comparison of Legislative Bills Relating to TelemedicineReimbursement. – pg. 53

2: Telemedicine Related State Licensure Laws – pg. 64

3: Letter from Association of Pediatric Nurses Association, Association of Women’s HealthObstetric and Neonatal Nurses – pg. 67

4: Joint Working Group on Telemedicine Draft Paper on Credentialing – pg. 71

5: Federal Drug Administration’s Regulatory Role in Telemedicine – pg. 74

6: FCC Rural Health Care Program: A Short History – pg. 91

7: U.S. Department of Health and Human Services Fact Sheet on Final HIPAA Privacy Rules – pg.96

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The Healthcare Research and Quality Act of1999, Section 6, requires the Secretary of Healthand Human Services (DHHS) to submit a Report toCongress on Telemedicine by 2001. Congressrequested that the Report describe barriers totelemedicine, determine the extent of patient andphysician satisfaction with this mode of healthdelivery and assess patient benefits fromtelemedicine services.

What exactly is meant by telemedicine andtelehealth? In the Department of Commerce’s1997 Report to Congress, “telemedicine” referredto “the use of electronic communication andinformation technologies to provide or supportclinical care at a distance.” 1Telehealth is abroader concept. For the purposes of this Report,telehealth is defined as the use of electronicinformation and telecommunications technologiesto support long-distance clinical health care,patient and professional health-related education,public health and health administration.

CURRENT TRENDSOne of the most important trends to emerge

over the past four years is the remarkable growthand development of the Internet. While much ofthis report focuses on telehealth providers and thebarriers they face in expanding the delivery oftelehealth, this is only one part of the story. TheInternet is dramatically changing the wayconsumers access health information, receivediagnostics and purchase pharmaceuticals.According to the Federal Trade Commission (FTC),consumer searching for online health informationis increasing dramatically; it is predicted that 30million Americans will seek health informationonline by 2001.2

The Internet will most likely play a key role inexpanding the reach of telehealth and telemedicineto the average consumer. However, this potentialalso brings other concerns about state jurisdiction

and enforcement, physician and other healthprovider cross-state licensure, privacy and safetyissues, as discussed throughout the Report toCongress.

KEY ISSUESKey issues affecting the telemedicine and

telehealth industry have remained the same overthe past five years but their relative importancehas changed with the advent of dramatictechnology changes such as the wide spreadadoption of the Internet. These issues are:

• Lack of Reimbursement;• Legal Issues;• Safety and Standards;• Privacy, Security and Confidentiality;• Telecommunications Infrastructure.

Lack of Reimbursement remains a criticalbarrier to the expansion of telemedicine. Eventhough technology has made it easier to deliverhealth care services using advanced communica-tions and computers, historically few public or privatepayers have covered them. The Balanced Budget Actof 1997 (BBA) expanded coverage options fortelemedicine but also included several requirementsthat preclude telemedicine’s use under conditionswhere it is commonly being used outside ofMedicare. The BBA required the Health CareFinancing Administration (HCFA), DHHS topay for telemedicine consultation services as ofJanuary 1, 1999. Some current reimbursementeligibility requirements are outlined in Table 1. In the first two years, many telemedicinepractitioners found the requirements under theBBA mandate too narrow for most practicalpurposes. Between January 1, 1999 andSeptember 30, 2000, HCFA had reimbursed 301

1 1997, Telemedicine Report to Congress, U.S. Department ofCommerce, P.1.

2 Federal Trade Commission, Protecting Consumers Online: A FederalTrade Commission Report on the First Five Years of Its Internet LawEnforcement Program, December 1999.

Executive SummaryExecutive Summary

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SCOPE ELIGIBILITY REQUIREMENTSSCOPE ELIGIBILITY REQUIREMENTS

GEOGRAPHIC SCOPE Only patients located in Rural Health Profesional Shortage Areas (HPSAs),counties in Non-MSAs and in approved Federal demonstration projects areeligible for telemedicine reimbursement. A list of HPSA shortage areascan be found at http://www.access.gpo.gov.

ELIGIBLE SERVICES/ Eligible Current Procedural Terminology (CPT) codes include profes-CPT CODES sional consultations, office visits, and office psychiatry services (codes

99241-99275; 99201-99215; 90804-90809; and 90862) and anyadditional services specified by the Secretary.

ELIGIBLE PRESENTING The new law eliminates the requirement to have a telehealth presenterPRACTITIONER present a patient at a consultation unless it is medically necessary (as

determined by the physician or practitioner at the distant site).

FEE-SHARING The new law eliminates the fee sharing requirement between a consultantand referring physician.

ELIGIBLE TECHNOLOGY1 The new Act provides for reimbursement for store and forward technologyin demonstration projects in Alaska and Hawaii but no other setting.HCFA’s payment policy was developed to replicate a standard consultationas closely as possible. Under Medicare, a separate payment for a consul-tation requires a face to face examination of the patient. This requirementis consistent with the American Medical Association’s description of aconsultation. To that end, Medicare’s teleconsultation rule requires acertain level of interaction between the patient and consulting practitionerbecause it offers the best substitute for a “face to face” consultation.Regardless of the technology, the patient must be present during theconsultation.

HOME HEALTH CARE The new Act clarifies that home health agencies “may adopt telehealthtechnology that it believes promotes efficiencies or improves quality ofcare, however, these technologies will not be specifically recognized orreimbursed under the home health benefit. Telehealth encounters do notmeet the definition of a Medicare covered home health visit. But this doesnot preclude a home health agency from spending prospective paymentdollars to furnish services outside of the Medicare home health benefit(i.e. for telehealth services to home health beneficiaries). If a physicianintends that telehealth services be furnished while a patient is under ahome health program of care, this should be recorded in addition to theMedicare covered home health services to be furnished.”

3 Medicare has historically reimbursed some telemedicine services that did not traditionally require face-to-face contact between a patient andpractitioner. For example, Medicare covered EKG or EEG interpretation, teleradiology, and telephathology in most areas of the nation, in accordancewith individual Medicare carrier policies.

(Under the Medicare, Medicaid & SCHIP Benefits & Improvement Protection Act of 2000)Table 1: TELEMEDICINE REIMBURSEMENT REQUIREMENTS

those commonly used by telemedicinepractitioners.

During its last two sessions, Congressintroduced over nine bills that addressed some ofthese limitations. On December 20, 2000, Con-

gress passed the Medicare, Medicaid andSCHIP Benefits Improvement and ProtectionAct (“the Act”). Among other things, this Acteliminates the fee-split and telepresenterrequirements and expands the types ofpresenters, current procedural terminologycodes and geographic area limits that areeligible for reimbursement. (See Table 1)Appendix 1 presents a comparison of billsand a summary of the Act. Historically, telemedicine reimburse-ment expansion has been prevented by alack of data on which to judge changes ingovernment expenditure. The Office for theAdvancement of Telehealth (OAT) workedwith the Center for Telemedicine Law (CTL)and OAT’s grantees to develop a series ofcost models that show the impact ofexpanding telemedicine coverage on anythird party payer’s expenditures. These“scoring” models have the advantage of

being based on actual telemedicine experience inthe field. Preliminary results suggest that many ofthe modest telemedicine reimbursement expan-sions introduced in the 106th Congress wouldhave a minimal impact on Medicare expenditures.(For example, CTL/OAT estimates of thebudgetary impact of Senate Bill 2505 range from$50 to $100 million over five years, as comparedto the estimate of over a billion dollars forTelemedicine legislation in earlier years.)

Aside from Medicare reimbursement, 20 stateMedicaid programs now reimburse for telemedicine

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claims for a total of $20,000. Several factors mayaccount for this small number. In particular, fourrequirements greatly limited the number ofconsultations eligible for reimbursement:

• Health Professional ShortageArea (HPSA) Requirement: Medi-care paid for telemedicine ser-vices only in areas that lack ade-quate primary care services,even though many rural commu-nities have little or no access tospecialists, such as cardiolo-gists or psychiatrists. Often theneed for specialty services drivesthe demand for telemedicineservices.

• Fee sharing requirement: HCFAmandated fee sharing, requiringspecialists to provide services at a75% fee that HFCA then reports asa 100% fee to the IRS. Otherproblems include accounting andfee tracking. Most rural practi-tioners are not equipped to tracksplit fees. Finally, the eligiblepresenter must either be thereferring physician or an employee ofthe referring physician. In many cases, thepresenter is an employee of the localhospital or clinic.

• Eligible Presenters: Although registerednurses, licensed practical nurses andother similar types of health care profes-sionals are the most common presentersin a telemedicine setting, they werenot eligible for reimbursement.

• Eligible Current Procedural Terminol-ogy Codes: The allowable codes greatlyrestricted what services were reimburs-able under the BBA and did not include

BOX 1

MEDICAID STATECOVERAGE

Arkansas, Califor-nia, Georgia,Iowa, Illinois,

Indiana, Kansas,Kentucky,

Louisians, Mon-tana, Nebraska,North Carolina,North Dakota,South Dakota,

Oklahoma, Texas,Utah, Virginia,

and West Virginia.In addition,

Connecticut,Maine and

Minnesota arepiloting

telemedicineprograms.*

* Sources: CTL “Medicaid Telemedicine and Telehealth Update”,July 2000, Health Care Finance Administration, DHHS

interstate telemedicine practice, 12 states haveadopted the Interstate Nurses Licensure Compactas shown in Box 2. The compact is a licensure modelbased on mutual recognition. Under it, the head ofthe nursing licensing board will administer the

Compact for his/her state.

Safety and Standards have taken ongreater importance in the past few years, notonly in the world of telemedicine but also inthe world at large. Without widely adoptedstandards and guidelines, interoperabilityand interconnection are not possible and thegreat potential of telemedicine will bedifficult to achieve. Older equipment oftenwill not interconnect with newer versions ofthe same machine. Different brands of thesame equipment will not operate with oneanother, making networking across projectsand sometimes within a project expensiveand frustrating.

In addition to technical standards, there is aneed for clinical protocols and guidelines. Examplesof clinical protocols for telemedicine practiceinclude preliminary scheduling procedures, actualconsult procedures and telemedicine equipmentoperation procedures (such as telecommunicationstransmission specifications). The clinical technicalstandard for image quality in a video transmissionwould specify the technical standards needed by aspecialist, such as a dermatologist, to achieve thehigh levels of image clarity and color required tocorrectly diagnose a patient. Only a few professionalassociations have adopted either clinical practiceprotocols or technical standards and guidelines, asshown in Table 2. Additionally, some governmentagencies have worked to develop technicalguidelines for telemedicine interoperability.

Just as the wide adoption of telemedicinestandards and protocols plays an important role inprotecting public safety, the Food and Drug

services and three other states are conductingpilot programs to assess telemedicine efficacy asshown in Box 1.

Some private insurers also provide limitedtelemedicine coverage in certain states. Forexample, California Blue Cross is currentlyfunding the build-out of a statewidetelemedicine network. Blue Cross - BlueShield in Montana and North Dakota alsoprovides some telemedicine coverage.

Legal Issues, particularly those relatingto cross-state licensure, were thought to beamong the most critical to the expansion oftelemedicine five years ago. Today, tradi-tional licensure issues remain important, buttelemedicine practitioners have found thatthey can provide many in-state services.Moreover, consumer use of the Internet(which knows no borders) for health relatedinformation, purchase of prescription drugs andonline consultations may create new legal andlicensure issues, overshadowing the moretraditional issues. For example, a consumer,located in state A, sues a health practitioner in stateB, who has provided consultations to the consumervia a Web site. Who has jurisdiction in this case?How easily can state A enforce its state healthlicensure laws if the health practitioner is notlicensed in state A?

Currently, about 26 states have laws regulatingout-of-state telemedicine practitioners. Twenty-onerequire full licensure for an out-of state physician,providing telemedicine services to a patient locatedin that state. The other five states approachlicensure in a variety of ways, such as California’sregistration requirement or Hawaii’s permit for anout-of-state physician to provide consultation to anin-state licensed physician. A list of states’licensure laws is shown in Appendix 2.

While many more states restrict physicians’

BOX 2

STATES THATADOPTED THE

COMPACT

Arkansas, Dela-ware, Iowa,

Maine, Maryland,Mississippi,

Nebraska, NorthCarolina, SouthDakota, Texas,

Utah andWisconsin

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Administration (FDA) and the Federal TradeCommission (FTC) play a critical regulatory role.The FDA ensures the safety and effectiveness oftelemedicine medical devices and software, withthe Center for Devices and Radiological Health(CDRH) as the lead agency. In oversight oftelemammography, regulating standards, person-nel, practice and procedures, the FDA plays an

even more critical role.

A number of federal and state regulatoryagencies are working together to address health-related consumer problems on the Internet. Theyinclude state health authorities, FDA, the JusticeDepartment and FTC. FTC plays a key oversightand enforcement role in Internet Commerce asillustrated in its December 1999 Report:

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ORGANIZATION STANDARDS AND GUIDELINES

Table 2: TELEMEDICINE STANDARDS AND GUIDELINES

ORGANIZATION STANDARDS AND GUIDELINES

AMERICAN TELEMEDICINE Telehomecare Clinical Guidelines:ASSOCIATION (ATA) http:www.atmeda.org/news/guidelines.html. ATA has also posted a May

1999 working draft of its Clinical Guidelines for Telepathology.

AMERICAN Clinical Telepsychology guidelines posted on its Web site atPSYCHOLOGICAL http://www.apa.org/ethics/stmnt01.htmlASSOCIATION (APA)

AMERICAN DERMATOLOGY The American Dermatology Association has drafted proposals for clinicalASSOCIATION protocols for teledermatology.

AMERICAN NURSES Clinical Core Principles on Telehealth, March 1998ASSOCIATION Competencies on Telehealth Technologies in Nursing, March 1999

AMERICAN COLLEGE OF Digital Imaging and Communication in Medicine (DICOM)RADIOLOGY/NATIONAL Standards a uniform set of communication standards.ELECTRONICMANUFACTURERSASSOCIATION

HEALTH LEVEL SEVEN HL7 Standard for data exchange

KENNEDY KASSEBAUM Under the Administrative Simplification provision of HIPAA, the ActHEALTH INSURANCE mandates the development and adoption of national electronic healthPORTABILITY ACT, 1996 transaction standards.

