BILL NUMBER: SB 1665 CHAPTERED
BILL TEXT
CHAPTER 864
FILED WITH SECRETARY OF STATE SEPTEMBER 25, 1996
APPROVED BY GOVERNOR SEPTEMBER 24, 1996
PASSED THE SENATE AUGUST 23, 1996
PASSED THE ASSEMBLY AUGUST 19, 1996
AMENDED IN ASSEMBLY AUGUST 5, 1996
AMENDED IN ASSEMBLY JULY 7, 1996
AMENDED IN ASSEMBLY JUNE 20, 1996
AMENDED IN SENATE MAY 23, 1996
AMENDED IN SENATE MAY 15, 1996
AMENDED IN SENATE APRIL 15, 1996
INTRODUCED BY Senator Thompson
(Principal coauthor: Senator Leslie)
(Coauthors: Senators Alquist, Costa, Johannessen, O'Connell,
Polanco, Sher, and Watson)
(Coauthors: Assembly Members Bustamante, Caldera, Machado,
Mazzoni, Napolitano, and Woods)
FEBRUARY 21, 1996
An act to amend Section 2060 of, and to add Section 2290.5 to, the
Business and Professions Code, to amend Sections 1367 and 1375.1 of,
and to add Sections 1374.13 and 123149.5 to, the Health and Safety
Code, to amend Section 10123.13 of, and to add Section 10123.85 to,
the Insurance Code, and to add and repeal Section 14132.72 of the
Welfare and Institutions Code, relating to telemedicine.
LEGISLATIVE COUNSEL'S DIGEST
SB 1665, M. Thompson. Medicine: telemedicine.
Existing law provides that the Medical Practice Act does not apply
to any practitioner when in actual consultation with a licensed
practitioner of this state, and would prohibit the practitioner from
opening an office, a place to meet patients, and from receiving calls
from patients within the limits of this state.
This bill would instead provide that the act does not apply to any
practitioner located outside the state when in actual consultation
either within this state or across state lines with a licensed
practitioner of this state, and would also prohibit the out-of-state
practitioner from having ultimate authority over the care or primary
diagnosis of a patient who is located within this state.
Existing law provides for the licensure and regulation of
physicians and surgeons and other health care professionals and
provides that various actions constitute unprofessional conduct.
Existing law also regulates health care service plans, disability
insurers, and nonprofit hospital service plans and requires each of
them to provide certain prescribed benefits. Existing law provides
that a violation of the provisions governing health care service
plans is subject to criminal sanction. Existing law establishes the
Medi-Cal program which provides for health care services for
individuals who meet certain financial eligibility criteria.
This bill would enact the "Telemedicine Development Act of 1996"
by imposing several requirements governing the delivery of health
care services through telemedicine, as defined. It would require a
health care practitioner, as defined, prior to providing health care
services through telemedicine, as defined, to obtain the verbal and
written consent of the patient, and would provide that the failure to
do so would constitute unprofessional conduct. This requirement
would not apply when the patient is not directly involved in the
telemedicine interaction, with a specified exception. The bill would
impose various requirements in regard to the provision of, or
payment for, telemedicine services by health care service plans,
disability insurers, and, until January 1, 2001, the Medi-Cal
program.
Existing law establishes procedures regarding the maintenance of a
patient's medical records and for the patient's access to medical
records.
This bill would state that it is the intent of the Legislature
that all medical information transmitted through telemedicine be
maintained as a part of the patient's medical record. The bill would
also provide that it should not be construed to alter the scope of
practice of any health care provider or to authorize the delivery of
health care services in a setting or in a manner not otherwise
authorized by law.
By changing the definition of a crime applicable to health care
service plans, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
This bill would incorporate additional changes in Section 10123.13
of the Insurance Code, proposed by SB 1478, to be operative only if
SB 1478 and this bill are both chaptered and become effective on
January 1, 1997, and this bill is chaptered last.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Lack of primary care, specialty providers, and transportation
continue to be significant barriers to access to health services in
medically underserved rural and urban areas.
(b) Parts of California have difficulty attracting and retaining
health professionals, as well as supporting local health facilities
to provide a continuum of health care. As of June, 1995, 49 counties
received federal designation as having medically underserved areas
or populations.
