Teitiaiy 0niveisity

Neuical Centei of
Inuianapolis
Telemeuicine
Biabetes Telemeuicine Pilot








1hls paper ouLllnes a comprehenslve deLalled program
Lo successfully lmplemenL Lelemedlclne aL 1uMC Lach
secLlon of Lhe paper deLalls Lhe operaLlonallzaLlon of Lhe
Lechnology affecL on paLlenL care and lLs cosL 1he
reader should be well lnformed Lo appreclaLe Lhe
dlfferences beLween each opLlon of Lechnology and Lhe
perLlnenL legal lmpllcaLlons lnvolved uslng Lelemedlclne
Lo provlde chronlc dlsease paLlenL care



Reaueis aie encouiageu to use http:telemeuicine.weebly.com to view
auuitional suppoitive uocumentation anu appenuices.
2011
Nichael Bunt, Lee Kauffman, anu Steven Nellemann
Noithwestein 0niveisity

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1ab|e of Contents
LxecuLlve Summary 3
nLroducLlon 7
CurrenL SlLuaLlon 7
roposed SoluLlon 8
1 Cvervlew of 1elemedlclne 11
2 Success lacLors and 8arrlers Lo 1elemedlclne 13
3 Modes of Lelemedlclne dellvery 17
4 Plgh Level mplemenLaLlon 19
3 8elmbursemenL 22
6 1echnology 24
LqulpmenL and neLwork lannlng 23
vldeo Conferenclng Scenarlos 28
vldeo Conferenclng SLandards and nLeroperablllLy 32
vldeo Conferenclng vendor 8ecommendaLlon 33
8ecommendaLlons for Pome 1elehealLh lloL 33
lormal LqulpmenL and Servlces AcqulslLlon rocess 38
CosL and LqulpmenL Summary 39
7 Lndocrlne 1elemedlclne lloL llnanclal Analysls 40
8 Legal ssues 43
Llcensure 44
8elmbursemenL 43
Medlcal MalpracLlce 48
8eferences 32

Appendlces and addlLlonal documenLs are easlly vlewed aL hLLp//Lelemedlclneweeblycom/


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Executive Summary

Tertiary University Medical Center (TUMC), located in Indianapolis, Indiana, wants to
implement a comprehensive telemedicine program to improve specialty services to patients
throughout their catchment area (a key initiative), decrease their costs to provide medical
services, improve utilization oI their specialists, improve quality oI care received by their
patients, improve medical specialty services to rural areas, and prepare Ior eventual program
scalability. This program leverages the subspecialty capabilities oI a tertiary level academic
medical center and delivers services to currently underserved rural populations.

TUMC is preparing to meet major changes in reimbursement as it shiIts Irom Iee Ior service to
pay Ior perIormance, by exploring alternatives such as accountable care organizations (ACO),
medical homes, pay-Ior-perIormance private insurance contracting, and Medicaid and Medicare
group medical practice programs. New models oI healthcare depend upon saving resources by
providing eIIicient quality care, not volume oI care and create virtualized integrated health
delivery organizations Irom multiple providers.
The proposed telemedicine program Ior TUMC is a comprehensive multiIaceted program that
utilizes TUMC`s current specialty providers; endocrinologist(s), nurse practitioner(s), endocrine
nursing staII, chronic disease case manager(s), medical assistant, and inIormation technical staII.
TUMC plans to pilot the program in FrankIort and Logansport. These cities were identiIied
because oI their historical reIerral patterns and interest by local primary care providers and
hospital leadership. Collectively, 200 chronic complicated diabetic patients will be enrolled.

4
The program encourages the local primary care providers to reIer patients to the program, and
TUMC will conduct community outreach and advertising to encourage selI reIerral. Both pilot
locations will identiIy an exam room that will meet technologic speciIications to conduct
comprehensive two-way video assisted telemedicine encounters with TUMC. TUMC`s nurse
practitioner (medical assistant can be used) will participate on-site to Iacilitate the synchronous
telemedicine encounter and assist with visit documentation and examination. TUMC`s
endocrinologists will participate Irom TUMC`s main campus telemedicine center and
communicate with the patient synchronously or asynchronously. Selected patients will be
triaged Ior home monitoring using glucometers that transmit data to TUMC by internet or
interactive voice recognition. TUMC`s nursing staII and case managers will Iollow each
patient`s individual progress and coordinate interventions appropriately.

The initial program provides healthcare to rural and underserviced diabetic populations, but can
be rapidly scaled to include additional specialties. The Iollowing metrics will be evaluated;
number oI visits (hospital, emergency room, urgent care, and medical oIIice), , HgA1c levels
(expect patients to have improved levels to demonstrate control), disease complications and rate
(example decreased neuropathy, visual changes, kidney malIunction), completed health
maintenance recommendations (example eye and Ioot exam), measure cost-oI-care and health
care savings (allows Ior risk analysis Ior pay-Ior-perIormance participation), and measure rates
oI reimbursement (private and public).

Video conIerencing technologies as well as home telehealth monitoring systems are rapidly
increasing in utility and decreasing in price. The paper oIIers an overview oI each oI the
3
technologies as well as our vendor recommendations. These solutions take advantage oI the rapid
changes in technologies, desktop virtualization, and cloud-based third- party solutions. . Our
goal is to recommend architectures that can be readily implemented, well supported, and easily
scalable.

TUMC required capital investment is $390,000, with monthly operating expenses oI $39,000.
This capital portion oI the investment will build the needed technologic inIrastructure. We
estimate the program`s break-even point is 360 monthly visits (both video-conIerencing and
store-and-Iorward) and that the Iirst year oI the pilot will generate about a $300,000 loss. TUMC
will need to take advantage oI grants in the short term to cover this shortage, but expects that Iee-
Ior-service reimbursement and realization oI cost-savings within a shared risk perIormance
program will allow Ior long-term program sustainability. .

There are three main legal issues to consider: licensure requirements Ior physicians that provide
telemedicine services; reimbursement eligibility Ior services provided; and the evolution oI
medical malpractice laws that create additional risks Ior providers to mitigate as they seek to
provide telemedicine services.

With regard to licensing, both Indiana and Michigan have implemented statutes governing
physician licensure. However, only Indiana has enacted regulations governing the use oI
telemedicine. TUMC can mitigate the risk by requiring its physicians to have dual licensure in
both Indiana and Michigan.
6

Reimbursement rights with respect to telemedicine are evolving and currently rely heavily on the
makeup oI the patient population and reimbursement models. Given this current landscape,
TUMC will need to identiIy and Iollow their patient population and payer mix (Medicare and
Medicaid) plan Ior reimbursement challenges. It remains to be seen iI TUMC can create a
telemedicine program that can drive patients into a program that produces greater Iinancial
returns.

Medical malpractice claims may prove to be the 'Ily in the ointment when it comes to
utilization rates. The legal landscape will likely shiIt dramatically as more cases are decided by
the court system. There is a level oI risk TUMC is undertaking by implementing a telemedicine
program without clear, deIinitive legal decisions Irom which to scope its parameters. It is
imperative that TUMC acknowledge and understand the current-state oI potential legal risk is
expected to rapidly evolve as health system reIorm becomes actualized in the next 24-48 months.
We would expect the legal landscape to change dramatically as it relates to physician licensure,
reimbursement and medical malpractice.

The paper covers the Iull liIecycle oI the project, Irom deIining requirements, understanding the
basics oI the technology that will be employed, creating a Iormal RFP, Iinancial and ROI
inIormation and guides Ior training and implementation. Each oI these areas are covered in the
paper and supplemented with detailed examples in the appendices.


7
3troductio3

The purpose oI this paper is to provide recommendations as well as an educational background
to aid in the establishment oI a telemedicine program intended to improve access to specialty
care Ior underserved rural populations in Indiana. Tertiary University Medical Center has
identiIied a key initiative through strategic planning to improve specialty access to care Ior
patients in remote and rural areas oI Indiana. Access to specialty care will enhance eIIorts to
participate in new models oI health care delivery, improve stewardship oI medical resources
(Iinancial and proIessional), and address the challenges oI reimbursement.

