Committee on Business, Consumer, and Regulatory Affairs

COUNCIL OF THE DISTRICT OF COLUMBIA COMMITTEE ON BUSINESS, CONSUMER, AND REGULATORY AFFAIRS DRAFT COMMITTEE REPORT

1350 Pennsylvania Avenue, N.W., Suite G-6 Washington, D.C. 20004

To: Members of the Council of the District of Columbia

From: Vincent B. Orange, Sr., Chairperson, Committee on Business, Consumer, and Regulatory Affairs

Date: May 8, 2013

Subject: Report on B20-50, the “Telehealth Reimbursement Act of 2013”

The Committee on Business, Consumer, and Regulatory Affairs, to which Bill B20-50 was referred, reports favorably on the same and recommends its adoption by the Council of the District of Columbia.

SUMMARY OF CONTENTS PAGE

I. Purpose and Effect 1

II. Background 2

III. Legislative History 2

IV. Position of the Executive 2

V. Comments of Advisory Neighborhood Commissions 3

VI. Public Hearing Testimony 3

VII. Fiscal Impact 6

VIII. Section-by-Section Analysis 6

IX. Impact on Existing Law 7

X. Committee Action 7

XI. Attachments 7

1 I. Purpose and Effect

The purpose of B20-50, the “Telehealth Reimbursement Act of 2013”, is to provide for health insurance coverage and Medicaid reimbursement for telehealth services. The bill requires health insurance coverage and appropriate payment for healthcare services provided by interactive audio, video, or other electronic means to diagnose, consult, or treat patients. Excluded from coverage are audio only telephone consults, email messages or fax transmissions.

Telecommunications technology has been effective in increasing health care access to hard- to-reach patient populations. Its impact on the medically underserved has resulted in improved care, especially in rural areas, and its utilization has the potential of producing greater efficiencies in the health care economy. Improvements in the accessibility of telehealth services can be replicated in the medically underserved areas of major urban areas, such as Washington, D.C.

Currently, the District of Columbia has no statutory or regulatory framework to regulate the delivery of telehealth services.1 According to Mr. William P. White, Commissioner of the Department of Insurance, Securities, and Banking, twenty (20) states have adopted telemedicine statutes, 14 of those states mandate reimbursement for telemedicine serves. The Act encourages the District of Columbia to follow that trend as a means of increasing the delivery of health care services to hard-to-reach and medically underserved District residents.

The title of the bill was amended to read the “Telehealth Reimbursement Act of 2013”. The term “telehealth” is a more encompassing term than “telemedicine”. Telehealth represents the integration of telecommunications systems into the practice of promoting health whereas telemedicine is the incorporation of interactive technologies into curative medicine. Telehealth has a broader meaning whereas telemedicine is more restrictive. The Telehealth discipline is rapidly evolving. Because of the changing character of the practice of telehealth medicine, the Committee considered the term “telehealth” a more fitting usage for the bill.

II. Legislative History

January 8, 2013 B20-50 is introduced by Councilmember Mary Cheh (Ward 3)

1 Testimony of Ms. Jacqueline A. Watson, Executive Director, DC Board of Medicine before the Committee on Business, Consumer, and Regulatory Affairs, Councilmember Vincent B. Orange, Sr., Chairperson, February 7, 2013 (see attached) January 8, 2013 B20-50 is referred to the Committee on Business, Consumer, and Regulatory Affairs

January 18, 2013 Notice of Intent to Act is published in the District of Columbia Register

February 7, 2013 The Committee on Business, Consumer, and Regulatory Affairs holds a public hearing on B20- 50

April 8, 2013 The Committee on Business, Consumer, and Regulatory Affairs was unsuccessful in reporting out B20-50 May 8, 2013 Reconsideration request made by Councilmember Alexander to have the Committee on Business, Consumer, and Regulatory Affairs mark-up B20-50

III. Position of the Executive

Commissioner William B. White of the District of Columbia Department of Insurance, Securities, and Banking and Ms. Jacqueline Watson, Executive Director, of the District of Columbia Board of Medicine, testifying on behalf of Dr. Saul Levi, Interim Director of the Department of Health, represented the views of the Executive Branch. Both expressed support for the intent of the legislation. See summaries of their statements in Section 6 of the Committee report and their testimony of February 7 under Attachment E.

