SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Telemedicine and Medical 
Informatics Demonstration Act of 1996''.

SEC. 2. INFORMATICS, TELEMEDICINE, AND EDUCATION DEMONSTRATION PROJECT.

    (a) Purpose and Authorization.--
            (1) In general.--Under section 1142 of the Social Security 
        Act and consistent with this section, the Secretary of Health 
        and Human Services, through the Agency for Health Care Policy 
        and Research, shall make a grant to an eligible grantee to 
        provide for a project to demonstrate the application of high-
        capacity computing and advanced networks to the provision of 
        health care to both residents of medically underserved rural 
        areas and residents of medically underserved inner-city areas.
            (2) Focus.--The project shall focus on--
                    (A) improvements in primary care (and prevention of 
                complications) for those residents with diabetes 
                (mellitus), and
                    (B) those residents who are Medicare beneficiaries.
            (3) Duration of project.--The project shall be conducted 
        over a 4-year period.
            (4) Authorization of appropriations; medicare and medicaid 
        waiver authority.--The total amount of Federal expenditures 
        that may be provided pursuant to this section under the project 
        shall not exceed $30,000,000. Subject to such limitation, the 
        Secretary may waive such provisions of title XVIII and XIX of 
        the Social Security Act as may be appropriate in order to 
        permit and demonstrate the provision of Medicare and Medicaid 
        funding under the project.
    (b) Objectives of Project.--The objectives of the project include 
the following:
            (1) Improving patient access to and compliance with 
        appropriate care guidelines for chronic diseases through direct 
        telecommunications link with information networks in order to 
        improve patient quality-of-life and reduce overall health care 
        costs.
            (2) Developing a curriculum to train, and providing 
        standards for credentialing and licensure of, health 
        professionals (particularly primary care health professionals) 
        in the use of medical informatics and telecommunciations.
            (3) Demonstrating 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 applying individualized, automated care 
        guidelines, to assist primary care providers in assisting 
        patients with chronic illnesses in a home setting.
            (4) Application of medical informatics to residents with 
        limited English language skills.
            (5) Developing standards in the application of telemedicine 
        and medical informatics.
            (6) Developing a model for the cost-effective delivery of 
        primary and related care both in a managed care environment and 
        in a fee-for-service environment.
    (c) Eligible Grantee.--For purposes of this section, the term 
``eligible grantee'' means a consortium that includes at least one 
tertiary care hospital, at least one medical school, and at least one 
regional telecommunications provider and that meets the following 
requirements:
            (1) The consortium is located in an area with a high 
        concentration of medical schools and tertiary care facilities 
        and has appropriate arrangements (within or outside the 
        consortium) with such schools and facilities, universities, and 
        telecommunications providers, in order to conduct the project.
            (2) The consortium submits to the Secretary an application 
        at such time, in such manner, and containing such information 
        as the Secretary may require, including a description of the 
        use to which the consortium would apply any amounts received 
        under the project and the source and amount of non-Federal 
        contribution towards the project.
            (3) The consortium demonstrates that it will provide for a 
        contribution toward the project from non-Federal funds or 
        resources in an amount that is not less than 50 percent of the 
        total amount to be expended in carrying out the project.
    (d) Use of Funds.--
            (1) In general.--Federal payments made available to an 
        eligible grantee under this section shall be used for the 
        development and operation of telemedicine and medical 
        informatics systems and related activities under the project.
            (2) Specific uses permitted.--Such payments may be used for 
        any of the following:
                    (A) The acquisition of telemedicine equipment for 
                use in patients' homes (but only in the case of 
                patients located in medically underserved areas).
                    (B) Curriculum development and training of health 
                professionals in medical informatics and telemedicine.
                    (C) Payment of telecommunications costs (including 
                salaries and maintenance of equipment), including costs 
                of telecommunications between patients' homes and the 
                eligible grantee and between the grantee and other 
                entities under the arrangements described in subsection 
                (c)(1).
                    (D) Payments to practitioners and providers under 
                the Medicare and Medicaid programs.
            (3) Prohibited uses.--Such payments may not be used for any 
        of the following:
                    (A) The purchase or installation of transmission 
                equipment (other than such equipment used by health 
                professionals to deliver medical informatics services 
                under the project).
                    (B) The establishment or operation of a 
                telecommunications common carrier network.
                    (C) Construction (except for minor renovations 
                related to the installation of reimbursable equipment) 
                or the acquisition or building of real property.
    (e) Reports.--The Secretary shall submit to the Committees on Ways 
and Means and Commerce of the House of Representatives and the 
Committees on Finance and Labor and Human Resources of the Senate 
interim reports on the project and a final report on the project within 
6 months after the conclusion of the project. The final report shall 
include an evaluation of the impact of the use of telemedicine and 
medical informatics on improving access of medicare and medicaid 
beneficiaries to health care services, on reducing the costs of such 
services, and on improving the quality of life of such beneficiaries.
    (f) Definitions.--For purposes of this section:
            (1) Interventional informatics.--The term ``interventional 
        informatics'' means using information technology and virtual 
        reality technology to intervene in patient care.
            (2) Medical informatics.--The term ``medical informatics'' 
        means the storage, retrieval, and use of biomedical and related 
        information for problem solving and decision-making through 
        computing and communications technologies.
            (3) Project.--The term ``project'' means the demonstration 
        project under this section.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
Medicare Telemedicine and Medical Informatics Demonstration Act of 1996 - Directs the Secretary of Health and Human Services, through the Agency for Health Care Policy and Research, to make a grant to a consortium meeting specified criteria to provide for a project for the development and operation of telemedicine and medical informatics systems to demonstrate the application of high-capacity computing and advanced networks to the provision of health care to residents of medically underserved rural and inner-city areas.  Requires the project to focus on Medicare beneficiaries and on improvements in primary care (and prevention of complications) for residents with diabetes (mellitus).  Lists project objectives, which include improving patient access to and compliance with appropriate care guidelines for chronic diseases through direct telecommunications link with information networks in order to improve patient quality-of-life and reduce overall health care costs. Authorizes appropriations.
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