To establish an informatics grant program for hospitals and skilled nursing facilities and to encourage health care providers to make major information technology advances by establishing a Medical Information Technology Advisory Board that will develop and disseminate standards for the electronic sharing of medical information.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medication Errors Reduction Act of 
2001''.

SEC. 2. INFORMATICS SYSTEMS GRANT PROGRAM FOR HOSPITALS AND SKILLED 
              NURSING FACILITIES.

    (a) Grants.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        establish a program to make grants to eligible entities that 
        have submitted applications in accordance with subsection (b) 
        for the purpose of assisting such entities in offsetting the 
        costs related to purchasing, leasing, developing, and 
        implementing standardized clinical health care informatics 
        systems designed to improve patient safety and reduce adverse 
        events and health care complications resulting from medication 
        errors.
            (2) Duration.--The authority of the Secretary to make 
        grants under this section shall terminate on September 30, 
        2011.
            (3) Costs defined.--For purposes of this section, the term 
        ``costs'' shall include total expenditures incurred for--
                    (A) purchasing, leasing, and installing computer 
                software and hardware, including handheld computer 
                technologies;
                    (B) making improvements to existing computer 
                software and hardware;
                    (C) purchasing or leasing communications 
                capabilities necessary for clinical data access, 
                storage, and exchange; and
                    (D) providing education and training to eligible 
                entity staff on computer patient safety information 
                systems.
            (4) Eligible entity defined.--For purposes of this section, 
        the term ``eligible entity'' means the following entities:
                    (A) Hospital.--A hospital (as defined in section 
                1861(e) of the Social Security Act (42 U.S.C. 
                1395x(e))).
                    (B) Skilled nursing facility.--A skilled nursing 
                facility (as defined in section 1819(a) of such Act (42 
                U.S.C. 1395i-3(e))).
    (b) Application.--An eligible entity seeking a grant under this 
section shall submit an application to the Secretary at such time, in 
such form and manner, and containing such information as the Secretary 
specifies.
    (c) Special Considerations and Rural Hospital Reserve.--
            (1) Special consideration for eligible entities that serve 
        a large number of medicare, medicaid, and schip eligible 
        individuals.--In awarding grants under this section, the 
        Secretary shall give special consideration to eligible entities 
        in which individuals that are eligible for benefits under the 
        medicare program under title XVIII of the Social Security Act, 
        the medicaid program under title XIX of such Act, or under the 
        State children's health insurance program under title XXI of 
        such Act make up a high percentage of the total patient 
        population of the entity.
            (2) Reserve 20 percent of grant funds for rural 
        hospitals.--
                    (A) In general.--Subject to subparagraph (C), the 
                Secretary shall ensure that at least 20 percent of the 
                funds available for making grants under this section 
                are used for making grants to eligible entities that 
                are rural hospitals.
                    (B) Rural hospital defined.--For purposes of 
                subparagraph (A), the term ``rural hospital'' means a 
                hospital that--
                            (i) is located in a rural area (as such 
                        term is defined for purposes of section 1886(d) 
                        of the Social Security Act (42 U.S.C. 
                        1395ww(d)));
                            (ii) is located in an area designated by 
                        any law or regulation of the State as a rural 
                        area; or
                            (iii) is designated by the State as a rural 
                        hospital.
                    (C) Availability of reserve funds if limited number 
                of rural hospitals apply for grants.--If the Secretary 
                estimates that the amount of funds reserved under 
                subparagraph (A) for hospitals described in such 
                subparagraph exceeds the maximum amount of funds 