OFFICE FOR THE Practical technical guidelines based on OAT Grantee experiences atADVANCEMENT OF http://telehealth.hrsa.gov/ These guidelines are a work in progress.TELEHEALTH Currently include specifications for teledermatology, teleopthamology,

emergency medical, telecardiology, telerehab. OAT has also funded a grantto develop a technical assessment center.

Protecting Consumers Online: A Federal TradeCommission Report on the First Five Years of ItsInternet Law Enforcement Program. In this reportthe Commission discusses its activities tocombat general consumer fraud and deception onthe Internet. Since 1994, it has focused on thelargest and “most egregious” fraud and deceptionexamples, taking action against companies inmore than 100 cases.

Privacy, Security and Confidentialityconcerns are not unique to telemedicine. The U.S.Congress and individual state legislatures are allbut certain to consider a wide range of privacy-related Internet legislation that could affect manyindustries next year. However, the unique privacyproblems associated with personal patientinformation, such as HIV status, cancer or mentalhealth, raise many important questions aboutpersonally identifiable information and itsprotection.

An important national privacy measure thatmay affect the telemedicine industry is the HealthInsurance Portability and Accountability Act of1996 (HIPAA). Under the Administrative Simplifi-cation provision of HIPAA, the Act mandates thedevelopment and adoption of a number ofnational electronic health transaction standards,including stan-dards for electronic data exchangeof health information; standards for the privacy ofindividually identifiable health information; anational provider identifier; an employer identifierand secure electronic signatures, among others.

According to the Act, the Secretary of HHSmust develop final regulations relating to privacystandards by February 2000, if Congress has notacted by August 1999. In 1997, the Secretarytogether with the National Committee on Vital andHealth Statistics (NCVHS), sent preliminaryrecommendations to Congress. In the absence ofCongressional action by the mandated deadline,

HHS published a notice of proposed rulemaking inNovember 1999. Final HIPAA privacy rules werepublished December 28, 2000 and an HHS Factsheet on these rules can be found in Appendix 7.The complete text can be found at: http://aspe.hhs.gov/admnsimp.

The general principles, for the use anddisclosure of personally identifiable healthinformation, are applicable regardless of the formthe information is kept in, the methods oftransmission, the time sequence of its creationand use, or the way it is communicated. HIPAA rules cover health plans (e.g., insurers,managed care organizations, federal healthprograms), clearinghouses (which unify data instandardized formats) and health care providers,who engage, directly or through contractualarrangements, in HIPAA standard electronictransactions.

Potentially the most challenging issue fortelemedicine practitioners will be HHS’ proposalfor federal privacy law to preempt state law onlywhen states are less stringent. Thus, if staterequirements are in conflict with federal ones, therules providing more stringent privacy protectionswould prevail. Telemedicine practitioners couldbe faced with a patchwork of state privacystandards.

State laws governing health information exhibitwide discrepancies in protection, complexity andcoverage as illustrated by a 50-state survey4 ofhealth privacy statutes that can be found at theHealth Privacy Project Web site at: http://www.healthprivacy.org/resources/statereports/exsum.html.

OAT and the Assistant Secretary’s Office ofPlanning and Evaluation have recently funded astudy and a conference entitled Privacy, HIPAA

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4 Health Privacy Project of the Institute for Health Care Researchand Policy at Georgetown University.

and Telemedicine that will be completed in Spring2001. The purpose of the study is to identifyprivacy issues unique to telemedicine and todetermine how HIPAA privacy rules may affecttelemedicine practitioners and patients.

Although a detailed discussion of consumerprivacy and the Internet is beyond the scope ofthis Report, it is of growing concern to the public.To address this problem, industry has promotedself-regulatory mechanisms such as standards forWeb sites. The Health on the Net Foundation(HON) (http://www.hon.ch) and TRUSTe (http://www.TRUSTe.org) have developed some of themost widely accepted standards and “privacyseals.” “Ethical principles” or “Ecodes” areanother alternative. Two new industry coalitionscalled the Internet Healthcare Coalition(ihealthcoalition.org/ethics/ecode.html) and theHealth Internet Ethics Coalition have promotedthis type of self-regulation.

Despite industry’s efforts to self regulate,agencies, such as the FTC, have found thatindustry self-regulation is not sufficient to protectconsumer privacy on the Internet. In its reportentitled, Privacy Online: Fair Information Practicesin the Electronic Marketplace, May 2000, (http://www.ftc.gov/os/2000/05/index.htm#22) the FTCoffers legislative recommendations to Congressthat would set a basic level of privacy protectionfor all visitors to consumer-oriented commercialWeb sites. The legislation would “require allconsumer oriented commercial Web sites to theextent already covered by the Children’s OnlinePrivacy Protection Act of 1998 (COPPA), toimplement the four widely-accepted fair informa-tion practice principles.”5 These principles areoutlined below.

• Notice: Provide consumers clear andconspicuous notice of informationpractices;

• Choice: Offer consumers choices as tohow their personal identifying informa-tion is used;

• Access: Offer consumers reasonableaccess to the information the Web sitehas collected about them;

• Security: Take reasonable steps toprotect the security of the informationcollected from consumers.

Telecommunications Infrastructure costscontinue to represent a large percentage of overallcosts in a telemedicine project’s monthly budget.To alleviate some of this burden, theTelecommunications Act of 1996 charged the FCCto administer the Universal Service program,which would provide rural health care providerswith a discount on their telecommunicationtransmission charges equaling the differencebetween urban and rural transmission rates.

In 1997, the FCC established the UniversalService Administrative Company (USAC), aseparate, not for profit entity, to oversee both the E-Rate discount for Schools and Libraries and theRural Health Care Program (RHCD). USAC’s RuralHealth Care Program issued its first fundingcommitments on June 25, 1999, five days beforethe end of the first 18-month program year. In total,483 rural Health Care Providers received $3.4million out of a possible $400 million, whichequaled the total requested support for completedapplications received by USAC that year (January 1,1998 through June 30, 1999). In the first year, fewproviders completed applications for the discount,because most found they could not benefit from itunder the original program.

Since the first year, the FCC has adopted anumber of reforms to the program, whichstreamlines the discount application process,

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5 FTC: Privacy Online: Fair Information Practices in the ElectronicMarketplace, A Report to Congress, May 2000, p. 38.

6 “Future Trends in Medical Device Technology: Results of anExpert Survey,” FDA, April 1998 and Workshop on Home CareTechnologies for the 21st Century, Catholic University, April 1999.

and addresses practical concerns voiced bypractitioners and others. (See Appendix 5 for adetailed history of RHCD and OAT’s FCC filing onUniversal Service or at http://telehealth.hrsa.gov/pubs.htm). Funding in the second year of theprogram, after reforms were implemented,increased to $6.1 million. Moreover the FCC andUSAC expect that third year funding will increaseto nearly $10 million, once all reforms have beenin place for a full year.

RESEARCH AND EVALUATIONFew statistically significant studies of patient/

physician satisfaction or telemedicine cost savingshave been conducted. This dearth of research maybe due to the relatively small number of tele-medicine consultations in any one specialty and/orto the lack of a standard evaluation methodology tostudy either efficacy or patient/physician satisfac-tion across small groups of specialties and projects.

Despite the lack of statistical significance inmost of the studies, all showed high patientsatisfaction with telemedicine. Provider satisfac-tion was more variable, but generally moderate tohigh. Moreover, although one cannot generalizeto all telemedicine applications, studies ofspecific services, such as tele-homecare andteledermatology, suggest that at least for theseservices, there may be real cost savings to berealized.

EMERGING TRENDS & POLICY ISSUESTwo important trends that may greatly affect

the telehealth industry and raise key policy issuesare rapid technology changes and America’s agingpopulation. Shown on the next page are tech-nology trends that already exist and will mostlikely be common in the near future.

In addition to technological trends, demo-graphic trends will have an important impact onthe health and telehealth industry. The aging ofthe Baby Boomer generation combined with a

longer life expectancy, will most likely mean alarge population of “fragile” and chronically illelderly, many of those requiring rehabilitationafter hospitalization. Given this demographictrend, alone with the strong movement towardhome health care, telehomecare will be animportant associated trend. According to recentstudies and workshops6, home care medicaldevices were the fastest growing segment of themedical device industry throughout the 1990s.

Providing tele-home care to the elderly ordisabled populations, using telemedicine, raisesimportant policy questions about health careaccess and the reimbursement of telemedicineservices for both rural and urban patients. It canbe argued that urban patients who are very elderly,chronically ill, poor or disabled may be as isolatedand have as much difficulty getting access toneeded health services as those living in ruralareas. Most of these urban patients cannot driveto local clinics and many require assistancegetting from point A to point B. Traveling a mile forsuch an urban patient may be as onerous as arural patient’s two hundred-mile drive to see aspecialist.

Reimbursement for both rural and urbanpatients may be a cost effective policy decision.Studies show tele-homecare can save money bydecreasing unnecessary hospital and emergencyroom admissions. Around the clock monitoringand nurse availability via videoconferencing hashelped patients better self-diagnose and maintaindrug therapies on schedule.

This policy issue may be resolved at the thirdparty payer level, if cost savings are sufficientlygreat enough to attract the attention of this group.

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NEXT STEPS

Outlined below are some proposed “nextsteps” for the Office for the Advancement ofTelehealth (OAT) and the Joint Working Group onTelemedicine (JWGT).

PAYMENT• OAT will collaborate with HCFA, state Medi-

caid programs, private third party payersand other relevant organizations to createa forum in which the telemedicine experi-ences of third party payers can be shared.

• OAT will continue to refine its telemedicinescoring models for a broad range of tele-medicine applications.

LEGAL ISSUES• The JWGT will work with various state

governmental and professional groups toassess the feasibility of developing com-mon licensure application forms, similarto the common college application formaccepted at a number of universities.Common applications will reduce time andcosts associated with completing numer-ous different applications that vary instate requirements and paperwork.States,in turn, can more easily develop a compre-hensive database of practitioners andtrack them across state borders.

SAFETY AND STANDARDS• The OAT will work with its grantees, the

American Telemedicine Association (ATA)and other groups to expand its clinical andtechnical guidelines. (See http://t e l e h e a l t h . h r s a . g o v / p u b s .htm for currently completed telemedicineapplication guidelines).

• OAT will continue to support the work of theAdvanced Technology Institute, which isdeveloping a Telehealth Deployment Re-

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search Testbed. This work is being con-ducted in conjunction with the MedicalUniversity of South Carolina, West VirginiaUniversity Concurrent Engineering ResearchCenter, Arthur D. Little, Oak Ridge NationalLaboratory, the Low country HealthcareNetwork and the CPRI-HOST consortium.The testbed will evaluate the effectivenessand practical utility of telehealth techno-logies by providing both laboratory and “real-world” evaluations.

• Medical Error reduction: OAT will develop aseries of measures to be included in GPRAdata elements to be collected by all OATgrantees.

PRIVACY, SECURITY AND CONFIDENTIALITY• OAT together with the Office for the

Assistant Secretary of Policy and Evalua-tion have funded a research paper on“Privacy, HIPAA and Telemedicine” as wellas a conference on the same subject.OAT and OASPE anticipate that the finalpaper and conference will be completed bysummer 2001 and the results madeavailable to the public both in print and onOAT’s Web site, shortly thereafter.

TELECOMMUNICATIONS INFRASTRUCTURE• OAT recently filed comments with the FCC

on the question of “possible impedimentsto deployment and subscribership inunserved and underserved areas of thenation.” (See OAT’s FCC filing on PacificBasin at http:// telehealth.hrsa.gov/pubs.htm) Follow-up with the FCC on thisissue continues.

• OAT also filed comments on the FCC’sproposal to set aside spectrum for theuse of Wireless Medical Telemetry(See http://telehealth.hrsa.gov/pubs.htm). OAT’s comments also reflected

tegy that uses cross-project evaluationmethodologies to obtain more generaliz-able findings.

• Future evaluations should examine pro-vider satisfaction, quality and cost impli-cations of telemedicine for specific appli-cations such as telehome-care, tele-dermatology and mental health.

TECH TRENDS TELEHEALTH APPLICATIONS RELATED POLICY ISSUES TECH TRENDS TELEHEALTH APPLICATIONS RELATED POLICY ISSUES

Internet Most telehealth transactions may be done • Retrofitting HIPAA and otherover the next generation Internet in video, privacy concernsvoice, text, still images etc.: on-line • Blurring of borders and scope ofconsultations, presecription purchases and practiceadministrative transactions. • Security issues

Digitization Smart cares, digital medical libraries, • Interoperabilitycompressed video and images, imbedded • Information interexchangechips. • Technical standards

Wireless Technology Hand held computers, mobile videophones, • Electromagnetic Interferenceand satellite based mobile hand held devices • Future spectrum bandwidthwith global access. needsEmergency medical applications such as • Interoperability across equipmenttwo-way video consultations. • Interconnection problemsWireless monitoring in the home. Other • Security issueshome wireless equipment with two wayvideo and peripherals for blood pressure,heart rate, etc. Biosensors, data feedbackloop.

concern about adequate spectrum forfuture telemedicine applications, whichmay require more bandwidth than cur-rently allocated for telemetry. This issuewill most likely remain an issue in the nearfuture.

RESEARCH AND EVALUATION• OAT will collaborate with other Agencies

within HHS as well as work with JWGTmembers to develop an evaluation stra-

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OVERVIEWThe beginning of the new millennium is a time to

look back from where we have come and to dreamof where we wish to go. For those in health care, thescientific triumphs of the past, such as theeradication of polio and small pox or thedevelopment of immunization, point to a future,when closing the health gap between the “haves andhave nots” in this country and throughout the world,is possible.

Imagine a world, where no matter who you are orwhere you are you get the health care you need,when you need it. Such a dream could already be areality. Technologies such as interactivevideoconferencing, the Internet, store-and-forwardimaging, streaming media, satellite and otherwireless communications networks already existand can deliver health services or education overvast distances. However, these are not yet part ofthe landscape for our nation’s rural and urbanunderserved peoples.

