[Federal Register Volume 63, Number 52 (Wednesday, March 18, 1998)]
[Notices]
[Pages 13260-13262]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-6940]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[HCFA-3000-N]
Medicare Program; Solicitation of Proposals for a Demonstration
Project for the Use of Informatics, Telemedicine, and Education in the
Treatment of Diabetes Mellitus in the Rural and Inner-City Medicare
Populations
AGENCY: Health Care Financing Administration (HCFA).
ACTION: Notice.
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SUMMARY: This notice announces our intent to solicit proposals from
eligible health care telemedicine networks for a demonstration project
to use high capacity computing and advanced networks for the
improvement of primary care and prevention of health care complications
for Medicare beneficiaries with diabetes mellitus, who are residents of
medically underserved rural areas or medically underserved inner city
areas. We are soliciting these proposals under the authority of section
4207 of the Balanced Budget Act of 1997, section 1875 of the Social
Security Act, and sections 402(a)(1)(B) and (a)(2) of the Social
Security Amendments of 1967.
This notice also describes the requirements for submitting
proposals and applications for this demonstration project.
DATES: For consideration, letters of intent must be received by April
17, 1998 and mailed to the following address: Lawrence E. Kucken,
Health Care Financing Administration, Office of Health Standards and
Quality, Mailstop C3-24-07, 7500 Security Boulevard, Baltimore, MD
21244-1850.
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FOR FURTHER INFORMATION CONTACT: Lawrence E. Kucken, (410) 786-6694
SUPPLEMENTARY INFORMATION:
I. Background
A. Diabetes Mellitus in the Medicare Population
Diabetes is one of the most prevalent and costly diseases in the
Medicare population. The National Health Interview Survey reported a
prevalence of 10.4 percent in individuals aged 65 and older, based on
the American Diabetes Association (ADA) diagnostic criteria of fasting
blood glucose greater than 140. Medical costs for patients with
diabetes are two to five times higher than costs for patients without
diabetes. Cardiovascular disease, stroke, renal disease, and amputation
occur more frequently in the elderly patient with diabetes than in
those without diabetes.
A significant percentage of the morbidity associated with diabetes
can be reduced or delayed in the Medicare population by appropriate
diagnosis, preventive strategies, and management. Appropriate foot
care, eye examinations and treatment of retinopathy, and other
interventions on the part of the health care team, and involvement of
the patient in his or her own self-care, such as intense blood glucose
monitoring for patients on insulin have been shown to significantly
reduce poor outcomes associated with diabetes.
B. Current HCFA Initiatives in Medicare Diabetes Treatment
We have undertaken several major initiatives aimed at improving
quality of life, decreasing morbidity and mortality, and providing the
most appropriate, cost-effective care for Medicare beneficiaries with
diabetes. Peer Review Organizations in each State have been charged
with identification of quality of care issues in their State and
[[Page 13261]]
development of partnerships with hospitals and physicians to improve
care for persons with diabetes. Projects are underway in all 50 states
and the District of Columbia. In addition, we have coordinated and
financed a partnership among key users and developers of performance
measurement techniques to identify components of quality care for
persons with diabetes and to develop a set of performance measures to
assess and improve the care provided to these individuals across all
health care settings.
C. Development of the Telemedicine Network Demonstration
In October 1996, we initiated a 3-year, rural outreach
demonstration of Medicare payment for telemedicine services. The
demonstration focuses primarily on medical consultations between a
primary care physician with a patient located at a remote rural site
(spoke) and a medical specialist (consultant) located at a medical
center facility (hub). Through this demonstration, we are addressing
concerns that certain populations, primarily persons in rural or inner-
city areas, have limited access to health care specialists, and that
recent advances in telecommunications technology can provide low cost
access to medical specialists.
The demonstration is designed to examine alternative payment
methods, including separate payments to providers at each end of the
telecommunication network, as well as a single ``bundled payment'' to
cover services of both providers. Provider payments are based on
predetermined amounts associated with CPT-4 evaluation and management
codes contained in the Medicare physician fee schedule. In the case of
the bundled payment option scheduled to begin during the third year of
the demonstration, sites will determine the relative payment amounts
received by the consulting specialists and the referring primary care
physicians. Coincident with the implementation of the bundled payment
approach, we will negotiate with demonstration participants to develop
a telemedicine facility fee structure based on telemedicine cost
centers and billing data accumulated during the demonstration. These
negotiations will recognize the principle of efficient provider
pricing, reflecting the optimal use of telemedicine resources and
prudent buying.