Curre3t Situatio3

Tertiary University Medical Center (TUMC) oI Indianapolis would like to establish outreach
clinics throughout Indiana and include small remote cities near the Michigan state border that are
included in their reIerral network. TUMC has made access to specialty reIerral services a key
initiative. They have identiIied two cities that they want to develop a specialty presence,
FrankIort and Logansport. Each city has a population oI 15,000 and 17,000 plus respectively.
Based upon reIerrals to TUMC, Physician Services draIted a business case to serve these rural
cities. Given shortages oI specialty physicians, they want to establish a telemedicine program to
improve physician utilization on the main campus. Because oI reIerral patterns and department
acceptance, the endocrinology service was selected as the pilot department.

St. Vincent Heath System in FrankIort and Logansport Memorial Hospital accepted the
invitation to participate in the pilot project. Given population demographics, about 900 patients
8
in FrankIort and 1000 patients in Logansport represent potential diabetic patients needing
endocrine consultation and management. This estimated patient population represents six
percent oI each city`s population that typically suIIers Irom diabetes and associated co-
morbidities. Each Iacility has experienced a high readmission rate Ior diabetics, and their
medical staIIs have requested resources to serve this population. The literature, (Krishna,
Gillespie, & McBride, 2010), demonstrates that rural locations have higher incidence oI diabetes
as compared to urban locales. These diabetic patients tend not to complete recommended health
maintenance recommendations and have higher incidence oI complications oI diabetes which
adds additional burden to local health care resources.

There are many reasons that rural residents have greater diIIiculty controlling their chronic
diseases. The most typical reasons include (see Appendix 1, Eliminating Rural Disparities) lack
oI specialty care, transportation, cost and insurance issues, and education. Rural insurance
premiums tend to be higher than urban rates, and more rural patients lack insurance. Because
specialty physicians are less likely to be available in rural locations, primary care providers may
not be able to meet all patient needs. Both target cities have adequate primary care physicians
and providers that struggle to manage the chronic needs oI their diabetic patients and need
remote specialty care to provide adequate services to this population oI patients.

Proposed Solutio3

The program TUMC will oIIer is a comprehensive telemedicine program beginning with the
management oI high risk diabetic patients. The patients will be reIerred Irom the local medical
Iacility or selI reIerred. The overall process is as Iollows:
9

A TUMC endocrinologist`s initial consultation (oIIice visit) will be scheduled and coordinated
with the local Iacility by TUMC support staII. On the initial visit the patient will present to the
local Iacility, placed in a telemedicine exam room and all pertinent patient inIormation entered
into TUMC`s electronic medical record (EMR). A nurse practitioner will remain with the patient
to Iacilitate the telemedicine visit (placing monitoring equipment on the patient or assisting with
the physical examination). The on-site presence oI the nurse practitioner enhances current
Iunctionality (add the sense oI touch Ior diagnostic challenges). The ability to schedule patient
visits with the proper co-worker skill-set (medical assistant), improves the overall cost
eIIectiveness oI the program. The specialist will conduct the visit Irom his/her oIIice and record
the visit within the EMR and utilize the telemedicine tools (order entry, electronic prescribing,
electronic stethoscope, ophthalmoscope, etc.) as needed. Depending on patient severity, the
endocrinologist can order home monitoring devices (such as home glucometer), schedule Iollow-
up visits (Irom home or local medical Iacility), communicate by secure messaging (store-and-
Iorward electronic visits, or email), and include the patient in care management activities. The
diabetic patient will have the condition managed as iI a Iace-to-Iace traditional visit occurred, but
have greater access to TUMC`s specialty staII. Should the patient need admission to the local
hospital, the endocrinologist may participate remotely using the mobile teleconIerencing
technology (TUMC`s specialists will meet local Iacility`s staII privilege requirements). Detailed
10
work Ilows are available in appendix 16. Coordination oI care with local providers and TUMC

(Scrogham, 2009)
proIessional staII allows the patient to receive the right care at the right time. The patient will
receive all health maintenance orders and reIerrals as recommended, but enjoy specialty
oversight Irom home. The patient can use the home glucometer and transmit the data to TUMCs
EMR. Based upon patient speciIic alert settings (see Appendix 5, The Basic Design and
WorkIlow oI the Initial Telemedicine Program), the readings can be monitored by the endocrine
case manager and eIIicient patient Iollow-up accomplished. In this scenario, the patient receives
quality care using the whole diabetic care team Irom TUMC, enjoys improved specialty access
Irom home and rural health care Iacility, and can use either telephonic or internet connections Ior
continual diabetic care and monitoring. The program will improve patient compliance to
therapy, improve disease health maintenance, reduce hospital admissions, and reduce overall cost
oI care because diabetic complications can be minimized with aggressive diabetic oversight and
attention to guidelines. The patient can interact with the complete health care team (specialist,
nursing staII, case manager, etc.) and receive diabetic education speciIically oriented to the
individual.

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The goal is to provide the patient with the right care at the right time with the right resource.
Utilizing a comprehensive health care team provides ideal medical care to the patient. The case
manager is tasked to constantly review the patient population. When an acute change in
condition occurs, the patient can be directed to the proper level oI care and intervention.
Ultimately, technology provides the health care team a 'tool box oI Iunctionality to provide
either virtual exam care synchronously, or home care asynchronously. Review oI the medical
literature indicates that most telemedicine programs choose one modality. This comprehensive
approach allows patient speciIic chronic disease management.

In order to implement this program the remainder oI this document presents both educational
material and recommendations that are essential Ior a successIul implementation oI this program.
The document is organized as Iollows:
1. Overview oI Telemedicine
2. Success Factors and Barriers to Telemedicine
3. Modes oI Telemedicine Delivery
4. High Level Implementation Tasks
5. Reimbursement Guidelines and Issues
6. Technology Recommendations
7. Pilot Financial Analysis
8. Legal Issues

Overview of Telemedici3e
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Telemedicine is described as the use oI telecommunication combined with other technologies to
enhance and Iacilitate the delivery oI medical care. Telemedicine allows a physician at one
location to examine and collect patient data remotely. The terms telemedicine and telehealth are
Irequently used interchangeably. However Ior purposes oI this project we diIIerentiate the terms
and deIine 9eleheal9h to be associated with monitoring devices (external such as
sphygmomanometer or pulse oximeter and internal such as a pacemaker) that allow the patient to
be monitored Irom home while Telemedicine reIers to remote communication between clinical
settings. Throughout this project recommendation we will increasingly diIIerentiate these terms.

Medical proIessionals and patients are becoming increasingly excited to use distance
communication technologies as tools to improve the eIIiciency and quality oI health care
delivery. The American Osteopathic Association and the American Medical Association have
repeatedly published that the number oI physicians currently in training and those that will train
in the near Iuture will not be able to adequately provide care Ior the number oI expected patients
that require treatment. This trend coupled with the consistent rise in cost associated with
virtually every aspect oI health care bolsters the need to create increasingly eIIicient delivery
mechanisms. A recent marketing survey Iound that seven percent oI physicians (psychiatrists
and oncologists most likely) already use a Iorm oI teleconIerencing technology (StaII, 2011).
Physicians reported that the use oI technology would supplement their oIIice-based practice,
with little impact on oIIice overhead, once the hardware and soItware were installed. Physicians
who already have implemented EMRs and telecommunication inIrastructure can capitalize on
their investment by including telemedicine Iunctionality.

13
A review oI the available literature demonstrates abundant eIIorts to establish programs that
improve the patient-physician care experience, but lacks long-term conIirmation oI success as
demonstrated by Ekeland (Ekeland, Bowes, & Flottorp, 2010). Thus, our Iocus on diabetes,
which has had demonstrable success as witnessed by the Veteran`s Administration, showed
home monitoring Ior population management was very successIul (Darkins, 2008).

