BILL ANALYSIS                                                                                                                                                                                                    Ó







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        |Hearing Date:July 6, 2011          |Bill No:AB                         |
        |                                   |415                                |
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                      SENATE COMMITTEE ON BUSINESS, PROFESSIONS 
                               AND ECONOMIC DEVELOPMENT
                          Senator Curren D. Price, Jr., Chair
                                           

                          Bill No:        AB 415Author:Logue
                        As Amended:May 27, 2011  Fiscal:   Yes

        
        SUBJECT:   Healing arts:  telehealth. 
        
        SUMMARY:  Enacts the Telehealth Advancement Act of 2011 which repeals 
        and recasts existing law provisions dealing with telemedicine and 
        replaces the term telemedicine with telehealth.

        NOTE: This bill was heard in Senate Health Committee on June 29, 2011 
        and passed 8-0.
        
        Existing law:
        
        1) Establishes the Medical Board of California (MBC) to regulate the 
           practice of medicine under the Medical Practice Act.  

        2) Establishes the Telemedicine Development Act of 1996 for the 
           purpose of addressing significant barriers to access to health 
           services in medically underserved rural and urban areas.  Defines 
           "telemedicine" as the practice of health care delivery, diagnosis, 
           consultation, treatment, transfer of medical data, and education 
           using interactive audio, video or data communications.  Neither a 
           phone conversation nor an electronic mail message between a health 
           care practitioner and patient constitutes telemedicine.  (Business 
           & Profession Code 
        § 2290.5)

        3) Provides that for the purpose of practicing telemedicine, provides 
           that the term "health care practitioner" includes a physician and 
           surgeon, podiatrist, clinical psychologist, marriage and family 
           therapist, licensed clinical social worker, dentist, or 
           optometrist.  (Id.)





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        4) Requires, prior to the delivery of health care via telemedicine, a 
           health care practitioner who has ultimate authority over the care 
           or primary diagnosis of the patient to obtain verbal and written 
           informed consent from the patient or the patient's legal 
           representative.  Specifies that the informed consent procedure must 
           include certain information to be given to the patient or the 
           patient's legal representative verbally or in writing.  Specifies 
           that failure of a health care provider to comply with these 
           requirements constitutes unprofessional conduct.  Provides for 
           exemptions to the application of telemedicine.  (Id.)

        5) States that no health care service plan contract that is issued, 
           amended, or renewed shall require face-to-face contact between a 
           health care provider and a patient for services appropriately 
           provided through telemedicine, as specified.  Provides that this 
           requirement applies to health care service plan contracts with the 
           Medi-Cal managed care program only if certain requirements are met. 
            (Health & Safety Code § 1374.13)

        6) Provides that no disability insurance contract that is issued, 
           amended, or renewed for hospital, medical or surgical coverage 
           shall require face-to-face contact between a health care provider 
           and a patient for services appropriately provided through 
           telemedicine, as specified.  (Insurance Code § 10123.85)

        7) Establishes the Medi-Cal program, administered by Department of 
           Health Care Services (DHCS), under which health care services are 
           provided to qualified low-income persons.  (Welfare & Institutions 
           Code (WIC) § 14000 et.seq.)

        8) Provides that face-to-face contact between a health care provider 
           and a patient shall not be required under the Medi-Cal program for 
           services appropriately provided through telemedicine, subject to 
           reimbursement policies developed by the Medi-Cal program, as 
           specified.  (Id., WIC § 14132.72)

        9) Requires the DHCS to report to the appropriate committees of the 
           Legislature by January 1, 2000, on the application of telemedicine 
           to provide specified services.  (Id.)

        10)                 Establishes the Confidentiality of Medical 
           Information Act, which among other provisions, prohibits licensed 
           or certified health care professionals, clinics and health 
           facilities, health plans and insurers, and contracting entities, as 
           defined, from disclosing or using a patient's medical information 





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           for any purpose not necessary to provide health care services to 
           the patient and related administrative functions, without first 
           obtaining authorization from the patient or the patient's 
           representative, as specified, with exceptions.  (Civil Code § 56 
           et.seq.)

        11)                 Establishes in federal law the Health Insurance 
           Portability and Accountability Act, which among other provisions, 
           prohibits a health plan, health care clearinghouse or a health care 
           provider, who transmits health information in electronic form, from 
           using or disclosing protected health information, for purposes 
           other than medical treatment or payment, or health care operations, 
           as defined, without written authorization of the patient, with 
           exceptions.

