Telemedicine Action Update 1998

Preface and Acknowledgments

In 1995, the Western Governors' Association published its Telemedicine Action Report that looked at barriers to the use of telecommunications for health care and made recommendations to the governors on how to address those barriers within their states, regionally and nationally. WGA was greatly assisted in developing the 1995 Action Report by its Telemedicine Policy Review Group. These individuals and many others in the telemedicine policy world have been a great source of information and assistance to the WGA since that time.

The Telemedicine Action Update is WGA's effort to inform the governors and telemedicine constituents of the status of those 1995 barriers. We also hope that it serves as a resource for the many persons that are tackling these telemedicine barriers. In developing this report, WGA was greatly assisted by the following individuals and institutions:

Robert Waters, Elizabeth Saindon and The Center for Telemedicine Law in Washington D.C. for the updates on reimbursement, licensure and credentialing, and malpractice liability;

Charles Holum, an attorney in private practice in Denver, for the update on telecommunications regulation; and,

Francoise Gilbert, an attorney with Gray, Cary, Ware & Freidenrich in Palo Alto, for the update on medical information confidentiality.

WGA thanks all of these individuals for contributing their vast telemedicine policy knowledge, and for their professionalism, timeliness and good cheer. Thanks also to Nancy Brown at the Telemedicine Research Center in Portland.

This report was prepared by Paul Orbuch of the WGA. He received valuable assistance from WGA Communications Director Karen Deike. Additional copies of this report and more information on the WGA and its telemedicine work can be obtained on the WGA Web site at www.westgov.org. You may contact us at Western Governors' Association, 600 17th Street, Suite 1705 South Tower, Denver, CO, 80202. Phone: (303) 623-9378; Fax: (303) 534-7309.

Introduction - Telemedicine: The View of the Western Governors
By North Dakota Governor Ed Schafer
Western Governors' Association Lead Governor for Rural Health

States are at the forefront of a revolution that is using telecommunications technology to improve the health care of millions of Americans in both rural and urban areas of the country. Yet telemedicine is still in its infancy, and without careful nurturing of it by state leadership, it may not reach its full potential. We need to ensure that government is not a hindrance to this service. Instead we should be seeking to clear away the barriers that inhibit growth of this valuable technology. Just as a school teacher allows for a child's advanced learning by teaching her the alphabet and providing a stimulating place to learn, so must government work to provide the best environment in which telemedicine can flourish.

Telemedicine uses telecommunications to reach those living in areas not served by specialists. In lieu of traveling great distances with the commensurate time and expense, patients can access specialty care through a video link from their physician's office to a university medical center at

the other end of the state. In the West, the other end of the state can often be a one-day drive.

In both a rural and urban setting, telemedicine also facilitates in-home monitoring of elderly patients or those with chronic conditions. The technology can alleviate the need for in-home nurse visits that are primarily needed to monitor vital signs or medicine intake. Telemedicine technology is also valuable for continuing medical education and the dissemination of public health information.

Even though telemedicine offers great hope for improving health care, we have hardly scratched the surface of its potential. Only about 30 percent of rural hospitals nationally were expected to use some sort of telemedicine technology by the end of 1996, and more than 40 percent of existing programs have been operating for less than two years. The February 1998 Health Information and Management Systems Society survey of their rural and urban membership found that only 34 percent of the respondents currently use some form of telemedicine technology. Another 10 percent plan to use telemedicine applications within the next 12 months, and 28 percent are investigating future use.

In 1995 at the request of governors, the Western Governors' Association (WGA) prepared a Telemedicine Action Report. The report describes six key legal and policy barriers to the growth of telemedicine and makes recommendations on how to dismantle those barriers. Those barriers are:

• Infrastructure Planning and Development
• Telecommunications Regulation
• Lack of Reimbursement for Telemedicine Services
• Licensure and Credentialing of Physicians and Other Health Care Practitioners
• Medical Malpractice Liability
• Confidentiality of Patient-Identifiable Medical Information

In 1998, the Western governors asked the WGA to update the status of these barriers. Clearly, some progress has been made in the last three years, particularly in the areas of telecommunications regulation and reimbursement. At the same time, telemedicine's growth has been hampered by government's inability to resolve the licensure and confidentiality barriers.

As this Telemedicine Action Update notes, a concerted effort must be made to help overcome some of the challenges we face in capitalizing on the incredible benefits telemedicine can have for people in the West and nationwide. The information in this report provides background for the political leadership and other interested parties to continue to make a difference in this field. Our success will pay dividends for many generations to come.

BARRIER ONE: INFRASTRUCTURE PLANNING AND DEVELOPMENT

In its 1995 Action Report, WGA found that it was rare for emerging health-care applications, such as telemedicine, to be factored into state telecommunications and information technology legislation, planning, and procurement. A failure by state policy makers to consider telecommunication needs and solutions across the range of state activities (e.g., health and social services, education, criminal justice) threatened to result in missed opportunities for capacity and cost-sharing, as well as costly redundancies and incompatibilities in a state's network. Without careful planning, opportunities to establish interstate networks could also be lost.