The devices used in telemedicine vary Irom smart phones using both telecommunication and
image acquisition and transmission, secured messaging allowing the store-and-Iorward
technology that allows asynchronous electronic visits, two-way video conIerencing allowing
synchronous visits between a tertiary academic reIerral center and a local medical oIIice or
home. These technologies expand the 'virtual oIIice experience by using electronic physical
exam tools (stethoscope, otoscope, blood pressure, scale, etc.) to collect physical data and store
the values Ior enhanced patient care. The technology allows Ior eIIicient use oI health care
resources to provide the 'right care at the right time.

Extensive medical literature review highlights the optimal model to enhance patient care in
remote, rural, or distant locations is a telemedicine program using more than one type oI
technology. In essence, no single device type or method oI patient care has proven to be the
'best technology to achieve the highest standards oI patient care. To achieve high standards oI
medical care Ior clients with limited access to Iacilities means oIIering the right medical services
at the right time. The natural conclusion, however not proven, is a reduction in the costs oI health
care.

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The recommended telemedicine program incorporates a variety oI technologic tools used
appropriately to serve speciIic patient needs. ThereIore, it is essential the telemedicine program
utilizes two-way video conIerencing Ior Iace-to-Iace visits, store-and-Iorward technology Ior
electronic oIIice visits not Iace-to-Iace, secured messaging, telehealth home monitoring devices,
traditional telephonic options (iI internet not available), population disease management (models
oI traditional case management directed to speciIic chronic diseases), and decision support
(speciIically utilizing an EMR`s alert capability). Appendix 5 demonstrates a detailed step-wise
process to complete a telemedicine event. The diabetic patient can participate in a variety oI
electronic visit types that enable the endocrinologist ample methodologies to treat the disease
and co-morbidities. The physician and health care team incorporate the telemedicine
technologies and EMR to capitalize decision support tools, document the provision oI care, and
triage the population Ior improved case management.

TUMC`s business case to establish a telemedicine program utilized Shannon`s (Shannon et al.,
2002) work demonstrating the Iundamental organization requirements Ior the telemedicine
program. They recognized the need to insure Iunding sources (grant and insurance
reimbursement), understood the needs oI their geographic area and unmet health care needs,
appreciated the challenge to health care access in remote areas, and the need to provide access to
medical care services Ior selected target populations (Iocus oI pilot on diabetes). The ultimate
goal oI the pilot will determine the scalability to other specialties and speciIic patient populations
with chronic diseases.

13
Success Factors a3d Barriers to Telemedici3e (Kraetschmer, Deber, Dick, &
1e33ett,

The success oI a telemedicine program has multiple determinants. They include:
1. A clearly articulated mission and direction Ior the program detailing the speciIic targets
and goals to be achieved.
2. DeIined accountable governance structure with accountability and decision-making
authority to Iacilitate operations and coordinate activities.
3. A speciIic service or target population to receive telemedicine services, criteria Ior
entitlement (insurance coverage, regional residency, demonstration oI speciIic disease
qualities), and patient willingness to participate.
4. Additional criteria include what services are to be provided and under what conditions
they can be applied (example includes remote home monitoring oI pacemakers).
5. Need to establish quality analysis and mechanisms Ior improvement, and clear
understanding oI the technological needs to oIIer the intended services meeting
expectation and demand.
6. The program must demonstrate economic viability and be selI-sustaining to realize an
appropriate return-on-investment.
Barriers to success include:
1. DiIIerences in medical practice (within regions or countries).
2. Variations in cultures and illnesses.
3. Limited utilization.
4. Technology standards, inIrastructure.
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5. Inability to adapt to technologic advancement and interoperability.
6. Geographic licensure and proIessional privileging.

To successIully deploy and implement the telemedicine program in this case, FrankIort and
Logansport, TUMC considered challenges to technology. These cities have established internet
and communication inIrastructure and the local medical community support, as demonstrated by
their current reIerral patterns. The challenge that TUMC will need to overcome will be patient
acceptance oI various technologic tools and Irequent case management contacts. To gain
eIIiciencies, TUMC will need to properly introduce the case management nursing staII to the
communities to enhance outreach (with patients and providers), communication, and compliance
to diabetic regimens.

From a patient`s perspective, the acceptance oI telemedicine has been Iairly well received.
Zetterman (Zetterman, Sweitzer, Webb, Barak-Bernhagen, & Boedeker, 2011) surveyed surgical
patients prior to surgery at the Omaha VA Medical Center. Neither the patient nor medical team
reported negative issues using telemedicine technology. The patients overwhelmingly believed
that the technology would save them time, travel and cost. Eighty Iive percent oI patients Ielt the
consultation using telemedicine was as good as a 'Iace-to-Iace pre-surgical visit. However, a
small minority oI patients reported discomIort using the technology, and Ielt that the duration oI
the televisit was longer than expected.

Acceptance oI technology and 'readiness to accept technology must be evaluated Ior both
patient and physician/provider. Appendix 7 summarizes Lewin`s model Ior change. When rural
17
communities are evaluated, several impediments to adoption include: the availability oI
technology or adaptive equipment; cultural norms that prevent acceptance; and, Iear or doubt that
the experience will meet expectation. In the rural setting, both patient and provider have strong
belieI systems that require extensive outreach to accept change. As the plan to implement
telemedicine into the rural community is developed, signiIicant outreach and education prior to
the go-live date is necessary to prepare the rural community Ior acceptance. The rural setting
tends to develop strong patient-physician (provider) relationships that deIy 'outside strangers to
participate in health care team. Understanding the phases oI change, and including them within
the implementation strategy, is essential Ior success.

Patient satisIaction using telemedicine technology is dependent upon the perceived commitment
to patient care using technology by both the academic and reIerring providers. SuccessIul
collaboration between reIerring and reIerral entities, with dedicated commitment to promote the
rural primary care relationship while using subspecialty access, has proven eIIective.
odes of telemedici3e delivery

At present, there are two high-level modes oI delivery associated with telemedicine:
1.Synchronous interactive video typically taking place between clinical sites.
2.Asynchronous or store and Iorward technology which captures data, images or other results
Irom patients at one time and location and is transmitted to another location at a Iuture time
Irom analysis and response. While email could be considered store Iorward, payers typically
require a more structured approach.

18
Asynchronous encounters do not occur 'real-time, and are extensively used in dermatology,
radiology, and lately in electronic oIIice visits (the literature details various experiences treating
colds, urinary tract inIections, and other ailments). Synchronous events occur 'real time using
videoconIerencing or audio conIerencing. Patient education can be delivered in either mode (See
Appendix 2 Ior a detailed explanation oI the ATA model Ior delivery modes oI telemedicine).
The chart below brieIly highlights the mode most utilized Ior a speciIic medical specialty (as
demonstrated in the literature).


Figure 2
Modes oI Telehealth care (Williams, May, Mair, Mort, & Gask, 2003)

Appendix 6 (Literature Synopsis oI Telemedicine Support) details the complexities associated
with these two major modes oI telemedicine. Several authors have investigated various
technologies and the impact on the actual patient examination process. CMS has established
requirements Ior visit documentation. Each component perIormed remotely using telemedicine
19
technology meets or exceeds the gold standard oI traditional Iace-to-Iace visits. When compared
to traditional oIIice visits, the ability to examine and diagnose a patient`s complex presentation is
349 hindered using current technologies to perIorm telemedicine. Danksy (Dansky & Ajello,
2005) wrote that acceptance oI telemedicine requires clinical excellence, technological
preeminence, and cost containment. Patients need reassurance the technology will improve the
care they receive and the provider organization uses the technology to enhance the quality oI
care that is rendered.