Although these technologies are available,several barriers, such as the lack of significantreimbursement, cross-state licensure problems,privacy issues, lack of universal standards and hightransmission costs, have inhibited the telemedicineand telehealth industry from reaching its fullpotential in the United States.

In addition to these traditional barriers, thedramatic growth and use of the Internet by healthconsumers poses new challenges. Despite its greatbenefits, such as a wealth of health information orfingertip access to prescription drugs, the Internethas created serious threats to industry expansion.These include new legal, safety, privacy andconfidentiality concerns for the telemedicineindustry.

The Healthcare Research and Quality Act of 1999,Section 6, requires the Secretary of Health andHuman Services (HHS) to submit this Report to

Congress on Telemedicine, no later than January10, 2001. Congress requested that the Reportdescribe barriers to telemedicine, determine theextent of patient and physician satisfaction with thismode of health delivery and evaluate the extent towhich patients have benefitted from telemedicineservices.

What exactly is meant by telemedicine andtelehealth? In the Department of Commerce’s1997 Report to Congress, “telemedicine” referredto “the use of electronic communication andinformation technologies to provide or supportclinical care at a distance.”1 Telehealth is a broaderconcept than telemedicine. For the purposes of thisReport, it is defined as the use of electronicinformation and telecommunications technologiesto support long-distance clinical health care, patientand professional health-related education, publichealth and health administration.

CURRENT TRENDSOne of the most important trends to emerge over

the past five years is the remarkable growth anddevelopment of the Internet. While much of thisreport focuses on telehealth providers and thebarriers they face in expanding the delivery oftelehealth, that is only part of the story. The Internetis dramatically changing the way consumers accesshealth information, receive diagnostics andpurchase pharmaceuticals. It is also conceivablethat soon health providers will move much of theiradministrative transmissions onto the Internet.Hence, the Internet may greatly affect differentaspects of telemedicine and telehealth.

According to the Federal Trade Commission(FTC), consumer online searches for healthinformation are increasing dramatically. Thirtymillion Americans are expected to seek health

1 1997, Telemedicine Report to Congress, U.S. Department ofCommerce, P.1.

IntroductionIntroduction

13

information online by 2001.2

To establish a viable presence on the Internet,the banking, credit card and retail industry, amongothers, have found it critical to reassure theirconsumers about the protection of personallyidentifiable information. Although online shopping,banking and auction bidding are ubiquitous, whatconsumer does not worry about the random stealingof information by computer hackers? More insidiousis the possibility that entire identities can be stolenafter a person’s social security and other personalinformation has been made public on the Internet.

Just as other industries have found the Internetto be both a market boon and privacy bane, so thehealth industry may find that consumers of healthinformation, prescriptions or other health serviceson the Internet, may be vulnerable. As theGeorgetown University Health Privacy Project notes:

“Although health Web sites now provide awide range of clinical and diagnostic infor-mation; opportunities to purchase productsand services; interactions among consu-mers, patients, and health care profes-sionals; and the capability to build apersonalized health record, they have notmatured enough to guarantee the quality ofthe information, protect consumers fromproduct fraud or inappropriate prescribing, orguarantee the privacy of individuals’information.”

STRUCTURE OF THE REPORTThe structure of the Telemedicine Report to

Congress, 2001 is similar to that of the 1997Report. Chapter III describes the current Medicarereimbursement rules for telemedicine, as well as thepreliminary outcomes for the first year of thisprogram. Chapter IV discusses legal issues affectingthe proliferation of telemedicine and telehealth,including state licensure and electronic healthinformation issues as well as other related issues,

such as credentials. Chapter V outlines safety andstandards issues, limited to specific telehealthconcerns. Chapter VI highlights HHS privacy rules forpersonally identifiable health related informationthat is electronically stored or transferred. Thischapter also discusses how these proposed rulesmay affect telehealth practitioners. Chapter VIIexamines the Federal CommunicationsCommission’s (FCC) Universal Service AdministrativeCompany’s (USAC) Rural Health Care Program. ThisChapter also highlights recent FCC reforms thataddress some telehealth practitioner concernsthat were major barriers to applying to theprogram. Chapter VIII draws upon previousresearch to summarize the current status ofpatient and physician satisfaction withtelemedicine and anecdotal examples oftelemedicine efficacy. The final Chapter IX looksat issues that may emerge over the next fewyears. Specifically Congress requests that HHSreport the following:

• The extent to which patients receivingtelemedicine services have benefitted fromthem and are satisfied with the treatmentreceived pursuant to the services;

• The extent to which medical outcomes forsuch patients would have differed if tele-medicine services had not been available tothem;

• The extent to which physicians involved withtelemedicine services have been satisfiedwith the medical aspects of the services;and

• The extent to which primary care physiciansare enhancing their medical knowledge andexperience through the interaction withspecialists provided by telemedicineconsultations.

2 Federal Trade Commission, Protecting Consumers Online: A FederalTrade Commission Report on the First Five Years of Its Internet LawEnforcement Program, December 1999.

14

15

16

Payment IssuesPayment Issues

17

OVERVIEWOne of the greatest stumbling blocks to the

expansion of the telehealth industry has been lackof reimbursement for telemedicine and telehealthservices. Advances in telemedicine technologyhave made it easy to deliver health care servicesover a distance but few public or private payers willpay telemedicine costs. Until recently, Medicarehas not had an explicit policy to pay for telemedicineservices. Historically, Medicare reimbursed someservices that did not traditionally require face-to-facecontact between a patient and practitioner. Forexample, it covered EKG or EEG interpretation,teleradiology and telepathology in most of thenation, depending on individual Medicare carrierpolicies.

However, the Balanced Budget Act of 1997(BBA) brought about a significant change inMedicare telemedicine reimbursement policy. As ofJanuary 1, 1999, Congress required the Health CareFinancing Administration (HCFA), DHHS to pay fortelemedicine consultation services under the BBA.Some current reimbursement eligibility require-ments are outlined in Table 1.

MEDICARE REIMBURSEMENT–THE FIRST TWO YEARS

Over the first two years of the Medicaretelemedicine reimbursement rule, many telehealthpractitioners have found both the BBA mandatesand HCFA’s interpretation of the BBA too narrowfor most practical purposes. On September 30,2000, after almost two years of telemedicinereimbursement, Medicare has reimbursed a totalof $20,000 for 301 teleconsultation claims.

Four major issues may have greatly limited thenumber of reimbursable telemedicineconsultations:

• Health Professional Shortage AreaLimitations. Only patients in HealthProfessional Shortage Areas (HPSAs)

were eligible for reimbursement under theBBA. This restriction greatly narrows thenumber of people, who might benefit fromtelemedicine, and disregards the needs ofmany rural patients, who may have accessto a nurse or general practitioner, but notto specialists such as cardiologists, psy-chologists, dermatologists, etc.

• Fee-sharing requirement. Consultingphysicians found fee-sharing problematicbecause they received only 75 percent ofnormal pay for their services. Moreover,HFCA reports consultant payment to theIRS at 100 percent. Other problems withfee-sharing included accounting and feetracking. Most rural practitioners are notequipped to track split fees. Finally,perhaps the most important ramificationof the fee- sharing requirement is that, tobe paid, the eligible presenter must eitherbe the referring physician or an employeeof the referring physician. In many cases,the presenter is an employee of the localhospital or clinic.

• Eligible presenters. In many (if not most)places rural clinics are staffed only by regis-tered nurses (RNs), licensed practicalnurses (LPNs) or by health technicians, whowere all ineligible presenters under the BBA.In a survey of 20 telehealth networks repre-senting 4,761 telehealth encounters bet-ween Jan. 1, 1999 and June 30, 1999, theUniversity of Missouri found that:

– LPNs and RNs make up the majority ofpatient presenters in almost all tele-health networks, but they are not eligiblepresenters.

– 171 or 3.6% of all encounters involved apatient interaction with either an occu-pational, physical, speech therapist or

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SCOPE ELIGIBILITY REQUIREMENTSSCOPE ELIGIBILITY REQUIREMENTS

GEOGRAPHIC SCOPE Only patients located in Rural Health Profesional Shortage Areas (HPSAs),counties in Non-MSAs and in approved Federal demonstration projects areeligible for telemedicine reimbursement. A list of HPSA shortage areascan be found at http://www.access.gpo.gov.

ELIGIBLE SERVICES/ Eligible Current Procedural Terminology (CPT) codes include profes-CPT CODES sional consultations, office visits, and office psychiatry services (codes

99241-99275; 99201-99215; 90804-90809; and 90862) and anyadditional services specified by the Secretary.

ELIGIBLE PRESENTING The new law eliminates the requirement to have a telehealth presenterPRACTITIONER present a patient at a consultation unless it is medically necessary (as

determined by the physician or practitioner at the distant site).

FEE-SHARING The new law eliminates the fee sharing requirement between a consultantand referring physician.

ELIGIBLE TECHNOLOGY1 The new Act provides for reimbursement for store and forward technologyin demonstration projects in Alaska and Hawaii but no other setting.HCFA’s payment policy was developed to replicate a standard consultationas closely as possible. Under Medicare, a separate payment for a consul-tation requires a face to face examination of the patient. This requirementis consistent with the American Medical Association’s description of aconsultation. To that end, Medicare’s teleconsultation rule requires acertain level of interaction between the patient and consulting practitionerbecause it offers the best substitute for a “face to face” consultation.Regardless of the technology, the patient must be present during theconsultation.

HOME HEALTH CARE The new Act clarifies that home health agencies “may adopt telehealthtechnology that it believes promotes efficiencies or improves quality ofcare, however, these technologies will not be specifically recognized orreimbursed under the home health benefit. Telehealth encounters do notmeet the definition of a Medicare covered home health visit. But this doesnot preclude a home health agency from spending prospective paymentdollars to furnish services outside of the Medicare home health benefit(i.e. for telehealth services to home health beneficiaries). If a physicianintends that telehealth services be furnished while a patient is under ahome health program of care, this should be recorded in addition to theMedicare covered home health services to be furnished.”

3 Medicare has historically reimbursed some telemedicine services that did not traditionally require face-to-face contact between a patient andpractitioner. For example, Medicare covered EKG or EEG interpretation, teleradiology, and telephathology in most areas of the nation, in accordancewith individual Medicare carrier policies.

(Under the Medicare, Medicaid & SCHIP Benefits & Improvement Protection Act of 2000)Table 1: TELEMEDICINE REIMBURSEMENT REQUIREMENTS

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clinical psychologist.– Only 7% of referring of the referring prac-

titioner acted as patient presenters inconsultations. This suggests that if all ofthe reported 4,761 telehealth activitieswere Medicare, less than 7 per-cent of all cases would meetHCFA’s eligible presentercriteria.

• Eligible Current ProceduralTerminology Codes: Only afew codes were eligible for HCFAtelemedicine reimbursement. Thislimitation greatly restricted thetypes of services for which practi-tioners could be reimbursed. Manyservices that telemedicine providersalready offer were not included inthese codes.

LEGISLATIONThe House and Senate introduced nine

bills with telehealth provisions in the 106th

Session to address the BBA’s telemedicinereimbursement limitations and to allowmore Medicare coverage for telemedicineservices. At the end of December 2000,Congress passed the Medicare, Medicaidand SCHIP Benefits Improvement andProtection Act of 2000 (“the Act”), which becomeseffective October 1, 2001. (See Table 1)

Among other things, Section 223 of the Act,eliminates the presenter and fee-sharingrequirements, expands eligible locations toinclude HPSAs and counties not included in aMetropolitan Statistical Area, expands thenumber of CPT codes that are eligible for Medicarereimbursement and provides full reimbursementto a specialist for services rendered in ateleconsultation. Section 503 addresses the useof telehealth in the delivery of home health

services. (See Appendix 1 for language of the Actand a comparison of the bills)

Historically, one of the key challenges to thepassage of any expansion of telemedicinereimbursement has been the lack of data upon

which to judge its impact on governmentexpenditures. The Office for theAdvancement of Telehealth (OAT) hasworked with the Center for TelemedicineLaw (CTL) and OAT’s grantees to develop aseries of cost models that would provide amore accurate estimate of the impact ofexpanded coverage on third party payers.These “scoring” models have the advantageof being able to use actual telemedicineexperience from the field. Preliminary resultssuggest that many of the modesttelemedicine reimbursement expansionsintroduced in the 106th Congress would haveminimal impact on Medicare expenditures.(For example, CTL/OAT estimates of SenateBill 2505 budgetary impact range from $50to $100 million over five years as comparedto an estimate of over a billion dollars scoredfor legislation in earlier years.)

OTHER PAYMENT COVERAGEIn addition to Medicare payments for

telemedicine, 20 state Medicaid programsas shown in Box 1 and several state Blue Cross/Blue Shield plans, as well as some other privateinsurers, pay for select telemedicine services.Several states have recently passed laws thatprohibit insurers from discriminating betweenregular medical and telemedicine services’reimbursement. These states include California,Texas and Louisiana.

Some private insurers also provide limitedtelemedicine coverage in certain states. For

BOX 1

MEDICAID

STATECOVERAGE

Arkansas, Califor-nia, Georgia, Iowa,

Illinois, Indiana,Kansas, Kentucky,

Louisians, Mon-tana, Nebraska,North Carolina,North Dakota,South Dakota,

Oklahoma, Texas,Utah, Virginia, andWest Virginia. In

addition, Connecti-cut, Maine andMinnesota are

pilotingtelemedicineprograms.*

Sources: CTL “MedicaidTelemedicine and TelehealthUpdate”, July 2000, HealthCare Finance Administrationhttp://www.hcfa.gov/medicaid/telemed.htm

* Sources: CTL “Medicaid Telemedicine and Telehealth Update”,July 2000, Health Care Finance Administration, DHHS

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example, Blue Cross-Blue Shield in Montana andNorth Dakota provide some telemedicinecoverage and Blue Cross of California is going astep further by developing a statewide telemedicinenetwork. In July 1999, the Managed Risk MedicalInsurance Board awarded $1.8 million to BlueCross California to expand telemedicinecapabilities throughout California. Blue Crossplanned to use the funds to expand services at 17existing clinics to serve medically underservedpopulations and to provide equipment andsupport to 22 new telemedicine sites in 18counties.