Since 1995, Western states have made some progress integrating health care needs with information technology. In order to further this objective, the WGA produced a report in April, 1998 entitled Health-Care On-Ramps: A Road Map to Western States' Information Highways that was based on an extensive survey completed by 17 Western states. The On-Ramps report examines state strategies for implementing telemedicine applications and details the evolution toward the integration of state telecommunications networks and telemedicine applications. It also provides basic telecommunications network information for Western states that enables other states to learn about their neighbors and consider opportunities for regional interconnection.⁽¹⁾

The findings and conclusions from the On-Ramps report relevant to the infrastructure barrier are:

* Western states are continuing to develop integrated statewide networks to provide voice, data, and video communications services to multiple end-users, including state agencies, local governments, and public health-care facilities among others.

* Western state and private telecommunications networks and services are evolving rapidly. This evolution, combined with advances in information technologies, is making telemedicine more efficient, effective, and affordable.

* Few states have integrated telecommunications and telemedicine strategic planning activities despite the fact that each influences the other dramatically.

* There is a small but growing number of examples of state telecommunications networks connecting to other states' networks to provide medical education. However, certain legal and policy barriers limit opportunities to provide medical services via telemedicine over these interstate connections.

* Western states expressed an interest in interconnecting their telecommunications networks with other states' networks.

Conclusion

* Governors and state legislators should insist on a tighter integration of strategic planning efforts for telemedicine and telecommunications. This should be done on a statewide basis across all agencies, given the substantial investments states have made and will make in equipment. Private sector telecommunications companies, telemedicine equipment manufacturers, and private medical-services providers should be at the table as well.

Health-Care On-Ramps: A Road Map to Western States' Information Highways, the WGA's April 1988 report on telemedicine and telecommunications networks in 17 western states may be obtained by contacting the WGA or from its Web site (www.westgov.org).

BARRIER TWO: TELECOMMUNICATIONS REGULATION

The telecommunications network is a double-edged sword, not only providing the means for telemedicine, but also presenting a major obstacle towards the rapid and economical deployment of this new set of health-care technologies. For example, the High Plains Rural Health Network, now in its third year of operation in Eastern Colorado and portions of western Kansas and Nebraska, still has major problems obtaining the necessary communications services, particularly at rates that it can afford over the long term. Initially dependant like other fledgling networks on federal and state grants to purchase expensive equipment and to pay ongoing costs, High Plains is now struggling to afford a small staff and its telecommunications expenses. Its 24-member sites contribute funds in the hopes that advanced patient care will mean expanded markets and eventual provider payments through Medicare and insurance companies.

The WGA's 1995 Action Report, issued while the 1996 Telecommunications Act was first being considered, identified several traditional regulatory barriers to the effective use of public service communications network. These obstacles included strict antidiscrimination rules, high costs for the necessary bandwidth, and the unavailability of certain services in rural areas. In the past, utility regulation has prevented discrimination, or differing rate or service treatment, between similarly situated customers. Accordingly, a phone company had to charge nonprofit rural hospitals the same rates, for the same services, as it did a Fortune 500 company. In the West particularly, the accepted practice of computing phone charges based on the mileage between users can create a significant obstacle for many customers to overcome. Paying for a line with the bandwidth needed to carry a video or other signal between sophisticated end-user equipment can also be prohibitive for a modest rural clinic located hundreds of miles from the desired connection.

The Telecommunications Act of 1996 dramatically altered the communications rates and services potentially available to telemedicine providers. The Act continues to promote the long-held goal of universal service to provide access to telecommunications services regardless of one's address by requiring discounted services for rural health-providers and by removing some of the major telecommunications burdens facing telemedicine. The Snowe-Rockefeller-Exon-Kerry provisions in section 254(h) of the Act,⁽²⁾ should make communications services more affordable and available to rural health providers by providing Universal Service Fund (USF) support for specified health care, library and school services. Discriminatory rates are no longer an issue since the Act specifically endorses rural health-care rates that are "comparable" to urban rates, thus lowering the rates normally charged to rural customers.⁽³⁾ By eventually providing USF support of up to $400 million each year for health-care providers, advanced services should become more available to rural users.⁽⁴⁾

The Federal Communication Commission's (FCC) final USF rules, issued in May 1997, attempt to resolve many of the difficult issues inherent in the implementation of the new federal program.⁽⁵⁾ The rules provide that services up to 1.544 Mbps, or its equivalent, are eligible for the reduced telecommunications costs, without requiring any specific medical uses. The result is health-care providers will be able to decide for themselves what kind of consultation or imaging they need, and they will be able to "shop around" for what best fits their needs.⁽⁶⁾ Both the Act and the FCC's regulations specify which nonprofit health-care entities are allowed to use the reduced rates and prohibit the transfer of any USF benefits to ineligible customers.

Thus far the USF application process has been very slow starting. The FCC found it necessary to establish a separate Health Care Corporation to manage the rural health discount program, and it spent many months developing and obtaining approval for the necessary application forms.⁽⁷⁾ The rural health discount program, as well as the schools and libraries program, are facing increasing criticism for the delays and also for the complexity and costs of their management schemes. Some major telecommunications companies and members of Congress are calling for a sharp reduction in, or even elimination of, the rural health-care portion of the USF program. It remains to be seen whether this criticism, together with the huge legal battles being fought over other aspects of the 1996 Act, will ultimately jeopardize the telemedicine discount program.

