[We redact certain identifying information and certain potentially privileged, confidential, or proprietary information associated with the individual or entity, unless otherwise approved by the requester.]
Issued: December 28, 1999
Posted: January 6, 2000
[Name and address redacted]
Re: OIG Advisory Opinion No. 99-14
Ladies and Gentlemen:
We are writing in response to your request for an advisory opinion about a rural
telemedicine network arrangement implemented and operated pursuant to Federal
grants from the Office of Rural Health Policy ("ORHP") and the Office
for the Advancement of Telehealth ("OAT"), divisions of the Health
Resources Services Administration ("HRSA"). Specifically, you have
inquired whether the use of Federal grant funds and the continued operation
of the telemedicine network after the expiration of the grant period would,
in the circumstances presented, constitute grounds for the imposition of sanctions
for violations of the anti-kickback statute, section 1128B(b) of the Social
Security Act (the "Act"), pursuant to sections 1128(b)(7) and 1128A(a)(7)
of the Act.
In issuing this opinion, we have relied solely on the facts and information
presented to us. We have not undertaken an independent investigation of such
information. This opinion is limited to the facts presented. If material facts
have not been disclosed or have been misrepresented, this opinion is without
force and effect.
Based on the information provided, we conclude that the Arrangement (as defined
in the next sentence) could potentially involve prohibited remuneration under
section 1128B(b) of the Act, if the requisite intent to induce referrals were
present; however, the Office of Inspector General ("OIG") will not
impose sanctions on Health System A ("Health System A") for violations
of the anti-kickback statute arising under sections 1128(b)(7) or 1128A(a)(7)
of the Act in connection with the Arrangement (limited as set forth in the next
sentence), as described and certified in the request letter and supplemental
submissions. For purposes of this advisory opinion, the "Arrangement"
means, collectively, Health System A's (i) use of Federal grant funds under
the terms of the ORHP/OAT grants; (ii) continued provision of telemedicine consultations
within the Telemedicine Network ("Telemedicine Network") after the
end of the grant period; (iii) continued payment of transmission line charges
related to the Telemedicine Network (whether by Health System A or third party
sources arranged for by Health System A) after the end of the grant period;
(iv) continued payments after the end of the grant period to an unrelated third-party
vendor to maintain the existing telemedicine equipment owned by Health System
A until January 2003; (v) lease of telemedicine equipment to members of the
Telemedicine Network pursuant to leases that satisfy the equipment rental safe
harbor at 42 C.F.R. § 1001.952(d) after the end of the grant period; and (vi)
participation in the administration of the Telemedicine Network for telemedicine
purposes after the end of the grant period.(1)
This opinion may not be relied on by any persons other than Health System A
and is further qualified as set out in Part IV below and in 42 C.F.R. Part 1008.
I. BACKGROUND
A.
The Rural Telemedicine Grant Program
We begin with a discussion of the relevant Federal telemedicine grant programs.
For purposes of this advisory opinion, the two grant programs described below
will be collectively referred to as the "Telemedicine Grant Program"
or "TGP".
Congress established the Rural Telemedicine Grant Program through the Department
of Health and Human Services Appropriations Act of FY 1994 (Pub. L. 103-112)
to demonstrate and collect information on the feasibility, cost, appropriateness,
and acceptability (to practitioners and patients) of telemedicine consultations
for improving access to health care services for rural residents and for reducing
the isolation of rural practitioners. The program, administered by ORHP (later
OAT(2)), was designed to demonstrate how telemedicine
could be used as an effective tool in the development of integrated systems
of health care for rural residents. See 1994 TGP Program Guide at 1.
For purposes of the TGP, ORHP defined telemedicine as the use of telecommunications
for medical diagnosis and patient care, including patient counseling and clinical
training of residents and health professions students when such training is
a by-product of direct patient care. See Id. at 1. Under the 1994
grant program, telemedicine consultations could be performed with or without
the patient present, as appropriate. See id. at 2.
