• Printer-friendly 2001 Report to Congress on Telemedicine (6.61 MB )

Tommy G. Thompson, Secretary
Claude Earl Fox, MD, MPH, Administrator
Department of Health and Human Services
Health Resources and Services Administration

February 2001

The Healthcare Research and Quality Act of 1999, Section 6, requires the Secretary of Health and Human Services (DHHS) to submit a Report to Congress on Telemedicine by 2001. Congress requested that the Report describe barriers to telemedicine, determine the extent of patient and physician satisfaction with this mode of health delivery and assess patient benefits from telemedicine services.What exactly is meant by telemedicine and telehealth? In the Department of Commerce's1997 Report to Congress, "telemedicine" referred to "the use of electronic communication and information technologies to provide or support clinical care at a distance."¹ Telehealth is a broader concept. For the purposes of this Report, telehealth is defined as the use of electronic information and telecommunications technologies to support long-distance clinical health care, patient and professional health-related education, public health and health administration.

Current Trends

One of the most important trends to emerge over the past four years is the remarkable growth and development of the Internet. While much of this report focuses on telehealth providers and the barriers they face in expanding the delivery of telehealth, this is only one part of the story. The Internet is dramatically changing the way consumers access health information, receive diagnostics and purchase pharmaceuticals. According to the Federal Trade Commission (FTC), consumer searching for online health information is increasing dramatically; it is predicted that 30 million Americans will seek health information online by 2001.²The Internet will most likely play a key role in expanding the reach of telehealth and telemedicine to the average consumer. However, this potential also brings other concerns about state jurisdiction and enforcement, physician and other health provider cross state licensure, privacy and safety issues, as discussed throughout the Report to Congress.

Key Issues

Key issues affecting the telemedicine and telehealth industry have remained the same over the past five years but their relative importance has changed with the advent of dramatic technology changes such as the wide spread adoption 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 critical barrier to the expansion of telemedicine. Even though technology has made it easier to deliver health care services using advanced communications and computers, historically few public or private payers have covered them..The Balanced Budget Act of 1997 (BBA) expanded coverage options for telemedicine but also included several requirements that preclude telemedicine's use under conditions where it is commonly being used outside of Medicare. The BBA required the Health Care Financing Administration (HCFA) to pay for telemedicine consultation services as of January 1, 1999. Some important reimbursement eligibility requirements are outlined in Table 1.

TABLE 1: HCFA Telemedicine Reimbursement Requirements Under the Medicare, Medicaid and SCHIP Benefits and Improvement Protection Act of 2000

In the first two years, many telemedicine practitioners have found the requirements under the BBA mandate too narrow for most practical purposes. Between January 1, 1999 and September 30, 2000, HCFA had reimbursed 301 claims for a total of $20,000. Several factors may account for this small number. In particular, four requirements greatly limited the number of consultations eligible for reimbursement:

• Health Professional Shortage Area (HPSA) Requirement: Medicare paid for telemedicine services only in areas that lack adequate primary care services, even though many rural communities have little or no access to specialists, such as cardiologists or psychiatrists. Often the need for specialty services drives the demand for telemedicine services.
• Fee sharing requirement: HCFA mandated fee sharing, requiring specialists to provide services at a 75% fee that HFCA then reports as a 100% fee to the IRS. Other problems included accounting and fee tracking. Most rural practitioners are not equipped to track split fees. Finally, the eligible presenter must either be the referring physician or an employee of the referring physician. In many cases, the presenter is an employee of the local hospital or clinic.
• Eligible Presenters: Although registered nurses, licensed practical nurses and other similar types of health care professionals were the most common presenters in a telemedicine setting, they are not eligible for reimbursement.
• Eligible Current Procedural Terminology Codes: The allowable codes greatly restricted what services were reimbursable under the BBA and did not include those commonly used by telemedicine practitioners.

During its last two sessions, Congress introduced over nine bills that addressed some of these limitations. On December 20th, 2000, Congress passed the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act ("the Act"). Among other things, this Act eliminates the fee-split and telepresenter requirements and expands the types of presenters, current procedural terminology codes and geographic area limits that are eligible for reimbursement. ( Table 1). Appendix 1 presents a comparison of bills and a summary of the Act.

Historically, telemedicine reimbursement expansion has been prevented by a lack of data on which to judge changes in government expenditure. The Office for the Advancement of Telehealth (OAT) worked with the Center for Telemedicine Law (CTL) and OAT's grantees to develop a series of cost models that will show the impact of expanding telemedicine coverage on any third party payer's expenditures . These "scoring" models have the advantage of being based on actual telemedicine experience in the field. Preliminary results suggest that many of the modest telemedicine reimbursement expansions introduced in the 106th Congress would have a minimal impact on Medicare expenditures. (For example, CTL/OAT estimates of the budgetary impact of Senate Bill 2505 range from $50 to $100 million over five years, as compared to the estimate of over a billion dollars for legislation in earlier years.)

Aside from Medicare reimbursement, 20 state Medicaid programs now reimburse for telemedicine services and three other states are conducting pilot programs to assess telemedicine efficacy as shown in Box 1. Some private insurers also provide limited telemedicine coverage in certain states. For example, California Blue Cross is currently funding the build-out of a statewide telemedicine network. Blue Cross- Blue Shield in Montana and North Dakota also provides some telemedicine coverage. Legal Issues, particularly those relating to cross-state licensure, were thought to be among the most critical to the expansion of telemedicine five years ago. Today, traditional licensure issues remain important, but telemedicine practitioners have found that they can provide many in state services. Moreover, consumer use of the Internet (which knows no borders) for health related information, purchase of prescription drugs and online consultations may create new legal and licensure issues, overshadowing the more traditional issues. For example, a consumer, located in state A, sues a health practitioner in state B, who has provided consultations to the consumer via a Web site. Who has jurisdiction in this case? How easily can state A enforce its state health licensure laws if the health practitioner is not licensed in state A?

Currently, about 26 states have laws regulating out-of-state telemedicine practitioners. Twenty-one require full licensure for an out-of state physician, providing telemedicine services to a patient located in that state. The other five states approach licensure in a variety of ways, such as California's registration requirement or Hawaii's permit for out-of-state physician to provide consultation to an in-state licensed physician. A list of states' licensure laws is shown in Appendix 2.

While many more states restrict physician's interstate telemedicine practice, 12 states have adopted the Interstate Nurses Licensure Compact as shown in Box 2. The compact is a licensure model based on mutual recognition. Under it, the head of the nursing licensing board will administer the Compact for his/her state.

Safety and Standards have taken on greater importance in the past few years, not only in the world of telemedicine but also in the world at large. Without widely adopted standards and guidelines, interoperability and interconnection are not possible and the great potential of telemedicine will be difficult to achieve. Older equipment often will not interconnect with newer versions of the same machine. Different brands of the same equipment will not operate with one another, making networking across projects and sometimes within a project expensive and frustrating.

In addition to technical standards, there is a need for clinical protocols and guidelines. Examples of clinical protocols for telemedicine practice include preliminary scheduling procedures, actual consult procedures and telemedicine equipment operation procedures (such as telecommunications transmission specifications). The clinical technical standard for image quality in a video transmission would specify the technical standards needed by a specialist, such as a dermatologist, to achieve the high levels of image clarity and color required to correctly diagnose a patient. Only a few professional associations have adopted either clinical practice protocols or technical standards and guidelines, as shown in Table 2. Additionally, some government agencies have worked to develop technical guidelines for telemedicine interoperability.

TABLE 2: Telemedicine Standards and Guidelines

Just as the wide adoption of telemedicine standards and protocols plays an important role in protecting public safety, the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) play a critical regulatory role. The FDA ensures the safety and effectiveness of telemedicine medical devices and software, with the Center for Devices and Radiological Health (CDRH) as the lead agency. In oversight of telemammography -- regulating standards, personnel, practice and procedures -- the FDA plays an even more critical role.