                permitted for such hospitals under subsection (d), the 
                Secretary may reduce the amount reserved for such 
                hospitals by an amount equal to such excess and use 
                such funds for awarding grants to other eligible 
                entities.
            (3) Special consideration for compliance with recommended 
        standards.--In awarding grants under this section, the 
        Secretary shall give special consideration to eligible entities 
        for grants that are intended to comply with the requirements 
referred to in paragraph (1)(B) of section 3(c) (relating to 
interoperability standardization, common medical technology (lexicon), 
and records security) that are recommended under such section.
    (d) Limitation on Amount of Grant.--
            (1) In general.--A grant awarded under this section may not 
        exceed the lesser of--
                    (A) an amount equal to the applicable percentage of 
                the costs incurred by the eligible entity for the 
                project for which the entity is seeking funding under 
                this section; or
                    (B) in the case of a grant made to a--
                            (i) hospital, $750,000; or
                            (ii) skilled nursing facility, $200,000.
            (2) Applicable percentage.--For purposes of paragraph 
        (1)(A), the term ``applicable percentage'' means, with respect 
        to an eligible entity, the percentage of total net revenues for 
        such period as determined appropriate by the Secretary for the 
        entity that consists of net revenues from the medicare and 
        medicaid programs or the State children's health insurance 
        program under titles XVIII, XIX, and XXI of the Social Security 
        Act.
    (e) Eligible Entity Required To Furnish Secretary With 
Information.--An eligible entity receiving a grant under this section 
shall furnish the Secretary with such information as the Secretary may 
require to--
            (1) evaluate the project for which the grant is made; and
            (2) ensure that funding provided under the grant is 
        expended for the purposes for which it is made.
    (f) Reports.--
            (1) Interim reports.--
                    (A) In general.--The Secretary shall submit, at 
                least annually, a report to the Committee on Ways and 
                Means of the House of Representatives and the Committee 
                on Finance of the Senate on the grant program 
                established under this section.
                    (B) Contents.--A report submitted pursuant to 
                subparagraph (A) shall include information on--
                            (i) the number of grants made;
                            (ii) the nature of the projects for which 
                        funding is provided under the grant program;
                            (iii) the geographic distribution of grant 
                        recipients; and
                            (iv) such other matters as the Secretary 
                        determines appropriate.
            (2) Final report.--Not later than 180 days after the 
        completion of all of the projects for which a grant is made 
        under this section, the Secretary shall submit a final report 
        to the committees referred to in paragraph (1)(A) on the grant 
        program established under this section, together with such 
        recommendations for legislation and administrative action as 
        the Secretary determines appropriate.
    (g) Authorization of Appropriations.--
            (1) Authorization.--
                    (A) Hospitals.--There are authorized to be 
                appropriated from the Federal Hospital Insurance Trust 
                Fund under section 1817 of the Social Security Act (42 
                U.S.C. 1395i) $93,000,000, for each of the fiscal years 
                2002 through 2011, for the purpose of making grants 
                under this section to eligible entities that are 
                hospitals.
                    (B) Skilled nursing facilities.--There are 
                authorized to be appropriated from the Federal Hospital 
                Insurance Trust Fund under section 1817 of the Social 
                Security Act (42 U.S.C. 1395i) $4,500,000, for each of 
                the fiscal years 2002 through 2011, for the purpose of 
                making grants under this section to eligible entities 
                that are skilled nursing facilities.
            (2) Availability.--Any amounts appropriated pursuant to the 
        authority contained in subparagraph (A) or (B) of paragraph (1) 
        shall remain available, without fiscal year limitation, through 
        September 30, 2011.

