January 31, 1997


Telemedicine, in one form or another, has been practiced for over thirty years. At the simplest level, a nurse providing clinical advice over the telephone is telemedicine. Today, however, we think of telemedicine applications that employ advanced image as well as audio capabilities. These technologies can range from high resolution still images (e.g., x-rays) to sophisticated interactive teleconferencing systems. Telemedicine now has the potential to make a difference in the lives of many Americans. For example, telemedicine can improve the delivery of health care in America by bringing a wider range of services such as radiology, mental health services and dermatology to communities and individuals in underserved urban and rural areas. In remote rural areas, where the distance between a patient and a health professional can be hundreds of miles, telemedicine can mean access to health care where little had been available before. In emergency cases, this access can mean the difference between life and death. In particular, in those cases where fast medical response time and specialty care are needed, telemedicine availability can be critical. In addition, telemedicine can also help attract and retain health professionals in rural areas by providing ongoing training and collaboration with other health professionals.

Given this potential, Congress has asked the Secretary of Commerce, in consultation with the Secretary of Health and Human Services and other appropriate departments and agencies, to submit a report on the use of advanced telecommunications services for medical purposes. Specifically, the Telecommunications Reform Act of 1996, requires a summary of the Joint Working Group on Telemedicine's (JWGT) activities as well as findings from federally-funded telemedicine studies and demonstrations. In addition, Congress requested that the report examine questions related to patient safety, the efficacy and quality of services provided and other legal, medical, and economic issues.(1)


Before launching into a full discussion of telemedicine and its related topics, it is important to clarify the definition and scope of telemedicine. For the purposes of this report, "telemedicine" refers to the use of electronic communication and information technologies to provide or support clinical care at a distance. Various broader definitions of "telemedicine" have been previously proposed, such as the Institute of Medicine's(2) interpretation in its recent publication on telemedicine.

More broadly speaking, the term "telehealth" is often used to refer to a diverse group of health-related activities, such as health professional's education, community health education, public health, research, and administration of health services. Although this report primarily focuses on telemedicine, it should be noted that almost all of the telemedicine activities funded by the Federal agencies have some broader telehealth applications.

The telemedicine projects and networks now operating are just beginning to test the potential of telemedicine to deliver health care services, safely and efficiently. What is known today about telemedicine represents only an initial snapshot of a technology that is changing and expanding daily. Given that telemedicine is still in its early stages, the report's scope is limited to a current status report of federally-funded telemedicine studies and projects.

The concept for the JWGT began with Vice President Gore, who identified telemedicine as a key area requiring attention to ensure progress in the development of the National Information Infrastructure (NII). Since 1992, the Information Infrastructure Task Force, (IITF) under the leadership of the Department of Commerce (DOC), has examined broad innovative uses of the NII and coordinated NII initiatives throughout the Federal government. In early 1994, it created the Health Information Application Working Group, with a subgroup that focused upon telemedicine.

In 1995, after the Vice President asked the Department of Health and Human Services (HHS) to take a greater leadership role in developing cost-effective health applications for the NII, the Commerce Department joined forces with HHS to form the Joint Working Group on Telemedicine, which is chaired by the acting director of the Office of Rural Health Policy, Health Resources and Services Administration (ORHP). Currently, the JWGT is a government-wide entity with a focus on telemedicine that has grown to more than eight member departments and agencies(3).

The JWGT is charged with assessing the role of the Federal government in telemedicine and coordinating telemedicine activities across Federal cabinet agencies. Part of that task involves developing specific actions to overcome barriers to the effective use of telemedicine technologies. JWGT members are involved in several different aspects of telemedicine; each member agency bringing its own unique expertise to the table. Table B at the end of the summary, gives a brief outline of these activities.