While the FCC and the Health Care Corporation seek to advance the federal program, states have also taken steps to promote telemedicine programs through support of communications networks. States will likely follow the FCC's standards for setting the "comparable" and USF-supported rates. States are permitted to be more generous in their support, under state laws and using state funds, as long as state standards are not "inconsistent" with the federal USF system.⁽⁸⁾ In addition, several Western states have continued their development of public networks. For example, Texas and Kansas have dedicated substantial funds towards state-operated networks with health-care components. Most Western states have attempted some centralized planning, often through the state offices of rural health.⁽⁹⁾

Conclusion

The FCC's telemedicine program should soon work to lower transmission costs for many rural health-care networks. This indirect financial support comes at a crucial time for networks in their first years of operation. The FCC, the Health Care Corporation and state utility commissions should hasten the flow of support funds for eligible rural health-providers. In that way, telemedicine proponents will gather evidence and constituents to convince Congress and the FCC to insure that telecommunications support for telemedicine is sustained and then evaluated. While other parts of the 1996 Act could be debated in the courts for years, USF resources should be used to bridge the traditional affordability gaps faced by rural customers in using telecommunications technology such as telemedicine.

BARRIER THREE: LACK OF REIMBURSEMENT FOR TELEMEDICINE SERVICES

In 1995, reimbursement policies for telemedicine services by the Health Care Financing Administration (HCFA), state Medicaid programs, and private insurers, were severely limited and inconsistent.⁽¹⁰⁾ In recent years, however, there has been a noticeable expansion in reimbursement policies for telemedicine on both the state and federal levels.

Medicare

HCFA administers, in whole or in part, both the Medicare and Medicaid programs. Currently, Medicare does not maintain a national coverage policy regarding the reimbursement for telemedicine services and allows carriers the discretion to provide coverage for certain services. In general, Medicare pays for physician services that are "reasonable and necessary for the diagnosis or treatment of illness or injury."⁽¹¹⁾ HCFA defines physicians' services as "a service where the physician either examines the patient in person or is able to visualize some aspect of the patient's condition without the interposition of a third person's judgement."

Medicare will reimburse for certain medical practices that traditionally have not required "face-to-face" contact between the patient and the physician or health professional. For example, Medicare currently reimburses for teleradiology and other similar imaging services as well as EKG and ECG interpretations. Coverage for telepathology may be provided, but at the carriers' discretion where appropriate Medicare codes are available. In addition, HCFA has informed certain Medicare managed-care plans and federally qualified health maintenance organizations that they may offer telemedicine services. The use of telemedicine in the Medicare managed-care program may be viewed as a means of increasing access to quality health care for rural and under-serviced Medicare beneficiaries.

Looking forward, the Balanced Budget Act of 1997 requires HCFA to promulgate regulations that will begin to develop a national coverage policy. The Act requires the Secretary of Health and Human Services (HHS) to make payments for certain health professional consultations delivered via telecommunications systems by January 1, 1999.⁽¹²⁾ Coverage for teleconsultations is limited to those Medicare beneficiaries living in rural counties that are designated as a health professional shortage area (HPSA).⁽¹³⁾ In general, a HPSA is a rural or urban area designated by HHS as having an insufficient ratio of available health manpower compared to the number of individuals in an area or is not adequately served by an appropriate medical facility. The Act specified that a methodology be developed by HCFA regarding payment determinations for telemedicine.⁽¹⁴⁾ While the law limits the reimbursement for telemedicine to HPSAs, this development is seen as a significant first step toward establishing a broader Medicare coverage policy in the future.

Although HCFA remains cautious in its approach to reimbursement, a number of developments have begun to demonstrate that its historic reluctance to pay for telemedicine services may be slowly changing. For example, in October of 1996, HCFA announced that it would begin making limited payments for telemedicine consultations as part of a three-year demonstration project.⁽¹⁵⁾ This ongoing project is an effort to study the effects of telemedicine with respect to cost and quality of services on a fee-for-service basis.

Medicaid

The Medicaid program operates under federal law as well, but states are allowed to establish their own eligibility standards. States may determine the types, amount, duration and scope of services provided to beneficiaries. States may also set the rate of payment for services rendered. The Medicaid program has addressed the issue of reimbursement for telemedicine services, albeit on a more piece-meal basis. It is worth noting that state Medicaid programs often cover transportation costs of beneficiaries to and from necessary medical care. This may account for the reason why state Medicaid programs have been more aggressive in the use and coverage of telemedicine services. According to HCFA the following Western states currently cover some form of telemedicine services under Medicaid: California, Kansas, Nebraska (pending), North Dakota, Montana, South Dakota and Texas (pending).⁽¹⁶⁾ Although it has not been officially surveyed, unofficial communications with HCFA indicate that a number of other Western states such as New Mexico and Utah may also be providing payment for certain telemedicine services.⁽¹⁷⁾