A number of federal and state regulatory agencies are working together to address health-related consumer problems on the Internet. They include state health authorities, FDA, the Justice Department and FTC. FTC plays a key oversight and enforcement role in Internet Commerce as illustrated in its December 1999 Report: Protecting Consumers Online: A Federal Trade Commission Report on the First Five Years of Its Internet Law Enforcement Program. In this report, the Commission discusses its activities to combat general consumer fraud and deception on the Internet. Since 1994, it has focused on the largest and "most egregious" fraud and deception examples, taking action against companies in more than 100 cases.

Privacy, Security and Confidentiality concerns are not unique to telemedicine. The U.S. Congress and individual state legislatures are all but certain to consider a wide range of privacy-related Internet legislation that could affect many industries next year. However, the unique privacy problems associated with personal patient information, such as HIV status, cancer or mental health, raise many important questions about personally identifiable information and its protection.

An important national privacy measure that may affect the telemedicine industry is the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Under the Administrative Simplification provision of HIPAA, the Act mandates the development and adoption of a number of national electronic health transaction standards, including standards for electronic data exchange of health information; standards for the privacy of individually identifiable health information; a national provider identifier; an employer identifier and secure electronic signatures, among others.

According to the Act, the Secretary of DHHS must develop final regulations relating to privacy standards by February 2000, if Congress has not acted by August 1999. In 1997, the Secretary together with the National Committee on Vital and Health Statistics (NCVHS), sent preliminary recommendations to Congress. In the absence of Congressional action by the mandated deadline, DHHS published a notice of proposed rulemaking in November 1999. Final HIPAA privacy rules were published December 28, 2000 and an DHHS Fact sheet 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 and disclosure of personally identifiable health information, are applicable regardless of the form the information is kept in, the methods of transmission, the time sequence of its creation and use, or the way it is communicated.

HIPAA rules cover health plans (e.g., insurers, managed care organizations, federal health programs), clearinghouses (which unify data in standardized formats) and health care providers ,who use who engage, directly or through contractual arrangements, in HIPAA standard electronic transactions.

Potentially the most challenging issue for telemedicine practitioners will be DHHS' proposal for federal privacy law to preempt state law only when states are less stringent. Thus, if state requirements are in conflict with federal ones, the rules providing more stringent privacy protections would prevail. Telemedicine practitioners could be faced with a patchwork of state privacy standards.

State laws governing health information exhibit wide discrepancies in protection, complexity and coverage as illustrated by a 50-state survey⁴ of health privacy statutes that can be found at the Health Privacy Project Web site at: http://www.healthprivacy.org/resources/statereports/exsum.html.

OAT and the Assistant Secretary's Office of Planning and Evaluation have recently funded a study and a conference entitled Privacy, HIPAA and Telemedicine that will be completed in Spring 2001. The purpose of the study is to identify privacy issues unique to telemedicine and to determine how HIPAA privacy rules may affect telemedicine practitioners and patients.

Although a detailed discussion of consumer privacy and the Internet is beyond the scope of this Report, it is of growing concern to the public. To address this problem, industry has promoted self-regulatory mechanisms such as standards for Web sites. The Health on the Net Foundation (HON) (http://www.hon.ch) and TRUSTe (http://www.TRUSTe.org) have developed some of the most widely accepted standards and "privacy seals." "Ethical principles" or "Ecodes" are another alternative. Two new industry coalitions called the Internet Healthcare Coalition (http://www.ihealthcoalition.org/ethics/ecode.html) and the Health Internet Ethics Coalition have promoted this type of self-regulation.

Despite industry's efforts to self regulate, agencies, such as the FTC, have found that industry self-regulation is not sufficient to protect consumer privacy on the Internet. In its report entitled, Privacy Online: Fair Information Practices in the Electronic Marketplace, May 2000, (http://www.ftc.gov/os/2000/05/index.htm#22) the FTC offers legislative recommendations to Congress that would set a basic level of privacy protection for all visitors to consumer-oriented commercial Web sites. The legislation would "require all consumer oriented commercial Web sites to the extent already covered by the Children's Online Privacy Protection Act of 1998 (COPPA), to implement the four widely-accepted fair information practice principles."⁵ These principles are outlined below.

• Notice: Provide consumers clear and conspicuous notice of information practices;
• Choice: Offer consumers choices as to how their personal identifying information is used;
• Access: Offer consumers reasonable access to the information the Web site has collected about them;
• Security: Take reasonable steps to protect the security of the information collected from consumers.

Telecommunications Infrastructure costs continue to represent a large percentage of overall costs in a telemedicine project's monthly budget. To alleviate some of this burden, the Telecommunications Act of 1996 charged the FCC to administer the Universal Service program, which would provide rural health care providers with a discount on their telecommunication transmission charges equaling the difference between urban and rural transmission rates.

In 1997, the FCC established the Universal Service Administrative Company (USAC), a separate, not for profit entity, to oversee both the E-Rate discount for Schools and Libraries and the Rural Health Care Program (RHCD). USAC's Rural Health Care Program issued its first funding commitments on June 25, 1999, five days before the end of the first 18-month program year. In total, 483 rural Health Care Providers received $3.4 million out of a possible $400 million, which equaled the total requested support for completed applications received by USAC that year (January 1, 1998 through June 30, 1999). In the first year, few providers completed applications for the discount, because most found they could not benefit from it under the original program.

Since the first year, the FCC has adopted a number of reforms to the program, which streamlines the discount application process, and addresses practical concerns voiced by practitioners and others. ( Appendix 5 provides a detailed history of RHCD and OAT's FCC filing on Universal Service or at http://telehealth.hrsa.gov/pubs.htm). Funding in the second year of the program, after reforms were implemented, increased to $6.1 million. Moreover the FCC and USAC expect that third year funding will increase to nearly $10 million, once all reforms have been in place for a full year.

Few statistically significant studies of patient/ physician satisfaction or telemedicine cost savings have been conducted. This dearth of research may be due to the relatively small number of telemedicine consultations in any one specialty and/or to the lack of a standard evaluation methodology to study either efficacy or patient/physician satisfaction across small groups of specialties and projects.

Despite the lack of statistical significance in most of the studies, all showed high patient satisfaction with telemedicine as shown in Table 3. Provider satisfaction was more variable, but generally moderate to high. Moreover, although one cannot generalize to all telemedicine applications, studies of specific services, such as tele-homecare and tele-dermatology, suggest that at least for these services, there may be real cost savings to be realized.

TABLE 3: Patient/Provider Satisfaction with Telemedicine

Two important trends that may greatly affect the telehealth industry and raise key policy issues are rapid technology changes and America's aging population. Shown below are technology trends that already exist and will most likely be common in the near future.

• OAT will collaborate with HCFA, state Medicaid programs, private third party payers and other relevant organizations to create a forum in which the telemedicine experiences of third party payers can be shared.
• OAT will continue to refine its telemedicine scoring models for a broad range of telemedicine applications.

• OAT will work with its grantees, the American Telemedicine Association (ATA) and other groups to expand its clinical and technical guidelines. (See http://telehealth.hrsa.gov/pubs.htm for currently completed telemedicine application guidelines).
• OAT will continue to support the work of the Advanced Technology Institute, which is developing a Telehealth Deployment Research Testbed. This work is being conducted in conjunction with the Medical University of South Carolina, West Virginia University Concurrent Engineering Research Center, Arthur D. Little, Oak Ridge National Laboratory, the Low country Healthcare Network and the CPRI-HOST consortium. The testbed will evaluate the effectiveness and practical utility of telehealth technologies by providing both laboratory and "real-world" evaluations.
• Medical Error reduction: OAT will develop a series of measures to be included in GPRA data elements to be collected by all OAT grantees.

• OAT together with the Office for the Assistant Secretary of Policy and Evaluation have funded a research paper on "Privacy, HIPAA and Telemedicine" as well as a conference on the same subject. OAT and OASPE anticipate that the final paper and conference will be completed by summer 2001 and the results made available to the public both in print and on OAT's Web site, shortly thereafter.