The Joint Working Group has worked to educate its members through distributed material and presentations from both public and private sector groups that specialize in this field. These efforts have helped the group achieve greater consensus on a range of key issues. Some of these issues as well as those identified in the Group's work plan are highlighted below:

Development of a Working Inventory of Federal Projects. When the Vice President tasked the JWGT to report on current telemedicine projects funded by the Federal government, there was no comprehensive inventory of Federal telemedicine projects available. Therefore, the JWGT identified the development of a Federal inventory as a high priority activity. JWGT created an electronic inventory of Federal telemedicine activities that will be posted on the World Wide Web. The Telemedicine Gateway should be viewed as a prototype that demonstrates the usefulness of using the World Wide Web for maintaining distributed data bases across Federal agencies. The basic design of the inventory could be very useful to other initiatives that need to be tracked across Federal agencies.

Evaluation. Although many individuals believe strongly in the potential of telemedicine for providing cost-effective services, not much "hard data" is available to support that belief. Decision-makers want to know the value-added of telemedicine. Lack of solid evaluative information is a significant barrier to the deployment of telemedicine. In the past year, the JWGT has developed a framework for project evaluation. The framework allows federally-funded projects to share information with each other and may eventually facilitate cooperative evaluation efforts with private sector telemedicine projects. In addition, several JWGT members have funded evaluation studies and developed evaluation requirements for their federal telemedicine grantees so that comparative information can be gathered and analyzed. For example, the Defense Department (DoD) is evaluating some of its telemedicine demonstration projects, such as that in Bosnia; ORHP has funded, along with several other evaluation studies, a project to develop uniform data collection instruments; DOC's National Telecommunications and Information Administration (NTIA) recently released "Lessons Learned from the Telecommunication and Information Infrastructure Assistance Program," a report based on the experiences of its grantees.

Safety/Standards. Given telemedicine's rapid technological changes, most technical standards, and educational/clinical practice guidelines for telemedicine are either in the early developmental stages or non-existent. For example, with the exception of the American College of Radiology, which developed practice guidelines for teleradiology, there are no specialty-generated technical standards, protocols or clinical guidelines for telemedicine. This lack in standards may have serious implications for telemedicine safety and efficacy.

There are several groups in the process of generating clinical practice guidelines. Both the American Medical Association (AMA) and the American Telemedicine Association (ATA) have studied a number of issues related to telemedicine and have urged medical specialty societies to develop appropriate practice parameters. The American Academy of Ambulatory Care Nurses is currently developing practice standards for telephone-based nursing practice and the American Nurses Association is also in the process of developing general standards and guidelines for professional nurses practicing telehealth.

Given the concerns about technical equipment standards and clinical guidelines, the Federal government has a legitimate interest in protecting the public from unsafe and untested medical technologies. The U.S. Federal Food and Drug Administration's (FDA) Center for Device and Radiological Health (CDRH) is the lead agency with responsibility for protecting the public against unsafe medical devices. With respect to telemedicine, FDA's primary responsibility is to ensure the safety and effectiveness of telemedicine devices marketed in the U.S. However, in telemammography, the FDA plays a much broader role. The FDA establishes national standards for mammography facilities under the Mammography Quality Standards Act (MQSA).

Third Party Payment Policies: Private third party payers, including managed care plans, have been reluctant to pay for telemedicine services. And federally-funded programs such as Medicare and Medicaid provide limited coverage. Without adequate payments, the long term survival of telemedicine is in question. Thus, understanding the barriers to third party payment and how to overcome them has been a high priority for the JWGT.

Medicare's current coverage for telemedicine is limited to those telemedicine applications where, under conventional health care delivery, face-to-face contact is not required between patient and physician. Thus, Medicare covers teleradiology as well electrocardiogram (ECG), and electroencephalogram (EEG) interpretations.

As for Medicaid, telemedicine has only recently been introduced to Medicaid through the innovative programs of individual states. Medicaid programs in approximately ten states -- Arkansas, California (effective 1997), Georgia, North Dakota, New Mexico, Montana, South Dakota, Utah, Virginia, and West Virginia -- cover some telemedicine services.