NEXT STEPS

• OAT will collaborate with HCFA, stateMedicaid programs, private third partypayers and other relevant organizationsto create a forum in which the experiencesof third party payers with telemedicine canbe shared.

• OAT will continue to refine its telemedicinescoring models for a broad range oftelemedicine applications.

CONSULTING EXCEPTIONS With a consulting exception, a physician who is unlicensed in a particular statecan practice medicine in that state at the request of and in consultation with areferring physician. The scope of these exceptions varies from state to state.Most consultation exceptions prohibit the out-of-state physician from opening anoffice or receiving calls in the state. In most states, these exceptions wereenacted before the advent of telemedicine and were not meant to apply to on-going regular telemedicine links. However, some states permit a specific numberof consulting exceptions per year. Hawaii, Colorado and California allow signifi-cant consulting exceptions.

ENDORSEMENT State boards can grant licenses to health professionals in other states withequivalent standards. Health professionals must apply for a license by endorse-ment from each state in which they seek to practice. States may require addi-tional qualifications or documentation before endorsing a license issued byanother state. Endorsement allows states to retain their traditional power to setand enforce standards that best meet the needs of the local population. However,complying with diverse state requirements and standards can be time consumingand expensive for a multi-state practitioner.

Table 2: GENERIC LICENSURE MODELS

Legal IssuesLegal Issues

21

OVERVIEWFive years ago, interstate licensure issues

were thought to be among the most criticalbarriers to telemedicine. Today, the problem hasbeen compounded by the growth and consumeruse of the Internet. The Internet has also raisednew legal issues that may grow to overshadowinterstate licensure.

Since the Department of Commerce’s 1997Report to Congress on Telemedicine was pub-lished, the problem of multiple state licensurerequirements for telemedicine providers has notimproved and in some ways has worsened. Sincethen, more states have adopted restrictive lawsrequiring out-of-state telemedicine practitionersto obtain local state medical licenses.

STATE MEDICAL LICENSUREAND LICENSURE MODELS

Historically, states have had the authority toregulate activities affecting the health, safety andwelfare of their citizens. Hence, health professionals

in the United States are licensed at the state level.States define the process and procedures forgranting a health professional license, renewing alicense and regulating medical practice within thestate. The Federal government does have the auth-ority to establish national regulations such as thoseunder Medicare that set specific eligibility require-ments for reimbursement. However, there is astrong legal presumption against federal preemptionof state licensure laws. Therefore, unless Congressacts to regulate telemedicine licensure, the statesthemselves must decide to harmonize theirstandards and laws. Tables 1, 2 and 3 illustrategeneric and specific licensure models that could beused for multiple state health licenses.

PHYSICIAN AND NURSE STATE LICENSUREFOR TELEMEDICINE PRACTICE

In early 1997 only 11 states had telemedicinelicensure laws. Today, about 26 states haveintroduced licensure laws pertaining specificallyto telemedicine that may make it more difficult for

Table 2: GENERAL LICENSURE MODELS cont.

RECIPROCITY A licensure system based on reciprocity would require the authorities of eachstate to negotiate and enter agreements to recognize licenses issued by theother state without a further review of individual credentials. These negotiationscould be bilateral or multilateral. A license valid in one state would give privilegesto practice in all other states with which the home state has agreements.

MUTUAL RECOGNITION Mutual recognition is a system in which the licensing authorities voluntarily enterinto an agreement to legally accept the policies and processes (licensure) of alicensee’s home state. Licensure based on mutual recognition is comprised ofthree components: a home state, a host state and a harmonization of standardsfor licensure and professional conduct. The health professional secures a licensein his/her own home state and is not required to obtain additional licenses topractice in other states. The nurse licensure compact is based on this model.

REGISTRATION Under a registration system, a health professional licensed in one state wouldinform the authorities of other states that s/he wished to practice part-timethere. By registering, the health professional would agree to operate under thelegal authority and jurisdiction of the other state. Health professionals would notbe required to meet entrance requirements imposed upon those licensed in thehost state but they would be held accountable for breaches in professionalconduct in any state in which they are registered. California has the authority todraft this type of model.

LIMITED LICENSURE Under a limited licensure system, a health professional would have to obtain alicense from each state in which s/he practiced but would have the option ofobtaining a limited license for the delivery of specific health services underparticular circumstances. Thus, the system would limit the scope rather that thetime period of practice. The health professional would be required to maintain afull and unrestricted license in at least one state. The Federation of State MedicalBoards has proposed a variation of this model.

NATIONAL LICENSURE A national licensure system could be adopted on the state or national level. Alicense would be issued based on a universal standard for the practice of healthcare in the U.S.. If administered at the national level, questions might be raisedabout state revenue loss, the legal authority of states and logistics about howdata would be collected and processed. If administered at the state level, thesequestions might be alleviated. States would have to agree on a common set ofstandards and criteria ranging from qualifications to discipline.

FEDERAL LICENSURE Under a Federal licensure system health professionals would be issued onelicense, valid through the U.S., by the Federal government. Licensure would bebased on Federally established standards related to qualifications and disciplineand would preempt state licensure laws. Federal agencies would administer thesystem. However, given the difficulties associated with central administration andenforcement, the states migh play a role in implementation.

Source: U.S. Department of Commerce, “Report to Congress on Telemedicine,” 1997.

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Table 3: SPECIFIC LICENSURE MODELS

AMERICAN COLLEGE OF In 1994, the ACR adopted a “Standard for Teleradiology” and developed a ModelRADIOLOGY (ACR) Act based on this standard that is similar to the general endorsement model

described above.

AMERICAN MEDICAL In 1994, the AMA adopted a policy that “states and their medical boards shouldASSOCIATION (AMA) require a full and unrestricted license for all physicians practicing telemedicine

within a state.”

CALIFORNIA STATE The State of California’s law is a specific example of a registration model. InREGISTRATION 1997, California passed laws that permits the Board of Medicine to create a

registration program for telemedicine providers.

COLLEGE OF AMERICAN The CAP model is a variation of the endorsement model. This proposal requiresPATHOLOGISTS (CAP) physicians to have their licenses endorsed in each state from which they receive

patient specimens of information. The CAP suggests that an abbreviated licen-sure process would be preferable to a license for limited practice.

FEDERATION OF STATE The FSMB supports a special licensure for telemedicine, a variation on theMEDICAL BOARDS (FSMB) general limited licensure model. In 1995, FSMB proposed an “Act to Regulate the

Practice of Medicine Across State Lines.” Under this Act, a physician would berequired to obtain a special license issued by the state medical board. Severalstates have adopted variations on this model including Alabama, Tennessee andTexas.

NATIONAL COUNCIL The National Council’s model is the most far reaching of any model and is basedOF STATE BOARDS OF on the general mutual recognition model. In November 1998, the National CouncilNURSING (NCSBN) adopted language for an Interstate Nurse Licensure Compact. This compact

creates a unified standard for nurses’ licenses. Nurses will be able practicetelemedicine in whichever states adopt the compact. Licenses will be fully recog-nized by the host and home state by mutual recognition. To date, Arkansas,Delaware, Iowa, Maine, Maryland, Mississippi, Nebrasks, North Carolina, SouthDakota, Texas, Utah and Wisconsin have passed this compact into law.

Source: U.S.Department of Commerce, “Report to Congress on Telemedicine,” 1997.

23

physicians to practice telemedicineacross state lines. Appendix 2 liststhese states. Making it easier fornurses to practice across state lines,the National Council of State Boardsof Nursing (NCSBN) developed alicensure model based on mutualrecognition called the InterstateNurse Licensure Compact. Asdescribed in Box 2, NCSBN promotesthe introduction of legislation and theadoption of state laws to allow nursesto practice across state borderswithout being licensed outside theirhome states. Currently, 12 stateshave adopted the Nurse LicensureCompact as listed in Box 3. Otherorganizations, such as the NationalAssociation of Pediatric NurseAssociates, and Practitioners, andthe Association of Women’s Health,Obstetric and Neonatal Nurses,believe that alternative models likethe national licensure model, asdescribed in Table 2, and in theirletter in Appendix 3 may be a bettersolution.

LEGAL ISSUES RELATINGTO THE INTERNET

Consumers with access to the World Wide Webcan peruse volumes of healthinformation, join chat groups, purchasepharmaceuticals in privacy andconsult a health care practitioner for afee. But together with these benefits,the Internet has added new twists toold licensure problems and hasraised other legal issues. Forexample, given the nature of the Web,it may be difficult for a consumer or

state government to determinewhether or not particular Web sitescomply with states’ laws pertaining toa physician’s or other healthpractitioner’s interstate practice.Theoretically, on-line healthpractitioners, who do not providespecific medical advice or diagnosis,would probably not be seen aspracticing medicine across statelines. Realistically however, theseconsultations can fall into large grayareas.

Perhaps the larger legal issue formany states may be their ability toenforce their own state health laws.For example, if a consumer, locatedin state A, sues an on-line practitioner,based in state B, who has jurisdictionin this case? Does the jurisdictionchange if the interactive consultationwas accomplished via the Web, overthe telephone, via email or a two-wayteleconferencing unit? What happensif the Web site was created andstaffed outside the United States?What recourse would the consumerhave if the Web site was immediately

taken down but reconfigured under a differentaddress the next day?

These legal questions apply notonly to Web based companies butalso to companies that provide healthcare consultations using any type oftechnology across state boarders.For example, many health insurancecompanies now give their clients theoption to consult with a nurse overthe telephone before seeking face-to-face medical consultation. Large

BOX 2

INTERSTATE NURSESLICENSURE COMPACT

Under this compact, thehead of the nursing licensing

board will administer theCompact for his/her state.Among other things, this

compact states that:

“License to practice regis-tered nursing issued by a

home state to a resident inthat state will be

drecognized by each partystate as authorizing a multi-state licensure privilege to

practice as a registerednurse in such party state.”

This compact also applies toa license to practice licensedpractical/vocational nursing.

To coordinate these multi-state licenses, all party

states:

“shall participate in acooperative effort to create acoordinated data base of alllicensed nurses and licensedpractical/vocational nurses.”

Including information on anurse’s licensure and disci-

plinary history.

BOX 3

STATE THAT ADOPTEDTHE COMPACT

Arkansas, Delaware, Iowa,Maine, Maryland, Missis-

sippi, Nebraska, NorthCarolina, South Dakota,

Texas, Utah and Wisconsin

24

health insurance companies with a national basewill often subcontract to a company with a centraloffice staffed with nurses, who field incomingnationwide calls. Do these nurses need to belicensed in every state in order to answer thesecalls?

A recent HHS report: Wired for Health and Well-Being, (http://www.scipich.org) states that “theextent and nature of liability associated with IHC(Interactive Health Communication) applicationsare unclear. Providing medical advice through IHCapplications, including Web sites, increasespotential liability for developers. To what extentthe developers, sponsors, content providers, orothers involved in the design and implementationof the application will be liable for damages isunknown. In the absence of precedents in thisarea, future legal action and case law may providesome clarity on these issues.” (Wired for Healthand Well-Being, HHS, Office of Public Health andScience, April 1999)

Finally, whether Web developers are statecertified or not, the issue of illegal drugs sold overthe Internet or legal drugs sold without an initialpatient examination by a physician has created agrowing safety and legal challenge for both stateand federal regulators, as discussed in the nextchapter.

OTHER RELATED ISSUESAnother dilemma that has not been resolved is

whether or not health care practitioners providingtelehealth services should be certified in this area.Earlier this year, the Joint Working Group onTelemedicine (JWGT) developed a draft discussionpaper (See Appendix 4), exploring the advantagesand disadvantages of certification. According to thepaper, there is confusion about the meaning of theterm. Credentialing, certification, privileging andlicensing are often used interchangeably to describethe validation of practitioners’ competencies in

telehealth. National professional and providerorganizations and government agencies areincreasingly queried about whether there is a needfor additional and/or official validation ofpractitioners’ competency to engage in telehealth.And it is unclear whether the questions aboutvalidation relate either solely to the equipment usedor to the clinical care delivered. Additionalcomplexity surrounds the relationship of thevalidation of individuals versus organizations.

The JWGT hopes to compile comments about thedraft paper from interested parties and provide asummary of its findings.

Although little has been resolved about individualaccreditation, there has been change at theinstitutional level. In the fall of 2000, the JointCommission on Accreditation of HealthcareOrganizations (JCAHO), an independent, not-for-profit organization, adopted new credentialingstandards for hospitals using telemedicine. The fulltext of these new standards, which becomeeffective January 1, 2001, can be found ath t tp ://www. jcaho.org/standardmedica lstaff_rev.html#Telemedicine. JCAHO evaluates andaccredits nearly 20,000 health care organizationsand programs in the United States. Itsaccreditation is recognized nationwide as asymbol of quality that indicates that anorganization meets certain performance standards.To earn and maintain accreditation, an organi-zation must undergo an on site survey by a JCAHOsurvey team at least every three years.4 The newstandards amend medical staff standards withinthe accreditation manual for hospitals. Accordingto the manual:

“If a telemedicine practitioner prescribes orrenders a diagnosis, or otherwise provides clinicaltreatment to a patient, the telemedicine

25

4 Information about JACHO was taken from theirwebsite at http://www.jcaho.org

26

practitioner is credentialed and privileged by theorganization receiving the telemedicine service.An organization may use credentialing informationfrom another Joint Commission accredited facility,so long as the decision to delineate privileges ismade at the facility that is receiving thetelemedicine service.”

NEXT STEPS

• The Joint Working Group on Telemedicinewill work with various state governmentaland professional groups to assess thefeasibility of developing common licensure

application forms, similar to the commoncollege application form, accepted at anumber of universities. Common applica-tions will reduce time and costs asso-ciated with completing numerous differentapplications that vary in state requirementsand paperwork. States, in turn, can moreeasily develop a comprehensive databaseon practitioners and track them acrossstate borders.

OVERVIEW

Thanks to advances in technology, telemedicinepractitioners have shifted easily from the phone tothe personal computer to the Internet to wirelesshandheld devices. Yet, the full potential of theseadvances cannot be reached without clinical andtechnical standards and guidelines.