The 1994 grant program required recipients to participate in a telemedicine
network composed of (i) a "hub" multi-speciality entity capable of
providing 24-hour a day specialty consultations for all specialty services offered
through the network(3) and (ii) at least one small rural hospital (fewer
than 100 beds) and one rural primary care practitioner office or clinic (the
"spokes"). Other rural sites could also participate, including long-term
care facilities, mental health clinics, school-based clinics, emergency services
providers, home health providers, and health professions schools. See
id. at 1-2.
To be eligible for grant purposes, a telemedicine network had to consist of
a partnership (whether a consortium of independent entities or other more formal
affiliation)(4) evidenced by:
See id. Grant recipients had to provide teleconsultation services
in a minimum of eight core areas: teleradiology, cardiology, dermatology, mental
health and/or substance abuse, obstetrics and gynecology, orthopedics, subspecialities
of pediatrics, and resuscitation of trauma patients. See id. at
3. TGP grants were typically awarded to the "hub" entities or to the
network itself (if the network were a legal entity capable of receiving grant
funds).
In 1996, Congress passed the Health Centers Consolidation Act of 1996 ("HCCA"),
which established, inter alia, the Rural Health Outreach, Network Development,
and Telemedicine Grant Program under section 330A of the Public Health Service
Act (42 U.S.C. § 254c) and specifically authorized the Director of ORHP to award
grants "to expand access to, coordinate, restrain the cost of, and improve
the quality of essential health care services, including preventive and emergency
services, through the development of integrated health care delivery systems
or networks in rural areas and regions." 42 U.S.C. § 254c(b). Under HCCA,
telemedicine grants could be used within specified limits to:
42 U.S.C. § 254c(e)(3)(A).
In 1997, the TGP grant application procedure and requirements were largely the
same as in 1994, except that ORHP additionally required all applicants to document
current referral patterns, including both referral patterns among network members
and referral patterns that extended beyond network members. See 1997
TGP Program Guide. In addition, ORHP allowed grant funds to be used to make
clinician incentive payments to consulting specialists of up to $60 per consultation,
so long as there were no third-party payers, including Medicare and Medicaid,
that could be billed for such consultations (regardless of whether
they were in fact billed). See id. at 3. The 1997 grant required
applicants to provide at least seven clinical telemedicine services, specifically
including the stabilization of patients in emergency situations and at least
two consultative services provided by physician specialists. The grant recipients
could select the other six services based on community need (e.g., services
not available locally or services rural residents might forgo if they had to
travel far or often to receive them). See id. at 18.
B.
The Arrangement
The Arrangement is a telemedicine network organized by Health System A and ten
outlying rural facilities and funded in part through two TGP grants.
Health System A is a [# redacted]-bed regional health care center located
in City W, State X, serving over [# redacted] persons spread over [# redacted]
square miles in [geographical designation redacted] State X and [geographical
designation redacted] State Y. Health System A is a 501(c)(3) tax-exempt charitable
institution consisting of the following subsidiaries: Health System A Hospital
(a [# redacted]-bed general acute care hospital and U.S. Designated Regional
Referral Center), Hospital B (an [# redacted]-bed psychiatric and chemical dependency
facility), [names of subsidiaries redacted], and Health System A Hospital Foundation,
a 501(c)(3) tax-exempt charitable institution whose mission is to support the
health care services, research, and educational mission of Health System A.
Health System A belongs to Network C, a national health care network. Health
System A also participates in a physician-hospital organization with its medical
staff and is developing a health maintenance organization to provide services
in its service area.