SEC. 3. MEDICAL INFORMATION TECHNOLOGY ADVISORY BOARD.

    (a) Establishment.--No later than three months after the date of 
the enactment of this Act, the Secretary of Health and Human Services 
(in this section referred to as the ``Secretary'') shall appoint a 
board to be known as the ``Medical Information Technology Advisory 
Board'' (in this section referred to as the ``MITAB''). The Secretary 
shall designate one member as chairman and one as vice chairman.
    (b) Composition.--
            (1) In general.--The MITAB shall consist of 17 members that 
        include--
                    (A) experts from the fields of medical information, 
                information technology, medical continuous quality 
                improvement, medical records security and privacy, 
                individual and institutional health care clinical 
                providers, health researchers, and health care 
                purchasers;
                    (B) one or more Members of the National Committee 
                on Vital and Health Statistics and one or more Members 
                of the Medicare Payment Advisory Commission or its 
                staff; and
                    (C) one or more staff experts from the National 
                Library of Medicine, the Centers for Medicare & 
                Medicaid Services, and the Agency for Healthcare 
                Research and Quality.
            (2) Terms; etc.--The provisions of paragraphs (3) through 
        (8) of section 4021(c) of the Balanced Budget Act of 1997 shall 
        apply to the MITAB in the same manner as they applied to the 
        National Bipartisan Commission on the Future of Medicare.
    (c) Duties.--
            (1) Initial report.--No later than 30 months after the date 
        of the enactment of this Act, the MITAB shall submit to 
        Congress a report on the following:
                    (A) The best current practices in medical 
                information technology.
                    (B) The requirements to be established (after 
                appropriate development and testing) for--
                            (i) health care information technology 
                        interoperability standardization,
                            (ii) common medical terminology (lexicon), 
                        and
                            (iii) records security.
                    (C) Certification of compliance with MITAB 
                requirements, so that the goal of confidential 
                information exchange among health care providers may be 
                promoted and so that long-term compatibility among 
                information systems is maximized, in order to promote 
                one or more of the goals described in subsection (d).
            (2) Subsequent reports.--During the 6 years after the year 
        in which the report is submitted under paragraph (1), the MITAB 
        shall submit to Congress reports, every 24 months, relating to 
        additional recommendations, best practices, results of 
        information technology improvements financed under grants under 
        section 2, and such other matters as may help ensure the most 
        rapid dissemination of best practices in health care 
        information technology.
    (d) Goals.--The goals described in this subsection are the 
following:
            (1) To maximize positive outcomes in clinical care--
                    (A) by providing decision support for diagnosis and 
                care; and
                    (B) by assisting in the emergency treatment of a 
                patient presenting at a facility where there is no 
                medical record of the patient.
            (2) To contribute to (and be consistent with) the 
        development of the patient assessment instrument provided for 
        under section 545 of the Medicare, Medicaid, and SCHIP Benefits 
        Improvement and Protection Act of 2000 (as enacted into law by 
        section 1(a)(6) of Public Law 106-554), and to assist in 
        minimizing the need for new and different records as patients 
        move from provider to provider.
            (3) To reduce or eliminate the need for redundant records, 
        paperwork, and the repetitive taking of patient histories and 
        administering of tests.
            (4) To minimize medical errors, such as administration of 
        contraindicated drugs.
            (5) To promote and ensure access to best practices of 
        medicine through support of research across institutions.
            (6) To provide a compatible information technology 
        architecture that facilitates future quality and cost-saving 
        needs and that avoids the financing and development of 
        information technology systems that are not readily compatible.
    (e) Staff and Administration.--The provisions of section 4021(d) of 
the Balanced Budget Act of 1997 shall apply to the MITAB in the same 
manner as they applied to the National Bipartisan Commission on the 
Future of Medicare.
    (f) Powers.--The provisions of section 4021(e) of the Balanced 
Budget Act of 1997 shall apply to the MITAB in the same manner as they 
applied to the National Bipartisan Commission on the Future of 
Medicare.
    (g) Termination.--The MITAB shall terminate 30 days after the date 
of submission of its final report under subsection (c)(2).
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated $2,500,000 in fiscal year 2002, $8,000,000 in fiscal year 
2003, and $9,500,000 in fiscal year 2004 to carry out this section. The 
full amount of such appropriation shall be payable from the Federal 
Hospital Insurance Trust Fund under section 1817 of the Social Security 
Act (42 U.S.C. 1395i). Funding for the reports provided under 
subsection (c)(2) shall be from funds appropriated for the 
administrative budget of the Centers for Medicare & Medicaid Services.

Summary: Medication Errors Reduction Act of 2001 - Directs the Secretary of Health and Human Services to establish a program to make grants to eligible entities for the purpose of assisting such entities in offsetting the costs related to purchasing, leasing, developing, and implementing standardized clinical health care informatics systems designed to improve patient safety and reduce adverse events and health care complications resulting from medication errors. Gives special consideration to eligible entities serving a large number of Medicare, Medicaid, and State Children's Health Insurance Program (SCHIP) eligible individuals. Reserves a certain percentage of grant funds for rural hospitals. Terminates the Secretary's authority to make such grants on September 30, 2011. Directs the Secretary to appoint a Medical Information Technology Advisory Board to study and report to Congress on best current practices in medical information technology and certain standardization and security requirements.