Through this demonstration, we will obtain information about the
utilization and costs of telemedicine services, as well as the general
characteristics and practice patterns of individual telemedicine
programs. Ultimately, the demonstration should provide insight and
information to help us determine whether telemedicine coverage is
warranted and, if so, how to implement cost-effective Medicare
coverage.
II. Provisions of This Notice
A. Purpose
The purpose of this demonstration is to determine and evaluate the
advantage of informatics and telemedicine for improving access to
needed services, reducing the cost of such services, and improving the
quality of life for affected Medicare beneficiaries. In this notice,
``medical informatics'' means the storage, retrieval, and use of
biomedical and related information for problemsolving and
decisionmaking through computing and communications technologies, and
``telemedicine'' means the use of telecommunications technologies for
diagnostic, monitoring and medical education purposes.
We are soliciting innovative proposals that will use medical
informatics, including telemedicine, to improve primary care for
Medicare beneficiaries who live in medically underserved rural and
inner-city areas and who suffer from diabetes. Proposals should
describe existing protocols for the application or demonstration of
telecommunications or informatics, that, at a minimum, have been pilot-
tested by the applicant, thus precluding the need for long
developmental timeframes.
Those protocols that have been developed for the general population
must be modified, as necessary, to meet the special needs of the
Medicare elderly, disabled, and end-stage renal disease populations,
and should be replicable for the general Medicare underserved
population. They should address developmental issues through
descriptions of end products, for example, a curriculum to train health
care professionals, and related strategies and workplans. They should
also contain available cost effectiveness data related to the described
protocols and developmental components.
Proposals must specifically address the following issues:
The application of telecommunications for the purpose of
providing Medicare beneficiaries diagnosed with diabetes, access to,
and compliance with, appropriate care guidelines;
The development of a curriculum to train health care
professionals in the use of medical informatics and telecommunications;
The demonstration of the application of advanced
technologies, such as video-conferencing from a patient's home, remote
monitoring of a patient's medical condition, interventional
informatics, and the application of individualized, automated care
guidelines, to assist primary care providers in assisting patients with
diabetes in a home setting;
The application of medical informatics to residents with
limited English language skills;
The development of standards in the application of
telemedicine and medical informatics; and
The development of a model for the cost effective delivery
of primary and related care both in a managed care and fee-for-service
environment.
B. Minimal Qualifications of Health Care Providers
We are interested in proposals from eligible health care provider
telemedicine networks. An eligible health care provider network must be
a consortium that is comprised of:
At least one tertiary care hospital, but no more than 2
such hospitals;
At least one medical school;
No more than four facilities in rural or urban areas; and
At least one regional telecommunications provider.
The consortium must be located in an area with a high concentration
of medical schools and tertiary care facilities in the United States
and have appropriate arrangements (within or outside the consortium)
with such schools and facilities, universities, and telecommunications
providers, in order to conduct the project. We interpret ``minimal
concentration'' as an area with at least three medical schools and
three tertiary care facilities, physically located within a recognized
area, such as a Standard Metropolitan Statistical Area, county or city.
Additionally, eligible applicants must guarantee that they will be
responsible for payment of all costs of the project that are not paid
by Federal funds and that the maximum amount of Federal funds to be
made to the consortium shall not exceed the limitation specified below
under ``payment provisions.''
C. Payment Provisions
Under this demonstration, services related to the treatment or
management of (including prevention of complications from) diabetes for
Medicare beneficiaries furnished under the project shall be considered
to be services covered under Part B of Title XVIII of the Social
Security Act. Subject to the limitations described below,
[[Page 13262]]
payment for these services will be made at a rate of 50 percent of the
costs that are reasonable and necessary and related to the provision of
such services.