In 1994, Health System A formed the Telemedicine Network(5)
with the stated goal of using telemedicine to provide better access to health
care services for rural citizens at remote locations without the inconvenience
or risks normally associated with travel or delays in treatment. Telemedicine
Network's service area includes approximately [# redacted] residents in an area
of approximately [# redacted] square miles. Telemedicine Network currently consists
of Health System A (the "hub") and [# redacted] outlying rural health
care facilities (the "spokes"), including [# redacted] hospitals and
[# redacted] rural health clinics.(6)
Each outlying "spoke" facility has a written telemedicine network
provider agreement with Health System A. Under these agreements, Health System
A agrees to provide the "spoke" facilities with technical communications
capability, telemedicine equipment (which remains the property of Health System
A), and technical assistance and training. In addition, Health System A agrees
to coordinate the Telemedicine Network telemedicine program and assume responsibility
for paying transmission line charges during the period it receives grant funds
under the TGP. In turn, the "spokes" agree to provide space and a
consultation room for the telemedicine equipment (including any remodeling necessary
to accommodate the equipment), site facilitators, local data collection and
documentation assistance, additional equipment such as video cassette recorders
and video tapes, and security for the telemedicine equipment. The "spokes"
also agree to promote the use of the Telemedicine Network for medical consultations
to their medical staffs and to encourage and train their physicians in the implementation
of the telemedicine program.
In 1994 and again in 1997, Health System A Hospital Foundation applied for,
and was awarded, TGP grants to support the Telemedicine Network in the amounts
of $[x] and $[y], respectively.(7) Each grant
had a three-year term. The grant funds were designated in part for the purchase
of telemedicine equipment and its placement in the outlying "spoke"
facilities and for payment of necessary line costs so that patients, physicians,
and other health care professionals could receive professional consultations
from physicians at Health System A's tertiary care facilities: Health System
A Hospital and Hospital B.(8) The 1997 grant
funds were further designated to pay fees to the physicians providing the consultations.
Health System A has certified that its use of the TGP grant funds has been, and will continue to be, consistent with the statutory and regulatory TGP grant guidelines and conditions, which include, without limitation, the following:
Currently, the Telemedicine Network offers interactive and asynchronous telemedicine
consultations in thirty-five medical specialties. Health System A has agreements
with approximately [over one hundred] physicians to provide telemedicine consultations
through the network. Of these physicians, approximately 10% are employed by
Health System A; the remainder are on the Health System A hospital medical staff.
The greatest number of consultations are provided in the area of mental health,
followed by teleradiology and speech pathology.(9)
The network is also used to provide educational and in-service training programs.
The Telemedicine Network is overseen by a project manager and a Telemedicine
Advisory Committee consisting of representatives of Health System A and the
"spoke" facilities.
In its 1997 grant application, Health System A estimated that it would receive
one inpatient admission for every twenty-five telemedicine consultation services
it provides to the network. Health System A has represented that apart from
the telemedicine equipment funded by the TGP grants and its own payment of line
and some maintenance costs, Health System A has not made (and will not make)
any payments to, and has not financially supported (and will not financially
support), directly or indirectly, telemedicine related services of the other
members of the Telemedicine Network or any of their affiliated physicians or
health care professionals.
Health System A is currently preparing its business plan for the continuation
and expansion of the Telemedicine Network after the grant period expires on
August 31, 2000. In general, the network will operate for the same purpose and
in the same manner as under the TGP grants. Health System A plans to continue
paying for all or part of the transmission line charges related to Telemedicine
Network services, with the assistance of third party sources as available.(10)
In addition, until no later than January 2003, Health System A will continue
to pay for maintenance of the telemedicine equipment owned by Health System
A and placed at the "spoke" facilities during the grant period.(11)
Except as provided in the previous sentence, the rural "spoke" facilities
will provide their own staffing, space, and maintenance for telemedicine equipment.
Existing and new "spoke" facilities will be responsible for the costs
of purchasing new or replacement equipment for their respective sites. In some
cases, Health System A may purchase telemedicine equipment centrally and lease
it to the "spoke" facilities at fair market rental rates pursuant
to rental agreements that meet the requirements of the equipment rental safe
harbor at 42 C.F.R. § 1001.952(c). Health System A has not paid, and does not
intend to pay, any cash or cash equivalent to any "spoke" facility
with respect to telemedicine.