• OAT recently filed comments with the FCC on the question of "possible impediments to deployment and subscribership in unserved and underserved areas of the nation." (OAT's FCC filing on Pacific Basin at http://telehealth.hrsa.gov/pubs.htm.) Follow-up with the FCC on this issue continues.
• OAT also filed comments on the FCC's proposal to set aside spectrum for the use of Wireless Medical Telemetry (http://telehealth.hrsa.gov/pubs.htm). OAT's comments also reflected concern about adequate spectrum for future telemedicine applications, which may require more bandwidth than currently allocated for telemetry. This issue will most likely remain an issue in the near future.

• OAT will collaborate with other Agencies within DHHS as well as work with JWGT members to develop an evaluation strategy that uses cross-project evaluation methodologies to obtain more generalizable findings.
• Future evaluations should examine provider satisfaction, quality and cost implications of telemedicine for specific applications such as tele-homecare, teledermatology and mental health.
  

Imagine a world, where no matter who you are or where you are you get the health care you need, when you need it. Such a dream could already be a reality. Technologies such as interactive videoconferencing, the Internet, store-and-forward imaging, streaming media, satellite and other wireless communications networks already exist and can deliver health services or education over vast distances. However, these are not yet part of the landscape for our nation's rural and urban underserved peoples.
Although these technologies are available, several barriers, such as the lack of significant reimbursement, cross-state licensure problems, privacy issues, lack of universal standards and high transmission costs, have inhibited the telemedicine and telehealth industry from reaching its full potential in the United States.

In addition to these traditional barriers, the dramatic growth and use of the Internet by health consumers poses new challenges. Despite its great benefits, such as a wealth of health information or fingertip access to prescription drugs, the Internet has created serious threats to industry expansion. These include new legal, safety, privacy and confidentiality concerns for the telemedicine industry.

The Healthcare Research and Quality Act of 1999, Section 6, requires the Secretary of Health and Human Services (DHHS) to submit this Report to Congress on Telemedicine, no later than January 10, 2001. Congress requested the Report describe barriers to telemedicine, determine the extent of patient and physician satisfaction with this mode of health delivery and evaluate the extent to which patients have benefitted from telemedicine services.

What exactly is meant by telemedicine and telehealth? In the Department of Commerce's 1997 Report to Congress, "telemedicine" referred to "the use of electronic communication and information technologies to provide or support clinical care at a distance."1 Telehealth is a broader concept than telemedicine. For the purposes of this Report, it is defined as the use of electronic information and telecommunications technologies to support long-distance clinical health care, patient and professional health-related education, public health and health administration.

Current Trends
One of the most important trends to emerge over the past five years is the remarkable growth and development of the Internet. While much of this report focuses on telehealth providers and the barriers they face in expanding the delivery of telehealth, that is only part of the story. The Internet is dramatically changing the way consumers access health information, receive diagnostics and purchase pharmaceuticals. It is also conceivable that soon health providers will move much of their administrative transmissions onto the Internet. Hence, the Internet may greatly affect different aspects of telemedicine and telehealth.

According to the Federal Trade Commission (FTC), consumer online searches for health information are increasing dramatically. Thirty million Americans are expected to seek health information online by 2001.2

To establish a viable presence on the Internet the banking, credit card and retail industry, among others, have found it critical to reassure their consumers about the protection of personally identifiable information. Although online shopping, banking and auction bidding are ubiquitous, what consumer does not worry about the random stealing of information by computer hackers? More insidious is the possibility that entire identities can be stolen after a person's social security and other personal information has been made public on the Internet.

Just as other industries have found the Internet to be both a market boon and privacy bane, so the health industry may find that consumers of health information, prescriptions or other health services on the Internet, may be vulnerable. As the Georgetown University Health Privacy Project notes:

"Although health Web sites now provide a wide range of clinical and diagnostic information; opportunities to purchase products and services; interactions among consumers, patients, and health care professionals; and the capability to build a personalized health record, they have not matured enough to guarantee the quality of the information, protect consumers from product fraud or inappropriate prescribing, or guarantee the privacy of individuals' information."

Structure of the Report
The structure of the Telemedicine Report to Congress, 2001 is similar to that of the 1997 Report. Chapter III describes the current Medicare reimbursement rules for telemedicine, as well as the preliminary outcomes for the first year of this program. Chapter IV discusses legal issues affecting the proliferation of telemedicine and telehealth, including state licensure and electronic health information issues as well as other related issues, such as credentials. Chapter V outlines safety and standards issues, limited to specific telehealth concerns. Chapter VI highlights DHHS privacy rules for personally identifiable health related information that is electronically stored or transferred. This chapter also discusses how these proposed rules may affect telehealth practitioners. Chapter VII examines the Federal Communications Commission's (FCC) Universal Service Administrative Company's (USAC) Rural Health Care Program. This Chapter also highlights recent FCC reforms that address some telehealth practitioner concerns that they consider to be major barriers to applying to the program. Chapter VIII draws upon previous research to summarize the current status of patient and physician satisfaction with telemedicine and anecdotal examples of telemedicine efficacy. The final Chapter IX looks at issues that may emerge over the next few years. Specifically, Congress requests that DHHS report the following:

The extent to which patients receiving telemedicine services have benefitted from them and are satisfied with the treatment received pursuant to the services;
The extent to which medical outcomes for such patients would have differed if telemedicine services had not been available to them;
The extent to which physicians involved with telemedicine services have been satisfied with the medical aspects of the services; and
The extent to which primary care physicians are enhancing their medical knowledge and experience through the interaction with specialists provided by telemedicine consultations.

Overview

One of the greatest stumbling blocks to the expansion of the telehealth industry has been lack of reimbursement for telemedicine and telehealth services. Advances in telemedicine technology have made it easy to deliver health care services over a distance but few public or private payers will pay telemedicine costs. Until recently, Medicare has not had an explicit policy to pay for telemedicine services. Historically, Medicare reimbursed some services that did not traditionally require face-to-face contact between a patient and practitioner. For example, it covered EKG or EEG interpretation, teleradiology and telepathology in most of the nation, depending on individual Medicare carrier policies. However, the Balanced Budget Act of 1997 (BBA) brought about a significant change in Medicare telemedicine reimbursement policy. As of Jan. 1, 1999, Congress required the Health Care Financing Administration (HCFA) to pay for telemedicine consultation services under the BBA. Some important reimbursement eligibility requirements are outlined in Table 1 below.

TABLE 1: HCFA Telemedicine Reimbursement Requirements Under the Medicare, Medicaid and SCHIP Benefits and Improvement Protection Act of 2000

• Health Professional Shortage Area Limitations. Only patients in Health Professional Shortage Areas (HPSAs) were eligible for reimbursement under the BBA. This restriction greatly narrows the number of people, who might benefit from telemedicine, and disregards the needs of many rural patients, who may have access to a nurse or general practitioner, but not to specialists such as cardiologists, psychologists, dermatologists, etc.
• Fee-sharing requirement. Consulting physicians found fee-sharing problematic because they receive only 75 percent of normal pay for their services. Moreover, HFCA reports consultant payment to the IRS at 100 percent. Other problems with fee-sharing included accounting and fee tracking. Most rural practitioners are not equipped to track split fees. Finally, perhaps the most important ramification of the fee-sharing requirement is that, to be paid, the eligible presenter must either be the referring physician or an employee of the referring physician. In many cases, the presenter is an employee of the local hospital or clinic.
• Eligible presenters. In many (if not most) places rural clinics are staffed only by registered nurses (RNs), licensed practical nurses (LPNs) or by health technicians, who were all ineligible presenters under the Act. In a survey of 20 telehealth networks representing 4,761 telehealth encounters between Jan. 1, 1999 and June 30, 1999, the University of Missouri found that:
  • LPNs and RNs make up the majority of patient presenters in almost all telehealth networks, but they are not eligible presenters.
  • 171 or 3.6% of all encounters involved a patient interaction with either an occupational, physical, speech therapist or clinical psychologist.
  • Only 7% of referring practitioners or employees of the referring practitioner acted as patient presenters in consultations. This suggests that if all of the reported 4,761 telehealth activities were Medicare, less than 7 percent of all cases would meet HCFA's eligible presenter criteria.
• Eligible Current Procedural Terminology Codes. Only a handful of CPT codes were eligible for HCFA telemedicine reimbursement under BBA. This limitation greatly restricted the types of services for which practitioners could be reimbursed. Many services that telemedicine providers already offer were not included in these codes.