Danksy Iurther cited the provider organization develop educational materials (brochures) that
demonstrate the service with visual illustrations tailored to the patient receiving the service, and
reinIorce the commitment to the 'state-oI-the-art technology to provide the service.

igh Level mpleme3tatio3

Burke (Burke, Bynum, Hall-Barrow, Ott, & Albright, 2008) implemented a telemedicine clinic
in a rural school setting. They articulated a seven-step process to plan and implement services.
The steps include:
1. Assess local and regional need and secure community support.
2. Establish related goals.
3. Evaluate resources.
4. ConIigure logistics.
5. Train StaII.
6. InIorm Patients.
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7. Launch clinic.

These steps are important Ior the key stakeholders, TUMC and each rural city`s medical
executive, to plan Ior implementation. It is essential that a positive relationship prior to local
outreach be established. Each member will identiIy speciIic accountable staII members that will
participate. They should have intricate knowledge oI the technology, processes, and establish
local plans Ior patient assistance. TUMC will utilize established inIormation services
department Ior project implementation and operationalization. TUMC`s implementation team
will consist oI telemedicine implementation team and inIormation services, corporate
communications, physician services, and the endocrine care team. Each local Iacility will
complement TUMC members as needed. Collaboration will script patient recruitment and
outreach.

The most important aspect oI implementation is to clearly establish and articulate the 'Scope oI
Services. Each local Iacility will need to provide an exam room to be utilized Ior telemedicine
visits (this includes hard-wire access and inIrastructure), collaborate with TUMC Ior scheduling,
participate in patient identiIication and reIerral, patient assistance and outreach (may share in
managed care services), and appropriately recognize and credential TUMC staII (physician,
nurse practitioner, medical assistant). TUMC will provide mobile telemedicine equipment,
telemedicine proIessional team, EMR access, and community communication and outreach. The
speciIic services have clearly been outlined in the introduction oI this paper. All work Ilows
have been detailed in appendix 16. All supplemental training will be provided by TUMC
telemedicine staII. Initial training is minimal since the telemedicine team has procured and
21
implemented the hardware. Initial training and expense is minimal. Training costs likely will be
re-evaluated when additional subspecialties are included in the program.

TUMC`s pilot advantageously uses currently trained inIormation technology and medical
proIessionals to limit training costs. TUMC telemedicine team will learn by 'hand-on training
as they purchase and install the hardware. The proIessional staII will learn to integrate the
telemedicine hardware with patient documentation tools and EMR. TUMC`s pilot participants
will not require extensive training. The remote sites will also take advantage oI current
inIormation technology staIIing that will collaborate with TUMC. This signiIicantly reduces the
need Ior training. TUMC will have staII 'on-site during telemedicine events (this removes
local medical staII training). We encourage local accountable executive to have basic
understanding to supplement trouble-shooting connectivity issues as needed. Training costs and
resources will be needed during program scalability (this will address co-worker inexperience by
additional subspecialties).

Three major stakeholders need signiIicant attention Ior implementation; the patient, each rural
(distant) medical site, and TUMC. The remote medical site requires an accountable
executive/project manager, inIormation service technical support, and engaged medical staII.
TUMC has many stakeholders including; ChieI Medical OIIice, ChieI Medical InIormation
OIIicer, ChieI InIormation OIIicer, ChieI Nursing OIIicer, medical group accountable executive,
compliance oIIicer, and endocrinology telemedicine team (well deIine within the paper). Each
stakeholder needs to participate and actively inIluence the project as necessary. These key
stakeholders will aIIect the program`s success and have authority to make necessary adjustments
22
to insure program sustainability. These stakeholders will collectively utilize program metrics to
evaluate the ability to eIIect change in chronic disease.

Appendix 16 demonstrates the ideal work Ilows Ior all stakeholders. Each health care
proIessional`s duties are articulated to insure appropriate patient care, data oversight, and
diabetic team communication. The work Ilow articulates: how the patient is identiIied Ior
participation, how telemedicine technology is used to provide patient care, how monitored data is
evaluated to manage populations, and how each team member`s special tasks are utilized, and
how communication between team members occurs. The work Ilow is dependent upon current
utilization oI TUMC`s EMR and established protocols. Communication between team members
is essential to provide comprehensive diabetic patient care across all care continuums (home,
exam room, virtual oIIice).
#eimburseme3t

TUMC`s telemedicine project is expected to require $390,000 in initial capital and employee
costs. The expectation is that the program will develop rapidly to serve more than 360 patient
visits monthly (see Appendix 3 Financial Analysis as well as the detailed section oI this report on
Iinancial analysis). Aggressive reimbursement and grant Iunding will oIIset the projected
monthly expenditure oI approximately $39,000. Ultimately, when varying models oI care come
into eIIect, such as accountable care organizations or a pay-Ior-perIormance model, TUMC will
realize cost neutralization or a positive return on investment.

23
The American Telemedicine Association has presented the reimbursement model to support
telehealth (see Appendix 8). They have sponsored changes to CMS rules allowing use oI these
technologies. Traditionally, Medicare, Medicaid, private payers, selI-insured employers, selI-
employed, or selI-payers have not reimbursed telemedicine visits. CMS is increasingly
recognizing the issues with reimbursement and have begun to allow claim payment. Private (see
Appendix 4) insurers are increasingly recognizing the need to reimburse the use oI the
technology and have participated in pilot studies and contracted its use in pay-Ior-perIormance
contracts. Traditional post-hospitalization population care has been reimbursed through
prevention oI readmission and decreased on-site Iollow-up care costs by employing managed
care, and through participation with quality care initiatives (such as pay-Ior-perIormance
programs including PQRS, and Core Measures). Annually, CMS continues to review and
approve additional categories oI billable telemedicine encounters. Home telemonitoring
continues to lag other services and remains a challenge that will be shared between the patient
and TUMC.

CMS and private insurers should recognize how home monitoring and telemedicine is
reimbursed internationally. Other countries have realized cost-savings with the technology.
Moreno-Ramirez, et. al (Moreno-Ramirez et al., 2009) looked at the cost oI perIorming
teledermatology using store-and-Iorward technology to triage Ior skin cancer. Their study
showed that the unit cost oI teledermatology was approximately 80 Euros to 129 Euros. This
was a 40 Euro saving over traditional oIIice visits. Kathleen Hall (Hall, 2011) recently looked at
the savings to COPD in the United Kingdom. She Iound that when telemedicine is implemented,
IiIty percent oI hospitalizations can be prevented. This resulted in a savings oI 1.2 million
24
pounds. Hall`s study demonstrated how home monitoring equipment can be used to monitor the
progress oI patients with exacerbations. Hall Iurther articulated that telemedicine`s cost savings
needs to be considered in the global cost to care Ior patients, as technology will not generate
abundant income Irom a hospital perIormance perspective. Other authors have shown that a Iive
pound weight gain in patients with congestive heart Iailure identiIies the risk oI readmission, and
a change in pacemaker monitored parameters can identiIy issues two weeks prior to disease
escalation. Both telemedicine and telehealth have been proven eIIective. These tools should be
components oI Iuture reimbursement models.

These studies demonstrate how TUMC`s integrated health system can realize improved costs
serving at risk patients and realize a share oI cost-savings when participating in pay-Ior-
perIormance programs. To insure a return on investment Ior telemedicine, the TUMC will:
aggressively bill insurance providers Ior telemedicine related services with a strong appeal
process to document services rendered; establish on-site cost-savings analysis; pilot various
models oI care that include telehealth Ior long-term longevity; establish telemedicine within an
integrated health delivery system allowing Ior inherent cost savings and service utilization;
establish cost-sharing with reIerring Iacility; educate and bill patients directly Ior services; and,
continuously engage elected leaders to make changes in laws and regulations.

Tech3ology

This section details the equipment and network technology necessary to meet the requirements
and support the telemedicine and telehealth program. The section provides an explanation oI the
technologies as well as pricing Ior each component. We also recommend speciIic vendors Ior
23
both video conIerencing and home telehealth monitoring (see appendix 9 Ior the ATA glossary
oI telemedicine technology).