C. Federal Reimbursement
for Telemedicine Services
A key component of the operation and continuation of the Telemedicine Network
is the evolving system of reimbursement for telemedicine services.
Historically, Medicare has reimbursed only those telemedicine applications where,
under conventional health care delivery methods, the medical services do not
require face-to-face, "hands on" contact between patient and physician.
For example, Medicare has covered teleradiology, the most widely used and reimbursed
form of telemedicine, as well as physician interpretation of electrocardiogram
and electroencephalogram readings that are transmitted electronically. By contrast,
Medicare has not, until recently, covered other physician services delivered
through telecommunications systems because under the conventional delivery of
medicine, those services are furnished in person. See generally
Medicare Program Payment for Teleconsultations in Rural Health Professional
Shortage Areas (Proposed Rule), 63 Fed. Reg. 33,882 (June 22, 1998); 63 Fed.
Reg. 58,879 (Nov. 2, 1998) (Final Rule).
Under section 4206 of the Balanced Budget Act of 1997 ("BBA") (Pub.
L. 105-33), Congress required Medicare Part B, as of January 1, 1999, to begin
paying for certain professional consultations via telecommunications systems
for beneficiaries residing in rural areas designated as health professional
shortage areas ("HPSAs"). Congress further required, among other things,
that the payment be shared between the referring practitioner and the consulting
practitioner; that the amount of the payment not exceed the current fee schedule
amount that would be paid to the consulting practitioner; that the payment not
include any reimbursement for telephone line charges or facility fees; and that
beneficiaries not be billed for any transmission line charges or facility fees
(although beneficiaries remain obligated for applicable Medicare copayments
and deductibles).
The Health Care Financing Administration ("HCFA") has promulgated
regulations implementing section 4206. See 63 Fed. Reg. 58,879, 58,909
(1998) (to be codified at 42 C.F.R. § 410.78). HCFA interprets section 4206
as applying only to interactive patient encounters where the patient is present
and the telecommunications technology allows the consulting practitioner to
control the interactive medical examination of the patient. Id. at 58,909-10.
"Store-and-forward" technologies, like those used in teleradiology,
typically do not meet this requirement (although HCFA allows for payment when
such technologies are used for interactive patient encounters that meet the
teleconsultation requirements). Under the regulations, the practitioner who
provides the consultation is paid the applicable physician fee schedule amount
and is required to pay 25% of that amount to the referring (e.g., the "spoke")
practitioner. The regulations do not provide for any payment of facility fees
or technical components to hospitals or other facilities.
Health System A currently receives no reimbursement from any Federal health
care program for teleconsultations provided through the network. Given the limitations
of section 4206 of BBA and the HCFA regulations (in particular, the requirements
that patients reside in HPSAs and that no hospital or facility technical fees
are paid), Health System A anticipates receiving limited Medicare reimbursement
related to the Telemedicine Network in the future. Health System A may receive
some technical fees related to teleradiology services reimbursed under the conventional
(i.e., "hands-on" services) rules.
Network practitioners, however, may be paid for telemedicine services in several
ways:
II. LAW AND ANALYSIS
The anti-kickback statute makes it a criminal offense knowingly and wilfully
to offer, pay, solicit, or receive any remuneration to induce referrals of items
or services reimbursable by the Federal health care programs. See section
1128B(b) of the Act. Where remuneration is paid purposefully to induce referrals
of items or services paid for by a Federal health care program, the anti-kickback
statute is violated. By its terms, the statute ascribes liability to parties
on both sides of an impermissible "kickback" transaction. For purposes
of the anti-kickback statute, "remuneration" includes the transfer
of anything of value, in cash or in-kind, directly or indirectly, covertly or
overtly.