IV. Comments from Advisory Neighborhood Commissions

The Committee on Business, Consumer, and Regulatory Affairs has not received any comments from Advisory Neighborhood Commissions on B20-50.

V. Public Hearing Testimony

The Committee on Business, Consumer, and Regulatory Affairs held a public hearing on B20-50 on Thursday, February 7, 2013. The testimony summarized below is from that hearing. Copies of the testimonies presented are attached to this report.

3 Public Witnesses

Jennifer Witten, Senior Government Relations Director, MD-DC, American Heart Stroke Association, urged the Committee and District Council to act favorably on B20-50. Stroke-prone patients who live in remote and medically underserved areas require increased access to appropriate care. In the United States, there are 4 neurologists per 100,000 persons providing care for more than 700,000 acute strokes per year. Telemedicine services reduce barriers that limit patients’ access to critical, time-sensitive treatments, and neurological care.

David W. Wilmot, Executive Director, District of Columbia Association of Health Plans, described telemedicine as a “new” and “appropriate” way of delivering and managing health care services. Because changes in the health care market place brought about by the implementation of the Patient Protection and Affordable Care Act, national and local health care systems are forced focus on policies and systems that improve economic and operational efficiencies. He suggested several guidelines for the Committee as it continues its work on B20-50:

 Any mandatory coverage policy should provide for a clear path for opportunity and guard against challenges;

 Telemedicine should be clearly defined and standards must be established to ensure appropriate use and delivery of care;

 The definition of “telemedicine” should specify the appropriate technology for the delivery of this type of health care; and,

 Require that the telemedicine services be delivered by a licensed health care provider.

Mr. Wilmot was critical of the bill because it does not address safeguards against fraud, abuse, and inappropriate overutilization. He also recommended adding language that would allow a health insurer to provide telemedicine coverage under a health insurance policy for contract for health care services appropriately delivered through telemedicine.

Mary Fuska, Operations Manager, Telehealth Services and Videoconferencing, Children’s National Medical Center, testified that telemedicine has proven to be an effective instrument for healthcare providers, patients, and families providing health care to children. It is an extremely helpful vehicle to fostering professional collaboration in the exchange of clinical and educational information. Telemedicine technologies support diagnoses, second opinions, and education by connecting hospitals, clinics, physicians and home-bound patients. Children’s National Medical Center uses telemedicine services “to deliver high-quality, cost-effective care to underserved populations – improving their access, continuity of care, and overall health. Ms. Fuska outlined the benefits of telemedicine as utilized by Children’s National Medical Center:

 Families can access pediatric specialty care near home, avoiding the expense and inconvenience associated with traveling to the hospital;  Children can be discharged in a timely fashion and avoid unnecessary and lengthy hospital stays; and,

 Telemedicine reduces healthcare costs by reducing unnecessary tests and procedures.

Children’s National Medical Center supports the passage of B20-50 because it will facilitate the expansion of services and provide timely medical care to infants, children, and young adults who have limited access to specialty and preventive care. Ms. Fuska highlighted that the bill requires Medicaid to provide reimbursement for telemedicine services. Children’s National Medical Center delivers services to a significant number of children who are Medicaid beneficiaries.

Christopher Weurker, Medical Director, MedSTAR Transport, MedSTAR Washington Hospital Center, testified that many patient transfers from community hospitals to specialty care hospitals maybe avoided if the necessary patient information could be transferred via telemedicine. Reductions in patient transfers could produce the following benefits:

 Cost savings resulting from reduced payments for patient transportation services;

 Patients being able to stay closer to home, family and friends; and,

 Increased bed availability at specialty hospitals for patients that require transfer for specialty care facilities for “hands-on” care.

