While many individuals strongly believe in the potential of telemedicine for providing cost-effective services, others remain skeptical. At the heart of much of the telemedicine debate are fundamental questions about the role of the Federal government in advancing telemedicine.

In his memo to Secretary Shalala, the Vice President requested the Department of Health and Human Services to take the lead in developing Federal policies that foster cost-effective health applications of the NII. The Vice President identified telemedicine as one of the four areas requiring the Department's attention if progress is to be made. More specifically, the Vice President directed the Department to "prepare a report on current telemedicine projects, the range of potential telemedicine applications, and public and private actions to promote telemedicine and remove existing barriers to its use."

Much has been written about the barriers to telemedicine, and the policies and programs needed to overcome these barriers. Nevertheless, these studies are generally much more likely to agree on the nature of the problems than on the solutions. And where agreement appears to exist, the recommended solutions lack specificity.

The Joint Working Group on Telemedicine has been formed to move beyond these previous efforts and develop very specific actions to address the particular challenges to the effective use of telemedicine as outlined int the Vice President's memo.

Initially the Working Group was composed of Department members only. After two meetings, however, it became obvious that the Department's activities and membership overlapped significantly with those of the Health Information Applications Working Group (HIAWG) Telemedicine Subgroup. To eliminate redundancy between the groups, members of the HIAWG's Telemedicine Subgroup were asked to join the Department's Joint Working Group. The result of this merger has been to gain representation on the Working Group from a variety of cabinet agencies which have been active in telemedicine, and from throughout the Department of Health and Human Services (See Attached List). In keeping with the directives in the Vice President's memo, representatives from Agriculture, Commerce, Defense, NASA, Veterans' Affairs, and the Office of Management and Budget have been active members of the Working Group. The diverse membership of the Working Group has greatly facilitated cooperation among the cabinet agencies in pursuing the objectives of the Working Group.

The Joint Working Group meets approximately twice a month. As of March 1, there have been 15 meetings of the Working Group (see attached calendar). Extended furloughs interrupted some of the Work Group's activities in the months of November and December.

The meetings are structured to allow maximum participation from Working Group members and interested parties. They provide an opportunity for information exchange, agenda setting, and decision-making. The actual work of the group is carried out primarily in smaller subgroups that are formed to address specific issues (e.g., evaluation). These subgroups meet as needed.

In the following section, activities of the Joint Working Group are described in some detail. Given the developmental nature of most of these activities, no specific budget estimate has been assigned. Currently, these activities are conducted under the auspices of the various agencies and represent an ongoing commitment to creating more effective and coordinated federal telemedicine policies and programs.

The Federal government is a major user of telemedicine technology as a provider of health care services (through the Departments of Defense and Veterans' Affairs, NASA, and the Department of Health and Human Services' Indian Health Service) and as a funder of private sector providers (through Medicare and Medicaid and through grants to community health centers and other providers). It also has played a strong role in research and development of telemedicine. Finally, the Federal government has an obligation to ensure the basic quality and safety of health services provided to its citizens.

Increasingly, the Federal government's telemedicine activities involve a partnership with the private sector to achieve their objectives. Last August, under the auspices of the Information Infrastructure Task Force, the Working Group provided leadership and participated in an invitational consensus conference involving representatives from the public and private sectors. The goal of the conference was to develop a policy agenda for the prudent and orderly development and deployment of telemedicine within the National Information Infrastructure of the United States. The conference addressed a wide range of policy issues, and resulted in explicit recommendations on telemedicine regulation, technological and human considerations in design of telemedicine systems, reimbursement, market opportunities, and evaluation. A report from the conference recently has been published in the Telemedicine Journal (Vol.1, No. 4).

The Working Group is committed to involving representatives from the private sector throughout its deliberations in order to gain the widest range of expertise and commitment possible. Several organizations, including the American Medical Association, the American Telemedicine Association, the Center for Telemedicine Law, the Council on Competitiveness, the Federation of State Medical Boards, and the Koop Foundation have met with the Working Group to discuss their mutual concerns, and, where appropriate, collaborative activities are being launched. For example, the Working Group is collaborating with the Koop Foundation to ensure that the Federal Telemedicine Inventory and Geographic Information System is compatible with that developed by the Foundation for private sector funded projects. Also, the Working Group's evaluation framework is being reviewed by a wide range of organizations and individuals to promote the widest examination.