On the state level, the activity regarding reimbursement for telemedicine services under private insurance has been more limited. For example, California passed the "Telemedicine Development Act" in 1996 providing for, among other things, elimination of the "face-to-face" rule and requiring private insurance to make reimbursements for telemedicine services.⁽¹⁸⁾ Texas also recently passed a law which provides for the reimbursement of telemedicine services with certain prescribed restrictions.⁽¹⁹⁾ In addition, North Dakota has begun to debate the issue of reimbursement for telemedicine services,⁽²⁰⁾ while Hawaii currently has bills pending before its legislature.⁽²¹⁾

Conclusion

Although reimbursement for telemedicine services has not yet reached the mainstream, there has been an evident amount of movement in favor of providing payment on both the state and federal level. In addition, the private sector has made some strides in providing for the reimbursement of telemedicine. Without a clear policy on telemedicine reimbursement, however, patients and physicians will continue to struggle with utilizing this innovative means of providing health care into the next century.

BARRIER FOUR: LICENSURE AND CREDENTIALING OF PHYSICIANS AND OTHER HEALTH-CARE PRACTITIONERS

Traditionally, physicians and other health-care practitioners are required to obtain licenses from every state in which they practice. The introduction of interstate telemedicine has, however, confused this requirement. It is unclear whether the patient "travels" to the provider, meaning the provider need only be licensed in the state where he or she is physically located, or whether the provider "travels" to the patient, perhaps requiring licensure in all 50 states. Providers are, understandably, reluctant to incur the prohibitive costs and administrative burdens of obtaining licenses in multiple states. Consequently, how states address licensure for the interstate practice of telemedicine is a critical part of the future of the field.

Since the Telemedicine Action Report was published in 1995, substantial movement has occurred in the area of telemedicine licensure. Several models for state-based telemedicine licensure have been proposed. These models demonstrate the wide range of options available for addressing this issue: full licensure, special telemedicine licensure, or mutual recognition of other states' licenses.

The American College of Radiology (ACR) published a policy statement and standard in 1994 and revised it in 1996. The ACR has taken the position that all physicians who provide the official, authenticated interpretation of images transmitted by teleradiology should obtain full and unrestricted licensure in the state where the patient is located.⁽²²⁾ The Federation of State Medical Boards (FSMB) has taken a slightly less restrictive approach in its model law. The FSMB's model law would require a special telemedicine license for physicians practicing across state lines. These special licenses would only permit a physician to practice from outside the state; should a physician choose to physically practice within the state, he or she would be required to obtain a full and unrestricted license. There is also an expedited review procedure for obtaining the special telemedicine license.⁽²³⁾

The proposal most supportive of cross-state practice was developed by the National Council of State Boards of Nursing (NCSBN). In December 1997, a special delegate assembly of the NCSBN approved final language for an interstate compact on nurse licensure.⁽²⁴⁾ The interstate compact authorizes the practice of nursing in all compact party states on the basis of a valid license issued by another compact party state. The interstate compact must be enacted into the laws of each state that wishes to join. On March 14, 1998, Utah became the first state in the nation to adopt the compact.⁽²⁵⁾

In addition to these models, there has been a proliferation of state laws and regulations addressing telemedicine licensure. These laws reflect the entire range of options and individual state attitudes on this issue. Beginning in 1994, Kansas was the first state to adopt a restrictive telemedicine licensure policy, although it did so by promulgating regulations rather than by enacting legislation. Since that time, eight other Western states have adopted specific telemedicine statutes or regulations.

The states are: California,⁽²⁶⁾ Hawaii,⁽²⁷⁾ Kansas,⁽²⁸⁾ Nebraska,⁽²⁹⁾ Nevada,⁽³⁰⁾ South Dakota,⁽³¹⁾ Texas,⁽³²⁾ Utah⁽³³⁾ and Wyoming.⁽³⁴⁾ Of these states, only Texas has adopted the FSMB model. Kansas and Wyoming have formally published regulations requiring full licensure, rather than enacting legislation. The boards of Alaska, Arizona, Montana, New Mexico, Oregon, and Washington have taken the position that existing law requires full licensure for any physician practicing medicine on an in-state patient. In 1997, the North Dakota legislature authorized a study of the licensure issue.⁽³⁵⁾ In addition, four states introduced telemedicine licensure bills in the 1997 legislative session, which were not enacted into law. Of these, three states used the FSMB Model. At this writing, Colorado has passed restrictive licensure legislation in the 1998 session that awaits the governor's signature, and Guam is planning to introduce legislation or adopt regulations that would require full licensure.

The federal government has also considered licensure issues related to telemedicine. In the 104th Congress, Senator Kent Conrad introduced legislation that called for a study of telehealth licensure issues.⁽³⁶⁾ In addition, Representative, now Senator, Ron Wyden offered an amendment to the Communications Act of 1995 that would have prohibited states from restricting interstate commerce by placing limitations on telemedicine consultations.⁽³⁷⁾ Ultimately, the amendment was withdrawn. In the 105th Congress, telemedicine legislation is focused on access to care and reimbursement issues. However, Senator Conrad has submitted a new version of his bill calling for a study of licensure issues.⁽³⁸⁾

Credentialing

Similar to licensure, credentialing refers to the requirements imposed by individual health-care facilities on practitioners. For example, many hospitals will require a physician to undergo a credentialing process in order to treat patients at that hospital. However, unlike the broad state movement in the area of telemedicine licensure, the states have not progressed in the creation of policy standards in the area of credentialing. This policy area is complex, and there are no clear laws or even signals indicating the direction the states will choose.

