A bill to establish an informatics grant program for hospitals and skilled nursing facilities in order to encourage health care providers to make major information technology advances.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medication Errors Reduction Act of 
2003''.

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, 
        2013.
            (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.
    (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 
                2004 through 2013, 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 2004 through 2013, 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, 2013.

Summary: Medication Errors Reduction Act of 2003 - Directs the Secretary of Health and Human Services to provide grants to eligible hospitals and skilled nursing facilities for 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 grant authority on September 30, 2013.