In the past few years, the need for standardshas taken on greater importance, not only in theworld of telemedicine, but also in the world atlarge. Without widely adopted standards andguidelines, interoperability and interconnectionare not possible and the great potential oftelemedicine will be difficult to achieve. Olderequipment often will not connect with newerversions of the same machine; different brandsdo not operate with one another, makingnetworking across projects and sometimes withina project expensive and frustrating.

In addition to technical standards, clinicalprotocols and guidelines are needed. Clinicalprotocols for telemedicine practice include pre-liminary scheduling procedures, actual consultprocedures and telemedicine equipment operationprocedures (such as telecommunications trans-mission specifications). The clinical technicalstandard for image quality in a video transmissionwould specify the technical standards needed by aspecialist such as a dermatologist to achieve thehigh levels of image clarity and color required tocorrectly diagnose a patient.

Unlike most clinical health professionalgroups, U.S. telemedicine practitioners have notformally developed and adopted many clinicalprotocols or technical standards for telehealthapplications. However, a few professional asso-ciations have adopted some clinical practiceprotocols.

• The American Telemedicine Associationrecently adopted Telehomecare Clinical

Guidelines, posted on their Web site ath t t p : / / w w w . a t m e d a . o r g / n e w s /guidelines.html. Additionally, the Asso-ciation has posted a May 1999 workingdraft of its Clinical Guidelines for Tele-pathology.

• The American Psychological Associationhas posted clinical guidelines on its Website to guide in the practice of tele-psychiatry

• The American Dermatology Associationhas drafted proposals for clinical protocolsfor teledermatology.

• The American Nurses Association, assis-ted by the Interdisciplinary TelehealthStandards Working Group, developed the“Core Principles on Telehealth” in March1998 and “Competencies in TelehealthTechnologies in Nursing in March 1999.

The following is a short list of technicalstandards and guidelines that have been adoptedor have been proposed that relate directly orindirectly to telemedicine and telehealth.

• The American College of Radiology andthe National Electronic ManufacturersAssociation created a uniform set ofcommunication standards called DICOM(Digital Imaging and Communications inMedicine).

• HL 7:5 standard for data exchange. Themost widely used HL7 specification isthe Application Protocol for ElectronicData Exchange in Healthcare Environ-ments. This is a messaging standard thatenables disparate healthcare applicationsto exchange data.

• Kennedy-Kassebaum Health Insurance

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Safety and StandardsSafety and Standards

5 Health Level Seven is one of several ANSI-accredited StandardsDeveloping Organizations (SDOs) operating in the healthcare arena.Health Level Seven’s domain is clinical and administrative data.

Portability and Accountability Act of 1996(HIPAA) mandated the development andadoption of standards for electronic ex-change of health information for admini-strative purposes. As of December 2000DHHS released its final rules on privacypractices for eligible entities such ashealth plans, clearing house and providerswho engage in electronic transactions.

• OAT and the JWGT organized a workshop inSeptember 1999 to address the need forguidelines in the area of technical standardsfor telemedicine practice. Several guidelineshave already been completed for telecar-diology, teledermatology, telerehabilitation,teleopthamology and telepsychiatry.(See: http:/telehealth.hrsa.gov/pubs.htm)Additionally, OAT has funded a grant to theAdvanced Technology Institute to develop atechnical assessment center. This TelehealthDeployment Research Test bed will esta-blish a national distributed test bed that willevaluate the effectiveness and practicalutility of telehealth technologies by providinglaboratory and “real world” evaluations.

FDA REGULATORY ROLEWidely adopted standards and guidelines not

only serve as a foundation for interoperability andinterconnection but also to protect public health.The US Federal Food and Drug Administration (FDA)plays a critical regulatory role in ensuring the safetyand effectiveness of telemedicine medical devicesand software with the Center for Devices andRadiological Health (CDRH) acting as lead agency.This role was discussed at length in the Departmentof Commerce’s 1997 Report to Congress onTelemedicine (See Appendix 5).

Over the past five years, the FDA has continuedits oversight of medical devices and softwareassociated with telemedicine. It has developed

guidelines and provided assistance to industry andother regulators through the work of severaltelemedicine related working groups. For example,the Telemetry Working Group worked with the FCC toprovide new spectrum for wireless medical serviceafter digital TV signals interfered with wirelessmedical telemetry equipment in 1999. The Soft-ware Working Group has developed guidelines forsoftware contained in Medical Devices and theTelemedicine Working Group has developedguidelines on Medical Image Management Devices,on Digital Mammography and Picture Archiving andCommunications Systems and Related Devices.Given the growing importance of the home healthindustry, the FDA and the National Science Foun-dation cosponsored the “Workshop on Home CareTechnologies for the 21st Century.” The FDA alsorecently approved Tele-homecare equipment formarket. Current telemedicine related FDA guide-lines can be found at the following sites:

• Guidance for the Submission of PremarketNotification for Medical Image ManagementDevices,(7/27/2000) http://www.fda.gov/cdrh/ode/guidance/416.pdf.

• Guidance for Industry: Wireless MedicalTelemetry Risks and Recommendations(9/27/2000) http://www.fda.gov/cdrh/comp/guidance/1173.html

• FDA Talk Paper: FDA approves first digitalmammography system. (1/31/2000)http://www.fda.gov/bbs/topics/ANSWERS/ANS01000.html

• ODE: Guidance for the Content ofPremarket Submissions for SoftwareContained in Medical Devices.(5/27/98)http://www.fda.gov/cdrh/ode/software.pdfor http://www.fda.gov/cdrh/ode/57.html

• MQSA Regulations relevant to new mam-mographic modalities are in 21CFR900:Quality Mammography Standards (as

28

amended): http://www.fda.gov/cdrh/mammography/frmamcom2.html#12

Another notable change in FDA’s role intelehealth is its growing involvement in theoversight of relevant Internet activities. Over thepast few years, some Web sites haveoffered illegal drugs or prescription drugsbased on questionnaires rather than aface-to-face examination by a licensedsites offer prescription drugs with anyprescription. The FDA is working with theNational Association of Boards of Pharmacy(NABP), which created a program in 1999called Verified Internet Pharmacy PracticeSites or VIPPS. The program givesconsumers a single place to check out anonline pharmacy to ensure that it meetscurrent standards. To become certified byVIPPS, an online pharmacy must meet thelicensing and inspection requirements inthe state where it is located and in eachstate to which it dispensespharmaceuticals. The FDA has also worked withthe Federation of State Medical Boards onprescribing issues. The FDA’s role in this areacompliments that of the Federal Trade Com-mission, a key player in enforcement (see below).Moreover, states remain primarily responsible forregulating and licensing of health care providersand pharmacies. About 13 states have recentlypassed laws that require a physical examinationbefore prescribing medication either over thephone or over the Internet as shown in Box 4.

THE FTC, CONSUMERS &THE INTERNET

A number of federal and state regulatoryagencies are working together to address health-related consumer problems on the Internet. Theyinclude state health authorities, the Federal Foodand Drug Administration, the Justice Department,

29

BOX 4

STATESENACTING

LEGISLATIONREQUIRINGPHYSICAL

EXAMINATIONBEFORE

PRESCRIBINGMEDICATION

Alabama, Arizona,California, Florida,

Iowa, Idaho,Kansas, Maine,

Mississippi,Nebraska, New

York, Ohio,Virginia

and the Federal Trade Commission. The FederalTrade Commission plays a key oversight andenforcement role in Internet Commerce asillustrated in its December 1999 Report:Protecting Consumers Online: A Federal TradeCommission Report on the First Five Years of Its

Internet Law Enforcement Program. In thisreport the Commission discusses itsactivities to combat general consumnerfraud and deception on the Internet. Since1994, it has focused on the largest and“most egregious” fraud and deceptionexamples, taking action against companiesin more than 100 cases. As shown in Box5, the Commission has made false orunsubstantiated health claims online a lawenforcement priority.Despite the actions of regulators,

consumers must bear the major burden ofdetermining the safety and privacy of healthrelated Web sites that they use. Several USGovernment-sponsored Web sites for

consumer health information are reviewedand links are carefully selected, with the selectioncriteria described on each site. Several yearsago, DHHS introduced its Web based “HealthFinder” - an Internet Website (http://www.healthfinder.gov) that provides search capabilitieson health information. Healthfinder includes linksto other important government health sourcessuch as Medlineplus (http://medlineplus.gov/),created by the National Library of Health. Otherlinks to the Center for Disease Control, the FDAand the National Cancer Institute name just a fewof the myriad Federal government healthinformation sources. While the Federal governmenthas made credible health information moreaccessible to consumers on the Web, private andnon-profit company Web sites have alsoproliferated. These health-oriented Web sitesrange widely from those providing general health

30

information to those selling pharma-ceuticals to those that provide amedical opinion for a fee.

For any such Web site, consumersmay find it difficult to determine the“quality” of the site. Consequently, theDHHS’ national Healthy People 2010initiative includes the goal of increasingthe number of health related Web sitesthat disclose quality standardsinformation. “Quality” here is definedas more than just the quality ofinformation at the site, including amongother things, elements that relate toreliability, value and user protections.Outlined below is the information DHHSrecommends be disclosed to users onhealth related Web sites:

• Identity of Web site developers

• Site Owner’s/Developer’s con-tact information

• Potential conflicts of interest/bias

• Purpose of the site

• Original sources of content

• Privacy and confidentiality pro-tection of personal information

• Site evaluation methodology

• Content updates

A recent article 6ProposedFrameworks to Improve the Quality ofHealth Web Sites reviews andcompares this DHHS framework tothree other frameworks for the Qualityof HealthSites.(http:www.medscape.Medscape/GeneralMedicine/journal/2000/v02.n05)

6 Proposed Frameworks to Improve the Quality ofHealth Web Sites: Review C. Baur, PhD, M.J.Deering, PhD, MedGenMed, Sept. 26, 2000.7 Institute of Medicine, To Err is Human: Building aSafer Health System, 2000

MEDICAL ERRORSThe Institute of Medicine’s report

To Err is Human: Building a SaferHealth System brought to publicattention data known in the medicalcommunity for some time7. Extra-polating results from a number ofstudies, the report concluded that44,000 to 98,000 Americans dieeach year as a result of medical error.National costs range between $17billion and $29 billion. Of note, isthat these data deal almost exclusivelywith hospitalized patients. Theconsensus opinion of experts onhuman error is that many medicalerrors are the result of systemicproblems rather than specific actionsby individuals. Complexity of systemshas been repeatedly shown toincrease the likelihood that errors willoccur.

This relationship betweencomplexity and error may haveimplications for telemedicine practice.As noted in the Institute of MedicineReport, “Telemedicine: A Guide toAssessing Telecommunications inHealth Care” published in 1996.

“Telemedicine is not a singletechnology or a discrete set of relatedtechnologies; it is rather, a large andvery heterogeneous collection ofclinical practices, technologies andorganizational arrangements. Inaddition, widespread adoption of

BOX 5

EXCERPTS FROM FTCREPORT:

Protecting Consumers online: AFederal Trade Commission Report

on the First Five Years of ItsInternet Law Enforcement Program

Operation Cure-All:The Commission brought fourcases against the marketers ofproducts such as magnetictherapy devices, shark cartilageand CMO. (cetymyristoleate) fortheir claims that these productscould cure a host of seriousdiseases, including cancer, HIV/AIDS, multiple sclerosis andarthritis. All the companies,which used Web sites to marketthe products and recruit distri-butors, entered into settlementswith the Commission.

FTC v.Slim America, Inc.:The defendants were chargedwith falsely advertising thattheir weight loss product wouldproduce dramatic weight lossresults. After a trial, the Courtordered the defendants to pay$8.3 million in consumer re-dress and ordered the individualdefendants to post multi-milliondollar bonds before engaging inthe marketing of weight loss orother products and services.

FTC v. American UrologicalClinic:The defendants touted “Vaegra”,a sham “Viagra” and other impo-tence treatment products,claiming that the products hadbeen developed by legitimatemedical enterprises and proveneffective. The Commission ob-tained an $18.5 million judg-ment that requires the defen-dants to post a $6 million bondbefore they promote any impo-tence treatment in the market-ing of impotence treatment orother products and services.

31

effective telemedicine applications depends on acomplex, broadly distributed human infrastructurethat is only partly in place and is being profoundlyaffected by rapid changes in health care,information and communications systems.”

This statement clearly identifies and articulatesthe rationale for a careful, robust and proactiveapproach to the identification, reporting andanalysis of medical errors encountered in thepractice of Telemedicine activities.

NEXT STEPS

• OAT will work with its grantees, the Ameri-can Telemedicine Association (ATA) andother groups to expand its clinical andtechnical guidelines.(See http://telehealth.hrsa.gov/pubs.htm for currentguidelines.)

• OAT will continue to support the work ofthe Advanced Technology Institute, indeveloping a Telehealth DeploymentResearch Testbed. This work is being con-ducted in conjunction with the MedicalUniversity of South Carolina,

West Virginia University ConcurrentEngineering Research Center, Arthur D.Little, Oak Ridge National Laboratory, theLow country Healthcare Network and theCPRI-HOST consortium. The testbed willevaluate the effectiveness and practicalutility of telehealth technologies by pro-viding both laboratory and “real-world”evaluations.

• OAT will develop a series of measuresto be included in its performance mea-surement data collection system withcommon data elements to be collected byall OAT grantees. These measures shouldhelp document the contribution of tele-medicine technologies in reducing theincidence of medical errors.

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OVERVIEWPrivacy, security and confidentiality concerns

are not unique to telemedicine. Industries suchas banking, credit card and health care areparticularly concerned about personally identifi-able information and the possible consequencesthat could arise should sensitive information bemade public. Advances in technology havebrought great benefits as well as drawbacks inthis area. Many view loss of privacy as part ofliving in the 21st Century. As Scott McNealy,Chairman and CEO of Sun Microsystems hassuccinctly put it: “You have no privacy – so getover it!” Fortunately, Congress, a number of stategovernments and privacy advocates provide abalance to this point of view.