The statute has been interpreted to cover any arrangement where one
purpose of the remuneration is to obtain money for referral of services or to
induce further referrals. United States v. Kats, 871 F. 2d 105 (9th
Cir. 1989); United States v. Greber, 760 F.2d 68 (3d Cir.),
cert. denied, 474 U.S. 988 (1985). Violation of the statute constitutes
a felony punishable by a maximum fine of $25,000, imprisonment up to five years
or both. Conviction will also lead to automatic exclusion from Federal health
care programs, including Medicare and Medicaid. The OIG may also initiate administrative
proceedings to exclude persons from Federal health care programs or to impose
civil monetary penalties for fraud, kickbacks, and other prohibited activities
under sections 1128(b)(7) and 1128A(a)(7) of the Act.(12)
We have stated often our view that a gift to an existing or potential referral
source that has independent value to such source implicates the anti-kickback
statute and may be unlawful if the donor of the gift has the requisite intent
to induce Federal health care program referrals. For example, in the preamble
to the 1991 safe harbor regulations, we stated that giving a physician who is
a referral source a free computer that has independent value to the physician
may violate the statute. See 56 Fed. Reg. 35,978 (July 29, 1991); see
also, e.g., OIG Advisory Opinion 98-16 (Nov. 3, 1998) (concluding
that the provision of free transplant pharmacy services to a transplant center
may violate the anti-kickback statute); OIG Special Fraud Alert, 59 Fed. Reg.
65373 (Dec. 19, 1994) (explaining that the anti-kickback statute is implicated
if a clinical laboratory provides a phlebotomist to a physician to perform tasks
normally the responsibility of the physician's office staff).
With these concerns in mind, in OIG Advisory Opinion 98-18 (Nov. 25, 1998),
we concluded that we would not impose sanctions on an arrangement for the provision
of telemedicine equipment between an ophthalmologist and an optometrist where
the optometrist would pay fair market value (as certified by the requesting
party), and the lease would fit in the equipment rental safe harbor. As noted
in 98-18, our concern about possible anti-kickback implications extended beyond
the value of the equipment itself to the value of the resulting teleconsultations
to both the referring and consulting practitioners. In 98-18, these concerns
were addressed through certifications that (i) the arrangement would have no
independent value to the optometrist, because she would neither use the arrangement
for marketing purposes, nor collect a fee for the teleconsultation services,
and (ii) the parties had no oral or written collateral agreements or understandings
between them, including agreements or understandings regarding the referral
of patients from either party to the other.
Despite factual differences, the Arrangement here presents similar kickback
concerns. By developing, operating, administering, and funding the Telemedicine
Network's telemedicine network (in whole or in part), Health System A confers
a benefit on two potential referral sources: (i) the rural "spokes"
(and, by extension, the referring health care professionals), which obtain free
equipment and subsidized line charges, and (ii) the "hub" consulting
practitioners, who receive additional opportunities to earn fees. If one purpose
of this remuneration is to induce referrals to a Health System A facility or
practitioner, the anti-kickback statute would be implicated.
Notwithstanding, the Telemedicine Network presently operates under the auspices
of the TGP, pursuant to a clearly expressed congressional directive to promote
telemedicine networks in rural areas, subject to certain statutory limitations
and oversight by ORHP/OAT. So long as Health System A is a grant recipient in
good standing, and Health System A and the Telemedicine Network satisfy all
statutory, regulatory, and administrative grant requirements (including, but
not limited to, the expenditure of grant funds and the 24-hour provision of
specialty consultations), we do not believe, on the facts presented, that the
Arrangement (limited to those aspects described in Part III below) falls into
the category of payment practices Congress intended to outlaw under the anti-kickback
statute.(13)
The continued operation of the Telemedicine Network beyond the grant-funded
period is also consistent with congressional intent and the TGP program. However,
the absence of applicable grant restrictions and OAT oversight in the post-grant
period increases the risk that improper payments for referrals could be masked
as payments for telemedicine network purposes. This is especially true where,
as here, some parties to the telemedicine network are engaged in, or contemplating,
other joint business relationships.