Whenever cost and budget data is provided, we have intentionally been conservative and provide
estimates skewed to the upper-end oI what actually will be realized. We believe this will allow
TUMC to implement a project that comes in on budget despite any unIoreseen circumstances.
Cost estimates are provided as each class oI equipment is described. At the end oI the
technology section, a cost summary oI capital and expense items related to the implementation is
provided. These Iigures will then be aggregated with other staII and related implementation
costs in the Iinancial and return on investment (ROI) section.

Equipme3t a3d Network Pla33i3g

Networki3g co3sideratio3s a3d costs

There are at least two sites involved in any the provider telemedicine or telehealth activity. For
the purpose oI simplicity, we deIine the site where the specialist is located as the 'distance site
and the site where the patient is located as the 'originating site.

Origi3ati3g Site Network a3d Costs

This is somewhat oI a complex subject. Video conIerencing systems plug directly into the local
area networks (LAN). A typical Ethernet network has speed oI 100 - 1000 megabytes (1GB). By
way oI reIerence a, 1080 P 30 Frames per Second (FPS) video conIerence system requires a
26
maximum oI 6 MB oI bandwidth. This requirement is unlikely to aIIect any existing LAN;
however, it may require the purchase oI additional bandwidth Ior the Wide Area Network
(WAN). The WAN is responsible Ior transmission oI the conIerence between sites.

WAN bandwidth can be purchased in a variety oI conIigurations. A point-to-point line can be
purchased between the two institutions Iacilitates communications. This line provides the
highest level oI service guarantee, but is seldom chosen due to its inherent high cost. The more
practical and common method is to purchase additional bandwidth into the cloud/internet, and
have the service provider provision a virtual network to the endpoint. This conIiguration
provides a high level oI security and can be provisioned with a comprehensive service level
agreement.

The 6 MB bandwidth Iigure used in the previous video conIerencing scenario is a maximum
bandwidth Ior Iull 1080 P high deIinition (HD) conIerencing. This will rarely be needed and is
only useIul where minute detail oI the patient or image is necessary. Most video conIerences are
currently operating at 500 Kb (.5 mb) or roughly at one-sixth oI their maximum bandwidth.

The cost oI bandwidth is aIIected by several Iactors:
1.The physical location oI the hospital/clinic.
2.Its immediate proximity to the network provider`s central hub.
3.Service level agreement guarantees and redundancy contained in the provider agreement.

27
There is also a possibility that neither the originating nor the distance hospital may require an
increase in bandwidth to accommodate the video conIerencing. It is possible each location may
have excess bandwidth capacity already in place. Also, there are optimization methodologies
depending on the sophistication oI the existing routers to more eIIiciently utilize existing
bandwidth.

Assuming a worst-case scenario, to add the required amount oI bandwidth requires a local loop
to the provider at about $2000/month and about $1000/month Ior bandwidth Ior a total oI
$3000/month per site. It is assumed that the additional bandwidth would support Irom three to
six examination sites assuming all exam rooms were not conducting 1080 P HD conIerences
simultaneously.

Budgeti3g Cost Summary $mo3th
Dista3t Site Network a3d Costs

The bulk oI specialist consultations will not require room level equipment or bandwidth. Where
minute patient details need to be observed, a video unit utilizing the maximum bandwidth
capability oI the originating site will be necessary. This is projected to be the exception rather
than the rule. The bulk oI academic centers are assumed to have these exam rooms in place.
Even iI this is not the case, the addition oI a small number oI telemedicine exam rooms will not
aIIect the network perIormance oI a major institution`s WAN. Note, in most cases the bandwidth
in major metropolitan areas is cheaper as network providers already have major Iacilities in most
buildings.
28

Most specialist consultations at the distant site will take place Irom their oIIices or homes. They
will utilize add-ons to their exiting laptops or desktop systems to access video conIerencing.
Bandwidth is typically under 128KB Ior these activities, and no additional allocation will be
needed Ior their oIIice systems.

II the specialist needs to be supported out oI their homes Ior consultations, their existing cable or
phone company connections can be supplemented with the business level products most phone
and cable providers now oIIer. In most cases, this will allow Ior Iull HD video conIerencing.
However service level agreements are likely to be lower with non-commercial providers.

'ideo Co3fere3ci3g Sce3arios
Poi3t-to-Poi3t 'ideo Co3fere3ci3g

The bulk oI video conIerencing Ior our initial pilot will be point-to-point (Iigure 3). This means
a conIerence is between the exam room system/cart (originating site) and the specialist at the
distance site. The specialist will likely be using either a dedicated desktop device or a PC with
video conIerencing soItware. The specialist will also be equipped with two screens to receive
data Irom an examination camera or other peripheral as well as the general video conIerence
29
camera. Each device has its own address book and no centralized services are required.

Figure 3
ulti-poi3t Co3fere3ci3g
Greater than two sites participating in a video conIerence (Iigure 4) requires an external device
called a multipoint controller unit (MCU). The MCU bridges the participants and Irequently
houses the management Ior a central address book. You will note Irom Appendix 10 that several
oI the larger room/cart systems have an integrated MCU supporting up to ten participants.

Most organizations utilize an external MCU as an integrated MCU creates many local bandwidth
issues. The MCU technology is very expensive and holding large meetings is a major
inIrastructure and bandwidth commitment. As well, MCU technology Iorces conIerence
participants to all step-down to the lowest resolution by matching bandwidth speeds oI the
participant with the least bandwidth.

Despite the heavy capital investment many organizations realize substantial costs reductions in
travel in training that oIIset the investment. The introduction oI accountable care organizations
(ACO) and medical home organizations will increase the desirability oI Ilexible multi-point
video conIerencing as a care teams evolve. Also providers and patient will want to access video
30
services across a broad array oI platIorms and devices. Optimally, the technology should support
tablets, smart phones and PC`s.

Figure 4
'ideo Co3fere3ci3g Equipme3t

While there are a myriad oI video conIerencing systems on the market, video conIerencing
systems Iall into two categories (as they apply to telemedicine):
1.Room and cart based systems.
2.Desktop systems.
3.
#oom a3d Cart Based System

The 'codec (it stands Ior compress and decompress) is the central device or soItware that
converts the image captured by the camera to digital video images. All video conIerencing
systems have a codec that is either soItware or hardware based. Typically, room and cart
systems have dedicated PC-like hardware as codecs and can drive larger screens as well as dual
screens.
31

Dual screens are required Ior viewing simple devices such as digital stethoscopes or more
complex devices such as EKG`s and sonograms while maintaining an HD image oI the patient.
Most units require an additional interIace unit to integrate these devices. Room and cart-based
systems range Irom about $6000 to about $50,000, dependent upon Ieatures.

Carts add a minimum oI $2000 to the cost. II a battery backup is required on the cart the cost
can go to $7000. The total cost oI the average room/cart system with:
1.General Examination Camera
2.Telephonic Stethoscope
3.Digital Otoscope

Budgeti3g a3d Summary $, (See Appe3dix for full ve3dor quote

Desktop Systems

Desktop systems can be either dedicated devices only intended Ior video conIerencing or can be
soItware-based with the addition oI a camera added to an existing PC or laptop. Single purpose
devices have a very low learning curve and are not subject to issues such as computer virus.
PC`s tend to have more Ilexibility in terms oI use oI peripherals and potentially streaming
additional patient data such as EMR.
Budgeti3g a3d Summary $, (Assumi3g a PC is required, u3der $,
if a3 adequate (quad core PC is already i3 place
32

'ideo Co3fere3ci3g -Sta3dards a3d 3teroperability


There are a myriad oI standards the come into play when implementing video conIerencing
network. The bulk oI these standards are managed and recommended by the International
Telecommunication Union (ITU). The ITU standards are not unique to medical and health
applications but are necessary to create interoperable, secure conIerencing networks.

The key standards that apply to this project are interoperability between systems (H.323), the
ability to conduct two video channels in a single conIerence H.239 and security oI data (AES).
A detailed explanation oI each oI these standards can be Iound Appendix 13 (Video and Security
Standards).