On the private sector side, very little information exists on private payer coverage of telemedicine. Evidence to date, however, suggests that few private payers cover telemedicine consultation services, although most cover radiology and similar imaging services. In addition to private fee-for-service payers, the private managed care community has also been slow to deploy telemedicine. However, there are a growing number of successful managed care models that have recently begun utilizing telemedicine applications. Two of these plans are Allina Health Systems of Minneapolis, MN and Methodist Hospital of Indianapolis, IN.

In addition, important recent legislative changes occurred in California and Louisiana that may spur greater managed care use of telemedicine. Louisiana recently passed a law dealing with telemedicine reimbursement that specifies a certain reimbursement rate for physicians at the originating site and also includes language prohibiting insurance carriers from discriminating against telemedicine as a medium for delivering health care services. More recently in 1996, California passed California State Bill 1665 (1996) requiring private managed care plans to cover telemedicine services.

Licensure. Telemedicine offers the potential to provide health services across vast distances to underserved areas. However, even though telemedicine technology knows no boundaries, health professionals must be licensed and regulated at the state level. Therefore, issues relating to cross-state licensure are perceived to be potential barriers to the expansion of telemedicine.

Historically, states have the authority to regulate activities that affect the health, safety, and the welfare of their citizens. Each state defines the process and procedures for granting a health professional license, renewing a license, and regulating medical practice within the state. While states have the authority to license health professionals, the Federal government has the authority to establish national licensure standards. For example, the Medicare and Medicaid programs, which include conditions of participation for nursing homes and other providers, establish specific standards of practice under their respective program.

Moreoever, although there is a strong presumption against state preemption, the Supremacy Clause of the Constitution mandates that even state regulation designed to protect vital state interests must give way to paramount Federal legislation. Should Congress desire to regulate telemedicine licensure, it could do so. However, states would be able to continue their own licensing systems in the absence of complete preemption. Thus, the ultimate question of preemption will lie with the intent of Congress.

Table A presents an outline of general alternative licensure models. In addition to these general models, many organizations have put forth specific proposals to address the cross-state telemedicine delivery dilemma.
Table A: Alternative Approaches to Licensure
Licensure Model Name Description of alternative licensure model
Consulting Exceptions With a consulting exception, a physician who is unlicensed in a particular state can practice medicine in that state at the behest and in consultation with a referring physician. The scope of these exceptions varies from state to state.

Most consultation exceptions prohibit the out-of-state physician from opening an office or receiving calls in the state. Consultation exceptions to the licensure laws were enacted in most states before the advent of telemedicine. Although they may be well-suited to some telemedicine situations, it is unlikely these exceptions were intended to apply to regular, on-going telemedicine links.

Endorsement State boards can grant licenses to health professionals licensed in other states that have equivalent standards. For example, health professionals must apply for a license by endorsement from each state in which they seek to practice. States may require additional qualifications or documentation before endorsing a license issued by another state. Endorsement allows states to retain their traditional power to set and enforce standards that best meet the needs of the local population.
Mutual Recognition Mutual recognition is a system in which the licensing authorities voluntarily enter into an agreement to legally accept the policies and processes (licensure) of a licensee's home state. This approach has been adopted by the European Community and Australia to enable the cross-border practice of medicine. Licensure based on mutual recognition is comprised of three components: a home state, a host state, and a harmonization of standards for licensure and professional conduct deemed essential to the health care system. The health professional secures a license in his/her home state and is not required to obtain additional licenses to practice in other states.
Reciprocity Reciprocity denotes the relationship between two states when each state gives the subjects of the other, certain privileges, on the condition that its own subjects shall enjoy similar privileges at the hands of the latter state. A licensure system based on reciprocity would require the authorities of each state to negotiate and enter agreements to recognize licenses issued by the other state without a further review of individual credentials. These negotiations could be conducted on a bilateral or multilateral basis. A license valid in one state would give privileges to practice in all other states with which the home state has agreements. No states are currently parties to a reciprocity agreement, although reciprocity arguably occurs now when patients physically travel to distant states to receive care.
Registration Under a registration system, a health professional licensed in one state would inform the authorities of other states that s/he wished to practice part-time therein. By so registering, the clinician would submit to the legal authority and jurisdiction of the other state. Health professionals would not be required to meet the entrance requirements imposed upon those licensed in the host state, but they would be held accountable for breaches of professional conduct in any state in which they are registered. California has passed legislation that would authorize registration but has not yet implemented it.
Limited Licensure A limited licensure system would be a modification of the current system. Health professionals would be required to obtain a license from each state in which they practiced. However, the health professional would have the option of obtaining a limited license that allows the delivery of a specific scope of health services under particular circumstances. This system would limit the scope of practice rather than the time period for practice as is currently the case. The health professional would be required to maintain a full and unrestricted license in at least one state. There are currently no other licensure systems utilizing registration.
National Licensure A national licensure system could be implemented at the state or national level. A license would be issued based on a standardized set of criteria for the practice of health care throughout the U.S. Administration at the national level could be left to a national professional organization.