Over the coming months, the Working Group will concentrate on activities that achieve a greater consensus on the role of the Federal government in telemedicine. The goals of these activities are to identify strategies that overcome barriers to telemedicine and facilitate private sector development of effective uses for telemedicine technologies in a range of applications.

After meeting with interested parties and review of studies prepared by the Office of Rural Health Policy (ORHP), the Health Information Applications Working Group (HIAWG), the Council on Competitiveness, the Western Governors' Association, and background materials from the published and unpublished literature, the Working Group identified the following six areas for its activities this year.

• Telemedicine Inventory: In his memo, the Vice President directs the Department to report on current telemedicine projects. Currently, there is no up-to-date, comprehensive inventory of telemedicine projects funded by the Federal government, a critical beginning point for meeting the Vice President's charge. Thus, the Working Group has identified creation of a Federal telemedicine inventory as a high priority first-order project.

  The Federal inventory is to contain basic descriptive information on each project, including names of individuals to be contacted for further information. Information is to be in a uniform format, easily accessible to the public.

  This inventory will be expanded to private sector "testbeds" through a partnership with private sector organizations, which are currently tracking telemedicine activities.

  ORHP has taken an initial step in developing this broader inventory through a survey of all rural hospitals to determine their involvement in telemedicine, including partnerships with clinics and urban hospitals. The National Library of Medicine (NLM) has made a valuable initial contribution by creating a bibliography of current telemedicine publications. Also, the Institute Of Medicine (IOM), with funding from the National Library of Medicine (NLM), is developing a listing of private and public sector telemedicine projects that will be incorporated into the Work Group's inventory. DOD has begun to develop a comprehensive inventory of its projects, as well as projects funded by other federal entities.

  The challenge to the Working Group, however, is not creation of the inventory, but its maintenance. Such inventories are frequently out-of-date before the "ink is dried on the paper." Previously, NASA had created an inventory that it ceased to update after several years because of high costs.

  With the assistance of a DOD contractor and personnel from DOD, VA, NASA, and HHS, the Working Group is creating an inventory, using the interactive capabilities of the internet, that will be affordable to maintain. Information on each agency's projects will be updated by that agency on its own web-page. Simplified programs to "search" these web-pages will be developed, permitting summarization and analysis of information contained in the various agency web pages. Geographic identifiers will facilitate development of a geographic information system that will link information in the inventory to other basic information about communities in which telemedicine projects are implemented. Basic analytic reports will be developed from the information maintained in the inventory. This activity is being coordinated with those of the Koop Foundation and other interested parties who are seeking to track telemedicine activities in this nation. These activities are also coordinated with the development of a centralized data base at the National Library of Medicine.

• Evaluation: Despite a myriad of papers written on telemedicine, the need for quality, scientific evaluations has not been met. This is a major barrier to the adoption of telemedicine.

  Several Federal agencies, including NASA, DOD, HCFA, and ORHP, have been actively funding telemedicine demonstrations. While earlier demonstrations in the 1970s and early 1980s, funded by NASA and others, were evaluated, more recent Federal projects are just beginning to be evaluated. In addition, there have been a number of telemedicine demonstrations funded by the states and the private sector that have had little or no evaluation.

  To facilitate coordination among Federal agencies and with the states and private sector, the Working Group is developing a framework for evaluating telemedicine projects that will allow agencies to more effectively share information across the studies funded. This framework will be used to categorize current evaluation activities and identify areas where further evaluation and demonstration projects are needed. In addition, the Working Group serves as a technical assistance and coordinating team on evaluation to the agencies.

  In developing its framework, the Work Group is coordinating its efforts with ongoing DOD, ORHP, HCFA, and NLM-IOM funded evaluation projects. DOD has embarked on a comprehensive evaluation of its demonstrations, including development of outcomes measures to assess the clinical efficacy of telemedicine. ORHP is conducting an overall assessment of rural telemedicine that includes all rural providers of telemedicine services. HCFA has recently awarded a major contract for an evaluation of telemedicine specifically focused on information required to develop payment policies (see discussion below). The National Library of Medicine (NLM) has also made a valuable initial contribution by creating a bibliography of current telemedicine publications and is currently funding the Institute of Medicine (IOM) to conduct an assessment of current evaluation efforts.