Many oI the Iree or inexpensive video conIerencing solutions such as SKYPE, which consumers
are most Iamiliar are inappropriate Ior the health care environment as they do not adhere to one
or more oI the above standards. While this may be rectiIied in time, they are currently
inappropriate tools Ior any health care applications.

edical a3d 3teroperability Sta3dards

With the exception oI AES (HIPAA security compliance Ior PHI in video conIerencing), there
are no health care standards speciIic to video conIerencing Ior telemedicine. However, since
33
telemedicine and telehealth naturally need to be interoperable with an EMR implementation, it is
expected that any health care data or PHI will adhere to all the Iollowing standards:
1.HL7 - Ior messaging and transIer oI speciIic patient data
2.HL7 Version 3 - CDA when using store and Iorward technologies to allow data to be easily
integrated into a patient record in virtually any EMR.
3.LOINC Ior laboratory codes
4.ICD/9/10
5.Snowmed CT
6.DICOMM Ior image transIer particularly in a store and Iorward mode.
'ideo Co3fere3ci3g 'e3dor #ecomme3datio3

Current economic conditions have hastened technology company mergers. Two major vendors
in the telemedicine video conIerencing market space have been recently acquired. Tandberg
was acquired by CISCO Systems, Inc. in 2010 and prior to that, LiIesize became a division oI
Logitech. Due diligence into the long-term directions oI these players with regards to
telemedicine should be considered an essential piece oI the RFP process.

SoItware based solutions are rapidly replacing hardware based codec in room/cart systems as
well as desktop systems. While soItware based video conIerencing requires greater support than
dedicated devices, it is clearly becoming dominant technology, particularly as end-points at the
distance sites. This is due to the inherently lower equipment costs as well as the increased
Ilexibility oI running the soItware on a PC. LiIesize, Tandbeg-CISCO and Polycom have all
introduced soItware based room and desktop systems. The soItware costs are $399/unit and
under and some companies are moving towards site licensing.
34

Presumably this is a step Iorward as these systems are standards compliant and interIace with the
legacy systems as well as utilizes the existing MCU Iacilities. The issue Ior Iluid multi-point
conIerencing is that the newer soItware based products Ior the bulk oI vendors are still based on
the older MCU transcoding systems. While the soItware based codec`s are more cost eIIicient
they still require the expensive MCU based architectures Ior multi-point conIerencing. This
architecture is also poorly suited to being deployed across smart phone and tablet devices. This
will become a requirement in the not very distant Iuture.

In 2010, a venture capital start-up company name Vidyo introduced video conIerencing soItware
that was standards complaint, could be deployed across virtually all platIorms (PC, smart phones,
tablets), and had vastly superior multi-point capabilities. The major diIIerence between Vidyo
and other vendors is that Vidyo`s architecture is not subject to the traditional limitation inherent
with MCU architectures. Vidyo uses a gateway and router costing $6000 that allows up 50
multi-point conIerence participants without the bandwidth limitations that legacy MCU systems
require. From a price perspective, Vidyo is about 10 oI the cost oI traditional MCU systems.
In addition to vastly lowering the cost oI multipoint conIerencing the Vidyo architecture
improves video quality by adjusting bandwidth user-user as opposed to lowering the bandwidth
Ior the entire conIerence. For the above reason we recommend Vidyo, Inc. as your video
conIerencing equipment and soItware vendor.

Normally we would not recommend a major acquisition Irom a venture start-up such as Vidyo.
However, our preliminary due diligence has determined:
33
1.The company is extremely well Iunded by Iive respected venture capital Iirms.
2.Gartner in a 2011 review positioned them against the industry leaders as very promising.
3.The company has signed major contracts with American Well that has over 800,000
subscribers.
4.The company has signed major agreement to replace existing telemedicine video equipment Ior
Massachusetts General Hospital.

From a cost perspective, the room systems Irom Vidyo are competitively priced with those oI the
other major vendors. The long-term advantage cost wise is scalability and Iunctionality. As the
telemedicine and telehealth program expands we will have the ability to deploy on tablets and
smart phones. This will be extremely advantageous to both patients and providers.
#ecomme3datio3s for ome Telehealth Pilot

The key to successIul home telehealth monitoring is ensuring that the medical devices and
communication devices deployed in-home are easily supportable and provide dependable
standards based transIer oI data. There are several vendors that act as this type middleware.
These systems are responsible Ior aggregating and transIer oI data in a secure, standards based
data in an HL7 Iormat. They typically oIIer a patient and provider based portal, or Iull
integration with the provider based EMR.

In last two years, Numera Health care, Inc. has become the vendor oI choice in this area. They
oIIer the most Ilexible platIorm and can utilize all necessary platIorms to oIIer patients choice in
both medical devices and communication mediums (PC, Cellular, Smartphone, Tablet).
Appendix14 (Glucose SMART TRACKING) details deploying and integrating a large-scale
36
telehealth home monitoring service Ior management oI diabetes patient. As seen Irom this paper,
one oI the key components oI success is matching the correct technology to a patient`s ability to
use the system as well as the communications inIrastructure available at the patient`s home. This
can range Irom simple entry system using a telephone or cell phone, to real time transmission oI
readings Irom medical devices using USB or Bluetooth connections to a PC or other
transmission device.

Form a regulatory perspective there is a consistent grey area regarding the use oI various
transmission devices. The FDA regulates and approves anything that is considered a medical
device. The issue is whether a Smartphone acting as a recording and transmission device a
medical device or peripheral? To date, the FDA has not provided clear guidance on the
demarcation between smartphone and medical device. While this is not unexpected, a
conservative interpretation oI the issue would be to monitor TUMC`s expected use oI
smartphones and be aware oI any pronouncement Irom the FDA.

Also there are multiple standards that have arisen with regards to communication protocols oI
medical devices such as use oI Bluetooth and other communication standards. These are rapidly
evolving. The best source oI keeping inIormed with these trends and development is the
Continua Health Alliance. This alliance has more than 240 corporate members representing the
dominant players in the medical consumer device industry. They have become the de Iacto
standards organization Ior approval oI devices (http://www.continuaalliance.org).

37
We estimate that the license cost Ior Numera is $30,000 exclusive oI integration with an EMR
with a yearly maintenance Iee oI 10 ($3,000/yr). We recommend the pilot be conducted using
the Numera portals, as opposed to the Iull-scale EMR implementation. This will demonstrate the
Ieasibility oI the project and save over $100,000 in development expense. Under this scenario,
Numera`s services are used as SoItware as a Service (SaaS), and the entire inIrastructure is
cloud-based. Figure 5 details the network architecture oI our home telehealth network.

Figure 5
It is estimated that an additional $100,000 would be necessary to integrate with the tertiary
hospital`s EMR. While this is would be necessary in the long run, we recommend that the pilot
38
be conducted using the SaaS approach. EMR integration can be accomplished in the next phase
once metric support the viability oI the program.

In addition to the soItware cost, we estimate an additional $2000 in capital expenditure per
patient. While some patients may require as little as $500 Ior a communicating device, others
will require up to $3000 in peripherals and potentially video conIerencing equipment.

Video conIerencing support will be soItware based Ior clients with existing PC`s and technical
abilities and will leverage oII the Vidyo, Inc license recommended in the previous section. For
patients requiring video conIerencing but are not computer literate a dedicated desktop device
will be supplied.


Budget Summary (Capital $, software lice3se Numera o3goi3g yearly
mai3te3a3ce charges of or $, (expe3se
(Capital Per patie3t i3-home equipme3t average $

Formal Equipme3t a3d Services Acquisitio3 Process

Although we have made preliminary equipment and vendor recommendations, the Iinal selection
oI equipment must necessarily be based on a Iormal acquisition process including:
1.Assembling a representative team across all hospitals and any other providers who will be
involved in the telemedicine project to help deIine the requirements.
39
2.A set oI requirements agreed upon by the team as well as senior management champions and
department heads.
3.Preparation oI an RFP clearing stating all requirements as well as detailing the metrics that
will be used Ior the selection process.
4. A committee to pick Iinalist based on a Iormal score card which includes live demo`s and
visits to existing customers. (The attached RFP in Appendix 11 provides sample guidelines
detailing the Iinal product oI this process).