• OAT will collaborate with HCFA, state Medicaid programs, private third party payers and other relevant organizations to create a forum in which the experiences of third party payers with telemedicine can be shared.
• OAT will continue to refine its telemedicine scoring models for a broad range of telemedicine applications.
  

Five years ago, interstate licensure issues were thought to be among the most critical barriers to telemedicine. Today, the problem has been compounded by the growth and consumer use of the Internet. The Internet has also raised new legal issues that may grow to overshadow interstate licensure.

Since the Department of Commerce's 1997 Report to Congress on Telemedicine was published, the problem of multiple state licensure requirements for telemedicine providers has not improved and in some ways has worsened. Since then, more states have adopted restrictive laws requiring out-of-state telemedicine practitioners to obtain local state medical licenses.

State Medical Licensure and Licensure Models

Historically, states have had the authority to regulate activities affecting the health, safety and welfare of their citizens. Hence, health professionals in the United States are licensed at the state level. States define the process and procedures for granting a health professional license, renewing a license and regulating medical practice within the state. The Federal government does have the authority to establish national regulations such as those under Medicare that set specific eligibility requirements for reimbursement. However, there is a strong legal presumption against federal preemption of state licensure laws. Therefore, unless Congress acts to regulate telemedicine licensure, the states themselves must decide to harmonize their standards and laws. Tables 2 and 3 below illustrate generic and specific licensure models that could be used for multiple state health licenses.

TABLE 2: General Licensure Models

Source: Department of Commerce, "Report to Congress on Telemedicine," 1997.

TABLE 3: Specific Licensure Models

Sources: Commerce Department, "Report to Congress on Telemedicine," 1997; Western Governors Association

In early 1997 only 11 states had telemedicine licensure laws. Today, about 26 states have introduced licensure laws pertaining specifically to telemedicine that may make it more difficult for physicians to practice telemedicine across state lines. Appendix 2 lists these states. Making it easier for nurses to practice across state lines, the National Council of State Boards of Nursing

(NCSBN) developed a licensure model based on mutual recognition called the Interstate Nurse Licensure Compact. As described in Box 2, NCSBN promotes the introduction of legislation and the adoption of state laws to allow nurses to practice across state borders without being licensed outside their home states.

Currently, 12 states have adopted the Nurse Licensure Compact as listed in Box 3. Other organizations, such as the National Association of Pediatric Nurse Associates, and Practitioners, and the Association of Women's Health, Obstetric and Neonatal Nurses, believe that alternative models like the national licensure model, as described in Table 2 and in their letter in Appendix 3 may be a better solution.

Consumers with access to the World Wide Web can peruse volumes of health information, join chat groups, purchase pharmaceuticals in privacy and consult a health care practitioner for a fee. But together with these benefits, the Internet has added new twists to old licensure problems and has raised other legal issues. For example, given the nature of the Web, it may be difficult for a consumer or state government to determine whether or not particular Web sites comply with states' laws pertaining to a physician's or other health practitioner's interstate practice. Theoretically, online health practitioners, who do not provide specific medical advice or diagnosis, would probably not be seen as practicing medicine across state lines. Realistically however, these consultations can fall into large gray areas.

Perhaps the larger legal issue for many states may be their ability to enforce their own state health laws. For example, if a consumer, located in state A, sues an on-line practitioner, based in state B, who has jurisdiction in this case? Does the jurisdiction change if the interactive consultation was accomplished via the Web, over the telephone, via email or a two-way teleconferencing unit? What happens if the Web site was created and staffed outside the United States? What recourse would the consumer have if the Web site was immediately taken down but reconfigured under a different address the next day?

These legal questions apply not only to Web based companies but also to companies that provide health care consultations using any type of technology cross state boarders. For example, many health insurance companies now give their clients the option to consult with a nurse over the telephone before seeking face-to-face medical consultation. Large health insurance companies with a national base will often subcontract to a company with a central office staffed with nurses, who field incoming nationwide calls. Do these nurses need to be licensed in every state in order to answer these calls?

A recent DHHS report, Wired for Health and Well-Being, states that "the extent and nature of liability associated with IHC (Interactive Health Communication) applications are unclear. Providing medical advice through IHC applications, including Web sites, increases potential liability for developers. To what extent the developers, sponsors, content providers, or others involved in the design and implementation of the application will be liable for damages is unknown. In the absence of precedents in this area, future legal action and case law may provide some clarity on these issues." (Wired for Health and Well-Being, DHHS, Office of Public Health and Science, April 1999)

Finally, whether Web developers are state certified or not, the issue of illegal drugs sold over the Internet or legal drugs sold without an initial patient examination by a physician has created a growing safety and legal challenge for both state and federal regulators, as discussed in the next chapter.

Another dilemma that has not been resolved is whether or not health care practitioners providing telehealth services should be certified in this area. Earlier this year, the Joint Working Group on Telemedicine (JWGT) developed a draft discussion paper (See Appendix 4), exploring the advantages and disadvantages of certification. According to the paper, there is confusion about the meaning of the term. Credentialing, certification, privileging and licensing are often used interchangeably to describe the validation of practitioners' competencies in telehealth. National professional and provider organizations and government agencies are increasingly queried about whether there is a need for additional and/or official validation of practitioners' competency to engage in telehealth. And it is unclear whether the questions about validation relate either solely to the equipment used or to the clinical care delivered. Additional complexity surrounds the relationship of the validation of individuals versus organizations.

The JWGT hopes to compile comments about the draft paper from interested parties and provide a summary of its findings.

Although little has been resolved about individual accreditation, there has been change at the institutional level. In the fall of 2000, the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), an independent, not-for-profit organization, adopted new credentialing standards for hospitals using telemedicine. The full text of these new standards, which become effective January 1, 2001, can be found at http://www.jcaho.org/standard/medicalstaff_rev.html#Telemedicine. JCAHO evaluates and accredits nearly 20,000 health care organizations and programs in the United States. Its accreditation is recognized nationwide as a symbol of quality that indicates that an organization meets certain performance standards. To earn and maintain accreditation, an organization must undergo an on site survey by a JCAHO survey team at least every three years.⁴ The new standards amend medical staff standards within the accreditation manual for hospitals. According to the manual:

"If a telemedicine practitioner prescribes or renders a diagnosis, or otherwise provides clinical treatment to a patient, the telemedicine practitioner is credentialed and privileged by the organization receiving the telemedicine service. An organization may use credentialing information from another Joint Commission accredited facility, so long as the decision to delineate privileges is made at the facility that is receiving the telemedicine service."

Next Steps

• The Joint Working Group on Telemedicine will work with various state governmental and professional groups to assess the feasibility of developing common licensure application forms, similar to the common college application form, accepted at a number of universities. Common applications will reduce time and costs associated with completing numerous different applications that vary in state requirements and paperwork. States, in turn, can more easily develop a comprehensive database on practitioners and track them across state borders.
  

Thanks to advances in technology, telemedicine practitioners have shifted easily from the phone to the personal computer to the Internet to wireless handheld devices. Yet, the full potential of these advances cannot be reached without clinical and technical standards and guidelines.

In the past few years, the need for standards has taken on greater importance, not only in the world of telemedicine, but also in the world at large. Without widely adopted standards and guidelines, interoperability and interconnection are not possible and the great potential of telemedicine will be difficult to achieve. Older equipment often will not connect with newer versions of the same machine; different brands do not operate with one another, making networking across projects and sometimes within a project expensive and frustrating.

In addition to technical standards, clinical protocols and guidelines are needed. Clinical protocols for telemedicine practice include preliminary scheduling procedures, actual consult procedures and telemedicine equipment operation procedures (such as telecommunications transmission specifications). The clinical technical standard for image quality in a video transmission would specify the technical standards needed by a specialist such as a dermatologist to achieve the high levels of image clarity and color required to correctly diagnose a patient.

Unlike most clinical health professional groups, U.S. telemedicine practitioners have not formally developed and adopted many clinical protocols or technical standards for telehealth applications. However, a few professional associations have adopted some clinical practice protocols.