Mr. Weurker urged the Committee to support B20-50 because the lack of reimbursement is a “significant barrier” to increasing access to telemedicine services.

Government Witnesses

William P. White, Commissioner, Department of Insurance, Securities and Banking, testified that the Department would greatly benefit from additional guidance on the practical application of the telemedicine definition provided in the bill. Such guidance would greatly assist the Department in establishing an enforcement investigation and enforcement model for reimbursement complaints. The Department also requested clarification on the specifics of the services mandated and which are eligible for reimbursement or payment. The Commissioner acknowledged that the Department lacks the competency to judge “whether industry acceptable” telemedicine services and practices are applied in reimbursable claims for patient care services.

Jacqueline Watson, Executive Director, District of Columbia Board of Medicine at the District of Columbia Department of Health, testified before the Committee on behalf of Dr. Saul Levi, Interim Director of the Department of Health. Ms. Watson indicated that telemedicine facilitates more than healthcare and encouraged policymakers to think more about the broader term of “telehealth.” She indicated that as the bill moves forward that the following points should be considered:

5  “Telemedicine,” as defined in the bill is too narrow, and a broader definition should be contemplated;

 Implementation of the bill would require “robust and comprehensive legislation” to effectively regulate telemedicine;

 The bill is silent on patient safety and other regulatory concerns

Despite the bill’s limitations, the Department of Health supports the intent of the legislation.

Statements Submitted for the Record

Amie W. Hsia, M.D., Medical Director, Medical Director MedSTAR Washington Hospital Stroke Center, remarked that it is important for the District to support B20-50 and encourage the development of use of telemedicine stroke care delivery in the City. Development of such a delivery system will reduce the racial disparities in stroke care across the District.

Pegeen A. Townsend, Vice President, Government Affairs, MedSTAR Health, acknowledged in his statement to the Committee that growing physician shortages and increasing demand for services due to “broader coverage expansions” and a growing older patient population require more efficient healthcare delivery mechanisms and technology is a part of that solution. B20-50 provides such a solution.

K. Edward Shanbacker, Executive Vice President, Medical Society of the District of Columbia, forwarded a letter to the Committee expressing support for B20-50. He characterized the legislation as a modest effort in bringing payment policy in line with the way medicine is “sometimes” practiced. That medical services are delivered through telemedicine should not pose a barrier for reimbursement.

VI. Fiscal Impact

The Committee adopts the attached fiscal impact statement from the District’s Chief Financial Officer. See Attachment F.

VII. Section-by-Section Analysis

Section 1 States the short title of B20-50

Section 2 Definitions.

Paragraph (1) “Health benefits plan” is defined pursuant to section 8899.1 of Title 26 of the District of Columbia Municipal Regulations. Paragraph (2) “Health insurer” is defined pursuant to section 8899.1 of Title 26 of the District of Columbia Municipal Regulations.

Paragraph (3) “Provider” has the same meaning as in section 8899.1 of Title 26 of the District of Columbia Municipal Regulations.

Paragraph (4) “Telehealth” means the delivery of healthcare services through the use of interactive audio, video, or other electronic media used for the purpose of diagnosis, consultation, or treatment, provided that services delivered through audio-only telephones, electronic mail messages, or facsimile transmissions are not included.

Section 3 Provides terms under which telehealth services are reimbursable under private health benefits plans. Nothing in the Act precludes a health insurer from undertaking utilization review to determine the appropriateness of telemedicine services. No health insurer is required to reimburse a provider for healthcare services that is beyond the scope of health care services coverage of the health benefit plan.

Section 4 Provides terms for Medicaid reimbursement.

Section 5 Adopts the Fiscal Impact Statement in the committee report.