Under the Arrangement in the post-grant period, payments from Health System
A to the "spoke" facilities will be limited to supplemental funding
of (i) all or part of the transmission line charges related to the teleconsultation
services provided through the Telemedicine Network and (ii) until January 2003,
continued maintenance of existing telemedicine equipment owned by Health System
A. For everything else, the "spokes" pay their own way, with financial
responsibility for all of their own staffing, operational, and maintenance costs,
as well as the costs of new or replacement equipment. The "spokes"
will remain free (though not necessarily encouraged) to use teleconsultants
who are not part of the Telemedicine Network. The Advisory Board will continue
to operate in its same capacity.
By subsidizing the Telemedicine Network's transmission line charges and equipment
maintenance beyond the grant-funded period, Health System A may in some cases
subsidize the private practice incomes of its "hub" consulting practitioners
and the referring "spoke" practitioners, many of whom are potential
referral sources for Health System A's facilities and providers. Typically these
consulting and referring practitioners are not performing a hospital service
when they participate in a telemedicine consultation through the Telemedicine
Network; rather, they are engaged in their own private medical practices. Absent
changes to HCFA's reimbursement rules (under which hospitals are not reimbursed
for telemedicine services), if such practitioners are permitted to participate
in the network without bearing a "fair share" of its costs, they stand
to reap future financial rewards while Health System A bears the corresponding
financial burdens. However, we would expect that, at such time as telemedicine
becomes financially viable, the practitioners who benefit economically from
the Telemedicine Network will also pay their share of its costs.
Finally and importantly, the Arrangement presents an opportunity for significant
community benefit through the study and development of telemedicine as a mechanism
to (i) improve access to essential health care services (including preventive
and emergency services) for rural patients who may otherwise forgo care; (ii)
constrain health care costs in rural areas; and (iii) reduce the isolation of
rural health care professionals.
Given all of the facts and circumstances, including, without limitation, (i)
the clear congressional policy favoring the study and development of rural telemedicine
networks, (ii) the oversight of the Telemedicine Network by ORHP/OAT during
the grant period, (iii) Health System A's representation that it has complied
fully (and will continue to comply fully) with the terms of its TGP grants,
(iv) the comprehensive range of telemedicine services provided through the network,
(v) the limited remuneration during the post-grant period, and (vi) the significant
potential community benefit to rural citizens through increased access to health
care, we conclude that we would not impose sanctions on Health System A for
violations of the anti-kickback statute arising from the Arrangement.
III. CONCLUSION
Based on the information provided, we conclude that the Arrangement (as defined
in the next sentence) could potentially involve prohibited remuneration under
section 1128B(b) of the Act, if the requisite intent to induce referrals were
present; however, the Office of Inspector General ("OIG") will not
impose sanctions on Health System A for violations of the anti-kickback statute
arising under sections 1128(b)(7) or 1128A(a)(7) of the Act in connection with
the Arrangement (limited as set forth in the next sentence), as described and
certified in the request letter and supplemental submissions. For purposes of
this paragraph, the "Arrangement" means, collectively, Health System
A's (i) use of Federal grant funds under the terms of the ORHP/OAT grants; (ii)
continued provision of telemedicine consultations within the Telemedicine Network
after the end of the grant period; (iii) continued payment of transmission line
charges related to the Telemedicine Network (whether by Health System A or third
party sources arranged for by Health System A) after the end of the grant period;
(iv) continued payments after the end of the grant period to an unrelated third-party
vendor to maintain the existing telemedicine equipment owned by Health System
A until January 2003; (v) lease of telemedicine equipment to members of the
Telemedicine Network pursuant to leases that satisfy the equipment rental safe
harbor at 42 C.F.R. § 1001.952(d) after the end of the grant period; and (vi)
participation in the administration of the Telemedicine Network for telemedicine
purposes after the end of the grant period.
IV. LIMITATIONS
The limitations applicable to this opinion include the following:
This opinion is also subject to any additional limitations set forth at 42
C.F.R. Part 1008.
