SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Critical Access to Health 
Information Technology Act of 2005''.

SEC. 2. HEALTH INFORMATION TECHNOLOGY GRANT PROGRAM.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary'') shall establish and 
implement a program to award grants to increase access to health care 
in rural areas by improving health information technology, including 
the reporting, monitoring, and evaluation required under this section.
    (b) State Grants.--The Secretary shall award grants to States to be 
used to carry out the State plan under subsection (e) through the 
awarding of subgrants to local entities within the State. Amounts 
awarded under such a grant may only be used in the fiscal year in which 
the grant is awarded or in the immediately subsequent fiscal year.
    (c) Amount of Grant.--From amounts appropriated under subsection 
(k) for each fiscal year, the Secretary shall award a grant to each 
State that complies with subsection (e) in an amount that is based on 
the total number of critical access hospitals in the State (as 
certified by the Secretary under section 1817(e) of the Social Security 
Act) bears to the total number of critical access hospitals in all 
States that comply with subsection (e).
    (d) Lead Agency.--A State that receives a grant under this section 
shall designate a lead agency to--
            (1) administer, directly or through other governmental or 
        nongovernmental agencies, the financial assistance received 
        under the grant;
            (2) develop, in consultation with appropriate 
        representatives of units of general purpose local government 
        and the hospital association of the State, the State plan; and
            (3) coordinate the expenditure of funds and provision of 
        services under the grant with other Federal and State health 
        care programs.
    (e) State Plan.--To be eligible for a grant under this section, a 
State shall establish a State plan that shall--
            (1) identify the State's lead agency;
            (2) provide that the State shall use the amounts provided 
        to the State under the grant program to address health 
        information technology improvements and to pay administrative 
        costs incurred in connection with providing the assistance to 
        local grant recipients;
            (3) provide that benefits shall be available throughout the 
        entire State; and
            (4) require that the lead agency consult with the hospital 
        association of such State and rural hospitals located in such 
        State on the most appropriate ways to use the funds received 
        under the grant.
    (f) Awarding of Local Grants.--
            (1) In general.--The lead agency of a State shall use 
        amounts received under a grant under subsection (a) to award 
        local grants on a competitive basis. In determining whether a 
        local entity is eligible to receive a grant under this 
        subsection, the lead agency shall utilize the following 
        selection criteria:
                    (A) The extent to which the entity demonstrates a 
                need to improve its health information reporting and 
                health information technology.
                    (B) The extent to which the entity will serve a 
                community with a significant low-income or other 
                medically underserved population.
            (2) Application and approval.--To be eligible to receive a 
        local grant under this subsection, an entity shall be a 
        government-owned or private nonprofit hospital (including a 
        non-Federal short-term general acute care facility that is a 
        critical access hospital located outside a Metropolitan 
        Statistical Area, in a rural census tract of a Metropolitan 
        Statistical Area as determined under the most recent version of 
        the Goldsmith Modification or the Rural-Urban Commuting Area 
        codes, as determined by the Office of Rural Health Policy of 
        the Health Resources and Services Administration, or is located 
        in an area designated by any law or regulation of the State in 
        which the hospital is located as a rural area (or is designated 
        by such State as a rural hospital or organization)) that 
        submits an application to the lead agency of the State that--
                    (A) includes a description of how the hospital 
                intends to use the funds provided under the grant;
                    (B) includes such information as the State lead 
                agency may require to apply the selection criteria 
                described in paragraph (1);
                    (C) includes measurable objectives for the use of 
                the funds provided under the grant;
                    (D) includes a description of the manner in which 
                the applicant will evaluate the effectiveness of the 
                activities carried out under the grant;
                    (E) contains an agreement to maintain such records, 
                make such reports, and cooperate with such reviews or 
                audits as the lead agency and the Secretary may find 
                necessary for purposes of oversight of program 
