By: Stephen J. Schanz, J.D., LL.M.
(Mr. Schanz is editor of Telemedlaw, a quarterly report devoted to the review of legal, legislative and regulatory aspects of telemedicine)

With the close of 1996 and the adjournment of the 104th Congress, many telemedicine-related initiatives have been laid to rest at both the federal and state legislative levels. Other significant measures were enacted and their impact upon the practice of telemedicine will be closely monitored.

In late 1996 the Congress passed H.R. 3103, commonly known as the Health Insurance Portability and Accountability Act of 1996. Though it covered many important aspects relating to health insurance and the ability to transfer coverage upon a change in employment, a small, concise provision of the law could profoundly affect the future of telemedicine. Section 192 of the bill requires the Health Care Financing Administration (HCFA) to report to Congress, no later than March 1, 1997, on that agency’s ongoing study of reimbursement for telemedicine services. Specifically, the study is to include an analysis of the costs of telemedicine services, data compiled from current telemedicine demonstration projects, and a proposal for Medicare reimbursement. The seventy-seven word provision is certainly brief by legislative standards but carries enormous potential for the telemedicine industry, depending upon the reports’ recommendations.

Another meaningful measure passed by the 104th Congress was the Health Centers Consolidation Act of 1996. Section 3 of the measure contains the telemedicine grant program to be administered by the Office of Rural Health Policy (ORHP), which can make awards to expand access, improve quality, and restrain the costs of health care in rural areas. In Section 330A(c)(3), provision is made for existing or proposed telemedicine networks to be considered eligible for such grants so long as certain conditions are met. First, the network must be comprised of a multispecialty entity in an urban or rural area. Second, the network must include at least two rural health care facilities, such as rural hospitals, physician offices or nursing homes. Grant funds could be used for improving health care access by rural citizens, the purchase or lease of equipment, and gathering of baseline data for the evaluation of telemedicine systems serving rural areas.

At the state level, California passed two bills affecting telemedicine. As discussed previously in Telemedicine Today, the Telemedicine Development Act of 1996 spoke to several issues critical to telemedicine practice, including informed consent, medical records and reimbursement. The California Legislature also passed Senate Bill 2098 which amended California’s Business and Professions Code to permit the Medical Board of that state to develop a registration program for out-of-state physicians who wished to practice across state lines. However, implementation of the proposed registration program would require subsequent authorizing legislation.

A sampling of Congressional bills and state legislative proposals reveals several telemedicine-related initiatives were introduced for consideration but failed, for one reason or another, to win passage. For instance, the Medicare Telemedicine and Medical Informatics Demonstration Act of 1996 would have established grants for projects to demonstrate high-capacity computing in connection with medically underserved areas. Objectives would have included: improved patient access to, and compliance with, care guidelines through telecommunications links; curriculum to train and credential health professionals in telecommunications; the application of advanced technologies in home settings; and the development of standards in telemedicine.

Similarly, the Rural Telemedicine Act of 1995 was introduced but failed to be enacted by the 104th Congress. That bill would also have set up pilot projects to investigate, over a three-year period, the effectiveness of telemedicine networks in rural care. Payment for physician services was also included.

A somewhat different approach was taken by H.R. 426, titled the National Commission on Telemedicine Act, which also did not pass the last Congress. The act would have established a 37-member commission to assess the use of existing and emerging telecommunications in the provision of health care.

Though many noteworthy measures failed to be enacted, the level of legislative activity may be indicative of things to come -- especially as "managed care" continues to evolve and telemedicine progresses. Depending upon one’s perspective, telemedicine offers opportunities for increasing health care access, improving the quality and standard of care, reducing health care costs, and addressing the need for enhanced rural care. All are valid underpinnings for future legislation.

Further, the multitude of regulatory issues facing telemedicine highlight the need for future clarification and reform. Questions involving licensure, reimbursement, medical records, confidentiality, and liability are but a few of the uncertainties telemedical practitioners wrestle with. 1997 will likely produce a combination of "re-packaged" ideas as well as new legislative initiatives. The months ahead will be telling.

This article provides information only, and is not intended to replace legal counsel or advice.

Steve Schanz
Tel 919/676-1137
legamed@aol.com