Cost a3d Equipme3t Summary:
Ieo Systems Capta| Lxpense
8oom/CarL sysLems wlLh
perlpherals
$27000/Lxam 8oom
ueskLop/C SysLems $2300/orlglnaLlng slLe physlclan
-etwork Costs
Lxam 8oom ulsLance SlLe $3000/monLh (accommodaLes
bandwldLh for up Lo slx rooms)
rovlde (home) neLwork
connecLlon
$200/monLh per provlder
1e|ehea|th nome Montorng
numera SaaS mlddleware for
all home monlLorlng devlces
$30000 (dependlng on your
organlzaLlons accounLlng pollcles
Lhls may be expensed)
$3000/ ?early MalnLenance
charge
vldyo Llcense $10000 (for 100 users)
(dependlng on your
organlzaLlons accounLlng pollcles
Lhls may be expensed)
$1000/ ?early MalnLenance
charge
user monlLorlng equlpmenL $2300/user
40

E3docri3e Telemedici3e Pilot Fi3a3cial A3alysis
Overview

In order to Iully Iund the Iirst phase oI the rural telemedicine program, the tertiary medical center
requires a $394,000 capital investment, and $39,000 in monthly Iixed and variable costs.
Approximately 66 oI the monthly budget is attributable to salaries. We are recommending Iour
FTE personnel be hired to staII the project despite that their services will be under-utilized
during the Iirst year pilot. We believe that this will provide time Ior the staII to address all start-
up issues and establish an eIIicient work-Ilow (See appendix 3 Ior line item detail).

Our pilot which includes 200 high risk diabetic patients is projected to generate sixty plus
reimbursable consultations per month over the Iirst year. Initial revenue generation will be on
Iee-Ior-service basis moving towards an ACO or Medical Home organization in year two.
Improved metrics with regards to reductions in hospital readmission rates and skilled nursing
costs will easily oIIset any short-term losses sustained during the pilot (reIer to VHA study data).

Given our pilot population we estimate sixty-Iive endocrinology consults monthly. Revenue is
based on current Medicare reimbursement rates. It should be noted that this number oI visits may
take several months to develop once local advertizing and patient recruitment is established.
This may raise Iirst year`s losses slightly more than estimated by the Iinancial model. We
41
estimate a Iirst year operating loss oI approximately $370,000 aIter anticipated revenue. We
recommend applying Ior grants to at least partially cover the loss.

A3alysis

A typical physician will see twenty-Iive patients daily and one hundred ten patients weekly in
Iace-to-Iace oIIice visits. The monthly average oIIice visit count is Iour hundred and Iorty oIIice
visits monthly. Since the literature shows that telemedicine visits may take more time to
complete, three hundred plus monthly electronic visits is a reasonable workload Ior the
telemedicine team.

Our Iinancial analysis indicates that approximately 360 consults per month on Iee-Ior-service
basis would reach a break-even point including the costs oI home monitoring equipment. We
oIIer this Iigure only as a basis Ior an estimate oI total cost as we envision a rapid switch to
medical home, ACO or other P4P oriented programs.

Additional patient care events using home monitoring is included in the proposed budget. The
patient will be given a home monitoring device or pc with video conIerencing capabilities,
glucometer, and transmit glucose data directly to the reIerral center. A case manager will
monitor all patient uploads and triage the data to eIIiciently serve the population and assist the
specialist(s). This additional service does not increase the labor component oI costs but adds an
42
additional $300,000 in capital equipment which translates to an additional expense oI
approximately $60,000 a year based on a Iive year depreciation oI the equipment. Based on 200
patients this represents an expense oI $400/yr per patient Ior home monitoring.

The pilot recognizes that a rural location has limited number oI diabetic patients that will require
tertiary care. ThereIore, the pilot will prove sustainability, scalability, workIlow, and quality
care by reaching perIormance standards. We recommend that a multispecialty approach be
utilized to reach a diverse rural patient population.

Once the program is established, patient recruitment in a wider geographical Ioot print can be
achieved using current staIIing and portable equipment. ThereIore, the three hundred monthly
visits can be achieved using multiple locations with limited capital purchase. The recommended
equipment is portable (as long as proper internet connections can be made) and should easily be
able to manage the minimum patient load. Only 80 patient visits per week and 16 per day allows
Ior selI-sustainability on a Iee-Ior-service basis.

Our goal is the creation an ACO or medical home arrangement that delivers improved outcome,
eIIiciencies and allows us to share in the savings. We recommend that you set a goal oI creating
the legal and organizational Iramework to achieve this goal by year two. We are conIident that
these arrangements will begin to evolve over the next 6 18 months as CMS has been tasked by
43
both the HITECH and the Patient Protection and AIIordable Care Act oI 2009 to aggressively
pursue these arrangements.

Legal ssues

Telemedicine has been around the United States Ior many years in multiple Iorms, however, only
recently has telemedicine taken a more prominent role in the delivery oI health care. This
evolution in the delivery oI care creates several potential legal issues that may impact how
TUMC manages their legal risk. The deIinition oI telemedicine under the Medicaid is, 'the use
oI medical inIormation exchanged Irom one site to another via electronic communications to
improve a patient`s health. This deIinition highlights there is no one size Iits all deIinition oI
telemedicine.
In Iact, even today state governments and the Iederal government do not have a consistent
deIinition oI telemedicine. For example, CMS Iocuses on telehealth services and deIines those to
include two-way, real time interactive communication between patient and distant site physician,
but not via telephone, email or Iax. While some states have applied the CMS deIinition oI
telemedicine in their state statutes, other states deIine telemedicine to include telephone calls,
emails, or Iaxes.( For a summary oI Indiana and Michigan State laws regarding telemedicine,
please see Appendix 12.) ConIounding matters, the deIinition and applicability oI telemedicine
may vary within state statutes, depending on the nature oI the statute (e.g. licensure, liability,
etc.).
This lack oI a uniIied, consistently applied, deIinition oI telemedicine highlights the challenges
Iaced in establishing and implementing an eIIective telemedicine program. Many legal issues are
raised in establishing and implementing a telemedicine program. This section will address three
key challenges in implementing a telemedicine program: licensure, reimbursement and legal
liability.
44
Lice3sure

Physician licensing can be a challenge, as state legislatures have enacted regulations that have
developed at a slower pace than the evolution oI technology. While this has traditionally been a
problem not limited to the medical arena, the impact is more acute when implementing a
telemedicine program, as physician licensure has traditionally served as a threshold inquiry.

Indeed, the United States Supreme Court has ruled, 'the states have a compelling interest in the
practice oI proIessions within their boundaries, and that part oI their power to protect the public
health, saIety and other valid interests, they have broad power to establish standards Ior licensing
practitioners and regulating the practice oI proIessions. Gade v. Nat`l. Solid Wastes Mgmt.
Assoc., 505 U.S. 88 (1992). Lower courts have echoed this line oI reasoning. Even Ior those
states that do not directly or indirectly address telemedicine in their medical licensing laws or
deIine the location oI the practice medicine, it is generally assumed that any act oI diagnosing or
recommending treatment is the practice oI medicine in the state the patient is located Ior the
purpose oI medical licensing and protection oI public health regardless oI whether it is
accomplished in the physical presence oI the patient or through electronic media. U.S. v.
Quinones, 536 F.Supp.2d 267, 272 (E.D.N.Y. 2008).
The legal Iramework highlights the central issue surrounding physician licensure, the law simply
has not been able to catch up with the myriad oI state statutes governing physician licensure, and
the potential conIlicts across states. In Iact, 'the very nature oI modern telecommunications
technology available today Irustrates simple determinations oI when and where medicine is
considered to be delivered.(Health InIormation and Technology Practice Guide, Second
Edition, Chapter 8: Telemedicine, American Health Lawyers Association, Release #1).