        This bill:

        1) Repeals and recasts existing law provisions relating to 
           telemedicine, updates and defines various terms related to 
           telehealth.  Deletes the term "telemedicine" and replaces it with 
           "telehealth," which is defined as the mode of delivering health 
           care services and public health via information and communication 
           technologies to facilitate the diagnosis, consultation, treatment, 
           education, care management, and self-management of a patient's 
           health care while the patient is at the originating site and the 
           health care provider is at a distant site.  States that telehealth 
           facilitates patient self-management and caregiver support for 
           patients and includes synchronous interactions and asynchronous 
           store and forward transfers.

        2) Deletes existing requirement that prior to the delivery of 
           healthcare via telemedicine that verbal and written informed 
           consent must be obtained from the patient or the patient's 
           representative, and instead requires that a health care provider to 
           verbally inform the patient that telehealth may be used and obtain 
           verbal consent from the patient.  Requires the verbal consent to be 
           documented in the patient's medical record.  Requires that all laws 
           regarding the confidentiality of health care information and a 
           patient's rights to his or her medical information to apply to 
           telehealth.

        3) Repeals and recasts existing law provisions requiring every  health 
           care service plan  or  health insurer  to adopt payment policies for 
           telemedicine.  Requires health care service plans or health 
           insurers to:






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           a)   Adopt payment policies to compensate health care providers who 
             provide covered health care services through telehealth, as 
             specified;

           b)   Not to limit the type of setting where services are provided 
             for the patient or by the health care provider;

           c)   Not to interpret this bill to require the use of telehealth 
             when the health care provider has determined that it is not 
             appropriate.

        4) Repeals and recasts existing law provisions relating to the 
           provision of telemedicine in the Medi-Cal program, and instead 
           provides:

           a)   That the DHCS shall not require a health care provider to 
             document a barrier to an in-person visit for Medi-Cal coverage of 
             services provided via telehealth;

           b)   For purposes of payment for covered treatment or services 
             through telehealth, the DHCS shall not  limit the type of setting 
             where services are provided for the patient or by the health care 
             provider;

           c)   Not to interpret the provisions of this bill to authorize the 
             DHCS to require the use of telehealth when the health care 
             provider has determined that it is not appropriate.

           d)   That the DHCS is authorized to implement, interpret and make 
             specific the provisions of this bill by means of all-county 
             letters, provider bulletins, and similar instructions.  

        5) Finds and declares the importance of telehealth and the need to 
           assure payment for telehealth.

        6) Makes other technical, non-substantive and clarifying changes.  

        FISCAL EFFECT:  According to the Assembly Appropriations Committee: 1) 
        Unknown one-time workload, unlikely to exceed $100,000, to DHCS to 
        modify regulations, develop specific payment policies, and communicate 
        the new policies via provider bulletins; and, 2) Potential unknown 
        additional costs, or savings, for telehealth services in the Medi-Cal 
        Program.  The cost impacts would depend on changes in payment policies 
        developed by DHCS and any resulting changes in provider billing 
        behavior.  A significant increase in the use of telehealth could have 
        indirect fiscal impacts on Medi-Cal and health plans and insurers.  





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        However, these potential impacts are speculative and would be effects 
        of the broader adoption of telehealth, not specific impacts of this 
        bill.



        
        COMMENTS:
        
        1. Purpose. According to the  California State Rural Health 
           Association  , the Sponsor of this measure, this bill will "remove 
           barriers in current law to the use of telehealth in the delivery of 
           health care, while maintaining the original legislative intent of 
           California's Telemedicine Development Act (TDA) of 1996.  This bill 
           replaces and updates outdated terminology of telemedicine term with 
           telehealth to reflect the current use of telehealth in California's 
           health care system providing a broader range of services than 
           contained in the outdated 1996 model statute.  The updated statute 
           applies the definition of telehealth to all licensed health 
           professionals; streamlines the process and removes duplicative 
           procedures; and recognizes changes in technology & health care 
           advances.  This bill will also eliminate an existing sunset date in 
           Medi-Cal on the provision of telehealth asynchronous store and 
           forward services for dermatology, ophthalmology and optometry, 
           since that is the current practice of health and no longer 
           considered experimental.  