  The IOM study provides the Working Group with a group of outside experts upon which to rely for ongoing input. For example, the initial evaluation framework was presented to the IOM Telemedicine Study Committee in early November for comment.

  An initial version of the framework also has been widely circulated to recognized evaluators and current demonstration projects for comment. In a recent article in the Telemedicine Journal (Volume 1, No. 4), the framework is presented and comments are sought from all those engaged in telemedicine systems, both within and outside of government. Revisions to the framework will be made in response to comments received.

• Telemedicine Safety Standards: Many of the telemedicine systems in use today are adaptations of teleconferencing or desk-top computer systems. These systems are not necessarily evaluated objectively for their ability to safely provide diagnostic information. Under the rubric of "telemedicine" falls a wide range of technologies and applications. This diversity poses a significant challenge to establishing safety standards, especially in light of the paucity of objective evaluative studies. Yet, with increasing interest in telemedicine comes increasing concerns about safety and efficacy.

  The Federal government has a legitimate interest in protecting the public from unsafe and untested medical technologies, while minimizing unnecessary regulatory delays in bringing to market life-saving or cost-saving technologies.

  As a first step in addressing this issue, the FDA is preparing a paper that outlines its current telemedicine activities and proposed future directions in order to provide a vehicle for discussion and comment by all relevant public and private sector interests.

• Licensure: Telemedicine has the potential to overcome barriers of distance in providing health care. State professional licensure laws, however, pose a significant obstacle to achieving this potential where health care markets cross state boundaries. Practitioners are reluctant to use multi-state telemedicine networks because of the costs and administrative burdens of complying with multiple licensure and credentialing rules compared to the expected low frequency of network use. Representatives from the Federation of State Medical Boards, the AMA, the Center for Telemedicine Law, and the American Telemedicine Association discussed licensing and accreditation of telemedicine practitioners at three meetings of the Working Group.

  The representatives at the meeting generally agreed that national licensure for telemedicine was not a politically feasible strategy (at this time) for overcoming the barriers posed by multiple state licensure. The Federation presented its model statute for a limited state license which would presumably facilitate telemedicine activities. Concern was raised about the long lead-time in implementing the model statute by each state, and about the possible barriers imposed by the states as they modify and implement the model statute to meet their needs.

  In addition, some observers have noted that the model legislation may be more restrictive than the current situation. That is, the model statute broadly defines the cross-state practice of medicine to include the rendering of a written or otherwise documented medical opinion concerning the diagnosis or treatment of a patient as a result of transmission of individual patient data, by electronic or other means, from within the State to a physician or his or her agent located outside the State. As such, a cardiologist in California who reads EKGs from patients in Nevada on a consistent basis may have to be licensed in both states if he or she renders a written or otherwise documented opinion.

  The Working Group seeks to facilitate the efforts of many interested parties to reduce interstate licensure barriers to telemedicine. In this regard, the National Telecommunications and Information Agency and the Agency for Health Care Policy and Research has awarded a grant to the Federation of State Medical Boards to work with states to implement legislation that reduces the barriers to the interstate practice of telemedicine.

  In addition, the Working Group is collaborating with various groups such as the Western Governors' Association, the Council on Competitiveness, the AMA, the Federation of State Medical Boards, the Center for Telemedicine Law, and others to determine what role the Federal government can play in facilitating these groups' efforts to reduce licensing barriers. Recent passage of the Telecommunications Reform Act lends added impetus to these activities since it requires a report on the activities of the Working Group, including the Working group's review of questions related to the legal barriers to telemedicine. As a part of reports to both the Congress and the Vice President, the Working Group will prepare chapters on licensure that will outline options for addressing licensure barriers, including national as well as state-based solutions.

• Telemedicine Third Party Payment Policies: Payment policies for telemedicine services by third party payers are currently limited and inconsistent. The Health Care Financing Administration (HCFA) has not yet established a national coverage policy for Medicare, but is working toward one. Medicare covers teleradiology and other services that do not require face-to-face encounters between physician and patient (teleconsultation). Medicare cannot pay for teleconsulting except under its demonstration waiver authority. It is preparing a waiver request to the Office of Management and Budget to cover such consults in several of its demonstration sites.