43
Thus, even iI a state does not currently have a telemedicine regulation enacted in their state, one
could reasonably conclude a state medical board, responsible Ior properly credentialing a
physician, would likely require physicians to obtain a license to practice medicine in the state
-efore permitting a physician to provide medical treatment to a patient located in their state. This
key consideration segues into the second issue when developing and implementing a
telemedicine program, physician reimbursement Ior services.

In our case, both Indiana and Michigan have implemented statutes governing physician
licensure. However, only Indiana has enacted regulations governing the use oI telemedicine. This
may raise a potential issue Ior TUMC as physicians attempt to provide health care services to
Michigan-based patients. TUMC can mitigate the risk by requiring its physicians to have dual
licensure in both Indiana and Michigan. However, even iI TUMC were to have Iully licensed
physicians to provide services in both Indiana and Michigan, additional legal issues arise when it
comes to reimbursement.

#eimburseme3t

Reimbursement rates Ior telemedicine vary by program and the type oI care provided. Generally
speaking, third party payers will not reimburse Ior services iI the Food and Drug Administration
(FDA) has not approved the technology and it is not accepted as standard medical care, but are
more likely to reimburse Ior technology that replaces or improves existing technology rather than
46
technology that leads to additional procedures Ior patients. Fleisher & Dechene, Telemedicine
and eHealth Law, 8-3.

There remains a distinction between reimbursement rates Ior telemedicine under Medicare.
Medicare Part A provides coverage Ior institutional services including hospital Iacilities, skilled
nursing Iacilities, and home health agencies. Thus, as long as the use oI telemedicine services is
not restricted by the conditions oI participation Ior the Iacility, then it can be included as part oI
the services provided under the prospective payment system without any additional cost to the
Medicare program. Fleisher & Dechene, Telemedicine and eHealth Law, at 8-8.

On the other hand, most reimbursement questions relate to Medicare Part B. As previously
discussed, the Iederal government has enacted numerous laws designed to aid in the development
and utilization oI telemedicine programs. Generally speaking, these programs were designed to
promote telemedicine in areas where access to physicians is limited. For example, in rural areas
where access to medical care is restricted and the physician population is sparse, telemedicine
programs have been implemented to address the access to care issue. Reimbursement is shared
between the reIerring physician and consulting physician Ior treatment provided to Medicare Part
B beneIiciaries. Fleisher & Dechene, Telemedicine and eHealth Law, at 8-9.

Recently, the Medicare Improvements Ior Patients and Providers Act included an expansion oI
what type oI teleservices can be reimbursed under Medicare. The originating sites must still be in
47
a rural health proIessional shortage area, and may also include an entity that is participating in a
Iederal telemedicine project. 42 U.S.C. Section 1395(m)(4)(c).

DiIIerent rules apply with respect to Medicaid, as Medicaid operates at the state level. As a
result, a state can determine whether the state will provide reimbursement Ior physician services.
Generally speaking, state Medicaid programs are limited to providers that meet Medicare
requirements Ior participation. Additionally, Medicaid may elect to reimburse Ior physicians
operating within the scope oI their license, which requires physicians to: (1) be aware oI any
particular licensing requirements unique to their state; and (2) ensure that they comply with
whatever licensing requirements needed to obtain reimbursement. Otherwise, it is within the
discretion oI the state to reimburse under Medicaid Ior telemedicine services. Fleisher &
Dechene, at 8-17. Although the Iederal Medicaid statute does not recognize telemedicine as a
distinct service, CMS has stated a state should submit a state plan amendment to CMS Ior
approval iI it would like to reimburse Ior telemedicine.

As with licensure, reimbursement models appear to be evolving as the increase in telemedicine
becomes more widespread. While the issue oI reimbursement is Iar Irom resolved, there does
appear to be strong support at the national level Ior the establishment oI new reimbursement
models Ior telemedicine. That said, as physicians are able to provide services to a wider group oI
patients, in a variety oI new settings, the issues oI physician liability, medical malpractice, and
identiIying the appropriate standard oI care become critical.

48
Given this current landscape, TUMC will need to evaluate several Iactors iI their telemedicine
program is to be a success. The Iirst step will be to identiIy their patient population. SpeciIically,
is TUMC seeing a mixture oI Medicare and Medicaid participants, and is that mix oI patients
skewed in the direction oI one program over the other. The answer to that question should drive
planning Ior their reimbursement models. It remains to be seen at this point iI TUMC can create
a telemedicine program that can drive patients into one program that produces greater Iinancial
returns. However, we would expect reimbursement models to continue to evolve as telemedicine
utilization continues its growth. Bottom-line, TUMC must be cognizant that today`s solution
may vary greatly than next year`s solution and beyond. As the utilization oI telemedicine
continues to evolve, we expect medical malpractice claims to also evolve as telemedicine now
creates new settings where potential claims could arise.

edical alpractice

A telemedicine malpractice case raises a variety oI new issues, including who owes the patient a
duty oI care and what standard oI care applies to telemedicine. Fleisher & Dechene supra note 4,
1-31. Moreover, telemedicine also raises jurisdictional issues with the key issue being what law
applies where patient and physician reside in diIIerent states.

With respect to the issue oI medical malpractice, the traditional elements oI the tort oI negligence
include (1) the existence oI a duty to maintain a standard oI care; (2) a breach oI that duty to
maintain that standard oI care; (3) such breach oI duty is the actual and proximate cause oI the
49
injury; and (4) actual harm to the patient. Both Indiana and Michigan employ a similar deIinition
oI negligence, however, each state has a well-developed body oI case law that interprets how
each element applies Ior a particular situation. Thus, uniIormity will be a challenge, and TUMC
should be aware oI those nuances in the case law that may result in potential liability. This
inconsistent approach creates downstream issues Ior practitioners utilizing telemedicine methods.

There is a dearth oI case law interpreting the issue oI medical malpractice in the telemedicine
setting. However, we would recommend TUMC begin any telemedicine malpractice risk
analyses with the Iollowing key questions:
1.In what state is the patient located?
2.In what state is the physician located?
3.To which state medical board(s) has the physician subjected himselI in perIorming the
telemedicine act in question?
4.Is the physician properly trained to use the telemedicine equipment and did the physician
use the equipment properly?
5.Did the physician Iail to utilize available telemedicine technology that could have
prevented injury to the patient?
6.What traditional medical encounters are most similar to the telemedicine encounter in
question?
7.Which state`s laws are more Iavorable Ior your client (i.e., statutes oI limitations, medical
30
malpractice damages caps, medical licensure laws, standards oI care, elements oI
malpractice, and burden oI prooI)?
8.Does either state have telemedicine laws that heighten physician requirements and
standards when perIorming telemedicine acts (i.e., inIormed consent, medical records,
Internet advertising, quality oI care, or prescribing medication)?
9.Does the physician`s malpractice insurance cover the telemedicine act in question? and
10.Does the physician or telemedicine provider have suIIicient assets in the state (or in the
United States in the case oI international telemedicine activities) in which the patient and
hospital are located?
(Tara Kepler and Charlene L. McGinty, Telemedicine: How to Assess Your Risks and Develop a
Program That Works, 2006).
The Iollowing questions will provide TUMC the opportunity to create a baseline Ior their
patient-physician encounters and understand their risk proIile in greater detail. In addition, the
answer to each oI these questions should provide TUMC the opportunity to reIine their current
risk management systems to mitigate against any glaring deIiciencies.

While we make the Iollowing legal recommendations, it is imperative that TUMC acknowledge
and understand the current-state oI potential legal risk is expected to rapidly evolve as health
system reIorm becomes actualized in the next 24-48 months. In the event the country is able to
connect at the national level via health inIormation exchanges and long-standing barriers to Iull
interoperability are removed, we would expect the legal landscape to change dramatically as it
31
relates to physician licensure, reimbursement and medical malpractice. This is the inherent
limitation to our recommendations.

32
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