(c) Many health care providers in medically underserved areas are
isolated from mentors, colleagues, and the information resources
necessary to support them personally and professionally.
(d) Telemedicine is broadly defined as the use of information
technology to deliver medical services and information from one
location to another.
(e) 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, consultations, and other forms of support.
(f) The use of telecommunications to deliver health services has
the potential to reduce costs, improve quality, change the conditions
of practice, and improve access to health care in rural and other
medically underserved areas.
(g) Telemedicine has been utilized in one form or another for 30
years, and telemedicine projects currently exist in at least 40
states.
(h) Telemedicine will assist in maintaining or improving the
physical and economic health of medically underserved communities by
keeping the source of medical care in the local area, strengthening
the health infrastructure, and preserving health care-related jobs.
(i) Consumers of health care will benefit from telemedicine in
many ways, including expanded access to providers, faster and more
convenient treatment, better continuity of care, reduction of lost
work time and travel costs, and the ability to remain with support
networks.
(j) Telemedicine does not change the existing scope of practice of
any licensed health professional.
(k) It is the intent of the Legislature that telemedicine not
replace health care providers or relegate them to a less important
role in the delivery of health care. The fundamental health care
provider-patient relationship can not only be preserved, but also
augmented and enhanced, through the use of telemedicine.
(l) Without the assurance of payment and the resolution of legal
and policy barriers, the full potential of telemedicine will not be
realized.
(m) This act shall be known as the "Telemedicine Development Act
of 1996."
SEC. 2. This act shall not be construed to alter the scope of
practice of any health care provider or authorize the delivery of
health care services in a setting, or in a manner, not otherwise
authorized by law.
SEC. 3. Section 2060 of the Business and Professions Code is
amended to read:
2060. Nothing in this chapter applies to any practitioner located
outside this state, when in actual consultation, whether within this
state or across state lines, with a licensed practitioner of this
state, or when an invited guest of the California Medical Association
or the California Podiatric Medical Association, or one of their
component county societies, or of an approved medical or podiatric
medical school or college for the sole purpose of engaging in
professional education through lectures, clinics, or demonstrations,
if he or she is, at the time of the consultation, lecture, or
demonstration a licensed physician and surgeon in the state or
country in which he or she resides. This practitioner shall not open
an office, appoint a place to meet patients, receive calls from
patients within the limits of this state, give orders, or have
ultimate authority over the care or primary diagnosis of a patient
who is located within this state.
SEC. 4. Section 2290.5 is added to the Business and Professions
Code, to read:
2290.5. (a) For the purposes of this section, "telemedicine"
means the practice of health care delivery, diagnosis, consultation,
treatment, transfer of medical data, and education using interactive
audio, video, or data communications.
(b) For the purposes of this section, "health care practitioner"
has the same meaning as "licentiate" as defined in paragraph (2) of
subdivision (a) of Section 805.
(c) Prior to the delivery of health care via telemedicine, the
health care practitioner who has ultimate authority over the care or
primary diagnosis of the patient shall obtain verbal and written
informed consent from the patient. The informed consent procedure
shall ensure that at least all of the following information is given
to the patient verbally and in writing:
(1) The individual retains the option to withhold or withdraw
consent at any time without affecting the right to future care or
treatment nor risking the loss or withdrawal of any program benefits
to which the individual would otherwise be entitled.
(2) A description of the potential risks, consequences, and
benefits of telemedicine.
(3) All existing confidentiality protections apply.
(4) Patient access to all medical information transmitted during a
telemedicine consultation is guaranteed, and copies of this
information are available for a reasonable fee.
(5) Dissemination of any patient identifiable images or
information from the telemedicine interaction to researchers or other
entities shall not occur without the consent of the patient.
(d) A patient shall sign a written statement prior to the delivery
of health care via telemedicine, indicating that the patient
understands the written information provided pursuant to subdivision
(a), and that this information has been discussed with the health
care practitioner, or his or her designee.
(e) The written consent statement signed by the patient shall
become part of the patient's medical record.