Very few formal statements on the issue of hospital credentialing for telemedicine providers exist. The American Medical Association's Board of Trustees has adopted a resolution in which it recommends physician credentialing for telemedicine practitioners.⁽³⁹⁾ In its teleradiology standard, the ACR indicates that the physician who provides the official interpretation of an image from a hospital should be credentialed at that hospital.⁽⁴⁰⁾ In addition, the Department of Health and Human Services has approved a demonstration project in which the federal agencies that employ physicians and dentists will share credentialing information, thereby eliminating unnecessary duplication.⁽⁴¹⁾ Although this demonstration project is not intended to directly address the issue of telemedicine, a model based on shared credentialing information could be very useful for ascertaining information for providers that are practicing across state lines.

Conclusion

Recent actions by state legislatures will make it more difficult to provide telemedical physician services on an interstate basis without full licensure in each state where the practice of medicine occurs. If governors wish to turn this tide, they will need to begin to coordinate state licensure policies in order to ease burdens on the interstate practice of medicine and nursing while protecting each state's citizens. Expanded access to the highest quality care, while reducing waiting time and commuting costs, especially for rural patients, is a distinct benefit of increased telemedicine service. The governors could also work toward coordinating enforcement efforts between states. For example, a major component of the interstate compact on nurse licensure is increased information sharing by states for the purpose of enhancing enforcement.

BARRIER FIVE: MEDICAL MALPRACTICE LIABILITY

Medical malpractice liability creates a barrier to telemedicine because physicians are concerned that the new practice of telemedicine will create additional malpractice claims. In truth, many physicians are unsure whether their current policies cover telemedicine practice, and even more have never considered the issue. The ambiguous issues and uncertainty regarding medical malpractice liability in the context of telemedicine are no closer to resolution than they were in 1995. As of this writing, no telemedicine malpractice cases have been decided on their merits, and state court systems have given little or no indication of possible outcomes in this area.

However, one area of litigation that is related to telemedicine malpractice is the issue of jurisdiction. In fact, courts began addressing this issue long before the term "telemedicine" came into popular use. Every lawsuit must have subject matter jurisdiction, the power of the court to hear the case, and personal jurisdiction - - the power of the court over the person of the defendant. Personal jurisdiction over an out-of-state defendant is generally based on a state's "long-arm statute." These statutes, as applied to the unique facts of each case, will determine whether a court will dismiss the action for want of personal jurisdiction.

Courts have come to differing conclusions on this issue. For example, in Ingraham v. Carroll,⁽⁴²⁾ the highest court in New York state concluded that there was no personal jurisdiction over a Vermont physician who received informal, although frequent, referrals from a New York HMO. In this case, Dr. Carroll was sued for malpractice for failing to diagnose Mrs. Ingraham's cancer. The patient was referred to the physician from her HMO, and traveled to see him three times for office visits, and once for surgery. The majority of the court held that there was not "substantial revenue from interstate commerce" sufficient to satisfy the state's long arm statute. Two judges dissented from the opinion, stating the plaintiffs should be permitted to sue in their home state. In Bullion v. Gillespie,⁽⁴³⁾ a federal court of appeals held that a California physician could be sued in Texas. In this case, Ms. Bullion was referred to Dr. Gillespie as a published expert on a particular disease. Ms. Bullion traveled to California, and was invited to participate in an experimental treatment protocol. After returning home, the patient and physician were in contact by telephone, and Dr. Gillespie sent prescription drugs from California to Texas. According to the court, these were sufficient contacts to create a prima facie case that the physician had "purposefully availed" herself of the privilege of conducting business in Texas. It therefore refused to dismiss the suit for lack of personal jurisdiction.

The issue of malpractice liability in telemedicine encounters is far broader than jurisdiction. Some of the numerous issues that have yet to be addressed include: whether a physician-patient relationship is created; standards of telemedical care, including equipment issues such as transmission rates and bandwidths; informed consent; and medical records privacy and retention.⁽⁴⁴⁾ In addition, some insurers could argue existing policies do not cover physicians practicing telemedicine in a state with a restrictive licensure law, in the event the physician was not appropriately licensed. The insurer could refuse payment on the grounds that the physician was practicing without a license.

Without guidance provided by case law, the telemedicine community is doing its best to protect itself from lawsuits. Some providers now know to discuss the issue of cross-state practice with their malpractice insurers. Likewise, insurers such as the Physician Insurers Association of America are aware of potential issues, and are actively studying telemedicine use and practices.⁽⁴⁵⁾

Conclusion

The lack of clarity on whether physicians are protected by their insurance when practicing telemedicine is a significant barrier to the growth of the field. Western governors could set national trends in the area of malpractice liability insurance if they were to coordinate their state's insurance commissioners investigations into this area. States could seek to develop far-reaching policies to address the proper practices of the insurance industry regarding telemedicine. In addition, governors could work towards positive legislation to ensure that malpractice liability statutes apply to out-of-state practice via telemedicine. This should be done in conjunction with licensure efforts, in order to broaden the access of all Western residents to quality and affordable telemedicine care.