A national licensure system implemented at the state level would require states to voluntarily incorporate the national standards into their laws. In such a system, the states would be unable to impose significant additional standards. Health professionals would still be required to obtain a license from every jurisdiction in which they practiced, but a common set of criteria would greatly facilitate the administrative process. States could, however, possibly retain some flexibility in the administrative process.

A number of states and organizations are examining licensure alternatives for telemedicine. Some of the more widely-known models include:

Privacy and Security. Lack of privacy and security standards affect several of the legal challenges facing telemedicine (e.g., malpractice) and have profound implications for the acceptance of telemedicine services. This is particularly of concern in the use of telemedicine technologies for treating mental illness, substance abuse, and other conditions that carry a social stigma such as HIV. Moreover, unlike standard medical record documentation, in which the health professional has discretion to selectively record his or her findings, most interactive telemedicine consultations are recorded in toto. This record usually is maintained as part of the documentation of the consultation. Clinicians have less discretion to remove information that they might otherwise not record.

Telecommunications Infrastructure. The cost of using advanced telemedicine applications can be prohibitive in many areas of the nation because of high telecommunications costs. One of the ways Federal telemedicine grantees have coped with this problem is to foster multiple uses of the system. (See Lessons Learned) Using the infrastructure for health education, administration and other non-clinical uses, grantees can spread the infrastructure cost over a number of uses.

In addition, provisions of the Telecommunications Act of 1996 concerning universal service policy are designed to help lower the rates for telecommunications services available to rural providers of health care. The Act requires that rates for telecommunications services necessary for the provision of health care in rural areas be reasonably comparable to rates for similar services in urban areas.

On November 7, 1996 a Joint Board, convened by the FCC in accordance with the Act and consisting of Federal and State communications commissioners, recommended that the FCC seek further data describing the costs and benefits associated with the recommendations of the Advisory Committee on Telecommunications and Health Care. This Committee's recommendations included: lowering the price of services in rural areas requiring bandwidth levels up to and including 1.54 Mbps to prices similar to those in urban areas; making funds available to support infrastructure upgrades in some areas; and making toll-free access to the Internet. The FCC will release its rules concerning telecommunications and rural health care providers no later than May 8,1997.


The majority of federally-funded telemedicine projects are currently in the early stages of development. Most have been in existence for three years or less. Thus, similar to any start-up company, these projects have faced steep learning curves; however, project directors from federally-funded telemedicine projects have gleaned some early lessons. These lessons are divided into three phases: pre-planning, start-up, and sustainability.

Pre-Planning Phase

A Business Plan. Successful telemedicine organizations developed a solid business plan that included:

Technology Selection. Successful projects used a thorough technology assessment to select the most simple and least expensive equipment to meet the clinical requirements. They also took into account:

Negotiating Telecommunications. Successful projects quickly learned to negotiate and work with telecommunications vendors and telephone companies to keep transmission costs low. This was particularly important in rural areas, where the telecommunications infrastructure and resulting rate structure vary greatly.