        2. Background.   SB 1665  (M. Thompson, Chapter 864, Statutes of 1996) 
           enacted the Telemedicine Development Act of 1996, which imposed 
           several requirements governing the delivery of health care services 
           through telemedicine.  The 1996 Telemedicine Development Act (TDA) 
           declared that lack of primary care, specialty providers, and 
           transportation are significant barriers to access to health 
           services in medically underserved rural and urban areas, and parts 
           of California have difficulty attracting and retaining health 
           professionals, as well as supporting local health facilities to 
           provide a continuum of health care.  It also declared telemedicine 
           is part of a multifaceted approach to address the problem of 
           provider distribution and the development of health systems in 
           medically underserved areas by improving communication capabilities 
           and providing convenient access to up-to-date information, 
           consultation, and other forms of support.  The TDA also specified a 
           number of requirements that must be followed by health care 
           practitioners prior to the delivery of health care via 
           telemedicine.  Specifically, a health care practitioner must obtain 
           the verbal and written consent of the patient prior to providing 





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           health care delivery services through telemedicine, and failure to 
           comply with constitutes unprofessional conduct.  

        The Medical Practice Act defines telemedicine as the practice of 
           health care delivery, diagnosis, consultation, treatment, transfer 
           of medical data, and education using interactive audio, video, or 
           data communications.  According to the MBC's Internet Website, 
           telemedicine is seen as a tool in medical practice, not a separate 
           form of medicine.  There are no legal prohibitions to using 
           technology in the practice of medicine, as long as the practice is 
           done by a California licensed physician.  The MBC points out that 
           the standard of care is the same whether the patient is seen 
           in-person, through telemedicine or other methods of electronically 
           enabled health care.  Physicians need not reside in California, as 
           long as they have a valid, current California license.  
           Additionally, physicians must provide an appropriate prior 
           examination to diagnose and/or treat a patient.  This examination 
           need not be in-person, if the technology is sufficient to provide 
           the same information to the physician if the exam had to be 
           performed face-to-face.

         AB 329  (Nakanishi, Chapter 386, Statutes of 2007) authorized the MBC 
           to establish a pilot program to expand the practice of 
           telemedicine, and authorized it to implement the program by 
           convening a working group.  AB 329 specified that the purpose of 
           the pilot program would be to develop methods, using a telemedicine 
           model, of delivering health care to those with chronic diseases and 
           delivering other health information.  Additionally, the MBC was 
           required to submit a report to the Legislature about its findings 
           within one calendar year of the commencement of the pilot program.  
           In July 2010, the MBC submitted this report, but indicated that in 
           developing the parameters of the pilot, the MBC realized that a 
           one-year pilot was not feasible, valuable results would not be 
           recognized, nor could feasible recommendations be made in such a 
           short time frame.  

        The report covers the period July 1, 2009 to April 30, 2010, and MBC 
           contracted with the University of California, Davis to develop a 
           telemedicine model for the provision of modern diabetes 
           self-management education and training classes for patients with 
           diabetes living in a 33-county area of rural, underserved 
           communities in northern and central California.  This telemedicine 
           model was referred to as the telemedicine Diabetes Self-Management 
           Education Curricula, which was piloted with a group of 9 patients 
           with diabetes at UC Davis Medical Center.  The report outlined the 
           accomplishments of the pilot project, including the hiring of a 





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           health educator staff, completion of curriculum development, and 
           the continuing medical education portion of the project has been 
           submitted and approved.  There are additional goals that need to be 
           met but the report indicated that two subsequent annual reports 
           that are forthcoming will better evaluate the effectiveness of the 
           pilot project.  

        3. Related Legislation.  

            a)   AB 386  (Galgiani) of 2011, requires the California Department 
             of Corrections and Rehabilitation to have an operational 
             telemedicine services program in all state prisons, as specified, 
             by January 1, 2016.  AB 386 was held on the Assembly 
             Appropriations Committee's Suspense File.

            b)   SB 946  (Committee on Health) incorporates some of the same 
             terminology changes proposed in this bill.  SB 946 is pending in 
             Assembly Health Committee.

            c)   AB 175  (Galgiani, Chapter 419, Statutes of 2010) for the 
             purposes of Medi-Cal reimbursement, expanded, until January 1, 
             2013, the definition of "teleophthalmology and teledermatology by 
             store and forward" to include services of an optometrist who is 
             trained to diagnose and treat eye diseases.  

            d)   AB 2120  (Galgiani, Chapter 260, Statutes of 2008) extended the 
             Medi-Cal telemedicine reimbursement authorization until January 
             1, 2013.

            e)   AB 329  (Nakanishi, Chapter 386, Statutes of 2007) authorized 
             the MBC to establish a pilot program to expand the practice of 
             telemedicine, as specified.

            f)   AB 1224  (Hernández, Chapter 507, Statutes of 2007) included 
             optometrists to the list of health care providers covered under 
             laws governing telemedicine services.