BARRIER SIX: CONFIDENTIALITY OF PATIENT-IDENTIFIABLE MEDICAL INFORMATION

The need to protect the confidentiality of electronic medical records has been in the spotlight for many years. Although state law traditionally protects and holds confidential a patient's medical records, the federal government has also begun to focus on this issue. This has occurred because current business practices often require the transfer of electronic medical records across state lines. For example, a patient may reside in a state other than where the insurance carrier's headquarters are located. Furthermore, the patient's pathological test or x-ray may be analyzed in a state other than where the patient met with his or her primary-care physician. Because different states have different laws and different levels of protections for this information, it has been difficult to effectively enforce these laws when information is transferred or used out of state.

In response to these and other changes in the health-care industry, Congress passed legislation to move toward the protection of individually identifiable health information. The Health Insurance Portability and Accountability Act of 1996⁽⁴⁶⁾ allows the Secretary of Health and Human Services (HHS) to directly promulgate final regulations on confidentiality by January 2000, if the Congress has not enacted specific legislation on the subject before that time.⁽⁴⁷⁾ In accord with the 1996 Act, HHS made recommendations to Congress on standards regarding the privacy of individually identifiable health information in a September 1997 report.⁽⁴⁸⁾ It called for the enactment of national standards, but it did not recommend outright and overall federal preemption. Instead, it recommends that federal law preempt states only when state law is less protective than the future federal law. The confidentiality protections provided would be cumulative, and the federal law would merely provide a floor.

During the 105th Congress, several bills were introduced that attempt to address this important privacy issue.⁽⁴⁹⁾ Yet those attempting to pass legislation on this subject, must take the time to understand the complexity of the entire health-care system. Issues that must be considered include who "owns" medical data, who should be considered a medical provider, and what constitutes a legitimate research interest. Given the complexity of this subject matter, there has been little activity thus far on the bills that have been introduced. It is unlikely that Congress will be able to act until very near its self-imposed deadline, if then.

As the debate on the federal level ensues, the states have continued to pass legislation to improve the protection given medical records. For example, in 1996 California enacted the Telemedicine Development Act, that addresses confidentiality in two ways.⁽⁵⁰⁾ First it provides that a patient's medical information record transmitted electronically for telemedicine is protected by state law just as are other medical records. Thus, a health-care provider has certain legal obligations - - use, disclosure, confidentiality, retention of contents, maintenance, and access to patient information. Second, California now requires that the patient be informed of his rights regarding confidential information and the existing legal protections, and that verbal and written consent be obtained from the patient prior to the use of telemedicine. In 1997, Arizona and Texas also enacted laws requiring confidentiality of all patient medical records generated through care via telemedicine and guaranteeing patient access to their medical records resulting from such care.⁽⁵¹⁾

Nearly every other Western state has also been active since 1995 in the confidentiality arena. New Mexico enacted a law called the Genetic Information Privacy Act. It states that a person's genetic information shall not be retained by another person or entity without his or her informed written consent, unless required pursuant to other interests such as identifying a deceased person, a person in a crime or to screen a newborn.⁽⁵²⁾ Oregon now provides that an individual's genetic information and DNA sample are the property of that individual, except when the information is used in anonymous research. A person may not retain another person's genetic information without that person's authorization.⁽⁵³⁾ And in Washington, prescription drug orders are now confidential patient information and may only be released to the patient's prescriber, or as otherwise authorized by law. Electronic systems must also have adequate security and systems safeguards to prevent and detect unauthorized access or manipulations of such prescription records.⁽⁵⁴⁾

Conclusion

Patient's medical records can now be created, modified, stored, compiled, transferred, and analyzed through the use of computer and information technologies. Concurrently while access to computerized medical information has becomes easier, the commercial value of computerized information and medical databases is increasing exponentially, making these records more vulnerable to misuse, abuse and disclosure. To maintain the confidence of consumers, it is crucial that government step up its efforts towards greater and better-organized protection of computerized medical records. This progress will provide the patients with assurances that their most confidential information will receive a more reliable form of protection.

Endnotes

1. WGA received funding for the report from the National Library of Medicine, and was assisted in surveying the states and developing the report by the National Association of State Telecommunications Directors.

2. 47 U.S.C. §254(h).

3. "Comparable" rates are calculated by looking to the "highest tarriffed or publicly available rate charged to a commercial customer for a similar service," measured over a "standard urban distance." The "urban distance" is the average of the longest diameters of cities with a population of 50,000 or more within a given state. 47 C.F.R. §54.605.

4. The FCC will collect and fund considerably less than $400 million in health-care support during calendar year 1998, primarily because the program is so late getting started. As of early April, the Rural Health Care Corporation estimates 1998 funding will amount to approximately $100 million.

5. Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Red 9113 (1997).

6. With a bandwidth of 1.544 Mbps, or a full T-1 connection, health-care facilities can share full-motion video. Yet, an ISDN connection, a switched-56 service, or even a simple voice or fax discussion allows greater user flexibility, and may work better in a specific situation than a leased T-1. The FCC decision also allows health-care providers without toll-free access to the Internet to gain USF support for the lesser of $180 in toll charges or toll charges for 30 hours of Internet access each month. 47 C.F.R. §54.621.

7. As of May 1, 1998, FCC Forms 465, 466 and 468 are available for use, with a 75-day application window, for equal treatment, expiring on July 14. The FCC's Internet home page offers an easy and direct way to keep current on the status of the rural health program, specifically at: http://www.fcc.gov/healthnet. The Rural Health Care Corporation and its contractor, Price Waterhouse, can be reached at 800-229-5476, or at 202-861-2665. RHCC's home page is also available at www.rhccfund.org. The FCC recently proposed to reorganize administration of the rural health discount program in response to Congressional concern. Report No. CC 98-13, May 8, 1998.

8. 47 U.S.C. §254(f).

9. See generally Office of Rural Health Policy, Health Resources and Services Administration, U.S. Department of Health and Human Services, State Activities in Telehealth (Report, January 1998), compiled by Center for Public Services Communications (Neal Neuberger and John C. Scott, ed.).

10. The Health Insurance Association of America (HIAA) survey sent to 120 insurers (53 responded) and that 15 percent of those responding paid for physicians' professional services furnished through telecommunications media. In addition, a study conducted by the Office of Rural Health Policy, in conjunction with Abt Associates, found that approximately eight percent of the telemedicine sites surveyed reported that they had successfully negotiated payment with private third-party payers for use of rural telemedicine services. See, Telemedicine Report to the Congress, U.S. Department of Commerce, January 31, 1997.

11. Social Security Act, § 1862(a)(1)(A), 42 U.S.C. § 1395y (a)(1)(A) (1994); 42 C.F.R. 411.15 (k)(1) (1997).

12. See, H.R. 2015, 105th Cong., 1st Sess. (1997).

13. Public Health Service Act, § 332(a)(1)(A), 42 U.S.C. § 254 e(a)(1)(A) (1994).

14. For example, payment is to be shared between the referring physician or practitioner and the consulting physician or practitioner; the amount of payment is not to exceed the current Medicare fee schedule for traditional consultations; the payment is not to include any reimbursement for telephone line charges or facility fees and the beneficiary may not be billed for any such charges or fees; payment amounts are to be increased annually by the update factor for physicians; payment is to be subject to the coinsurance and deductible requirements of the law. Balanced Budget Act of 1997, Pub. L. No. 105-33, § 4206, 111 Stat. 251, 377-379 (1997).

15. The sites selected for funding telemedicine include the following: East Carolina University project in North Carolina, the Mercy Foundation (Midwest Rural Telemedicine Consortium) project in Iowa, the West Virginia University project, and the University of Michigan/Medical College of Georgia Telemedicine project. The HCFA demonstration project also includes the previously awarded Iowa Health System site. See, Telemedicine Report to the Congress, U.S. Department of Commerce, January 31, 1997.

16. The following non-western state Medicaid programs provide reimbursement for telemedicine services: Arkansas, Georgia, Iowa, Illinois (pending), Virginia and West Virginia.

17. For reasons mostly related to the restrictions on agency to agency surveys imposed by the Paperwork Reduction Act, HCFA is unable to survey the states and keep an entirely updated list of state Medicaid programs that provide for the reimbursement of telemedicine services. This accounts, in part, for the differences in official and unofficial survey results. The following is a list of non-western states that have been unofficially described by HCFA as providing reimbursement for certain types of telemedicine services: Illinois (pending), Oklahoma, Pennsylvania, Tennessee and Wisconsin.

18. Cal. Insurance Code § 10123.85 (West 1997).

19. H.B. 2033, 75th Leg. Reg. Sess. (Texas 1997).

20. The North Dakota Legislative Council heard testimony in the fall of 1997 on reimbursement for telemedicine services.

21. H.B. 2852 and S.B. 2855, 19th Leg., 2nd Sess. (Haw. 1998). Also, non-Western states such as Louisiana and Oklahoma recently enacted legislation requiring the provision of telemedicine services. Iowa is currently considering a proposal regarding the reimbursement of telemedicine services and Virginia and New Hampshire are considering proposals to study the issue.

22. For more information, contact:

Brad Short

American College of Radiology

1891 Preston White Drive

Reston, Virginia, 22091

(703)648-8900

In addition, the ACR web site contains the policy statement and standard. See http://www.acr.org.

23. For more information, contact:

James R. Winn, MD

Executive Vice President

Federation of State Medical Boards

400 Fuller Wiser Road, Suite 300

Euless, TX 76039-3855

(817)868-4000

24. For more information, contact:

Carolyn Hutcherson, MS, RN

Senior Policy Analyst

National Council of State Boards of Nursing, Inc.