Start Up Phase

Local Support. Successful projects communicated a common vision of goals, priorities and needs to all levels of the team-from the leaders to the practitioners to the technical support. They also:

Data Collection and Evaluation: Successful project directors found that it is important to collect data right away because it can help improve negotiations with insurers for reimbursement.

Sustainability Phase

Program Coordination. Successful projects continually refine their program by ensuring:


This report provides a snapshot of the Federal government's activities in the area of telemedicine. Telemedicine is a rapidly evolving field, requiring flexibility and creativity to respond to its challenges. Moreover, telemedicine encompasses many legal, technical and political issues that must be resolved before it can proliferate. Thus, it will become all the more critical that the Federal government have a vehicle for coordinating its telemedicine policies and programs. And the JWGT provides an important forum to accomplish this task. However, Federal government agencies cannot resolve all the issues discussed in this report, alone. Congress, the states, health professionals and associations, and the private sector must come together to make telemedicine a viable health care delivery option for the United States. The following outline summarizes areas for further action over the coming year and should be viewed mainly as a work-in-progress.


Inventory and Evaluation. The telemedicine inventory of Federal activities will undergo further refinement and updating throughout the coming year. Moreover, the JWGT and its member agencies will be pursuing activities to promote better knowledge about what works and what doesn't in telemedicine. Some of these activities will include: uniform evaluation tool development; evaluation of Medicaid telemedicine programs; and evaluation of telemedicine in managed care settings.

Standards/Guidelines/Protocols. The JWGT will be working with Federal agencies, specialty associations, and industry groups to support the development of an agenda for establishing standards or guidelines for telemedicine. And will explore the economic and logistic feasibility of expanding the work of the Veterans Administration, National Institute of Standards and Technology and Open Systems Laboratory at Lawrence Livermore Laboratories.

The JWGT will also continue to work with the FCC and other appropriate bodies to promote greater uniformity of standards in both telecommunications and telemedicine equipment. And it will continue to work with the FDA in its activities to develop guidelines for defining its role in the regulation of medical devices. In addition to the standards question, questions of monitoring telecommunications service quality and reliability should be addressed.

Privacy and Security. The JWGT will provide assistance in addressing privacy and other related issues in the context of the broader privacy initiatives of HHS's Privacy Advocate and its Data Council. The Working Group will bring in representatives from various consumer and professional groups to discuss their views on privacy and security issues in telemedicine. Finally, it will examine available results from various demonstrations and pilot projects that may provide insights into privacy concerns in telemedicine and compile its results in a briefing paper.

Licensure and Credentialing. The JWGT will follow the Report to Congress by convening interested parties, including representatives from the Federation of State Medical Boards, the National Council of State Boards of Nursing, the AMA, the Center for Telemedicine Law, the Western Governors Association and the National Governors Association, to explore next steps, including the development of regional compacts or agreements, to ease the licensure barriers between states. In addition, the JWGT will convene several of the specialty associations and credentialing bodies (e.g., Joint Commission on Accreditation of Healthcare Organizations, the American Psychological Association, AMA, ANA) to explore issues in credentialing of health professionals in telemedicine.

Telecommunications Infrastructure Development. In order to meet Congress' deadline for the Universal Fund, which will provide subsidy funds for schools, hospitals and health care telecommunication costs, the JWGT and its members will be working with the FCC over the coming 6 months to assist in developing the necessary information to allow the agency to make decisions that would significantly assist rural and urban underserved health care providers obtain access to affordable advanced telecommunications services that support telemedicine applications.

Telehealth. The JWGT is particularly interested in addressing the opportunities for distance learning in health care delivery settings for both health professionals and patients. Moreover, the global implications of telehealth are of increasing concern to the group. As the activities of the Working Group progress over the coming months, more and more attention will be paid to the broader applications inherent in telehealth.


1. S. 652. 104th Cong., 1st Sess. (1996) Telecommunications Reform Act (Section 709)

2. Institute of Medicine, "Telemedicine: A Guide To Assessing Telecommunications in Health Care", 1996

3. See Appendix A. for a list of participating members.