A non-official “working definition”8 of theseconcepts is that Privacy is an individual’s claimto control the use and disclosure of personalinformation. This claim is backed by the societalvalue representing that claim. Confidentiality isa status accorded to information that indicates itis sensitive for stated reasons and therefore mustbe protected and access to it controlled.Security are the safeguards (administrative,technical, or physical) in an information systemthat protect it and its contents againstunauthorized disclosure, and limit access toauthorized users in accordance with anestablished policy.

HEALTH INSURANCE PORTABILITYAND ACCOUNTABILITY ACT OF 1996

The Health Insurance Portability and Account-ability Act of 1996 (HIPAA) not only affectsemployees’ health insurance portability but underthe Administrative Simplification (AS) provisionsalso mandates the development of far reachingnational standards for electronic health transac-tions. These standards include electronic trans-action standards for electronic exchange of health

information for administrative purposes; stan-dards for the privacy of individually identifiablehealth information; a national provider identifier;an employer identifier; and secure electronicsignatures, among others.

According to the Act, the Secretary of DHHSmust develop final regulations relating to privacystandards by February 2000, if Congress has notacted by August 1999. In 1997, the Secretarytogether with the National Committee on Vital andHealth Statistics (NCVHS), which serves as thestatutory public advisory body to the Secretary,sent preliminary recommendations to Congress.In the absence of Congressional action by themandated deadline, DHHS published a notice ofproposed rulemaking in November 1999. FinalHIPAA privacy rules were published December 28,2000 and an DHHS Fact sheet on these rules canbe found in Appendix 7. The complete text and thesummary can be found at: http://aspe.hhs.gov/admnsimp.

HIPAA privacy rules cover health plans (e.g.,insurers, managed care organizations, federalhealth programs), health clearinghouses (whichunify data in standardized formats) and healthcare providers, who engage, directly or throughcontractual arrangements, in HIPAA standardelectronic transactions.

Eligible individually identifiable health informa-tion can be in electronic, paper or oral format.Thus, the general principles for the use anddisclosure of personally identifiable healthinformation are applicable regardless of the formthe information is kept in, the methods oftransmission, the time sequence of its creationand use, or the way it is communicated.

8 Willis Ware, Lessons for the Future: Dimensions of Medical RecordKeeping, in Health Records: Social Needs and Personal Privacy 43(Task Force on Privacy, U.S. Department of Health and HumanServices (1993)).

Privacy, Security & ConfidentialityPrivacy, Security & Confidentiality

33

Consequently, the proposed standards for theprivacy of individually identifiable health informa-tion may greatly affect how the healthcare industryas a whole and the telemedicine industry inparticular protects privacy in the future.

Potentially one of the most challenging issuesfor telemedicine practitioners will be HHS’proposal for federal law to preempt state law onlywhen state privacy law is less stringent. If statelaw is in conflict with federal regulatoryrequirements, the rules providing more stringentprivacy protections should prevail. If many stateshave more stringent privacy laws, they would allpredominate and telemedicine practitioners couldbe faced with a patchwork of state privacystandards. For example, should telemedicinespecialists at a hospital in state A, who conferwith patients in states B, C, D and E, determinewhich state law of the five states is the moststringent for privacy and comply with that statelaw?

All states have laws governing the use anddisclosure of health information; however, thereare wide discrepancies in protection, complexityand coverage among them. Moreover, there istypically no one statute governing health datawithin a state. The Health Privacy Project of theInstitute for Health Care Research and Policy atGeorge-town University has compiled acomprehensive 50-state survey of health privacystatutes. A summary of findings is found at theHealth Privacy Project Web site at: http://www.healthprivacy.org/resources/statereports/exsum.html. At this time, it is too early topredict the impact HIPAA privacy requirementswill have on the telehealth industry. On one hand,ensuring and maintaining patient privacy andsecurity measures are good business practice.These practices could provide greater reassuranceto those reluctant to participate in telemedicine

for privacy or other reasons. On the other hand,specific requirements that do not reflecttelemedicine common practices may createproblems. Whether HIPAA requirements prove tobe too burdensome for telemedicine practitionersor whether HIPAA will create a “chilling” effect onthe industry remains to be seen.

OAT and the Assistant Secretary’s Office ofPlanning and Evaluation have recently funded astudy and a conference entitled Privacy, HIPAAand Telemedicine that will be completed in Spring2001. The purpose of the study is to identifyprivacy issues unique to telemedicine and todetermine how HIPAA may affect telemedicinepractitioners and patients. The study will drawupon the experience of OAT’s grantees, whoinclude over 60 telemedicine networks and over400 sites.

As we discuss in the Chapter on EmergingTrends and Policy Issues, technology changes inthe industry may call for retrofitting HIPAA rules.HIPAA rules do not necessarily cover all consumer-oriented Internet Web sites that collect, store andmaintain personally identifiable consumerinformation. Thus, this privacy measure does notcover an important telemedicine and consumerarena. A further discussion of this subject ishighlighted below.

CONSUMER PRIVACY AND THE INTERNETWhile a detailed discussion about consumer

health privacy online is not within the scope of thisreport, it is important to note some recentfindings. Over the past few years, consumerconcerns about privacy on the Internet haveescalated. According to a new Gallup pollcommissioned by the Medic-Alert Foundation,“almost 90% of participants said that, in general,the confidentiality of their personal healthinformation was important, and almost 85% saidthey were “concerned” that this information could

34

be given to others without their consent.”9 Thepublic’s concern about privacy online may bejustified, according to several recent reports andsurveys.

For example, Georgetown University recentlyreleased a report, called the HealthPrivacy Project (http:ehealth.chcf.org/), about the practice of privacyprotocols on health related web sites.The five major findings are:

• Consumers are using healthWeb sites to better managetheir health, but their personalinformation may not be ade-quately protected.

• Visitors to health Web sitesare not anonymous, even ifthey think they are.

• Health Web sites recognizeconsumers’ concern aboutthe privacy of their personalhealth information and havemade efforts to establishprivacy policies; however, thepolicies fall short of trulysafeguarding consumers.

• There is inconsistencybetween the privacy policies and theactual practices of health Web sites.

• Health Web sites with privacy policies,thatdisclaim liability for the actions of thirdparties on the site, negate those verypolicies.

Other notable reports that discuss consumerprivacy and the Internet include those released bythe FTC (see below) and a series of publications,included in a special edition of Health Affairs, Vol.19, No. 6. According to one, entitled VirtuallyExposed: Privacy and E-Health, “a recent study of

21 leading health related Web sites found that thepolices and practices of many fell short ofconsumers’ expectations for privacy.” The publi-cation also pointed out news stories, highlightingthe lax security for information shared and main-

tained online, as shown in Box 7.Consumers are using health Websites to better manage their health,but their personal information maynot be adequately protected.

INDUSTRY SELF REGULATION

To address these types ofproblems and concerns, industry haspromoted self-regulation by developingstandards for Web sites. The Healthon the Net Foundation (HON) (http://www.hon.ch) and TRUSTe (http://www.TRUSTe.org) promote some ofthe most widely accepted standardsand “privacy seals”. Another industryapproach is the promotion of “ethicalprinciples.” Two new industry coali-tions called the Internet HealthcareCoalition (ihealthcoalition.org/ethics/ecode.html) and the Health InternetEthics Coalition (http://www.

hiethics.org/Principles/index/index.asp) haveproposed the adoption of “ethical principles” or“Ehealth codes” of conduct. Some of theprinciples recommended by the Internet HealthcareCoalition are candor, honesty, quality andinformed consent. Principles adopted by theHealth Internet Ethics Coalition include acommitment to adopt a privacy policy, enhancedprivacy protection for health related personalinformation, safeguarding consumer privacy inrelationships with third parties, and disclosingownership and sponsorship information.

BOX 7

HEALTH RELATED ONLINESECURITY CONCERNS

Global-Healthrax, which sellshealth products online, inadvert-ently revealed names, homephone numbers, bank accountand credit care information ofthousands of customers on itsWeb site.

Kaiser Permanente mistakenlysent responses to members’email to the wrong recipients.The email messages, some ofwhich contained sensitiveinformation, affected 858members who use Kaiser’s on-line services.

Finally, thousands of patientrecords were accidentally madeavailable to the public on theUniversity of Michigan Medicalcenter’s Web

9 Source: California Healthcare Foundation, Online News(http://ehealth.chef.org)

35

of the Federal Trade Commission Act and theChildren’s Online Privacy Protection Act. However,the FTC still lacks authority to require Webcompanies to adopt standard information practicessuch as its Privacy Principles. These four widelyaccepted information privacy principles are outlinedbelow:

• Notice: Provide consumers clear andconspicuous notice of informationpractices;

• Choice: Offer consumers choices as tohow their personal identifying informationis used;

• Access: Give consumers reasonableaccess to the information the Web sitehas collected about them;

• Security: Take reasonable steps toprotect the security of the informationcollected from consumers.

While the FTC continues to strongly encourageindustry self-regulation, its 2000 Report Surveydemonstrates that self-regulation alone has notbeen sufficient. According to the Report, only 20% ofthe busiest Web sites comply with FTC InformationPrivacy Principles and only about 41% of all Websites comply with at least two principles.

In the past, the FTC has been reluctant torecommend legislative remedies but in the 2000Report, the FTC offers legislative recommendationsto Congress that would set a basic level of privacyprotection for all visitors to consumer-orientedcommercial Web sites. The legislation would“require all consumer oriented commercial Websites to the extent already covered by the Children’sOnline Privacy Protection Act of 1998 (COPPA), toimplement the four widely-accepted fair informationpractice principles, in accordance with more specificregulations to follow.”10

LEGISLATION AND REGULATION

Both the states and Congress have alsoresponded to consumer privacy concerns byintroducing a large number of bills that attempt toprotect the privacy of personal information collectedfrom the Internet. For example, Congress intro-duced and passed the Children’s Online PrivacyProtection Act of 1998. This law requires the FTC todevelop regulations, protecting the privacy of per-sonal information collected from and about childrenon the Internet and to provide greater parentalcontrol over the collection and use of that infor-mation. Recently, Congress introduced the HealthInformation Privacy Act (H.R.1941); the MedicalInformation Protection and Research EnhancementAct of 1999 (H.R.2470); the Consumer PrivacyProtection Act (SB 2606 IS); the Consumer InternetPrivacy Protection Act of 1999, (H.R.313 IH); andthe Consumer Internet Privacy Enhancement Act,among other bills that seek to protect the privacy ofconsumers who use the Internet.

THE FEDERAL TRADE COMMISSION’SREGULATORY ROLE

As noted in the previous Chapter, the FDA,Department of Justice and state governments allhave roles in online regulation and enforcement butthe FTC has emerged as a key online consumerprotection regulator, overseeing privacy protectionand deceptive trade practices on commercial Websites. The FTC has published a number of reports ononline consumer protection, including ProtectingConsumers Online: A Federal Trade CommissionReport on the First Five Years of Its Internet LawEnforcement Program, 1999. It also recently sub-mitted a Report to Congress, entitled, PrivacyOnline: Fair Information Practices in the ElectronicMarketplace, May 2000 (http://www.ftc.gov/os/2000/05/index.htm#22). Among other things, thisReport establishes the FTC’s authority to regulatepersonal data collected online, based on Section 5

36

10 FTC: Privacy Online: Fair Information Practices in the ElectronicMarketplace, A Report to Congress, May 2000, p.38.

NEXT STEPS

• OAT together with the Office for theAssistant Secretary of Planning andEvaluation have funded a researchpaper, Privacy, HIPAA and Telemedicine,as well as a conference on the samesubject. OAT and OASPE anticipatethat the final paper and conference willbe completed by summer 2001 andthe results made available to thepublic both in print and on OAT’s Website, shortly thereafter.

37

38

Telecommunications InfrastructureTelecommunications Infrastructure

OVERVIEWHigh transmission cost continues to detertelemedicine, particularly in rural areas of theUnited States. While it may be only a few yearsaway, competition in telecommunications servicehas not yet reached much of rural America andtransmission cost is still a significant part of arural telemedicine project’s overall budget.

Five years ago Congress passed the landmarkTelecommunications Act of 1996 (the Act),providing a blueprint for major changes in thetelecommunications industry, such as opening upcompetition between long distance carriers andthe Regional Bell Operating Companies. The Actalso stated that rural health care providers (HCPs)should have access to advanced telecom-munications services at reduced rates.

In the Act, Congress charged the FederalCommunications Commission (FCC) withadministering the Universal Service program thatwould provide rural health care providers with adiscount on their telecommunication transmissioncharges equaling the difference between urbanand rural transmission rates. In 1997, the FCCestablished the Universal Service AdministrativeCompany, (USAC) a separate, not for profit entity,which oversees both the E-Rate discount forSchools and Libraries and the Rural Health CareProgram (RHCD). After a number of false starts,the Rural Health Care Program issued its firstfunding commitments on June 25, 1999, fivedays before the end of the first 18-month programyear. In total, 483 rural health care providersreceived $3.4 million out of a possible $400million, which equaled the total requestedsupport for completed appli-cations received byUSAC that year (January 1, 1998 through June 30,1999).

Since then, the FCC has adopted a number ofreforms to the program, as outlined below, which

streamline the discount application process, andaddress practical concerns voiced by practitionersand others. Specifically, the FCC:

• Expanded the list of telecommunicationcarriers eligible to participate in theprogram to include non-ETC (long dis-tance) carriers;

• Streamlined the application process;

• Changed the discount calculation todistance based charges paid by ruralhealthcare providers rather than a com-parison of urban and rural publishedtariffs; and Eliminated bandwidth andquantity limits so that any bandwidth andany number of services could besupported.

Funding in the second year of program, afterreforms were implemented, increased toapproximately $6.1 million. Moreover the FCCand USAC expect that third year funding figureswill increase to nearly $10 million, once allreforms have been in place for a full year. (For adetailed history of the Rural Health Care Divisionsee Appendix 6 and OAT’s FCC filing on UniversalService at http://telehealth.hrsa.gov/pubs.htm.

NEXT STEPS

• OAT recently filed comments with the FCCon the question of “possible impedimentsto deployment and subscribership inunserved and underserved areas of thenation.” (See OAT’s FCC filing on PacificBasin at http:/telehealth.hrsa.gov/pubs.htm) Follow-up with the FCC on thisissue continues.