(f) The failure of a health care practitioner to comply with this
section shall constitute unprofessional conduct. Section 2314 shall
not apply to this section.
(g) Where the patient is a minor, or is incapacitated or mentally
incompetent such that he or she is unable to give informed consent,
this section shall apply to the patient's representative.
(h) Except as provided in paragraph (3) of subdivision (c), this
section shall not apply when the patient is not directly involved in
the telemedicine interaction, for example when one health care
practitioner consults with another health care practitioner.
(i) This section shall not apply in an emergency situation in
which a patient is unable to give informed consent and the
representative of that patient is not available.
(j) This section shall not apply to a patient under the
jurisdiction of the Department of Corrections.
SEC. 5. Section 1367 of the Health and Safety Code is amended to
read:
1367. Each health care service plan, and where applicable, each
specialized health care service plan, shall meet the following
requirements:
(a) All facilities located in this state including, but not
limited to, clinics, hospitals, and skilled nursing facilities to be
utilized by the plan shall be licensed by the State Department of
Health Services, where licensure is required by law. Facilities not
located in this state shall conform to all licensing and other
requirements of the jurisdiction in which they are located.
(b) All personnel employed by or under contract to the plan shall
be licensed or certified by their respective board or agency, where
licensure or certification is required by law.
(c) All equipment required to be licensed or registered by law
shall be so licensed or registered and the operating personnel for
that equipment shall be licensed or certified as required by law.
(d) The plan shall furnish services in a manner providing
continuity of care and ready referral of patients to other providers
at times as may be appropriate consistent with good professional
practice.
(e) (1) All services shall be readily available at reasonable
times to all enrollees. To the extent feasible, the plan shall make
all services readily accessible to all enrollees.
(2) To the extent that telemedicine services are appropriately
provided through telemedicine, as defined in subdivision (a) of
Section 2290.5 of the Business and Professions Code, these services
shall be considered in determining compliance with Section 1300.67.2
of Title 10 of the California Code of Regulations.
(f) The plan shall employ and utilize allied health manpower for
the furnishing of services to the extent permitted by law and
consistent with good medical practice.
(g) The plan shall have the organizational and administrative
capacity to provide services to subscribers and enrollees. The plan
shall be able to demonstrate to the department that medical decisions
are rendered by qualified medical providers, unhindered by fiscal
and administrative management.
(h) All contracts with subscribers and enrollees, including group
contracts, and all contracts with providers, and other persons
furnishing services, equipment, or facilities to or in connection
with the plan, shall be fair, reasonable, and consistent with the
objectives of this chapter. All contracts with providers shall
contain provisions requiring a dispute resolution mechanism under
which providers may submit disputes to the plan, and requiring the
plan to inform its providers upon contracting with the plan, or upon
change to these provisions, of the procedures for processing and
resolving disputes, including the location and telephone number where
information regarding disputes may be submitted.
(i) Each health care service plan contract shall provide to
subscribers and enrollees all of the basic health care services
included in subdivision (b) of Section 1345, except that the
commissioner may, for good cause, by rule or order exempt a plan
contract or any class of plan contracts from that requirement. The
commissioner shall by rule define the scope of each basic health care
service which health care service plans shall be required to provide
as a minimum for licensure under this chapter. Nothing in this
chapter shall prohibit a health care service plan from charging
subscribers or enrollees a copayment or a deductible for a basic
health care service or from setting forth, by contract, limitations
on maximum coverage of basic health care services, provided that the
copayments, deductibles, or limitations are reported to, and held
unobjectionable by, the commissioner and set forth to the subscriber
or enrollee pursuant to the disclosure provisions of Section 1363.
Nothing in this section shall be construed to permit the
commissioner to establish the rates charged subscribers and enrollees
for contractual health care services.
The commissioner's enforcement of Article 3.1 (commencing with
Section 1357) shall not be deemed to establish the rates charged
subscribers and enrollees for contractual health care services.
SEC. 6. Section 1374.13 is added to the Health and Safety Code, to
read:
1374.13. (a) It is the intent of the Legislature to recognize the
practice of telemedicine as a legitimate means by which an
individual may receive medical services from a health care provider
without person-to-person contact with the provider.