                activities and expenditures;
                    (F) contains a plan for sustaining the activities 
                after Federal support for the activities has ended; and
                    (G) contains such other information and assurances 
                as the Secretary may require.
            (3) Use of amounts.--
                    (A) In general.--An entity shall use amounts 
                received under a local grant under this section to--
                            (i) offset the costs incurred by the entity 
                        after December 31, 2005, that are related to 
                        clinical health care information systems and 
                        health information technology designed to 
                        improve quality of health care and patient 
                        safety; and
                            (ii) offset costs incurred by the entity 
                        after December 31, 2005, that are related to 
                        enabling health information technology to be 
                        used for the collection and use of clinically 
                        specific data, promoting the interoperability 
                        of health care information across health care 
                        settings, including reporting to Federal and 
                        State agencies, and facilitating clinic 
                        decision support through the use of health 
                        information technology.
                    (B) Eligible costs.--Costs that are eligible to be 
                offset under subparagraph (A) shall include the cost 
                of--
                            (i) purchasing, leasing, and installing 
                        computer software and hardware, including 
                        handheld computer technologies, and related 
                        services;
                            (ii) making improvements to existing 
                        computer software and hardware;
                            (iii) purchasing or leasing communications 
                        capabilities necessary for clinical data 
                        access, storage, and exchange;
                            (iv) services associated with acquiring, 
                        implementing, operating, or optimizing the use 
                        of new or existing computer software and 
                        hardware and clinical health care information 
                        systems;
                            (v) providing education and training to 
                        staff on information systems and technology 
                        designed to improve patient safety and quality 
                        of care; and
                            (vi) purchasing, leasing, subscribing, 
                        integrating, or servicing clinical decision 
                        support tools that integrate patient-specific 
                        clinic data with well-established national 
                        treatment guidelines, and provide ongoing 
                        continuous quality improvement functions that 
                        allow providers to assess improvement rates 
                        over time and against averages for similar 
                        providers.
            (4) Grant limit.--The amount of a local grant under this 
        subsection shall not exceed $250,000.
    (g) Reporting, Monitoring, and Evaluation.--The lead agency of a 
State that receives a grant under this section shall annually report to 
the Secretary--
            (1) the amounts received under the grant;
            (2) the amounts allocated to State grant recipients under 
        the grant;
            (3) the breakdown of types of expenditures made by the 
        local grant recipients with such funds; and
            (4) such other information required by the Secretary to 
        assist the Secretary in monitoring the effectiveness of 
        activities carried out under this grant.
    (h) Review of Compliance With State Plan.--The Secretary shall 
review and monitor State compliance with the requirements of this 
section and the State plan submitted under subsection (e). If the 
Secretary, after reasonable notice to a State and opportunity for a 
hearing, finds that there has been a failure by the State to comply 
substantially with any provision or requirement set forth in the State 
plan or the requirements of this section, the Secretary shall notify 
the lead agency involved of such finding and that no further payments 
to the State will be made with respect to the grant until the Secretary 
is satisfied that the State is in compliance or that the noncompliance 
will be promptly corrected.
    (i) Preemption of Certain Laws.--The provisions of this section 
shall preempt applicable Federal and State procurement laws with 
respect to health information technology purchased under this section.
    (j) Relation to Other Programs.--Amounts appropriated under this 
section shall be in addition to appropriations for Federal programs for 
Rural Hospital FLEX grants, Rural Health Outreach grants, and Small 
Rural Hospital Improvement Program grants.
    (k) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $10,000,000 for each of fiscal 
years 2006 through 2008.