• OAT also filed comments on the FCC’sproposal to set aside spectrum for theuse of Wireless Medical Telemetry.(See http://telehealth.hrsa.gov/pubs.htm) OAT’s comments also

39

reflected concern about adequatespectrum for future telemedicineapplications, which may require morebandwidth than currently allocated fortelemetry.

40

and the strengths and weaknesses of the reports.They include:

• Telemedicine for the Medicare Popu-lation by the University of Oregon, fundedby the Agency for Healthcare Researchand Quality for HHS;

• Patient Satisfaction with Telemedicineby the East Carolina University MedicalSchool Telemedicine Center;

• A DRAFT Assessment of Approaches toEvaluating Telemedicine by the LewinGroup, Inc, funded by the Office of theAssistant Secretary for Planning andEvaluation; and

• The 1999 Annual Report of the Asso-ciation of Telehealth Service Providers.

UNIVERSITY OF OREGON/DHHS REPORTIn 1999, the DHHS’ Agency for Healthcare

Research and Quality funded the University ofOregon to study Telemedicine for the MedicarePopulation. The Report assesses telemedicinetechnologies that substitute for face-to-facemedical diagnosis and treatment, focusing onthree technologies -- store and forward, self-monitoring/testing and non-surgical services.

Although the main thrust of the University ofOregon’s report is telemedicine technologies andnot patient/physician satisfaction withtelemedicine, the authors devoted a chapter totheir findings on satisfaction.

This chapter drew upon an extensive literaturesearch of both ongoing telemedicine programsaround the world and peer reviewed studiesassessing the efficacy and cost of telemedicine.The survey of telemedicine literature and projectswas extensive and about 30 studies fit theauthors’ criteria for inclusion in the patient/physician satisfaction chapter. The authorsselected 18 studies that examined patient

OVERVIEWDespite telemedicine’s relatively long history,

few statistically significant studies of efficacy,patient/physician satisfaction, or effectivenesshave been conducted. This dearth of research anddata may be due in part to the relatively smallnumber of telemedicine consultations within agiven specialty or across specialties withinindividual telemedicine projects, and to the lack ofa standard methodology to study efficacy,patient/physician satisfaction, or effectivenessacross projects.

Despite the lack of statistical significance inmost of the studies examined by this Report, allshowed high patient satisfaction with telemedicineas shown in Table 4. Provider satisfaction wasmore variable, but generally moderate to high.Moreover, although one cannot generalize to alltelemedicine applications, studies of specificservices, such as tele-homecare and tele-dermatology, suggest that at least for theseservices, there may be real cost savings to berealized from telemedicine.

Recent research on evaluation methodologies,such as the Lewin Group Inc.’s draft study on theAssessment of Approaches to EvaluatingTelemedicine, funded by the Office of theAssistant Secretary for Planning and Evaluation,the Department of Health and Human Services(DHHS), may offer hope for more statisticallyrobust studies in the near future.

PATIENT AND PHYSICIANSATISFACTION WITH TELEMEDICINE

To develop a better sense of patient andphysician satisfaction, this Report to Congressexamined four recent reviews of studies onpatient and/or provider satisfaction withtelemedicine. These reports offer sufficientbreadth or depth in their data to warrant a closerlook. Table 4 below highlights the general findings

Evaluation and ResearchEvaluation and Research

41

satisfaction with telemedicine and 10 studiesthat looked at physician satisfaction. Most ofthese focused on one clinical specialty such asoncology, psychiatry or dermatology, or on aparticular setting such as a prison or emergencyroom.

The majority of the Report’s selected studiesshow patients satisfied with their telemedicinetreatment. Out of 18 studies examined, only onestudy showed that most patients preferred face-to-face assessment in lieu of teleconsults. Therest of the studies reveal high levels ofsatisfaction.

Similarly, the Report found that, overall,physicians’ satisfaction ranges from “satisfied”with telemedicine technical quality to high levelsof satisfaction. However, one study out of the tenshowed that while the participating psychiatristswere satisfied, given a choice, they preferred face-to-face assessments.

Despite these positive outcomes, theUniversity of Oregon does not draw anyconclusions about patient or physician satis-

Table 4: STUDIES OF PATIENT/PHYSICIAN SATISFACTION WITH TELEMEDICINE

NUMBER OF PATIENT PROVIDERNAME OF REPORT STUDIES REVIEWED SATISFACTION SATISFACTION STRENGTHS/WEAKNESS

HHS/University of 30 studies Highly Satisfied Highly Satisfied Large survey of studies/Oregon (2000) small data samples in

each study. Studies onlylook at one applicationsuch as teledermatology.

East Carolina 12 studies plus Highly Satisfied N/A Large data sample in ECUUniversity (2000) ECU study of 495 98.3% rating for study with different appli-

teleconsults ECU Study cations and differentsettings/small survey of12 other studies withsmall data samples.

Association of Study based on 132 N/A Moderate to Large survey of users/Telehealth Service network responses Highly Satisfied only looks at technology

and users

faction because the authors felt that the studieswere not statistically significant. However, theauthors do acknowledge that further study ormore statistically significant study may notprovide any different conclusions than thosealready offered by these.

As shown in Table 5, most of the studies werebased on relatively small data sample sizesranging from one to about 100 patients. Two ofthe 18 patient studies were based on largersample sizes. One was based on a prison inmatepopulation of 576 inmates; the other was basedon a sample of 294 dermatological patients. Mostof the studies concentrated on only one specialtysuch as mental health or dermatology. A fewstudies did assess satisfaction across a fewspecialties but these were the exception.TELEMEDICINE CENTER OF THE EAST CAROLINAUNIVERSITY SCHOOL OF MEDICINE

The University of East Carolina (ECU) School ofMedicine recently published a report entitledPatient Satisfaction with Telemedicine, in theTelemedicine Journal (Vol.5, Num.1). In this

42

report, the authors review other non-telemedicinestudies that look at patient satisfaction as well as12 studies of patient satisfaction in telemedicineapplications. They also report their own findingsabout patient satisfaction based on data collectedand evaluated from 495 real-time interactivetelemedicine clinical consultations asso-ciated with their Telemedicine Center at theSchool of Medicine. ECU’s TelemedicineCenter is the hub to eight spoke sites,including six hospitals, one rural health clinicand one maximum-security prison.

ECU’s review of 12 telemedicine studiesshowed patient satisfaction ranging between71% to 100%. And similar to the University ofOregon’s review of 18 telemedicine studies,above, ECU found that the 12 telemedicinestudies they reviewed tended to have smallsample sizes, ranging from 21 to 292patients. Also similar to the DHHS studieswas the focus on one clinical specialty or a particularsetting, such as a prison.

In contrast to the reviewed studies, the ECUstudy has a much larger data sample size (495responses) and looks at patient satisfaction acrosstelemedicine specialties. ECU studied a wide varietyof clinical specialists including dermatology(33.5%), allergy (21%), cardiology (17%), psychiatry(5.1%), endocrinology (4.2%) and rehabilitationmedicine (4.0%).

Patient satisfaction was examined in relationto patient age, gender, race, income andinsurance. Overall patient satisfaction withtelemedicine applications was found to be a high98.3%. Patients were highly satisfied withconsultations through telemedicine and reportedthat care was easier to obtain.

ECU suggests several reasons for the highpatient satisfaction rate. For example, travel timecan be a factor in patient satisfaction. Travel

distances for patients seen over the telemedicinelink were on average 81 percent shorter, whencompared to the distance to the School of Medicineclinics. The overwhelming majority of patientsindicated that telemedicine had made it easier for

them to obtain medical care. For example,scheduling a time to see a telemedicinespecialist was easier than trying toschedule an appointment with a traditionalspecialist at ECU’s clinics. The amount oftime the teleme-dicine specialist spent ona patient’s interview, physical examinationand discussion of treatment options wasgreater and more satisfying to the patient.Part of the reason was that thetelemedicine physician received patientinformation several days prior to theconsultation and spent less time gatheringinformation about medical history andmore time on the problem at hand.

According to the ECU study, although thetelemedicine consult usually takes longer than atraditional exam, “it is plausible that these factorsmake the patient feel more involved in theconsultation and increase(s) satisfaction in theprocess.”

ASSOCIATION OF TELEHEALTHSERVICE PROVIDERS

The Association of Telehealth ServiceProviders’ (ATSP) annual report provides findingsfrom a nation wide survey of active telehealthnetworks. The purpose of the 1999 Report on USTelemedicine Activity, was to assess the state oftelemedicine from the clinical provider’sorganizational perspective; describe andcharacterize telemedicine/telehealth activity for1998 and the first quarter of 1999; and providereference material. The report does not includepatient or physician satisfaction with telemedicineper se but does survey clinical providers’

BOX 8

ECU STUDYRESULTS

Overall patient sat-isfaction with tele-medicine applica-tions was found tobe a high 98.3%.Patients werehighly satisfiedwith consultationsthrough telemedi-cine, and reportedthat care waseasier to obtain.

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satisfaction with specific types of telemedicinetechnology. ATSP’s 1999 report is based onresponses from 132 telehealth networks.

In this report, ATSP’s findings on providersatisfaction of telemedicine technology could beviewed as a proxy for health provider satisfactionwith telemedicine. The report shows clinicalproviders’ satisfaction with several types oftelemedicine technology with data from about 4 to69 users. Overall the majority (94%) of thoseinterviewed indicated moderate to high levels ofsatisfaction with the different types of equipmentused for telemedicine such as teleradiology,telepathology, videoconferencing, laptops, settops, home health systems.

Overall, each of these reports and the studiesthey review or the programs they survey show thatpatient satisfaction with telemedicine is high andthat physician satisfaction is moderate to high.Despite the lack of statis-tically significant dataunderpinning most of the studies, it is notable thatthey all show positive satisfaction.

THE OFFICE OF THE ASSISTANT SECRETARY FORPLANNING AND EVALUATION/LEWIN GROUP, INC.REPORT

The Office of the Assistant Secretary forPlanning and Evaluation (OASPE) of the DHHSfunded Lewin Group Inc. has drafted a reporttitled Assessment of Approaches to EvaluatingTelemedicine. This draft highlights some of thedifficulties of evaluating an industry driven byrapidly changing technology and, given thesedifficulties, reviews the frameworks needed toappropriately evalutate telemedicine projects. Forthe report, Lewin conducted a literature search ona number of telemedicine studies and visited fivetelemedicine sites, first hand. Additionally, 15telemedicine experts were extensively interviewed.Although the main purpose of the report wasassessing telemedicine evaluation and not

patient satisfaction with telemedicine, it doesaddress what subjects should be appraised in thefuture and what subjects, such as patientsatisfaction, may be sufficiently evaluated.As the Lewin Group Inc.’s Draft Report points out“patient satisfaction with telemedicine hasconsistently been demonstrated to be high. Assuch, resources for future evaluations may bebetter allocated to areas of higher priority.”

TELEMEDICINE COST SAVINGSJust as there has been an absence of statically

significant studies about patient/ providersatisfaction, at present, few telemedicine or otherhealth care projects track the number of patients,who would have been denied access to healthcare, died or suffered grave consequences in theabsence of telemedicine services. As for othertangible benefits related to telemedicine services,they too have not been systematically studiedacross telemedicine applications on a large scale.

This report briefly looks at several studies thatexamine telemedicine cost savings for a specifictelemedicine application.

Kaiser Permanente Medical Center ofSacramento, California conducted an in-depth studyon tele-homecare11 between 1996 to 1997. (Seehttp://www.archfammed.com). In the cost controlstudy home-care patients were assigned to twodifferent groups: a telemedicine intervention groupand a control group. The telemedicine interventiongroup included 102 patients, who had access to aremote video system that allowed nurses andpatients to interact in real time; the control groupincluded 110 home health patients, who werevisited by nurses. The study showed that remotevideo technology in the home care setting waseffective and well received by patients. Moreover,the quality of care provided by this technology

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11 “Outcomes of the Kaiser Permanente Tele-home Health ResearchProject Archives of Family Medicine”, Volume 9, January 2000.

yielded similar outcomes to those of the controlgroup. Finally, the study found that tele-homecarehad the potential for cost savings, which was mostlyattributable to hospitalization cost reduction asshown in Box 9.

The University of Tennessee MedicalSchool (UT) also published a study on tele-homecare, conducted between April 1998and June 1999. UT’s A Case Study ofBenefits & Potential Savings in Rural HomeTelemedicine”12 evaluated 444 tele-homehealth visits to 14 patients using the HomeTouch* system. The Home Touch systemincluded a 13-inch monitor, a speakerphone, a camera and ViaTV converterequipment to provide a real-time homehealth consultation with UT Home Healthnurses in both Knoxville and Jefferson City.The cost of the system was about $1,500.UT conducted in-depth interviews andmonthly surveys with nine of the 14 patients,as well as their caregivers. The results fromthe Case Study show that:

• 98% of the patients weresatisfied with telemedicine;

• 100% said the equipment waseasy to use;

• Use of the Home Touch programsaved more than 27,000 nursetravel miles between April ’98 andJune ’99, representing potential savingsof $7,091.76 @ $0.26/mile;

• For the 14 patients seen by tele-medicine, the mileage reimbursementand drive time potential savings were$49.33 per visit.

The Walter Reed Army Medical Center’s(WRAMC) Army Telemedicine Directorate recentlyevaluated the use of teledermatology for several

military sites. Although actual travel anddermatology contract costs for the different militarylocations were not available, the study found thatteledermatology’s current benefits are “reducedtravel and contract dermatologist costs, increased

Primary Care Manager (PCM) education,increased access to dermatologists andincreased patient/provider satisfaction”13.This study was based upon findings fromWRAMC’s Web-Based Telemedicine ConsultManagement System (TCMS) forteledermatology which conducted 108clinical consults between April 22, 1998 andJuly 15 1998.Finally, the OASPE/ Lewin Group Inc.’s

report findings suggest that “some of thecommonly recognized types of economicimpact of telemedicine applications arecosts associated with: patient time andproductivity; transportation; capital(equipment, space, etc.); maintenance;and communications; utilization of healthcare services; and staffing levels andproductivity of health professionals.”

