To amend title XIX of the Social Security Act to encourage the use of certified health information technology by providers in the Medicaid and SCHIP programs, and for other purposes.

Summary: E-Centives Act of 2008 - Amends title XIX (Medicaid) of the Social Security Act to direct the Secretary of Health and Human Services to make enhanced matching payments to states that provide incentive payments to physicians, hospitals, and community health centers that exhibit meaningful use of certified health information technology.

Limits such payments to each state that establishes a program to: (1) design, develop, install, maintain, and operate electronic information and eligibility systems and patient registries for the purpose of disease screening; and (2) train providers in the use of such systems and registries.

Directs the Secretary to report to Congress on Medicaid transformation payments.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``E-Centives Act of 2008''.

SEC. 2. INCREASED MATCHING PAYMENTS UNDER MEDICAID FOR HEALTH 
              INFORMATION TECHNOLOGY.

    Section 1903 of the Social Security Act (42 U.S.C. 1396b) is 
amended--
            (1) in subsection (a)(3)(E), by inserting ``(other than 
        costs attributable to programs described in subsection (bb))'' 
        after ``costs incurred during such quarter''; and
            (2) by adding at the end the following new subsections:
    ``(aa) Enhanced Payments for Certified Health Information 
Technology Incentives.--
            ``(1) In general.--The Secretary shall provide for payments 
        to each State that provides incentive payments to physicians, 
        hospitals, and community health centers that exhibit meaningful 
        use of health information technology certified under this 
        subsection, as determined by the measures for meaningful use of 
        health information technology under paragraph (5). No payment 
        may be made to a State for incentive payments made by a State 
        for meaningful use of health information technology that occurs 
        before January 1, 2012.
            ``(2) Application.--To qualify for payments under paragraph 
        (1), a State shall submit an application in a time and manner 
        specified by the Secretary and containing the following:
                    ``(A) A description of the incentive payments.
                    ``(B) A description of the method the State will 
                use to allocate such incentive payments among 
                physicians, hospitals, and community health centers, 
                including how the State will prioritize payments to 
                providers serving a high percentage of Medicaid, SCHIP, 
                and uninsured patients.
                    ``(C) A time line for implementing such payment 
                incentives.
                    ``(D) A plan for disseminating information to 
                physicians, hospitals, and community health centers 
                about the availability of such payment incentives.
                    ``(E) An assessment of the current level of use of 
                health information technology by physicians, hospitals, 
                and community health centers in the State, using a 
                standard assessment form developed by the Secretary.
                    ``(F) Any other information required by the 
                Secretary.
            ``(3) Amount of payments to states.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                payments made to States under this subsection shall be 
                in an amount equal to the enhanced FMAP (as defined in 
                section 2105(b)) of sums expended during any quarter 
                commencing on or after January 1, 2012, as are 
                attributable to providing incentive payments under 
                paragraph (1).
                    ``(B) Limitation.--
                            ``(i) Fiscal year limitation.--The total 
                        amount of payments made under this subsection 
                        shall not exceed $500,000,000 for any fiscal 
                        year.
                            ``(ii) Allocation.--If the amounts 
                        otherwise payable under this subsection for a 
                        fiscal year exceed the amount specified in 
                        clause (i), the Secretary shall reduce the 
                        amounts payable under this subsection, in a 
                        manner specified by the Secretary, to comply 
                        with the limitation under such clause.
                            ``(iii) Duplicative payments prohibited.--
                        No payment shall be made under any other 
                        provision of this title for expenditures for 
                        which payment is made under this subsection.
                    ``(C) Manner of payment.--Payment to a State under 
                this subsection shall be made in the same manner as 
                payments under subsection (a).
            ``(4) Certification requirements for health information 
        technology.--
                    ``(A) In general.--The Secretary, in consultation 
                with the Office of the National Coordinator of Health 
                Information Technology and the Certification Commission 
                of Health Information Technology, shall determine the 
                requirements for certification of health information 
                technology under this subsection.
                    ``(B) Interim certification requirements.--During 
                any period in which the Secretary has not determined 
                such certification requirements, the Secretary, for 
                purposes of this subsection, shall use the 
                certification requirements for health information 
                technology established by the Certification Commission 
                for Health Information Technology.
            ``(5) Measures for meaningful use of health information 
        technology.--
                    ``(A) In general.--For purposes of this subsection, 
                the Secretary shall publish standard measures of 
                meaningful use of health information technology to be 
                used by providers to demonstrate meaningful use of 
                certified health information technology. Such measures 
                may include--
                            ``(i) self-certification of operational use 
                        of such technology;
                            ``(ii) the submission of (or ability to 
                        submit), in a form and manner specified by the 
                        Secretary, such information on clinical 
                        measures and data (that do not include 
                        individually identifiable health information) 
                        from such technology as indicates a meaningful 
                        utilization of such technology; and
                            ``(iii) such other means as the Secretary 
                        may specify.
                    ``(B) Alternative measures.--The Secretary may 
                establish and apply different measures based on the 
                stage of implementation or adoption of the certified 
                health information technology involved.
    ``(bb) Payments for Electronic Information and Eligibility Systems 
and Patient Registries.--
            ``(1) In general.--In addition to the payments provided 
        under subsection (a), the Secretary shall provide for payments 
        to each State that establishes a program to--
                    ``(A) design, develop, install, maintain, and 
                operate--
                            ``(i) electronic information and 
                        eligibility systems; and
                            ``(ii) patient registries for the purpose 
                        of disease screening; and
                    ``(B) train providers in the use of such systems 
                and registries.
            ``(2) Application.--To qualify for payments under paragraph 
        (1), a State shall submit an application in such time and 
        manner as required by the Secretary and containing such 
        information as the Secretary specifies and include, at a 
        minimum, a description of the electronic information and 
        eligibility systems and patient registries covered by the 
        program described in paragraph (1).
            ``(3) Amount of payments to states.--
                    ``(A) In general.--The payments made a State under 
                this subsection shall be an amount equal to--
                            ``(i) 90 percent of so much of the sums 
                        expended by such State during any quarter 
                        commencing on or after January 1, 2009, as are 
                        attributable to--
                                    ``(I) the design, development, or 
                                installation of electronic information 
                                and eligibility systems and patient 
                                registries under paragraph (1); and
                                    ``(II) training staff employed by 
                                providers on the use of such system or 
                                registry during the three-year period 
                                beginning on the date such system or 
                                registry is installed; and
                            ``(ii) 75 percent of so much of the sums 
                        expended by such State during any quarter 
                        commencing on or after January 1, 2009, as are 
                        attributable to--
                                    ``(I) the maintenance of such 
                                systems and registries; and
                                    ``(II) training for staff employed 
                                by providers on the use of a system or 
                                registry that occurs after the last day 
                                of the end of the period described in 
                                clause (i)(II).
                    ``(B) Manner of payment.--Payment to a State under 
                this subsection shall be made in the same manner as 
                payments under subsection (a).
            ``(4) Electronic eligibility and information system 
        defined.--For purposes of this subsection, the term `electronic 
        eligibility and information system' means a system for 
        determining eligibility and exchanging information that meets 
        such requirements as the Secretary shall specify. Such 
        requirements for a system shall include a requirement that the 
        system--
                    ``(A) be interconnected and interoperable with 
                other electronic systems and registries, including--
                            ``(i) systems administered by the Centers 
                        for Disease Control for disease reporting 
                        purposes;
                            ``(ii) systems that exist for the purpose 
                        of determining eligibility for the Medicare 
                        program under title XVIII; and
                            ``(iii) systems that exist for the purpose 
                        of determining eligibility for the Temporary 
                        Assistance for Needy Families program under 
                        title IV, free and reduced price lunches under 
                        the Richard B. Russell National School Lunch 
                        Act (42 U.S.C. 1751 et seq.), or other 
                        federally funded programs targeted to low-
                        income populations; and
                    ``(B) can be used to automatically send, receive, 
                and integrate data (including laboratory results and 
                medical histories) from systems and registries 
                administered by other providers or organizations or 
                through a health information exchange.''.