• The American Telemedicine Association recently adopted Telehomecare Clinical Guidelines, posted on their Web site at http://www.atmeda.org/news/guidelines.html. Additionally, the Association has posted a May 1999 working draft of its Clinical Guidelines for Telepathology.
• The American Psychological Association has posted clinical guidelines on its Web site to guide in the practice of telepsychiatry.
• The American Dermatology Association has drafted proposals for clinical protocols for teledermatology.
• The American Nurses Association, assisted by the Interdisciplinary Telehealth Standards Working Group, developed the "Core Principles on Telehealth" in March 1998 and "Competencies in Telehealth Technologies in Nursing in March 1999.

The following is a short list of technical standards and guidelines that have been adopted or have been proposed that relate directly or indirectly to telemedicine and telehealth.

• The American College of Radiology and the National Electronic Manufacturers Association created a uniform set of communication standards called DICOM (Digital Imaging and Communications in Medicine).
• HL 75: standard for data exchange. The most widely used HL7 specification is the Application Protocol for Electronic Data Exchange in Healthcare Environments. This is a messaging standard that enables disparate healthcare applications to exchange data.
• Kennedy-Kassebaum Health Insurance Portability and Accountability Act of 1996 (HIPAA) mandated the development and adoption of standards for electronic exchange of health information for administrative purposes. As of December, 2000 DHHS released its final rule on privacy practices for covered entities such as health plans, clearing houses and providers who engage in electronic transactions.
• OAT and the JWGT organized a workshop in September 1999 to address the need for guidelines in the area of technical standards for telemedicine practice. Several guidelines have already been completed for telecardiology, teledermatology, telerehabilitation, teleopthamology and tele-psychiatry. (See: http://telehealth.hrsa.gov/pubs.htm) Additionally, OAT has funded a grant to the Advanced Technology Institute to develop a technical assessment center. This Telehealth Deployment Research Test bed will establish a national distributed test bed that will evaluate the effectiveness and practical utility of telehealth technologies by providing laboratory and "real world" evaluations.

Widely adopted standards and guidelines not only serve as a foundation for interoperability and interconnection but also to protect public health. The US Federal Food and Drug Administration (FDA) plays a critical regulatory role in ensuring the safety and effectiveness of telemedicine medical devices and software with the Center for Devices and Radiological Health (CDRH) acting as lead agency. This role was discussed at length in the Department of Commerce's 1997 Report to Congress on Telemedicine (See Appendix 5).

Over the past five years, the FDA has continued its oversight of medical devices and software associated with telemedicine, developed guidelines, and provided assistance to industry and other regulators through the work of several telemedicine related working groups. For example, the Telemetry Working Group worked with the FCC to provide new spectrum for wireless medical service after digital TV signals interfered with wireless medical telemetry equipment in 1999. The Software Working Group has developed guidelines for software contained in Medical Devices and the Telemedicine Working Group has developed guidelines on Medical Image Management Devices, on Digital Mammography and Picture Archiving and Communications Systems and Related Devices. Given the growing importance of the home health industry, the FDA and the National Science Foundation cosponsored the "Workshop on Home Care Technologies for the 21st Century." The FDA also recently approved Tele-homecare equipment for market. Current telemedicine related FDA guidelines can be found at the following sites:

• Guidance for the Submission of Premarket Notification for Medical Image Management Devices, (7/27/2000) http://www.fda.gov/cdrh/ode/guidance/416.pdf.
• Guidance for Industry: Wireless Medical Telemetry Risks and Recommendations (9/27/2000) http://www.fda.gov/cdrh/comp/guidance/1173.html
• FDA Talk Paper: FDA approves first digital mammography system. (1/31/2000) http://www.fda.gov/bbs/topics/ANSWERS/ANS01000.html
• ODE: Guidance for the Content of Premarket Submissions for Software Contained in Medical Devices. (5/27/98) http://www.fda.gov/cdrh/ode/57.html or ttp://www.fda.gov/cdrh/ode/software.pdf
• MQSA Regulations relevant to new mammographic modalities are in 21CFR900: Quality Mammography Standards (as amended): http://www.fda.gov/cdrh/mammography/frmamcom2.html#12

Another notable change in FDA's role in telehealth is its growing involvement in the oversight of relevant Internet activities. Over the past few years, some Web sites have offered illegal drugs or prescription drugs based on questionnaires rather than a face-to-face examination by a licensed health care practitioner. Some off-shore sites offer prescription drugs with any prescription. The FDA is working with the National Association of Boards of Pharmacy (NABP), which created a program in 1999 called Verified Internet Pharmacy Practice Sites or VIPPS.

The program gives consumers a single place to check out an online pharmacy to ensure that it meets current standards. To become certified by VIPPS, an online pharmacy must meet the licensing and inspection requirements in the state where it is located and in each state to which it dispenses pharmaceuticals. The FDA has also worked with the Federation of State Medical Boards on prescribing issues. The FDA's role in this area compliments that of the Federal Trade Commission, a key player in enforcement (see below). Moreover, states remain primarily responsible for regulating and licensing of health care providers and pharmacies. About 13 states have recently passed laws that require a physical examination before prescribing medication either over the phone or over the Internet, as shown in Box 4 .

A number of federal and state regulatory agencies are working together to address health-related consumer problems on the Internet. They include state health authorities, the Federal Food and Drug Administration, the Justice Department, and the Federal Trade Commission. The Federal Trade Commission plays a key oversight and enforcement role in Internet Commerce as illustrated in its December 1999 Report. In this report the Commission discusses its activities to combat general consumner fraud and deception on the Internet. Since 1994, it has focused on the largest and "most egregious" fraud and deception examples, taking action against companies in more than 100 cases. As shown in Box 5, the Commission has made false or unsubstantiated health claims online a law enforcement priority.

Despite the actions of regulators, consumers must bear the major burden of determining the safety and privacy of health related Web sites that they use. Several US Government-sponsored Web sites for consumer health information are reviewed and links are carefully selected, with the selection criteria described on each site. Several years ago, DHHS introduced its Web based "healthfinder®" - an Internet Web site (http://www.healthfinder.gov) that provides search capabilities on health information. Healthfinder® includes links to other important government health sources such as Medlineplus (http://medlineplus.gov/), created by the National Library of Health. Other links to the Center for Disease Control, the FDA and the National Cancer Institute name just a few of the myriad Federal government health information sources. While the Federal government has made credible health information more accessible to consumers on the Web, private and non-profit company Web sites have also proliferated. These health-oriented Web sites range widely from those providing general health information to those selling pharmaceuticals to those that provide a medical opinion for a fee.

For any such Web site, consumers may find it difficult to determine the "quality" of the site. Consequently, the DHHS' national Healthy People 2010 initiative includes the goal of increasing the number of health related Web sites that disclose quality standards information. "Quality"6 here is defined as more than just the quality of information at the site, including among other things, elements that relate to reliability, value and user protections. Outlined below is the information DHHS recommends be disclosed to users on health related Web sites:

• Identity of Web site developers
• Site Owner's/Developer's contact information
• Potential conflicts of interest/bias
• Purpose of the site
• Original sources of content
• Privacy and confidentiality protection of personal information
• Site evaluation methodology
• Content updates

A recent article, Proposed Frameworks to Improve the Quality of Health Web Sites, reviews and compares this DHHS framework to three other frameworks for the Quality of Health Sites. (http://www.medscape.Medscape/GeneralMedicine/journal/2000/v02.n05)

The Institute of Medicine's report, To Err is Human: Building a Safer Health System, brought to public attention data known in the medical community for some time.7 Extrapolating results from a number of studies, the report concluded that 44,000 to 98,000 Americans die each year as a result of medical error. National costs range between $17 billion and $29 billion. Of note, is that these data deal almost exclusively with hospitalized patients. The consensus opinion of experts on human error is that many medical errors are the result of systemic problems rather than specific actions by individuals. Complexity of systems has been repeatedly shown to increase the likelihood that errors will occur.