NEXT STEPS

T• Future evaluations might use theresults of the OASPE/Lewin Group Inc.Report to conduct research that yieldsdata with greater statistical signifi-cance, by using cross-project evalua-tion methodologies suggested in theReport.

• Future evaluations should examine

BOX 9

KAISERTELEHOMECARESTUDY RESULTS

The study found nodifference in qual-ity indicators, pa-tient satisfactionor use between acontrol group and at e l e - h o m e c a r egroup. Although theaverage direct costfor home healthservices was$1,830 in the tele-home group and$1,167 in the con-trol group, the totalmean costs of care,excluding homehealth care costs,were $1,948 in thetele-home groupand $2,674 in thecontrol group.

12 A Case Study of Benefits & Potential Savings in Rural HomeTelemedicine, Home Healthcare Nurse, vol. 18, No.2, Feb. 2000,p. 125.

* Home Touch is a registered trademark of the University ofTennessee Medical Center at Knoxville.

13 Advanced Concept Technology Demonstrations Letter of Finding,Telemedicine Directorate, Walter Reed Army Medical Center,2000.

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provider satisfaction, quality and costimplications of telemedicine for specificapplications such as tele-homecare,teledermatology and mental health.

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OVERVIEWTwo important trends that may greatly affect

the telehealth industry and raise key policy issuesare rapid technology changes and the agingpopulation of America. However, predicting thefuture of the telehealth industry and the technicalstandards that will underpin “next generation”technology is like predicting the lottery. At most,we can describe some important emerging trendsin the telehealth industry over the short term andsuggest some related policy issues for the future.

TECHNOLOGY CHANGESOver the past five years, significant changes in

the telehealth industry have been tied to rapidtechnology advances and the convergence of thecommunications, media and computer industries.What has been even more dramatic is theexponentially expanding global reach of theInternet, which grew out of a community of U.S.academic and military developers to reach a worldwide global audience in just a few years.Technology trends that will likely influence thenear future of the telehealth industry and dictatethe need for technical standards and guidelinesare:

• Next generation Internet;

• The digitization of information; and

• The migration toward wirelesscommunications.

NEXT GENERATION INTERNETAs consumers and businesses find more ways

to use the Internet in their homes andbusinesses, the next generation Internet willenable these tasks to be accomplished faster,more securely and reliably than on our presentsystem. Part of the anticipated next generationInternet, Internet2 is a joint venture by academia,the federal government and industry. This groupis using a new high-speed backbone network with

a core sub-network consisting of a 2.4 Gbps,13,000-mile research network to test Internetapplications such as Internet Protocol (IP)multicasting, differentiated service levels andadvanced security. It will also allow researchers totest and resolve problems such as bandwidthconstraints, quality and security issues.

DIGITIZATIONSimilar to the next generation Internet, the

digital revolution is already upon us. Digitizeddata, voice, still images and motion-video can bemixed, matched, melded and sent over myriadtypes of conduits. Advances in digital andcompression technology enable vast amounts ofinformation to be stored onto smaller and smallerchips. Applications of this technology include thecreation of digital medical libraries and medicaldatabases, as well as the potential to widelyadopt Electronic Medical Record Systems andSmart Cards that can hold medical information ona card the size of a credit card. Smart cards arealready in use to a limited degree here in the U.S.and more widely overseas. Currently, however,there are no technical standards that can help toeasily integrate telemedicine clinical data ontothese systems and cards.

WIRELESS TECHNOLOGYThe use of wireless telemetry in hospital

settings is already standard practice asdiscussed in the Chapter on Safety andStandards. (Examples of medical telemetryequipment include heart, blood pressure andrespiration monitors.) In addition, EmergencyMedical Services companies are or will beimportant users of telemetry and other wirelesstechnology. Companies already use wirelesstelemetry or more advanced wireless technologysuch as wireless interactive video on emergencyvehicles and to communicate with emergencyphysicians. It enables a paramedic to confer with an

Emerging Trends & IssuesEmerging Trends & Issues

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emergency physician for an early assessment, wellbefore the patient’s arrival at the hospital.Telemedicine equipment can be as simple as alaptop computer with desktop video conferencingcapabilities that provide simultaneous two-wayvideo, two-way voice, vital signs, cardiac and otherdata to a trauma center. Wireless technology is alsouseful in an emergency care hospital becauseemergency physicians, consulting a hand-heldwireless device, do not have to leave the patient’sside while researching unfamiliar symptoms.

Other wireless technology applications intelemedicine and telehealth will emerge as peopleadopt wireless applications in their every day lives.For example, the average consumer will be able tocarry a mobile library of health information anddiagnostics contained in a pocket-sized, handheldwireless computer. With such a wireless palmcomputer, the practitioner can send patient medicalinformation from the hand held device to anotherwireless device next door or around the world or to amain data center in the hospital for storage.

RELATED TECHNOLOGY POLICY ISSUES

POLICY LAGS TECHNOLOGY

Policy makers have not been able to anticipatethe changes brought about by the rapidtechnological advances, revolutionizing the healthcare industry. In just the past five years,discoveries related to DNA sequencing, theHuman Genome Project, cloning and other scientificbreakthroughs have raised questions about ethics,privacy and security. These types of discoveriescombined with the exponential growth and use ofthe Internet have created a “policy lag” wherebypolicy is developed and implemented many monthsor even years after technology has changed lives,businesses and health care delivery. In the past, thedeve-lopment of regulatory policy, technicalstandards and protocols could be created over a

number of years but not now. Internet time relatesnot only to businesses that must adjust to rapidindustry changes but also to industry regulators.

PRIVACY ISSUESFederal health privacy laws such as the Health

Portability and Administrative Act (HIPAA) wereconceived a few years before anyone couldanticipate the dramatic growth and global reach ofthe Internet or the convergence of cable, digital,telephony and video technologies. HIPAA rules didnot anticipate health practitioners, who could sendmultiple or a billion copies of a patient record in bothtext and video clips over the Internet in the form ofemail. Consequently, HIPAA policy and rules mayhave to be retrofitted to the current technologylandscape and its future possibilities. For example,HIPAA proposed rules do not cover many health-related Web sites. The Next Generation Internet willraise other important privacy and security issues ashealth care administration and services migratetoward Internet and wireless technologies.

TECHNICAL STANDARDS AND GUIDELINES

With an increase in the use of advancedwireless technologies, such as hand-held deviceswith video Internet capabilities, there will be acritical need for technical standards. Standardswill help to ensure interoperability, interconnectionreliability, quality and security of medical data,images and video trans-mitted over the airwaves.

Telemedicine providers are already finding itdifficult to get their equipment to “talk” to oneanother even if both perform the same function.Older machines will not talk to newer versions ofthemselves; different brands will not interconnect.This is frustrating to the health practitioner, tryingto provide services, and it is very expensive.

SPECTRUM FREQUENCY ALLOCATIONAs the health care industry adopts more

sophisticated technology, requiring more

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bandwidth, the bandwidth size, location andstatus of spectrum frequency that the FederalCommunications Commission allocates for medi-cal purposes will likely become a key policy issuefor the telehealth industry.

For example, streaming video requires a muchlarger bandwidth to convey natural movement thanbandwidth required for wireless monitoring of vitalstatistics. An on-going dialogue about the “primaryor secondary use” of designated or sharedspectrum may be required between the FederalCommunications Commission and health relatedorganizations, particularly as the use of telemetryand more advanced wireless telehealth applicationsis more widely used and moves from institutions tothe home or to other health related venues.

Spectrum frequency allocation has also becomea growing safety issue. For example, in March1999, incidences of digital TV interference withwireless medical telemetry equipment occurred attwo hospitals in Dallas. (Examples of medicaltelemetry equipment include heart, blood pressureand respiration monitors.) When new digital TVservices were piloted, medical telemetry equipmentin these two hospitals did not work. Incidences likethese highlight the dangers of electromagneticinterference with the operation of critical medicalequipment and underline the need for appropriatespectrum allocation and designation.

In June 2000, the FCC allocated new spectrumand established rules for a Wireless MedicalTelemetry Service (WMTS) that allows telemetryequipment to operate on an interference-protected basis. The FCC based its decision onformal comments from a number of organizationsincluding the Food and Drug Administration andthe American Hospital Association’s MedicalTelemetry Task Force, which provided specificrecommendations for spectrum allocation. OATalso filed comments with the FCC, supporting theAHA recommendations and submitted additional

comments concerning the possible future usesand spectrum needs of telemedicine andtelehealth applications.

BORDER ISSUESWith the Internet, digitization and wireless

technologies, the concept of either domestic orinternational borders will become blurred. As thistrend accelerates, cross-state jurisdiction andenforcement issues will become harder todisentangle. Blurring borders may also expandthe purview of general practitioners. For instance,if a Physician Assistant or Nurse Practitionerworks with a primary care physician or specialiston an ongoing basis and slowly assumes more ofthe physician’s basic duties, then a gradualchange in practice will naturally occur over time.How will states decide to license thesepractitioners? Will they receive specialcredentials?

AGING DEMOGRAPHICS, HOME HEALTHCARE AND URBAN TELEMEDICINE

A discussion of how demographic trends willaffect the health industry is not within the scope ofthis Report but it is hard to ignore the effect theaging of the Baby Boomer generation will have onthe health care and telehealth industry. An agingpopulation with a longer life expectancy may meana larger population of “fragile” elderly, thechronically ill and those requiring rehabilitation.

Given this demographic trend, recent studiesand workshops14 show that home care medicaldevices were the fastest growing segment of themedical device industry throughout the 1990s. Areport from the Workshop on Home CareTechnologies for the 21st Century suggests:“Consumer demand for home health and homehealth care is not new. When patients have a

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14 “Future Trends in Medical Device Technology: Results of an ExpertSurvey,” FDA, April 1998 and Workshop on Home CareTechnologies for the 21st Century, Catholic University, April 1999

choice, and if they have a reasonably stable andcaring home environment, they choose to gohome, almost without exception. If they have asevere, chronic, difficult condition it is difficult topermit them to go home, unless the home is fittedwith the appropriate technology and care giver.We have the opportunity today to make this choicepossible by developing technology that is easy touse, suitable for the patients’ particular needsand allows access to trained, off-site professionalswho can work with the patient on educational/problem areas of concern.”15 Given the movementtoward home health care, tele-homecare will mostlikely play an increasingly larger and moreimportant role in the home health care industry.

Home care in the future may rely on newapplications for wireless technology. Tele-homecare can be defined as providing monitoring(telemetry) and home health care services at adistance, using advanced telecommunicationsand information technology. Aside fromvideophones, wireless biosensors and feedbackloops data can be used to monitor patients whocan not get out of bed. OAT grantees have foundthat tele-home health care has been largelysuccessful, and can allow greater access to care,particularly in rural settings where a nurse mayhave to travel 200 miles one-way to see a patientat home face-to-face. With tele-homecare, a ruralnurse can “visit” six patients in one day, usinginteractive video instead of traveling 200-300miles to visit one patient face-to-face for 20

minutes.

Providing tele-home care to the elderly ordisabled populations, using telemedicine raisesimportant policy questions about health careaccess and the reimbursement of telemedicineservices for both rural and urban patients.

It can be argued that urban patients who arevery elderly, chronically ill, poor or disabled may beas isolated and have as much difficulty gettingaccess to needed health services as thosepatients, living in rural areas. Most of these urbanpatients can-not drive to their local clinics andmany require assistance getting from point A topoint B. Traveling a mile for such an urban patientmay be as difficult as the two hundred-mile ormore drive, that a mobile rural patient must maketo see a specialist.

Reimbursement for both urban and ruralpatients may be a cost effective policy decision fortele-homecare. Studies show tele-homecare cansave money by decreasing unnecessary hospitaland emergency room admittances. Around theclock monitoring and nurse availability overvideoconferencing has helped patients better self-diagnose and maintain drug therapies.

This policy issue may be resolved at the thirdparty payer level, if cost savings are sufficientlygreat enough to attract the attention of this group.

15 Personal Status Monitoring in the Home, Report Topic B,Workshop on Home Care Technologies for the 21st Century,Catholic University, April 1999.

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Hence, the Internet provides benefits but alsocreates concerns. On the one hand, a wealth ofhealth related information is available toconsumers at the touch of a fingertip. On theother, use of the Internet for telemedicine raisescomplex legal, jurisdictional, privacy/security andquality issues. The explosive growth of Internetuse for business is bound to change health caredelivery and, in turn, to affect how each consumerperceives his/her role in the health care arena. Inthe future it may be consumers who drive thedemand for telemedicine and telehealth ratherthan health professionals.

The Department of Health and Human Servicescontinues to address both the traditionalchallenges to the development of telehealth, suchas reimbursement, and to monitor new trends inthe industry. Working with Congress, theDepartment strives to increase health careaccess for America’s most underservedpopulations through telemedicine.

The turn of the century and the millennium is arare moment in time, a chance to reflect on thepast and dream about the possibilities of thefuture. Just in the last few years there have beenmedical advances on the scale of DNAsequencing, the Human Genome project and thesuccessful cloning of Dolly the sheep. As thehuman blueprint is better understood, so can thefuture health needs of this nation be betteraddressed. What will a schematic for this futurehealth care system look like? For starters it mustprovide all Americans - rich or poor, urban or rural,young or old - with access to health care.

Telemedicine can greatly increase access butit also has the potential to act as a barrier. Muchhas been written about the “digital divide”separating those, who have access to computersand the Internet, and those who do not. Will therebe a similar digital divide for those seeking healthcare in the future? The argument goes that thosewithout access to the Internet will be left furtherand further behind in terms of economic welfareand jobs. Does the same logic apply to healthinformation, on-line pharmaceuticals and on-linemedical care?

ConclusionConclusion

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Appendix 1THE MEDICARE, MEDICAIDAND SCHIP BENEFITSIMPROVEMENT AND BENEFICIARYPROTECTION ACT OF 2000SECTIONS 223 AND 504AND A COMPARISIONOF LEGISLATION BILLSRELATING TOTELEMEDICINEREIMBURSEMENT

DEPARTMENT

OF

HE

AL

TH

&H

U

MAN SERVICES • USA

U.S. Department of Health and Human ServicesHealth Resources and Services Administration

Office for the Advancement of Telehealth