Costs that may be included under these payments are as follows:
Acquisition of telemedicine equipment for use in patients'
homes (but only for patients located in medically undeserved areas);
Curriculum development and training of health
professionals in medical informatics and telemedicine;
Payment of telecommunications costs (including salaries
and maintenance of equipment), including telecommunications between
patients' homes and the eligible network and between the network and
other entities in the consortium; and
Payments to practitioners and providers under the Medicare
programs.
The following costs are not covered or payable under this
demonstration:
The purchase or installation of transmission equipment
(other than such used by health professionals to deliver medical
informatics services under the project);
The establishment or operation of a telecommunications
common carrier network; or
The establishment, acquisition, or building of real
property, except for minor renovations related to the installation of
reimbursable equipment costs.
D. Limitation
The total amount of payments that may be made for this project will
not exceed $30,000,000 for the 4-year period of the demonstration.
E. Limitation on Cost Sharing
The project may not impose cost sharing on a Medicare beneficiary
for the receipt of services under the project in excess of 20 percent
of the costs that are reasonable and related to the provision of such
services.
F. Evaluation
Proposals submitted for this demonstration must contain provisions
for an independent evaluation of the cost effectiveness of the services
provided. The evaluation must be performed by an independent contractor
competitively chosen according to bidding procedures approved by the
our project officer. Proposals should address the elements to be
incorporated into a request for proposal (RFP) to be used in the
procurement of an evaluation contractor.
G. Length of Demonstration
This demonstration project will cover a period of 4 years.
III. Application Procedures
The application procedure is two-step process involving submission
of letters of intent and formal proposals.
A. Step 1--Letters of Intent
A potential applicant is required to submit letters of intent
containing brief descriptions of the applicant's ability to meet each
of the provisions of this notice, including the following specific
items:
Protocols and plans related to the purpose of the project
(Section II);
Work plans describing the methods to be used in completing
the project within the prescribed period of performance; minimal
organizational characteristics and location requirements (Section II.
B); and cost and payment guarantees (Section II. C);
Descriptions of the use of Federal funds received under
the project and the source and amount of non-Federal funds used in the
project (Sections II. D and E);
An evaluation strategy and design (Section II. F); and
Length of the demonstration (Section II. G).
In addition, letters of intent should indicate acceptance of the
payment provisions set forth in this notice, should not exceed six
single spaced pages in length (including attachments), and must be
signed by an appropriate official of the proposing entity.
For consideration, letters of intent must be received within 30
days from the publication of this notice and mailed to the following
address:
Lawrence E. Kucken, Mailstop C3-24-07, Health Care Financing
Administration, Office of Health Standards and Quality, 7500 Security
Boulevard, Baltimore, Maryland 21244-1850
Letters of intent will be screened against criteria based on
provisions of this notice and period of performance requirements.
Application kits, in turn, will be sent promptly to applicants whose
letters of intent meet each these criteria.
B. Step 2--Formal Proposals
Detailed instructions for the preparation of formal proposals will
be contained in application kits and will address criteria for
screening proposals, evaluation criteria and associated weights, and
procedural considerations. We may consider verbal presentations in lieu
of written proposals. In addition, application kits will contain
guidelines to be used by the applicant for preparation of the
demonstration proposal cost estimate. This cost estimate will be used
by the OMB in the final approval of Medicare waiver status for the
project.
In accordance with the provisions of Executive Order 12866, this
notice was not reviewed by the Office of Management and Budget.
Authority: Sec. 1875 of the Social Security Act (42 U.S.C.
139511); sections 402(a)(1)(B) and (a)(2) of the Social Security
Amendments of 1967, as amended (42 U.S.C. 1395b-1(a)(1)(B) and
(a)(2)); and Section 4207(a), (b), (c), and (d) of the Balanced
Budget Act of 1997 (P.L. 105-33) (Catalog of Federal Domestic
Assistance Program No 93.779 Health Financing Demonstrations, and
Experiments)
Dated: February 25, 1998.
Nancy Ann-Min DeParle,
Administrator, Health Care Financing Administration.
Dated: March 10, 1998.
Donna E. Shalala,
Secretary.
[FR Doc. 98-6940 Filed 3-17-98; 8:45 am]
BILLING CODE 4120-01-P