            g)   AB 2661  (Dymally) of 2007, would have added telephone 
             communication to the definition of telemedicine, required the 
             practitioner practicing telemedicine by telephone to use an 
             electronic medical record (EMR) and provided that a practitioner 
             may be designated by the patient.  AB 2661 failed passage in the 
             Assembly Health Committee.

            h)   AB 354  (Cogdill, Chapter 449, Statutes of 2005) expanded 
             telemedicine provisions by providing that, from July 1, 2006 





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             through December 31, 2008, face-to-face contact between a health 
             care provider and a patient shall not be required for the 
             Medi-Cal program for "store and forward" teleophthalmology and 
             teledermatology services.

            i)   SB 1341  (Kuehl) of 2004 would have expanded the definition of 
             telemedicine to include the use of store-and-forward technology 
             for teledermatology and teleophthalmology services, and to allow 
             Medi-Cal reimbursement for these two types of services provided 
             by health care practitioners via telemedicine.  SB 1341 was 
             vetoed by former Governor Schwarzenegger.

            j)   AB 116  (Nakano, Chapter 20, Statutes of 2003) clarified that 
             the TDA applies to marriage and family therapists (MFTs) so that 
             MFTs may deliver services using interactive audio, video, or data 
             communications without direct contact with the patient.

            aa)       SB 1665  (Thompson, Chapter 864, Statutes of 1996) 
             established the TDA, to set standards for the use of telemedicine 
             by health care practitioners and insurers. 

        4. Arguments in Support.  Supporters, including the  California 
           Healthcare Institute  and the  Medical Board of California  state that 
           this bill would remove barriers in current law and update the 
           current practice of telehealth in the delivery of health care.   The 
           Children's Partnership  (TCP) states that low-income children living 
           in medically underserved areas face geographic and economic 
           barriers to accessing health care.  TCP states that telehealth 
           helps overcome barriers such as health care provider shortages, 
           transportation costs, and lost time from work and school by using 
           technology to bring the care to where the children are located.  
           The  California Hospital Association  further indicates that the use 
           of telehealth technologies increase access to health care in rural 
           communities by allowing clinical services such as diagnosis, 
           consultation, treatment and care management to be more easily 
           obtained in remote areas.  

        According to the  University of California  (UC), there are three major 
           initiatives underway to expand the use of telehealth technologies 
           and expertise throughout the state.  The first is the California 
           Telehealth Network (CTN), a recent statewide broadband initiative 
           to provide managed broadband access to hundreds of primarily rural 
           health care facilities throughout California.  The CTN expects to 
           link more than 800 qualified sites, including the five UC academic 
           health systems, Stanford University, University of Southern 
           California, and Loma Linda University in a peer-to-peer network 





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           which will be one of the largest in the nation.  A second enables 
           the expansion of existing telemedicine programs at UC medical 
           school campuses to provide facilities and state-of-the art 
           equipment to expand use of telemedicine across the state.  Lastly, 
           the Specialty Care Safety Net Initiative is a collaborative effort 
           between UC medical school specialty departments and safety net 
           clinics in California.  The initiative seeks to identify barriers 
           to adoption and sustainability of telehealth programs in high-need 
           specialties such as dermatology, endocrinology, hepatology, 
           neurology, orthopedics and psychiatry.

        5. Amendments Adopted in Senate Health Committee.  The Author agreed 
           to several amendments in Senate Health Committee which will be 
           adopted in this Committee.  These amendments update terms relating 
           to telehealth, clarify that this bill does not conflict with or 
           supersede existing state laws and regulations related to 
           reimbursement of services, and makes other, technical, and 
           clarifying changes.  (See  attached   mock-up  of Health Committee 
           Amendments.)

        SUPPORT AND OPPOSITION:
        
         Support:  

        California State Rural Health Association (sponsor)
        AgeTech California
        Association of California Healthcare Districts
        California Association of Physician Groups
        California Center for Rural Health Policy
        California Healthcare Institute
        California Hospital Association
        California Medical Association
        Children's Partnership
        Del Norte Clinics, Inc
        Kaiser Permanente
        Kings View Corporation
        Latino Coalition for a Healthy California
        Medical Board of California
        National Multiple Sclerosis Society - CA Action Network
        Occupational Therapy Association of California
        Peach Tree Healthcare
        Regional Council of Rural Counties
        Rural Health Sciences Institute, College of the Siskiyous
        University of California







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         Opposition:    None on file as of June 28, 2011



        Consultant:Rosielyn Pulmano