(b) For the purposes of this section, the meaning of "telemedicine"
is as defined in subdivision (a) of Section 2290.5 of the Business
and Professions Code.
(c) On and after January 1, 1997, 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, subject to all
terms and conditions of the contract agreed upon between the
enrollee or subscriber and the plan. The requirement of this
subdivision shall be operative for health care service plan contracts
with the Medi-Cal managed care program only to the extent that both
of the following apply:
(1) Telemedicine services are covered by, and reimbursed under,
the Medi-Cal fee-for-service program, as provided in subdivision (c)
of Section 14132.72.
(2) Medi-Cal contracts with health care service plans are amended
to add coverage of telemedicine services and make any appropriate
capitation rate adjustments.
(d) Health care service plans shall not be required to pay for
consultation provided by the health care provider by telephone or
facsimile machines.
SEC. 7. Section 1375.1 of the Health and Safety Code is amended to
read:
1375.1. (a) Every plan shall have and shall demonstrate to the
commissioner that it has all of the following:
(1) A fiscally sound operation and adequate provision against the
risk of insolvency.
(2) Assumed full financial risk on a prospective basis for the
provision of covered health care services, except that a plan may
obtain insurance or make other arrangements for the cost of providing
to any subscriber or enrollee covered health care services, the
aggregate value of which exceeds five thousand dollars ($5,000) in
any year, for the cost of covered health care services provided to
its members other than through the plan because medical necessity
required their provision before they could be secured through the
plan, and for not more than 90 percent of the amount by which its
costs for any of its fiscal years exceed 115 percent of its income
for that fiscal year.
(3) A procedure for prompt payment or denial of provider and
subscriber or enrollee claims, including those telemedicine services,
as defined in subdivision (a) of Section 2290.5 of the Business and
Professions Code, covered by the plan. Except as provided in Section
1371, a procedure meeting the requirements of Subchapter G of the
regulations (29 C.F.R. Part 2560) under Public Law 93-406 (88 Stats.
829-1035, 29 U.S.C. Secs. 1001 et seq.) shall satisfy this
requirement.
(b) In determining whether the conditions of this section have
been met, the commissioner shall consider, but not be limited to, the
following:
(1) The financial soundness of the plan's arrangements for health
care services and the schedule of rates and charges used by the plan.
(2) The adequacy of working capital.
(3) Agreements with providers for the provision of health care
services.
(c) For the purposes of this section, "covered health care
services" means health care services provided under all plan
contracts.
SEC. 8. Section 123149.5 is added to the Health and Safety Code,
to read:
123149.5. (a) It is the intent of the Legislature that all
medical information transmitted during the delivery of health care
via telemedicine, as defined in subdivision (a) of Section 2290.5 of
the Business and Professions Code, become part of the patient's
medical record maintained by the licensed health care provider.
(b) This section shall not be construed to limit or waive any of
the requirements of Chapter 1 (commencing with Section 123100) of
Part 1 of Division 106 of the Health and Safety Code.
SEC. 9. Section 10123.13 of the Insurance Code is amended to read:
10123.13. Every insurer issuing group or individual policies of
disability insurance that covers hospital, medical, or surgical
expenses, including those telemedicine services covered by the
insurer as defined in subdivision (a) of Section 2290.5 of the
Business and Professions Code, shall reimburse claims or any portion
of any claim, whether in state or out of state, for those expenses,
as soon as practical, but no later than 30 working days after receipt
of the claim by the insurer unless the claim or portion thereof is
contested by the insurer in which case the claimant shall be
notified, in writing, that the claim is contested or denied, within
30 working days after receipt of the claim by the insurer. The
notice that a claim is being contested shall identify the portion of
the claim that is contested and the specific reasons for contesting
the claim.
If an uncontested claim is not reimbursed by delivery to the
claimants' address of record within 30 working days after receipt,
interest shall accrue at the rate of 10 percent per annum beginning
with the first calendar day after the 30 working day period.