This relationship between complexity and error may have implications for telemedicine practice. As noted in the Institute of Medicine Report, Telemedicine: A Guide to Assessing Telecommunications in Health Care, published in 1996:

"Telemedicine is not a single technology or a discrete set of related technologies; it is rather, a large and very heterogeneous collection of clinical practices, technologies and organizational arrangements. In addition, widespread adoption of effective telemedicine applications depends on a complex, broadly distributed human infrastructure that is only partly in place and is being profoundly affected by rapid changes in health care, information and communications systems."

This statement clearly identifies and articulates the rationale for a careful, robust and proactive approach to the identification, reporting and analysis of medical errors encountered in the practice of Telemedicine activities.

• OAT will work with its grantees, the American Telemedicine Association (ATA) and other groups to expand its clinical and technical guidelines. (See http://telehealth.hrsa.gov/pubs.htm for current guidelines.)
• OAT will continue to support the work of the Advanced Technology Institute, in developing a Telehealth Deployment Research Testbed. This work is being conducted in conjunction with the Medical University of South Carolina, West Virginia University Concurrent Engineering Research Center, Arthur D. Little, Oak Ridge National Laboratory, the Low country Healthcare Network and the CPRI-HOST consortium. The testbed will evaluate the effectiveness and practical utility of telehealth technologies by providing both laboratory and "real-world" evaluations.
• OAT will develop a series of measures to be included in its performance measurement data collection system with common data elements to be collected by all OAT grantees. These measures should help document the contribution of telemedicine technologies in reducing the incidence of medical errors.

Privacy, security and confidentiality concerns are not unique to telemedicine. Industries such as banking, credit card and health care are particularly concerned about personally identifiable information and the possible consequences that could arise should sensitive information be made public. Advances in technology have brought great benefits as well as drawbacks in this area. Many view loss of privacy as part of living in the 21st Century. As Scott McNealy, Chairman and CEO of Sun Microsystems has succinctly put it: "You have no privacy-so get over it!" Fortunately, Congress, a number of state governments and privacy advocates provide a balance to this point of view.

A non-official "working definition"⁸ of these concepts is that Privacy is an individual's claim to control the use and disclosure of personal information. This claim is backed by the societal value representing that claim. Confidentiality is a status accorded to information that indicates it is sensitive for stated reasons and therefore must be protected and access to it controlled. Security are the safeguards (administrative, technical, or physical) in an information system that protect it and its contents against unauthorized disclosure, and limit access to authorized users in accordance with an established policy.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) not only affects employees' health insurance portability but under the Administrative Simplification (AS) provisions also mandates the development of far reaching national standards for electronic health transactions. These standards include electronic transaction standards for electronic exchange of health information for administrative purposes; standards for the privacy of individually identifiable health information; a national provider identifier; an employer identifier; and secure electronic signatures, among others.

According to the Act, the Secretary of DHHS must develop final regulations relating to privacy standards by February 2000, if Congress has not acted by August 1999. In 1997, the Secretary together with the National Committee on Vital and Health Statistics (NCVHS), which serves as the statutory public advisory body to the Secretary, sent preliminary recommendations to Congress. In the absence of Congressional action by the mandated deadline, DHHS published a notice of proposed rulemaking in November 1999. Final HIPAA privacy rules were published December 28, 2000 and an DHHS fact sheet on these rules can be found in Appendix 7. The complete text and the summary can be found at: http://aspe.hhs.gov/admnsimp.

HIPAA privacy rules cover health plans (e.g., insurers, managed care organizations, federal health programs), health clearinghouses (which unify data in standardized formats) and health care providers, who use who engage, directly or through contractual arrangements, in HIPAA standard electronic transactions. Eligible individually identifiable health information can be in electronic, paper or oral format. Thus, the general principles for the use and disclosure of personally identifiable health information are applicable regardless of the form the information is kept in, the methods of transmission, the time sequence of its creation and use, or the way it is communicated. Consequently, the proposed standards for the privacy of individually identifiable health information may greatly affect how the healthcare industry as a whole and the telemedicine industry in particular protects privacy in the future.

Potentially one of the most challenging issues for telemedicine practitioners will be DHHS' proposal for federal law to preempt state law only when state privacy law is less stringent. If state law is in conflict with federal regulatory requirements, the rules providing more stringent privacy protections should prevail. If many states have more stringent privacy laws, they would all predominate and telemedicine practitioners could be faced with a patchwork of state privacy standards. For example, should telemedicine specialists at a hospital in state A, who confer with patients in states B, C, D and E, determine which state law of the five states is the most stringent for privacy and comply with that state law?

All states have laws governing the use and disclosure of health information; however, there are wide discrepancies in protection, complexity and coverage among them. Moreover, there is typically no one statute governing health data within a state. The Health Privacy Project of the Institute for Health Care Research and Policy at Georgetown University has compiled a comprehensive 50-state survey of health privacy statutes. A summary of findings is found at the Health Privacy Project Web site at: http://www.healthprivacy.org/resources/statereports/exsum.html. At this time, it is too early to predict the impact HIPAA privacy requirements will have on the health industry at large or the telehealth industry in particular. On one hand, ensuring and maintaining patient privacy and security measures are good business practice. These practices could provide greater reassurance to those reluctant to participate in telemedicine for privacy or other reasons. On the other hand, specific requirements that do not reflect telemedicine common practices may create problems. Whether HIPAA requirements prove to be too burdensome for telemedicine practitioners or whether HIPAA will create a "chilling" effect on the industry remains to be seen.

OAT and the Assistant Secretary's Office of Planning and Evaluation have recently funded a study and a conference entitled Privacy, HIPAA and Telemedicine that will be completed in Spring 2001. The purpose of the study is to identify privacy issues unique to telemedicine and to determine how HIPAA may affect telemedicine practitioners and patients. The study will draw upon the experience of OAT's grantees, who include over 60 telemedicine networks and over 400 sites.

As we discuss in the Chapter on Emerging Trends and Policy Issues, technology changes in the industry may call for retrofitting HIPAA rules. HIPAA rules do not necessarily cover all consumer-oriented Internet Web sites that collect, store and maintain personally identifiable consumer information. Thus, this privacy measure does not cover an important telemedicine and consumer arena. A further discussion of this subject is highlighted below.

While a detailed discussion about consumer health privacy online is not within the scope of this report, it is important to note some recent findings. Over the past few years, consumer concerns about privacy on the Internet have escalated. According to a new Gallup poll commissioned by the MedicAlert Foundation, "almost 90% of participants said that, in general, the confidentiality of their personal health information was important, and almost 85% said the were "concerned" that this information could be given to others without their consent."⁹ The public's concern about privacy online may be justified, according to several recent reports and surveys.

For example, Georgetown University recently released a report, called the Health Privacy Project (http://ehealth.chcf.org/), about the practice of privacy protocols on health related web sites. The five major findings are:

• Consumers are using health Web sites to better manage their health, but their personal information may not be adequately protected.
• Visitors to health Web sites are not anonymous, even if they think they are.
• Health Web sites recognize consumers' concern about the privacy of their personal health information and have made efforts to establish privacy policies; however, the policies fall short of truly safeguarding consumers.
• There is inconsistency between the privacy policies and the actual practices of health Web sites.
• Health Web sites with privacy policies,that disclaim liability for the actions of third parties on the site, negate those very policies.

Other notable reports that discuss consumer privacy and the Internet include those released by the FTC (see below) and a series of publications, included in a special edition of Health Affairs, Vol. 19, No. 6. According to one, entitled Virtually Exposed: Privacy and E-Health, "a recent study of 21 leading health related Web sites found that the polices and practices of many fell short of consumers' expectations for privacy." The publication also pointed out news stories, highlighting the lax security for information shared and maintained online, as shown in Box 7. Consumers are using health Web sites to better manage their health, but their personal information may not be adequately protected.