  At least seven states cover telemedicine under Medicaid, and a number of Medicaid programs are in the process of implementing coverage. Since Medicaid does not mandate the face-to-face encounter required in Medicare, a waiver is not needed for states to add telemedicine to their Medicaid programs.

  HCFA's Office of Managed Care has advised managed care plans that telemedicine may be used for Medicare beneficiaries in "at risk" Medicare HMOs, but such plans would not receive any additional reimbursement for these services. So far, no at risk plans have added telemedicine coverage. Cost-based Medicare managed care plans are limited by the same face-to-face encounter provisions as non-managed care fee-for-service Medicare providers.

  Very little information exists on private payer coverage of telemedicine. Evidence to date, however, suggests that few private payers cover telemedicine consultation services, although most cover radiology and similar imaging services. As a part of its evaluation efforts, the Office of Rural Health Policy is conducting a survey which will identify the extent of current private third party coverage of telemedicine.

  The lack of clear and consistent policies for telemedicine third party payment makes it difficult to cover the costs of telemedicine consultations with reliable sources of revenue. Both public and private payers have been reluctant to set policy for telemedicine payment without detailed information about the costs and the effectiveness of specific telemedicine applications and procedures. In particular, payers have expressed concern that the fee-for- service system contains incentives for use of the technology that may significantly increase costs without significant increase in benefit.

  Demonstrations and evaluation studies funded by HCFA, ORHP, and DOD will provide information on the cost-effectiveness of telemedicine. HCFA has awarded a major contract for a cross-cutting evaluation of all HCFA and possibly a few non-HCFA telemedicine demonstration projects. This three-year evaluation will assess payment options that will assist in the development of Medicare payment policy for telemedicine. ORHP's evaluation will provide valuable information on use of telemedicine, cost, revenues, and extent of telemedicine services in rural areas. DOD studies will provide information on clinical outcomes in the 10 major specialties most frequently consulted using telemedicine.

  These studies will provide critical information that will be helpful to both private and public payers in their structuring of payment policies. The Working Group will use this information to facilitate the promotion of cost-effective payment policies for telemedicine.

• Telemedicine and Managed Care: Managed care is rapidly becoming the dominant form of private health care coverage in this country for those under 65 years of age. Currently, over 50 percent of employed individuals in this country are under some type of managed care program for their health care. In addition, states are rapidly moving to managed care for their non-elderly Medicaid recipients under various state waivers.

  At first glance, managed care plans might be expected to embrace telemedicine as a means to lower cost through more efficient use of specialty services under capitated systems. However, it appears that managed care plans have not rushed to cover telemedicine, although a few plans do so. The HIAWG is preparing a white paper on managed care and the National Information Infrastructure which lays out basic issues and suggests steps to be taken to expand the use of telemedicine in managed care plans.

  This paper, together with findings from the ORHP survey, should provide the necessary background to enable the Working Group to evaluate the barriers to expanding private third party coverage of telemedicine, including those of managed care plans, and to recommend specific actions, most likely involving both private and public sector players, to overcome these barriers.

The above work plan is just a beginning. As health information, in general, and telemedicine, in particular, become widely recognized as significant forces in the advancement of health care, the efforts of the Working Group will expand. It fully expects to revise this initial plan as conditions mandate. In collaboration with relevant private and public sector parties, the Working Group looks forward to undertaking an important and evolving agenda in support of the Vice President's Health Information Policy initiative.

Updates on these activities will be provided in accordance with the Department of Health and Human Services reporting to the Vice President. In addition, the Working Group will prepare a report to be submitted to the Congress by January 31, 1997, in accordance with the requirements of the recent Telecommunications Reform Act (P.L. 104-104). The Act requires the Secretary of Commerce, in consultation with the Secretary of Health and Human Services, and other appropriate departments and agencies to submit a report to the Congress on the activities of the Working Group, together with any findings reached in the studies and demonstrations on telemedicine funded by the Public Health Service or other Federal Agencies. The report is to examine questions related to patient safety, the efficacy and quality of services provided, and other legal, medical, and economic issues related to the utilization of advanced telecommunications services for medical purposes.

Chair

Members