SEC. 3. MEDICAID TRANSFORMATION PAYMENTS REPORT.

    (a) In General.--Not later than June 30, 2009, the Secretary of 
Health and Human Services shall submit to Congress a report on Medicaid 
transformation payments under section 1903(z) of the Social Security 
Act (42 U.S.C. 1396b(z)).
    (b) Contents.--The report under subsection (a) shall include--
            (1) a description--
                    (A) of the financial costs and benefits of the 
                Medicaid transformation payments;
                    (B) of the entities to which such costs and 
                benefits accrue; and
                    (C) of any reduction in duplicative or unnecessary 
                care resulting from methods adopted by States and 
                funded by such payments; and
            (2) an analysis of the information contained in the reports 
        submitted to the Secretary by States under section 
        1903(z)(3)(C) of the Social Security Act during the two-year 
        period ending on December 31, 2008, including--
                    (A) the impact of the methods funded by the 
                payments on--
                            (i) health care quality and safety; and
                            (ii) the privacy and security of 
                        identifiable health information;
                    (B) the effect of such methods on furthering 
                interconnectedness between--
                            (i) providers and State Medicaid programs; 
                        and
                            (ii) State Medicaid programs and other 
                        programs for low-income populations 
                        administered by State and Federal entities;
                    (C) the extent to which such methods reduce the 
                administrative burden on such programs; and
                    (D) the contribution of the payments to the goals 
                of public health and public health reporting.