To address these types of problems and concerns, industry has promoted self-regulation by developing standards for Web sites. The Health on the Net Foundation (HON) (http://www.hon.ch) and TRUSTe (http://www.TRUSTe.org) promote some of the most widely accepted standards and "privacy seals". Another industry approach is the promotion of "ethical principles." Two new industry coalitions called the Internet Healthcare Coalition (http://www.ihealthcoalition.org/ethics/ecode.html) and the Health Internet Ethics Coalition (http://www.hiethics.org/Principles/index/index.asp) have proposed the adoption of "ethical principles" or "Ehealth codes" of conduct. Some of the principles recommended by the Internet Healthcare Coalition are candor, honesty, quality and informed consent. Principles adopted by the Health Internet Ethics Coalition include a commitment to adopt a privacy policy, enhanced privacy protection for health related personal information, safeguarding consumer privacy in relationships with third parties, and disclosing ownership and sponsorship information.

Both the states and Congress have also responded to consumer privacy concerns by introducing a large number of bills that attempt to protect the privacy of personal information collected from the Internet. For example, Congress introduced and passed the Children's Online Privacy Protection Act of 1998. This law requires the FTC to develop regulations, protecting the privacy of personal information collected from and about children on the Internet and to provide greater parental control over the collection and use of that information. Recently, Congress introduced the Health Information Privacy Act (H.R.1941); the Medical Information Protection and Research Enhancement Act of 1999 (H.R.2470); the Consumer Privacy Protection Act (SB 2606 IS); the Consumer Internet Privacy Protection Act of 1999, (H.R.313 IH); and the Consumer Internet Privacy Enhancement Act, among other bills that seek to protect the privacy of consumers who use the Internet.

As noted in the previous Chapter, the FDA, Department of Justice and state governments all have roles in online regulation and enforcement but the FTC has emerged as a key online consumer protection regulator, overseeing privacy protection and deceptive trade practices on commercial Web sites. The FTC has published a number of reports on online consumer protection, including Protecting Consumers Online: A Federal Trade Commission Report on the First Five Years of Its Internet Law Enforcement Program, 1999. It also recently submitted a Report to Congress, entitled Privacy Online: Fair Information Practices in the Electronic Marketplace, May 2000 (http://www.ftc.gov/os/2000/05/index.htm#22). Among other things, this Report establishes the FTC's authority to regulate personal data collected online, based on Section 5 of the Federal Trade Commission Act and the Children's Online Privacy Protection Act. However, the FTC still lacks authority to require Web companies to adopt standard information practices such as its Privacy Principles. These four widely accepted information privacy principles are outlined below:

• Notice: Provide consumers clear and conspicuous notice of information practices;
• Choice: Offer consumers choices as to how their personal identifying information is used;
• Access: Give consumers reasonable access to the information the Web site has collected about them;
• Security: Take reasonable steps to protect the security of the information collected from consumers.

While the FTC continues to strongly encourage industry self-regulation, its 2000 Report Survey demonstrates that self-regulation alone has not been sufficient. According to the Report, only 20% of the busiest Web sites comply with FTC Information Privacy Principles and only about 41% of all Web sites comply with at least two principles.

In the past, the FTC has been reluctant to recommend legislative remedies ut in the 2000 Report, the FTC offers legislative recommendations to Congress that would set a basic level of privacy protection for all visitors to consumer-oriented commercial Web sites. The legislation would "require all consumer oriented commercial Web sites to the extent already covered by the Children's Online Privacy Protection Act of 1998 (COPPA), to implement the four widely-accepted fair information practice principles, in accordance with more specific regulations to follow."¹⁰

• OAT together with the Office for the Assistant Secretary of Planning and Evaluation have funded a research paper, Privacy, HIPAA and Telemedicine, as well as a conference on the same subject. OAT and OASPE anticipate that the final paper and conference will be completed by summer 2001 and the results made available to the public both in print and on OAT's Web site, shortly thereafter.
  

Five years ago Congress passed the landmark Telecommunications Act of 1996 (the Act), providing a blueprint for major changes in the telecommunications industry, such as opening up competition between long distance carriers and the Regional Bell Operating Companies. The Act also stated that rural health care providers (HCPs) should have access to advanced telecommunications services at reduced rates.

In the Act, Congress charged the Federal Communications Commission (FCC) with administering the Universal Service program that would provide rural health care providers with a discount on their telecommunication transmission charges equaling the difference between urban and rural transmission rates. In 1997, the FCC established the Universal Service Administrative Company, (USAC) a separate, not for profit entity, which oversees both the E-Rate discount for Schools and Libraries and the Rural Health Care Program (RHCD).

After a number of false starts, the Rural Health Care Program issued its first funding commitments on June 25, 1999, five days before the end of the first 18-month program year. In total, 483 rural health care providers received $3.4 million out of a possible $400 million, which equaled the total requested support for completed applications received by USAC that year (January 1, 1998 through June 30, 1999).

Since then, the FCC has adopted a number of reforms to the program, as outlined below, which streamline the discount application process, and address practical concerns voiced by practitioners and others. Specifically, the FCC:

• Expanded the list of telecommunication carriers eligible to participate in the program to include non-ETC (long distance) carriers;
• Streamlined the application process;
• Changed the discount calculation to distance based charges paid by rural healthcare providers rather than a comparison of urban and rural published tariffs; and Eliminated bandwidth and quantity limits so that any bandwidth and any number of services could be supported.
  Funding in the second year of program, after reforms were implemented, increased to approximately $6.1 million. Moreover the FCC and USAC expect that third-year funding figures will increase to nearly $10 million, once all reforms have been in place for a full year.

Next Steps
The Office for the Advancement of Telehealth (OAT) recently filed comments with the FCC on the question of "possible impediments to deployment and subscribership in unserved and underserved areas of the nation." (See OAT's FCC filing on Pacific Basin at http://telehealth.hrsa.gov/pubs.htm) Follow-up with the FCC on this issue continues.
OAT also filed comments on the FCC's proposal to set aside spectrum for the use of Wireless Medical Telemetry. (See http://telehealth.hrsa.gov/pubs.htm) OAT's comments also reflected concern about adequate spectrum for future telemedicine applications, which may require more bandwidth than currently allocated for telemetry.

Two important trends that may greatly affect the telehealth industry and raise key policy issues are rapid technology changes and the aging population of America. However, predicting the future of the telehealth industry and the technical standards that will underpin "next generation" technology is like predicting the lottery. At most, we can describe some important emerging trends in the telehealth industry over the short term and suggest some related policy issues for the future.

Over the past five years, significant changes in the telehealth industry have been tied to rapid

technology advances and the convergence of the communications, media and computer industries. What has been even more dramatic is the exponentially expanding global reach of the Internet, which grew out of a community of U.S. academic and military developers to reach a world wide global audience in just a few years. Technology trends that will likely influence the near future of the telehealth industry and dictate the need for technical standards and guidelines are:

• Next generation Internet;
• The digitization of information; and
• The migration toward wireless communications.

As consumers and businesses find more ways to use the Internet in their homes and businesses, the next generation Internet will enable these tasks to be accomplished faster, more securely and reliably than on our present system. Part of the anticipated next generation Internet, Internet2 is a joint venture by academia, the federal government and industry. This group is 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 Internet applications such as Internet Protocol (IP) multicasting, differentiated service levels and advanced security. It will also allow researchers to test and resolve problems such as bandwidth constraints, quality and security issues.

DigitizationSimilar to the next generation Internet, the digital revolution is already upon us. Digitized data, voice, still images and motion-video can be mixed, matched, melded and sent over myriad types of conduits. Advances in digital and compression technology enable vast amounts of information to be stored onto smaller and smaller chips. Applications of this technology include the creation of digital medical libraries and medical databases, as well as the potential to widely adopt Electronic Medical Record Systems and Smart Cards that can hold medical information on a card the size of a credit card. Smart cards are already 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 to easily integrate telemedicine clinical data onto these systems and cards.

The use of wireless telemetry in hospital settings is already standard practice as discussed in the Chapter on Safety and Standards. (Examples of medical telemetry equipment include heart, blood pressure and respiration monitors.) In addition, Emergency Medical Services companies are or will be important users of telemetry and other wireless technology. Companies already use wireless telemetry or more advanced wireless technology such as wireless interactive video on emergency vehicles and to communicate with emergency physicians. It enables a paramedic to confer with an emergency physician for an early assessment, well before the patient's arrival at the hospital. Telemedicine equipment can be as simple as a laptop computer with desktop video conferencing capabilities that provide simultaneous two-way video, two-way voice, vital signs, cardiac and other data to a trauma center. Wireless technology is also useful in an emergency care hospital because emergency physicians, consulting a hand-held wireless device, do not have to leave the patient's side while researching unfamiliar symptoms.