SEC. 3. REPLACEMENT OF THE INTERNATIONAL STATISTICAL CLASSIFICATION OF 
              DISEASES.

    (a) In General.--Not later than October 1, 2006, the Secretary of 
Health and Human Services shall promulgate a final rule concerning the 
replacement of the International Statistical Classification of 
Diseases, 9th revision, Clinical Modification (referred to in this 
section as the ``ICD-9-CM''), under the regulation promulgated under 
section 1173(c) of the Social Security Act (42 U.S.C. 1320d-2(c)), 
including for purposes of part A of title XVIII, or part B where 
appropriate, of such Act, with the use of each of the following:
            (1) The International Statistical Classification of 
        Diseases and Related Health Problems, 10th revision, Clinical 
        Modification (referred to in this section as ``ICD-10-CM''.
            (2) The International Statistical Classification of 
        Diseases and Related Health Problems, 10th revision, Clinical 
        Modification Coding System (referred to in this section as 
        ``ICD-10-PCS'').
    (b) Implementation.--
            (1) In general.--The Secretary of Health and Human Services 
        shall ensure that the rule promulgated under subsection (a) is 
        implemented by not later than October 1, 2009. In carrying out 
        the preceding sentence, the Secretary shall ensure that such 
        rule ensure that Accredited Standards Committee X12 HIPAA 
        transactions version (v) 4010 is upgraded to a newer version 
        5010, and that the National Council for Prescription Drug 
        Programs Telecommunications Standards version 5.1 is updated to 
        a newer version (to be released by the named by the National 
        Council for Prescription Drug Programs Telecommunications 
        Standards) that supersedes, in part, existing legislation and 
        regulations under the Health Insurance Portability and 
        Accountability Act of 1996.
            (2) Authority.--The Secretary of Health and Human Services 
        shall have the authority to adopt, without notice and comment 
        rulemaking, standards for electronic health care transactions 
        under section 1173 of the Social Security Act (42 U.S.C. 1320d-
        2) that are recommended to the Secretary by the Accredited 
        Standards Committee X12 of the American National Standards 
        Institute in relation to the replacement of ICD-9-CM with ICD-
        10-CM and ICD-10-PCS. Such modifications shall be published in 
        the Federal Register.
    (c) Notice of Intent.--Not later than 30 days after the date of 
enactment of this Act, the Secretary of Health and Human Services shall 
issue and publish in the Federal Register a Notice of Intent that--
            (1) adoption of Accredited Standards Committee X12 HIPAA 
        transactions version (v) 5010 shall occur not later than April 
        1, 2007, and compliance with such rule shall apply to 
        transactions occurring on or after April 1, 2009;
            (2) adoption of the National Council for Prescription Drug 
        Programs Telecommunications Standards version 5.1 with a new 
        version will occur not later than April 1, 2007, and compliance 
        with such rule shall apply to transactions occurring on or 
        after April 1, 2009;
            (3) adoption of ICD-10-CM and ICD-10-PCS will occur not 
        later than October 1, 2006, and compliance with such rules 
        shall apply to transactions occurring on or after October 1, 
        2009; and
            (4) covered entities and health technology vendors under 
        the Health Insurance Potability and Accountability Act of 1996 
        shall begin the process of planning for and implementing the 
        updating of the new versions and editions referred to in this 
        subsection.
    (d) Assurances of Code Availability.--The Secretary of Health and 
Human Services shall take such action as may be necessary to ensure 
that procedure codes are promptly available for assignment and use 
under ICD-9-CM until such time as ICD-9-CM is replaced as a code set 
standard under section 1173(c) of the Social Security Act with ICD-10-
PCS.
    (e) Deadline.--Notwithstanding section 1172(f) of the Social 
Security Act (42 U.S.C. 1320d-1(f)), the Secretary of Health and Human 
Services shall adopt the modifications provided for in this section 
without a recommendation of the National Committee on Vital and Health 
Statistics unless such recommendation is made to the Secretary on or 
before a date specified by the Secretary as consistent with the 
implementation of the replacement of ICD-9-CM with ICD-10-CM and ICD-
10-PCS for transactions occurring on or after October 1, 2009.
    (f) Limitation on Judicial Review.--The rule promulgated under 
subsection (a) shall not be subject to judicial review.
    (g) Application.--The rule promulgated under subsection (a) shall 
apply to transactions occurring on or after October 1, 2009.
    (h) Rule of Construction.--Nothing in this section shall be 
construed as effecting the application of classification methodologies 
or codes, such as the Current Procedural Terminology (CPT) as 
maintained and distributed by the American Medical Association and the 
Healthcare Common Procedure Coding System (HCPCS) as maintained and 
distributed by the Department of Health and Human Services, other than 
under the International Statistical Classification of Disease and 
Related Health Problems.
Critical Access to Health Information Technology Act of 2005 - Requires the Secretary of Health and Human Services to establish a program to award grants to states to increase access to health care in rural areas by improving health information technology.

 Requires a state that receives such a grant to designate a lead agency to: (1) administer the grant; (2) develop the state plan for use of grant funds; and (2) coordinate the expenditure of funds and provision of services under the grant with other federal and state health care programs.

Directs the lead agency to award local grants on a competitive basis based on the extent to which an entity: (1) demonstrates a need to improve its health information reporting and health information technology; and (2) will serve a community with a significant low-income or other medically underserved population. Requires each grant recipient to be a government-owned or private nonprofit hospital located in a rural area.

Requires the lead agency to annually report to the Secretary on: (1) the amounts received under the grant; (2) the amounts allocated to state grant recipients; and (3) the types of expenditures made by local grant recipients.

Requires the Secretary to review and monitor state compliance with the requirements of this Act.

Directs the Secretary to promulgate a final rule concerning the replacement of the International Statistical Classification of Diseases, 9th revision, Clinical Modification with the International Statistical Classification of Diseases and Related Health Problems, 10th revision, Clinical Modification and Clinical Modification Coding System. Authorizes the Secretary to adopt specified standards for electronic health care transactions that are recommended in relation to such replacements.
A bill to provide grants for rural health information technology development activities.