The OIG will not proceed against the requester with respect to any action that
is part of the Arrangement taken in good faith reliance upon this advisory opinion
as long as all of the material facts have been fully, completely, and accurately
presented and the Arrangement in practice comports with the information provided.
The OIG reserves the right to reconsider the questions and issues raised in
this advisory opinion and, where the public interest requires, rescind, modify,
or terminate this opinion. In the event that this advisory opinion is modified
or terminated, the OIG will not proceed against the requester with respect to
any action taken in good faith reliance upon this advisory opinion, where all
of the relevant facts were fully, completely, and accurately presented and the
Arrangement in practice comported with the information provided and where such
action was promptly discontinued upon notification of the modification or termination
of this advisory opinion. An advisory opinion may be rescinded only if the relevant
and material facts have not been fully, completely, and accurately disclosed
to the OIG.
Sincerely,
/s/
D. McCarty Thornton
Chief Counsel to the Inspector General
1. No opinion is expressed or implied with respect to any
other relationship between or among the Telemedicine Network members or any
other party. Except as it relates to the relationship between Health System
A and the Telemedicine Network members, no opinion is expressed or implied with
respect to the legality of the maintenance contract between Health System A
and the vendor.
2. The Office of Rural Health Policy ("ORHP") preceded the Office for the Advancement of Telehealth ("OAT"). For purposes of this advisory opinion, references to the ORHP should be considered synonymous with the present OAT.
3. Pursuant to the 1994 Program Guide, an entity was capable of providing 24-hour consultations if it had relevant specialists on-call. See 1994 TGP Program Guide at 3.
4. Grant applicants had to agree to obtain prior approval from ORHP before altering the network's membership.
5. Telemedicine Network is a consortium of hospitals and clinics, but not a separately incorporated legal entity. The members of Telemedicine Network or their affiliates may be engaged in, or contemplating, other joint business relationships. Those relationships are outside the scope of this advisory opinion.
6. The facilities are: [names and locations redacted]
7. Because it is not a legal entity, the Telemedicine Network was ineligible to serve as a grant recipient. Nor could any of the "spokes" qualify as grant recipients, because none provided the required multi-specialty, 24-hour consultations.
8. The telemedicine equipment may also be used, and is used, by health care professionals at the "spoke" facilities to communicate and consult with one another and with practitioners not affiliated with Telemedicine Network.
9. In the initial years, teleradiology played a small role in the Telemedicine Network, although it was a core required service for the 1994 grant. Of the original [# redacted] physicians who agreed to provide consultations, only [# redacted] were radiologists, and the Telemedicine Network didn't begin teleradiology services until April 1998. Because of certain limitations of available technology (e.g., resolution of transmissions), grant-funded teleradiology equipment has been installed in only one spoke facility. However, Telemedicine Network may expand its teleradiology capabilities using TGP grant funds to purchase and place teleradiology equipment in the "spoke" facilities.
10. Health System A expects that the Telemedicine Network's transmission line charges may be reduced by as much as 60% as a result of the Universal Service Fund ("USF") provisions of the Telecommunications Act of 1996 and recent Federal Communications Commission rulings addressing rural telecommunications rates. Telemedicine Network's application for USF funding has been approved.
11. Specifically, Health System A will pay a fixed fee to an unrelated, third party vendor for maintenance services. This vendor is the only vendor in the area that services the specific telemedicine equipment, and Health System A expects that the vendor will cease providing parts and servicing for the equipment by January 2003.
12. Because both the criminal and administrative sanctions related to the anti-kickback implications of the Arrangement are based on violations of the anti-kickback statute, the analysis for the purposes of this advisory opinion is the same under both.
13. This opinion is limited to the facts presented. Circumstances may exist in which parties use Federal grant programs or funds to further fraudulent or abusive schemes. This opinion should not be construed as standing for the proposition that the use of Federal grant programs or funds immunizes a party from sanction under the anti-kickback statute.