Other wireless technology applications in telemedicine and telehealth will emerge as people adopt wireless applications in their every day lives. For example, the average consumer will be able to carry a mobile library of health information and diagnostics contained in a pocket-sized, handheld wireless computer. With such a wireless palm computer, the practitioner can send patient medical information from the hand held device to another wireless device next door or around the world or to a main data center in the hospital for storage.

Related Technology Policy Issues

Policy makers have not been able to anticipate the changes brought about by the rapid technological advances, revolutionizing the health care industry. In just the past five years, discoveries related to DNA sequencing, the Human Genome Project, cloning and other scientific breakthroughs have raised questions about ethics, privacy and security. These types of discoveries combined with the exponential growth and use of the Internet have created a "policy lag" whereby policy is developed and implemented many months or even years after technology has changed lives, businesses and health care delivery. In the past, the development of regulatory policy, technical standards and protocols could be created over a number of years but not now. Internet time relates not only to businesses that must adjust to rapid industry changes but also to industry regulators.

Federal health privacy laws such as the Health Portability and Administrative Act (HIPAA) were conceived a few years before anyone could anticipate the dramatic growth and global reach of the Internet or the convergence of cable, digital, telephony and video technologies. HIPAA rules did not anticipate health practitioners, who could send multiple or a billion copies of a patient record in both text and video clips over the Internet in the form of email. Consequently, HIPAA policy and rules may have to be retrofitted to the current technology landscape and its future possibilities. For example, HIPAA proposed rules do not cover many health-related Web sites. The Next Generation Internet will raise other important privacy and security issues as health care administration and services migrate toward Internet and wireless technologies.

With an increase in the use of advanced wireless technologies, such as hand-held devices with video Internet capabilities, there will be a critical need for technical standards. Standards will help to ensure interoperability, interconnection reliability, quality and security of medical data, images and video transmitted over the airwaves.

Telemedicine providers are already finding it difficult to get their equipment to "talk" to one another even if both perform the same function. Older machines will not talk to newer versions of themselves; different brands will not interconnect. This is frustrating to the health practitioner, trying to provide services, and it is very expensive.

As the health care industry adopts more sophisticated technology, requiring more bandwidth, the bandwidth size, location and status of spectrum frequency that the Federal Communications Commission allocates for medical purposes will likely become a key policy issue for the telehealth industry.

For example, streaming video requires a much larger bandwidth to convey natural movement than bandwidth required for wireless monitoring of vital statistics. An on-going dialogue about the "primary or secondary use" of designated or shared spectrum may be required between the Federal Communications Commission and health related organizations, particularly as the use of telemetry and more advanced wireless telehealth applications is more widely used and moves from institutions to the home or to other health related venues.

Spectrum frequency allocation has also become a growing safety issue. For example, in March 1999, incidences of digital TV interference with wireless medical telemetry equipment occurred at two hospitals in Dallas. (Examples of medical telemetry equipment include heart, blood pressure and respiration monitors.) When new digital TV services were piloted, medical telemetry equipment in these two hospitals did not work. Incidences like these highlight the dangers of electromagnetic interference with the operation of critical medical equipment and underline the need for appropriate spectrum allocation and designation.

In June 2000, the FCC allocated new spectrum and established rules for a Wireless Medical Telemetry Service (WMTS) that allows telemetry equipment to operate on n interference-protected basis. The FCC based its decision on formal comments from a number of organizations including the Food and Drug Administration and the American Hospital Association's Medical Telemetry Task Force, which provided specific recommendations for spectrum allocation. OAT also filed comments with the FCC, supporting the AHA recommendations and submitted additional comments concerning the possible future uses and spectrum needs of telemedicine and telehealth applications.

With the Internet, digitization and wireless technologies, the concept of either domestic or international borders will become blurred. As this trend accelerates, ross-state jurisdiction and enforcement issues will become harder to disentangle. Blurring borders may also expand the purview of general practitioners. For instance, if a Physician Assistant or Nurse Practitioner works with a primary care physician or specialist on an ongoing basis and slowly assumes more of the physician's basic duties, then a gradual change in practice will naturally occur over time. How will states decide to license these practitioners? Will they receive special credentials?

A discussion of how demographic trends will affect the health industry is not within the scope of this Report but it is hard to ignore the effect the aging of the Baby Boomer generation will have on the health care and telehealth industry. An aging population with a longer life expectancy may mean a larger population of "fragile" elderly, the chronically ill and those requiring rehabilitation.

Given this demographic trend, recent studies and workshops¹⁴ show that home care medical devices were the fastest growing segment of the medical device industry throughout the 1990s. A report from the Workshop on Home Care Technologies for the 21st Century suggests: "Consumer demand for home health and home health care is not new. When patients have a choice, and if they have a reasonably stable and caring home environment, they choose to go home, almost without exception. If they have a severe, chronic, difficult condition it is difficult to permit them to go home, unless the home is fitted with the appropriate technology and care giver. We have the opportunity today to make this choice possible by developing technology that is easy to use, suitable for the patients' particular needs and allows access to trained, off-site professionals who can work with the patient on educational/problem areas of concern."¹⁵ Given the movement toward home health care, tele-homecare will most likely play an increasingly larger and more important role in the home health care industry.

Home care in the future may rely on new applications for wireless technology. Tele-homecare can be defined as providing monitoring (telemetry) and home health care services at a distance, using advanced telecommunications and information technology. Aside from videophones, wireless biosensors and feedback loops data can be used to monitor patients who can not get out of bed. OAT grantees have found that tele-home health care has been largely successful, and can allow greater access to care, particularly in rural settings where a nurse may have to travel 200 miles one-way to see a patient at home face-to-face. With tele-homecare, a rural nurse can "visit" six patients in one day, using interactive video instead of traveling 200-300 miles to visit one patient face-to-face for 20 minutes.

Providing tele-home care to the elderly or disabled populations, using telemedicine raises important policy questions about health care access and the reimbursement of telemedicine services for both rural and urban patients. It can be argued that urban patients who are very elderly, chronically ill, poor or disabled may be as isolated and have as much difficulty getting access to needed health services as those patients, living in rural areas. Most of these urban patients cannot drive to their local clinics and many require assistance getting from point A to point B. Traveling a mile for such an urban patient may be as difficult as the two hundred-mile or more drive, that a mobile rural patient must make to see a specialist.

Reimbursement for both urban and rural patients may be a cost effective policy decision for tele-homecare. Studies show tele-homecare can save money by decreasing unnecessary hospital and emergency room admittances. Around-the-clock monitoring and nurse availability over videoconferencing has helped patients better self-diagnose and maintain drug therapies.

This policy issue may be resolved at the third party payer level, if cost savings are sufficiently great enough to attract the attention of this group.

Telemedicine can greatly increase access but it also has the potential to act as a barrier. Much has been written about the "digital divide" separating those, who have access to computers and the Internet, and those who do not. Will there be a similar digital divide for those seeking health care in the future? The argument goes that those without access to the Internet will be left further and further behind in terms of economic welfare and jobs. Does the same logic apply to health information, on-line pharmaceuticals and on-line medical care?

Hence, the Internet provides benefits but also creates concerns. On the one hand, a wealth of health related information is available to consumers at the touch of a fingertip. On the other, use of the Internet for telemedicine raises complex legal, jurisdictional, privacy/security and quality issues. The explosive growth of Internet use for business is bound to change health care delivery and, in turn, to affect how each consumer perceives his/her role in the health care arena. In the future it may be consumers who drive the demand for telemedicine and telehealth rather than health professionals.
The Department of Health and Human Services continues to address both the traditional challenges to the development of telehealth, such as reimbursement, and to monitor new trends in the industry. Working with Congress, the Department strives to increase health care access for America's most underserved populations through telemedicine.