676 North St. Clair Street, Suite 550

Chicago, IL 60611-2921

(312)787-6555

In addition, the NCSBN web site contains the final language of the interstate compact, and other information. See http://www.ncsbn.org.

28. Kansas Administrative Regulations § 100-26-1 (1996).

39. For more information, contact:

Michael Vitek

American Medical Association

515 State Street

Chicago, IL 60610

(312)464-4757

41. For more information, contact:

Capt. Stephen B. Permison, MD

Deputy Director, Division of Quality Assurance

Health Resources Services Administration

Parklawn Building, 8A-55

5600 Fishers Lane

Rockville, MD 20850

(301)443-2300

44. The Center for Telemedicine Law has produced a white paper discussing these issues entitled "Legal Risk Management for Telemedicine Networks." For more information, contact:

Elizabeth H. Saindon

Center for Telemedicine Law

1050 Connecticut Avenue, NW, Suite 700

Washington, DC 20036-5339

(202)775-5722

45. The PIAA recently published "Telemedicine: A Medical Liability White Paper." For more information contact:

Lori Bartholomew

Director of Loss Prevention and Research

Physician Insurers Association of America

2275 Research Blvd., Suite 250

Rockville, MD 20850

(301)947-9000

• •Hawaii's 1995 HISB 171 § 1 provides that when disclosing a government record containing medical information, the public interest in the disclosure must be balanced against the privacy interest of an individual. Individuals have a significant privacy interest in information relating to medical history, diagnosis, condition, treatment or evaluation;
• •1998 Idaho Sess. Laws 81, S.B. 1358, § 1 provides that an individual may be appointed to make mental health treatment decisions for a principal under a declaration for mental health treatment. This individual has the same right as the patient to receive, review and consent to disclosure of medical records relating to that treatment;
• •1995 Idaho Sess. Laws 67, H.B. 253, § 2 creates a cancer registry fund in the state Treasury for the collection of data pertaining to the incidents, prevalence, management, survival, mortality, geographic distribution and risk factors associated with cancer. § 3. This information is available for use in aggregate forms for analysis, benchmarking, and reports of Idaho's cancer incidence, prevalence, management, survival, mortality, health status, geographic distribution, and risk factors in comparison to the nation. Confidential information refers to information which may identify a cancer patient. § 6. The department and authorized contractor will take measures to ensure that confidential information is kept confidential. However, they may share the confidential information with other state's cancer registries. § 7. Only where confidential information is disclosed through gross negligence or willful misconduct are damages allocated;
• •1995 Kan. Sess. Laws 44, 1995 Kan. H.B. 2203. [amended K.S.A. Supp. 45-221] providing that unless otherwise required by law, a public agency shall not be required to disclose "medical records . . . which pertain to identifiable patients."
• •1996 Neb. Laws 496, 1995 Neb. L.B. 496 which enact a new Parkinson's disease registry and § 14 states that any person or entity who wrongfully discloses the medical records in the registry or uses such information with an intent to deceive, shall be guilty of a Class IV misdemeanor.
• •1995 Nev. Ch. 290, 1995 Nev. S.B. 447 is a new law relating to the confidentiality of medical records obtained by the board of homeopathic medical examiners. Amends § 1, Chapter 630A of NRS;
• •1995 N.D. Ch. 152; 1995 N.D. S.B. 2410 is a new North Dakota law to provide for confidentiality of a minor's medical records. A counseling center may not disclose to a minor's guardian or parents the private records of such minor without the minor's authorization, unless the counseling center believes failure to inform the parent would "seriously jeopardize the health of the minor";
• •Three Oregon laws, 1997 Ore. Laws 208, § 1. Information necessary for diagnosis purposes can be disclosed by a prehospital care agency to a hospital. This information is considered confidential and shall be treated like other confidential medical records.
• •1997 Ore. Laws 559, S.B. 1001, § 1. Medical information contained in public records can be publicly disclosed only if it would not constitute an unreasonable invasion of privacy, or if public interest requires disclosure by clear and convincing evidence.
• •1997 Ore. Laws 635, S.B. 253, § 1. Medical records can only be disclosed after a patient signs a written release authorization. The statute provides the form to be used.
• •Washington's 1997 Wa. Ch. 345; 1997 Wa. H.B. 1605. Amendments to the law regarding confidentiality of AIDS tests for detainees and inmates. The amendments to this law create limited exceptions to the confidentiality of the results of such AIDS test for the health and safety of corrections facility workers. The results of such AIDS test shall be disclosed to the health care administrator or infection control coordinator of the corrections facility or local jail that houses the offender or detainee. Moreover, the test results shall be disclosed to any corrections or jail staff who have been "substantially exposed to the bodily fluids of the offender or detainee...."
• •Wyoming's 1997 Wy. SF 71; 1997 Wy. EA 50. Amends the current law to permit the state health officer, the state health epidemiologist or their respective designated representatives to access medical records without patient consent if such information is kept confidential and is necessary for the control, investigation and prevention of disease conditions dangerous to the public health. Any violation is a misdemeanor punishable by imprisonment for < 6 months and/or a fine < $1,000.

Page last updated 10/10/1999