Section 6 The Act shall take effect following approval by the Mayor (or in the event of veto by the Mayor, action by the Council to override a veto), a 30-day period of Congressional review as provided by section 602 (c) (1) of the District of Columbia Home Rule Act (87 Stat. 813; D.C. Official Code § 1-206.02(c) (2)), and publication in the District of Columbia Register.

VIII. Impact on Existing Law

B20-50, the “Telehealth Reimbursement Act of 2013” establishes a statutory framework for the delivery of telehealth medical services.

IX. Committee Action

On April 8, 2013, the Committee on Business, Consumer, and Regulatory Affairs met to consider B20-50, the Telehealth Reimbursement Act of 2013. The meeting was called to order at 3:30 p.m. Chairperson Orange began the mark-up by determining the presence of a quorum consisting of Councilmembers Cheh, Grosso, and Alexander.

After Chairperson Orange made his opening statement, he asked if there were any comments from any other members.

7 Councilmember Cheh spoke of how the bill would enhance healthcare services to infants, children, and individuals with mobility challenges. She also mentioned the cost-savings on transportation costs that the bill provides.

Councilmember Alexander supported the idea of telehealth services but raised a concern that the bill did not place the proper safeguards to make sure that an individual or provider is not charged more for using these services. Councilmember Cheh replied that there are parity provisions in the legislation similar to legislation in Maryland and Virginia providing the private health insurer from charging more for these services. She pointed out that the bill does not provide for a healthcare service, but for regulates the delivery of service, so costs would be based on services provided and not how they were provided.

Councilmember Alexander then moved an amendment to strike the parity provisions of the bill. Chairperson Orange stated his objection to the amendment.

Councilmember Grosso spoke in support of Councilmember Alexander's amendment and in support of telehealth services. Councilmember Grosso felt that the bill was restrictive towards businesses and was it was the government telling businesses how they can and cannot operate. He stated the DISB already regulates insurance rates and the Affordable Care Act would go further in regulating how much an insurance company may charge for a service. He felt certain provisions were already covered under the Affordable Care Act so they were unnecessary.

Chairperson Orange moved to consider the amendment. The vote on the amendment was defeated, with Chairperson Orange and Councilmember Cheh voting against amendment and Councilmembers Grosso and Alexander voting for the amendment.

Councilmember Grosso then moved an amendment that would strike section 3 and would amend section 4. He felt the Medicaid reimbursement and the private health insurance reimbursement sections should be treated similarly.

Chairperson Orange moved to consider the amendment. The vote on the amendment was defeated, with Chairperson Orange and Councilmember Cheh voting against amendment and Councilmembers Grosso and Alexander voting for the amendment.

Following the discussion, Chairperson Orange moved for approval of the Committee Prints and Committee Reports for B20-50, with leave to staff to make technical and conforming changes. The Committee voted not to approve the Committee Prints and Committee Reports for B20-50, with members voting as follows:

Committee members voting in favor: Chairperson Orange and Councilmember Cheh

Committee members voting against: Councilmember Grosso and Councilmember Alexander Committee members absent: Councilmember Graham

Committee members voting present: None

The meeting adjourned at 3:55 p.m.

On May 8, 2013, at the request of Councilmember Alexander, the Committee on Business, Consumer, and Regulatory Affairs met to reconsider B20-50, the Telehealth Reimbursement Act of 2013. The meeting was called to order at XXX a.m. Chairperson Orange began the mark-up by determining the presence of a quorum consisting of Councilmembers

Committee members voting in favor:

Committee members voting against:

Committee members absent:

Committee members voting present: None

The meeting adjourned at XXX a.m.

X. Attachments

A. B20-50 as introduced

B. Notice of Intent to Act Published in the District of Columbia Register

C. Public Hearing Notices

D. Witness Lists

E. Witness Testimony

F. Fiscal Impact Statement

G. Attestation of Legal Sufficiency

H. Committee print of B20-50