For purposes of this section, a claim, or portion thereof, is
reasonably contested where the insurer has not received a completed
claim and all information necessary to determine payer liability for
the claim, or has not been granted reasonable access to information
concerning provider services. Information necessary to determine
liability for the claims includes, but is not limited to, reports of
investigations concerning fraud and misrepresentation, and necessary
consents, releases, and assignments, a claim on appeal, or other
information necessary for the insurer to determine the medical
necessity for the health care services provided to the claimant.
SEC. 9.5. Section 10123.13 of the Insurance Code is amended to
read:
10123.13. Every insurer issuing group or individual policies of
disability insurance that covers hospital, medical, or surgical
expenses, including those telemedicine services covered by the
insurer as defined in subdivision (a) of Section 2290.5 of the
Business and Professions Code, shall reimburse claims or any portion
of any claim, whether in state or out of state, for those expenses,
as soon as practical, but no later than 30 working days after receipt
of the claim by the insurer unless the claim or portion thereof is
contested by the insurer in which case the claimant shall be
notified, in writing, that the claim is contested or denied, within
30 working days after receipt of the claim by the insurer. The
notice that a claim is being contested shall identify the portion of
the claim that is contested and the specific reasons for contesting
the claim.
If an uncontested claim is not reimbursed by delivery to the
claimants' address of record within 30 working days after receipt,
interest shall accrue at the rate of 10 percent per annum beginning
with the first calendar day after the 30-working-day period.
For purposes of this section, a claim, or portion thereof, is
reasonably contested where the insurer has not received a completed
claim and all information necessary to determine payer liability for
the claim, or has not been granted reasonable access to information
concerning provider services. Information necessary to determine
liability for the claims includes, but is not limited to, reports of
investigations concerning fraud and misrepresentation, and necessary
consents, releases, and assignments, a claim on appeal, or other
information necessary for the insurer to determine the medical
necessity for the health care services provided to the claimant.
The obligation of the insurer to comply with this section shall
not be deemed to be waived when the insurer requires its contracting
entities to pay claims for covered services.
SEC. 10. Section 10123.85 is added to the Insurance Code, to read:
10123.85. (a) It is the intent of the Legislature to recognize
the practice of telemedicine as a legitimate means by which an
individual may receive medical services from a health care provider
without person-to-person contact with the provider.
(b) For the purposes of this section, the meaning of "telemedicine"
is as defined in subdivision (a) of Section 2290.5 of the Business
and Professions Code.
(c) On and after January 1, 1997, 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, subject to all terms and conditions of the
contract agreed upon between the policyholder or contractholder and
the insurer.
(d) Disability insurers shall not be required to pay for
consultation provided by the health care provider by telephone or
facsimile machines.
SEC. 11. Section 14132.72 is added to the Welfare and Institutions
Code, to read:
14132.72. (a) It is the intent of the Legislature to recognize
the practice of telemedicine as a legitimate means by which an
individual may receive medical services from a health care provider
without person-to-person contact with the provider.
(b) For the purposes of this section, the meaning of "telemedicine"
is as defined in subdivision (a) of Section 2290.5 of the Business
and Professions Code.
(c) Commencing July 1, 1997, 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
to compensate licensed health care providers who provide health care
services, that are otherwise covered by the Medi-Cal program, through
telemedicine.
(d) The Medi-Cal program shall not be required to pay for
consultation provided by the health care provider by telephone or
facsimile machines.
(e) The Medi-Cal program shall pursue private or federal funding
to conduct an evaluation of the cost-effectiveness and quality of
health care provided through telemedicine by those providers who are
reimbursed for telemedicine services by the program.
(f) This section shall remain in effect only until January 1,
2001, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2001, deletes or extends
that date.
SEC. 12. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.
Notwithstanding Section 17580 of the Government Code, unless
otherwise specified, the provisions of this act shall become
operative on the same date that the act takes effect pursuant to the
California Constitution.
SEC. 13. Section 9.5 of this bill incorporates amendments to
Section 10123.13 of the Insurance Code proposed by both this bill and
SB 1478. It shall only become operative if (1) both bills are
enacted and become effective on January 1, 1997, (2) each bill amends
Section 10123.13 of the Insurance Code, and (3) this bill is enacted
after SB 1478, in which case Section 9 of this bill shall not become
operative.